Exhibit 5
BY AND BETWEEN
NCI BUILDING SYSTEMS, INC.
AND
XXXXXXX, DUBILIER & RICE FUND VIII, L.P.
DATED AS OF AUGUST 14, 2009
TABLE
OF CONTENTS
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Page
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Section 1.
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Authorization and Sale of Securities
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B-2
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Section 2.
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Closing and Delivery of Securities and Funds
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B-2
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Section 3.
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Closing Conditions
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B-3
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Section 4.
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Representations and Warranties of the Company
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B-8
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Section 5.
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Representations and Warranties of the Investor
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B-21
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Section 6.
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Certain Additional Agreements of the Parties
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B-24
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Section 7.
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Indemnity
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B-34
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Section 8.
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Termination
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B-37
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Section 9.
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Certain Definitions
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B-39
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Section 10.
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Survival of Representations, Warranties and Agreements
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B-48
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Section 11.
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Notices
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B-48
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Section 12.
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Successors and Assigns
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B-49
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Section 13.
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Amendments; Waiver
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B-49
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Section 14.
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Headings
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B-49
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Section 15.
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Severability
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B-49
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Section 16.
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Liability Limitations
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B-49
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Section 17.
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Integration
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B-50
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Section 18.
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Governing Law
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B-50
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Section 19.
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Counterparts
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B-50
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Section 20.
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Access; Information
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B-50
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Section 21.
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Publicity
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B-50
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Section 22.
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Confidentiality Agreement
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B-51
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Section 23.
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Specific Performance; Jurisdiction
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B-51
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Section 24.
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Waiver of Jury Trial
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B-51
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Section 25.
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Interpretation
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B-52
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Section 26.
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No Third Party Beneficiaries
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B-52
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Section 27.
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Certain Considerations Relating to Bankruptcy
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B-52
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B-ii
SCHEDULES
AND EXHIBITS
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Exhibit A
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Form of Amended Credit Agreement
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Exhibit B
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Form of Certificate of Designations, Preferences and Rights of
the Series B Preferred Stock
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Exhibit C
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Form of Stockholders Agreement
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Exhibit D
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Form of Indemnification Agreement
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Exhibit E
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Terms of Registration Rights Agreement
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Exhibit F
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Form of Press Release
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Exhibit G
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Employee Benefits Covenants
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Exhibit H
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ABL Term Sheet
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Exhibit I
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Prepackaged Plan Term Sheet
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Annex A
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Terms and Conditions of the Offer
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Disclosure Letter
B-iii
Annex B
THIS
INVESTMENT AGREEMENT (this “Agreement”), dated as
of August 14, 2009, is made by and among NCI BUILDING
SYSTEMS, INC., a
Delaware corporation, and XXXXXXX,
DUBILIER & RICE FUND VIII, L.P., a Cayman
exempted limited partnership (the “Investor”).
WITNESSETH:
WHEREAS, the Board of Directors (the “Board”) of the
Company (as defined herein) has determined that it is in the
best interests of the Company and its stockholders to
restructure the Company’s ownership and capital structure
through a series of transactions as contemplated in this
Agreement and the Transaction Documents (as defined herein) (the
“Restructuring”);
WHEREAS, in connection with the Restructuring, the Company
intends to enter into an amendment and restatement of its Credit
Agreement, dated June 18, 2004 (as amended prior to the
date hereof, the “Credit Agreement”), by and among the
Company, certain of its Subsidiaries (as defined herein),
Wachovia Bank, National Association, as administrative agent,
Bank of America, N.A., as syndication agent, and the lenders
party thereto (the “Term Lenders”) pursuant to which,
among other things, the Company would agree to pay
$143 million of the principal amount of the term loans
outstanding thereunder and the Term Lenders would agree to
extend the maturity of the remaining term loans outstanding
thereunder, upon the terms and subject to the conditions set
forth in the Form of Amended Credit Agreement (as defined
herein) (the “Term Loan Refinancing”);
WHEREAS, in connection with the Restructuring, the Company has
received an expression of interest from certain lenders (the
“ABL Lenders”) regarding the provision to the Company
and certain of its Subsidiaries of revolving credit commitments
for general corporate purposes, upon the terms and subject to
the conditions summarized in the term sheet attached hereto as
Exhibit H (the “ABL Term Sheet”);
WHEREAS, in connection with the Restructuring, the Company
intends to conduct an exchange offer to exchange all of the
Company’s outstanding 2.125% Convertible Senior
Subordinated Notes due 2024 (the “Convertible Notes”)
issued under that Indenture, dated as of November 16, 2004,
between the Company and The Bank of New York, as trustee (the
“Indenture”), upon the terms and subject to the
conditions set forth in this Agreement (such exchange offer, the
“Offer”);
WHEREAS, in connection with the Restructuring, each of the
Investor and the Company desires that, concurrent with the
consummation of the Term Loan Refinancing (or the Alternative
Term Loan Refinancing (as defined herein)), the ABL Financing
(or the Alternative ABL Financing (each as defined herein)) and
the consummation of the Offer, the Company will issue and sell
to the Investor, and the Investor will purchase and acquire from
the Company, 250,000 shares (the “Series B
Preferred Shares”) of a newly created series of preferred
stock designated the Series B Cumulative Convertible
Participating Preferred Stock, par value $1.00 per share (the
“Series B Preferred Stock”), of the Company
having the terms, rights, obligations and preferences set forth
in the Certificate of Designations (the “Series B
Preferred Stock CoD”) attached as Exhibit B hereto,
upon the terms and subject to the conditions set forth herein
(such purchase and sale, the “Investment”);
WHEREAS, in the event that the Offer Conditions are not
satisfied or waived by the Restructuring Deadline, but the
Requisite Acceptances (as defined herein) have been received and
all other conditions to the Investment have been satisfied (or
in the Company’s judgment, there is no reason to believe
that any such condition is unlikely to be satisfied by the
Outside Date), the Company and the Investor intend to effectuate
the Restructuring through the confirmation of the Prepackaged
Plan in the Prepackaged Plan Proceeding (each as defined herein)
and in connection therewith, to prepare the Prepackaged Plan and
a disclosure statement reflecting the Prepackaged Plan (which
disclosure statement shall be incorporated into the applicable
Offer Document (as defined herein)) (the “Disclosure
Statement”) and all related documents, including bankruptcy
ballots (collectively with the Disclosure Statement, the
“Solicitation Materials”), necessary to solicit
acceptances of the Prepackaged Plan from the creditors of the
Company whose claims are impaired by the Prepackaged Plan and to
solicit (the “Solicitation”) acceptances
B-1
of the Prepackaged Plan from such creditors pursuant to
Section 1126(b) of the Bankruptcy Code and Bankruptcy
Rule 3018(b) and to commence a case under the Bankruptcy
Code in the United States Bankruptcy Court in the District of
Delaware (the “Bankruptcy Court”);
WHEREAS, in connection with the Investment, (i) the Company
is willing to make certain representations and warranties and to
agree to observe certain covenants set forth herein for the
benefit of the Investor, and the Investor will rely on such
representations, warranties and covenants as a material
inducement to its purchase of the Series B Preferred Shares
and (ii) the Investor is willing to make certain
representations and warranties and to agree to observe certain
covenants set forth herein for the benefit of the Company, and
the Company will rely on such representations, warranties and
covenants as a material inducement to its sale of the
Series B Preferred Shares; and
WHEREAS, in connection with the Investment, the Investor and the
Company have agreed to enter into a Stockholders Agreement to
set forth certain terms and conditions regarding the Investment
and the ownership of the shares of the Series B Preferred
Stock, including certain restrictions on the transfer of the
Series B Preferred Stock and the Common Stock issuable upon
conversion thereof and on certain actions of the Investor and
its controlled Affiliates with respect to the Company, and to
provide for, among other things, preemptive rights, corporate
governance rights and consent rights and other obligations and
rights, in each case, on the terms and conditions contained in
the Stockholders Agreement;
NOW THEREFORE, in consideration of the premises and of the
respective representations, warranties, covenants and conditions
contained herein, the parties hereto agree as follows:
Section 1. Authorization
and Sale of Securities. Upon the terms and
subject to the conditions of this Agreement, at the Closing, the
Company shall issue, sell and deliver to the Investor, and the
Investor shall purchase from the Company, 250,000 shares of
Series B Preferred Stock, free and clear of all liens,
encumbrances, mortgages, pledges, charges, or security
interests, for an aggregate purchase price of two hundred and
fifty million dollars ($250,000,000) in cash (the
“Aggregate Purchase Price”) to be paid in full to the
Company.
Section 2. Closing
and Delivery of Securities and Funds.
(a) The Closing shall take place, subject to the
satisfaction or waiver of all conditions to the Closing set
forth in Section 3 hereof, at the offices of Wachtell,
Lipton, Xxxxx & Xxxx, 00 Xxxx 00xx Xxxxxx,
Xxx Xxxx City, at 10:00 a.m. New York City time, as
promptly as practicable (but no more than two (2) Business
Days) following the first date on which all conditions set forth
in Section 3 have been satisfied or waived (other than
those conditions that by their nature are to be satisfied by
actions taken at the Closing) or on such date and at such time
as otherwise agreed by the parties.
(b) At the Closing, the Investor shall deliver to the
Company:
(i) a portion of the Aggregate Purchase Price consisting of
(x) an amount equal to the full cash consideration due to
the holders of all Convertible Notes validly tendered and not
withdrawn under the Offer plus (y) an amount equal to the
maximum consideration necessary to redeem all of the Convertible
Notes not so tendered under the Offer pursuant to the Indenture,
including, without limitation, pursuant to
(A) Section 3.05 of the Indenture with respect to the
Designated Event (as defined in the Indenture) arising in
connection with the Investment, (B) Section 3.06 of
the Indenture on November 15, 2009 or
(C) Section 3.01 of the Indenture on November 20,
2009 plus (z) an amount equal to all reasonably anticipated
costs and expenses of effecting the redemption or repurchase of
all of the Convertible Notes (the “Convertible Notes
Expenses”), such portion (the “Convertible Notes
Portion”) to be delivered in immediately available funds by
wire transfer to the Convertible Notes Account;
(ii) the balance of the Aggregate Purchase Price consisting
of an amount equal to the Aggregate Purchase Price minus the
Convertible Notes Portion, such amount to be delivered in
immediately available funds by wire transfer to the
Non-Convertible Notes Account; and
(iii) all other documents and certificates to be delivered
to the Company by the Investor pursuant to Section 3(b)
hereof.
B-2
(c) At the Closing, the Company shall deliver to the
Investor:
(i) certificates representing the Series B Preferred
Shares, duly authorized and validly issued, nonassessable and
free of preemptive rights, other than as set forth in
Section 5.1 of the Stockholders Agreement, with no personal
liability attaching to the ownership thereof, and registered in
the name of the Investor; and
(ii) all other documents and certificates to be delivered
to the Investor by the Company pursuant to Section 3(c)
hereof.
(d) At or prior to the Closing, the Company and each of the
Subsidiaries party thereto shall duly execute and deliver
(i) the Amended Credit Agreement for the Term Loan
Refinancing (or the Alternative Term Loan Refinancing, as the
case may be) on terms and conditions that satisfy the condition
in Section 3(c)(vi) and (ii) each other Amended Credit
Document on terms and conditions that satisfy the condition in
Section 3(c)(viii).
(e) At the Closing, the Company and each of its
Subsidiaries party thereto shall duly execute and deliver
(i) the ABL Agreement for the ABL Financing (or the
Alternative ABL Financing, as the case may be) on terms and
conditions that satisfy the condition in Section 3(c)(vii)
and (ii) each other ABL Document on terms and conditions
that satisfy the condition in Section 3(c)(viii).
(f) If the Restructuring is not being effectuated through
the confirmation of the Prepackaged Plan in the Prepackaged Plan
Proceeding, concurrently with the Closing but after receipt of
proceeds from the Investment, the Company shall take the actions
set forth in Section 6(i)(i) and accept for exchange all
Convertible Notes validly tendered and not withdrawn pursuant to
the Offer.
(g) Concurrently with the Closing but after receipt of
proceeds from the Investment, the Company shall
(i) reimburse the Investor for all of the Transaction
Expenses (net of the Pre-Signing Expenses that have been
previously paid or reimbursed by the Company) and pay such
amounts to the account (or accounts) specified by the Investor
in writing at least 3 business days prior to the Closing and
(ii) pay the Deal Fee to CD&R Inc.
(h) If the Restructuring is being effectuated through the
confirmation of the Prepackaged Plan in the Prepackaged Plan
Proceeding, at the Closing, the Company shall deliver to the
disbursing agent appointed under the Prepackaged Plan (the
“Disbursing Agent”) sufficient cash and shares of
Common Stock to permit the Disbursing Agent to make the
Distributions required under the Prepackaged Plan.
(i) Concurrently with the Closing, but after receipt of
proceeds from the Investment, (i) the Company shall pay in
full (x) the principal amount of the term loans outstanding
under the Credit Agreement that are not rolled into the Amended
Credit Agreement as of the Closing, together with all accrued
and unpaid interest thereon and all other interest due and
payable as of the Closing Date under the Amended Credit
Agreement and other Amended Credit Documents, (y) all fees,
expenses and other obligations payable as of the Closing Date
under the Amended Credit Agreement, the other Credit Documents,
the ABL Agreement and the other ABL Documents and (z) all
costs, expenses and other obligations due as of the Closing Date
and relating to or arising out of the Transactions (including
but not limited to the Investment and the Offer) and
(ii) the Company shall cash collateralize or backstop in
full, or replace with or roll over and novate into letters of
credit issued and outstanding under the ABL Agreement, all
letters of credit outstanding under the Amended Credit Agreement.
Section 3. Closing
Conditions.
(a) The obligation of the Investor, on the one hand, and
the Company, on the other hand, to consummate the Closing is
conditioned on the fulfillment or written waiver by both the
Company and the Investor prior to the Closing of the following
conditions:
(i) Any waiting period (or any extension thereof) required
to consummate the Investment under the
Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the rules
and regulations promulgated thereunder (the “HSR Act”)
or the Austrian Cartel Act of 2005 (the “Austrian
Act”) shall have expired or been terminated.
(ii) No provision of any applicable Law and no Order shall
prohibit the Closing or the consummation of any of the
transactions contemplated by the Transaction Documents or shall
restrict the Investor and its Affiliates from owning, voting, or
converting or exercising, any Series B Preferred Stock in
accordance with
B-3
the terms thereof or exercising its consent rights in accordance
with the terms of the Stockholders Agreement and no lawsuit
shall have been commenced by a Governmental Entity seeking to
effect any of the foregoing.
(iii) The Company shall have received confirmation from the
New York Stock Exchange, or such other exchange on which the
Common Stock is then listed or quoted, and such confirmation
shall not have been withdrawn, that the issuance of the
Series B Preferred Shares and the other Transactions are in
compliance with the New York Stock Exchange’s (or such
other exchange’s) stockholder approval policy and that the
Company has properly, and without condition, obtained an
exception under Paragraph 312.05 of the New York Stock
Exchange Listed Company Manual (or such similar exception, if
any, of such other exchange) to issue the Series B
Preferred Shares without obtaining approval of the stockholders
of the Company.
(iv) The Company shall have properly provided notice to the
stockholders of the Company that the Company will issue the
Series B Preferred Shares without obtaining stockholder
approval as required by, and in compliance with,
Paragraph 312.05 of the New York Stock Exchange Listed
Company Manual (or such other required notice of such other
exchange on which the Common Stock is then listed or quoted),
and the ten (10) day notice period set forth in
Paragraph 312.05 of the New York Stock Exchange Listed
Company Manual (or such other notice period pursuant to such
other exchange’s rules and regulations) shall have passed
after such notice has been properly provided.
(v) The Company shall have duly filed with the Secretary of
State of the State of
Delaware the Series B Preferred Stock
CoD which shall have become effective as an amendment to the
Certificate of Incorporation.
(vi) Subject to and in accordance with Section 6(d),
the Offer shall have expired and all of the Offer Conditions
shall have been satisfied or earlier waived, with the prior
consent of the Investor, as of the expiration of the Offer.
(vii) The proceeds of the Investment together with cash of
the Company (without giving effect to any borrowings under the
ABL Agreement) shall be in an aggregate amount sufficient to
(A) pay the principal amount of the term loans outstanding
under the Credit Agreement that are not rolled into the Amended
Credit Agreement as of the Closing and all accrued and unpaid
interest thereon, and all other interest due and payable as of
the Closing Date under the Amended Credit Agreement and other
Amended Credit Documents, (B) pay in full all fees,
expenses and other obligations payable under the Amended Credit
Agreement, the other Amended Credit Documents, the ABL Agreement
and the other ABL Documents, (C) pay in full all fees,
costs and expenses relating to or arising out of the
Transactions (including but not limited to the Investment and
the Offer), (D) pay the full cash consideration for the
purchase of all Convertible Notes validly tendered and not
withdrawn under the Offer, (E) pay the maximum
consideration necessary to redeem all of the Convertible Notes
not so tendered under the Offer pursuant to the Indenture,
including, without limitation, pursuant to
(x) Section 3.05 of the Indenture with respect to the
Designated Event (as defined in the Indenture) arising in
connection with the Investment, (y) Section 3.06 of
the Indenture on November 15, 2009 or
(z) Section 3.01 of the Indenture on November 20,
2009 and (F) cash collateralize or backstop in full all
letters of credit outstanding under the Amended Credit Agreement
that are not replaced with or rolled over or novated into
letters of credit issued and outstanding under the ABL Agreement.
(b) The obligation of the Company to consummate the Closing
is conditioned on the fulfillment or written waiver by the
Company prior to the Closing of the following conditions:
(i) The representations and warranties of the Investor
contained in this Agreement (except for the representations and
warranties contained in Section 5(a)) shall be true and
correct (without giving effect to any qualifications or
limitations as to “materiality” or “Material
Adverse Effect” included therein) as of the date of this
Agreement and at and as of the Closing Date as if made at and as
of such time (except to the extent expressly made as of an
earlier date, in which case as of such earlier date), except
where the failure of such representations and warranties to be
true and correct, individually or in the aggregate, has not had,
and would not reasonably be expected to have, a material adverse
effect on the ability of the Investor to consummate the
Investment, and the representations and warranties of the
Investor contained in Section 5(a) shall be true and
correct in all respects at and as of the date of this Agreement
and at and as of the Closing Date as if made at and
B-4
as of such time. The Company shall have received a certificate
of a senior officer of the Investor, dated as of the Closing
Date, certifying to that fact.
(ii) The Investor shall have performed and complied in all
material respects with all covenants and obligations in this
Agreement that are to be performed or complied with by it at or
prior to the Closing.
(iii) The Investor shall have duly executed and delivered
to the Company each of the Stockholders Agreement, the
Registration Rights Agreement and the Indemnification Agreement.
(c) The obligation of the Investor to consummate the
Closing is conditioned on the fulfillment or written waiver by
the Investor prior to the Closing of the following conditions:
(i) The representations and warranties of the Company
contained in Section 4 of this Agreement (except for the
representations and warranties contained in Section 4(b)
and the first sentence of Section 4(f)) shall be true and
correct (without giving effect to any qualifications or
limitations as to “materiality” or “Material
Adverse Effect” included therein) as of the date of this
Agreement and at and as of the Closing Date as if made at and as
of such time (except to the extent expressly made as of an
earlier date, in which case as of such earlier date), except
where the failure of such representations and warranties to be
true and correct, individually or in the aggregate, has not had,
and would not reasonably be expected to have, a Material Adverse
Effect. The representations and warranties of the Company
contained in Section 4(b) shall be true and correct in all
but de minimis respects at and as of the date of this Agreement
and at and as of the Closing Date as if made at and as of such
time (except to the extent expressly made as of an earlier date,
in which case as of such earlier date). The representations and
warranties of the Company contained in the first sentence of
Section 4(f) shall be true and correct in all respects at
and as of the Closing Date as if made at and as of such time.
The Investor shall have received a certificate of a senior
officer of the Company, dated as of the Closing Date, certifying
to that fact.
(ii) The Company shall have performed and complied in all
material respects with all covenants and obligations in this
Agreement that are to be performed or complied with by it at or
prior to the Closing. The Investor shall have received a
certificate of a senior officer of the Company, dated as of the
Closing Date, certifying to that fact.
(iii) The Company shall have received all consents,
authorizations or approvals or delivered all notices required
under the Material Contracts listed in
paragraphs Items 1 and 2 of Section 4(d)(v) of
the Disclosure Letter, in each case in form and substance
reasonably satisfactory to the Investor, and no such consents,
authorizations, approvals or notices shall have been revoked.
(iv) The Company shall have duly executed and delivered to
the Investor the Stockholders Agreement, the Registration Rights
Agreement and the Indemnification Agreement.
(v) The Investor shall have received a certificate of the
Chief Executive Officer or Chief Financial Officer of the
Company, certifying the fulfillment of the condition set forth
in Section 3(a)(vii), in form and substance reasonably
satisfactory to the Investor.
(vi) The Company shall have duly authorized, executed and
delivered the Amended Credit Agreement for the Term Loan
Refinancing (or the Alternative Term Loan Refinancing, as the
case may be) (i) in the case of the Term Loan Refinancing,
in the form of the Form of Amended Credit Agreement or
(ii) in the case of the Alternative Term Loan Refinancing,
on terms and conditions that are (x) no less favorable (as
to each item (other than immaterial items) and in the aggregate)
to the Company and the Investor in its capacity as a prospective
shareholder of the Company than the terms and conditions
contemplated in the Form of Amended Credit Agreement, as
determined by the Investor in its sole discretion (exercised in
good faith) or (y) otherwise acceptable to the Investor in
its sole discretion (exercised in good faith). The Amended
Credit Agreement and the other Amended Credit Documents shall be
in full force and effect and the Company shall have satisfied
all conditions precedent (other than conditions relating to the
Investment, if any, and conditions relating to the payment of
the principal amount of the term loans outstanding thereunder
that shall be due and payable as of the Closing) to the
effectiveness of the Amended Credit Agreement and the other
Amended Credit Documents, without any amendment, waiver or other
modification thereto not consented to in writing by the Investor
(in its sole discretion). The Investor shall have received true,
correct and complete copies of the Amended Credit
B-5
Agreement and the other Amended Credit Documents (including
without limitation any amendments, waivers or modifications in
respect thereof). Subject only to the making of the Investment,
(1) the revolving commitments (if any) under the Credit
Agreement shall have terminated in accordance with the terms
thereof, and (2) the security interests arising under the
Amended Credit Documents with respect to the collateral securing
the ABL Financing (or the Alternative ABL Financing, as the case
may be) on a first-priority basis shall have been subordinated
to the security interests in such collateral securing the ABL
Financing (or the Alternative ABL Financing, as the case may be)
to the extent required by the terms of the Amended Credit
Documents and the ABL Documents. The Investor shall have
received a certificate of the Chief Executive Officer or Chief
Financial Officer of the Company, certifying the fulfillment of
this condition (vi), in form and substance reasonably
satisfactory to the Investor.
(vii) Subject to (A) the satisfaction or waiver of the
conditions set forth in Section 3(a) and Section 3(c)
(other than the satisfaction or waiver of the conditions
contained in this Section 3(c)(vii)) to the Investor’s
obligations to make the Investment, (B) the satisfaction or
waiver of the conditions set forth in Section 3(a) and
Section 3(b) to the Company’s obligation to accept the
Investment and (C) the Investor having indicated at the
Closing that it is prepared to make the Investment upon the
satisfaction of the conditions set forth in this
Section 3(c)(vii), the Company shall have duly authorized,
executed and delivered the ABL Agreement for the ABL Financing
(or the Alternative ABL Financing, as the case may be)
(i) in the case of the ABL Financing, on terms and
conditions that reflect the terms and conditions summarized in
the ABL Term Sheet and otherwise (x) are consistent with
and no less favorable to the Company and the Investor in its
capacity as a prospective shareholder of the Company than the
terms and conditions of asset-based revolving credit financing
transactions for companies sponsored by CD&R Inc., as
determined by the Investor in its reasonable discretion
(exercised in good faith), or (y) are acceptable to the
Investor in its sole discretion (exercised in good faith) or
(ii) in the case of Alternative ABL Financing, on terms and
conditions that are (1) no less favorable (as to each item
and in the aggregate) to the Company and the Investor as a
prospective shareholder of the Company than the terms and
conditions summarized in the ABL Term Sheet, as determined by
the Investor in its sole discretion (exercised in good faith)
and (2) otherwise (I) are consistent with and no less
favorable to the Company and the Investor in its capacity as a
prospective shareholder of the Company than the terms and
conditions of asset-based revolving credit financing
transactions for companies sponsored by CD&R Inc., as
determined by the Investor in its reasonable discretion
(exercised in good faith) or (II) are acceptable to the
Investor in its sole discretion (exercised in good faith). After
the execution and delivery thereof by the Company, the ABL
Agreement and the other ABL Documents shall be in full force and
effect, and the Company shall have satisfied all conditions
precedent to the effectiveness of the ABL Agreement, and to the
initial borrowings and any other extensions of credit thereunder
(whether or not any borrowing or other extension of credit is
then made) other than delivery of a borrowing notice, and to the
effectiveness of the other ABL Documents, without any amendment,
waiver or other modification thereto not consented to in writing
by the Investor (in its sole discretion). The Investor shall
have received true, correct and complete copies of the ABL
Agreement and the other ABL Documents (including without
limitation any amendments, waivers or modifications in respect
thereof). The Investor shall have received a certificate of the
Chief Executive Officer or Chief Financial Officer of the
Company, certifying the fulfillment of this condition (vii), in
form and substance reasonably satisfactory to the Investor.
(viii) Each Ancillary Refinancing Document (a) shall
have been duly authorized, executed and delivered by the Company
and each of its Subsidiaries party thereto and (b) shall be
(1) consistent with the ABL Agreement or the Amended Credit
Agreement, as applicable, and (2) otherwise consistent with
and no less favorable (as to each item (other than immaterial
items) and in the aggregate) to the Company and the Investor in
its capacity as a prospective shareholder of the Company than
the terms and conditions of such agreement or document for
companies sponsored by CD&R Inc., as determined by the
Investor in its reasonable discretion (exercised in good faith)
or otherwise acceptable to the Investor in its sole discretion
(exercised in good faith).
(ix) On the Closing Date, after giving effect to the
transactions contemplated by this Agreement (including, without
limitation, the Investment and the Offer), the ABL Agreement,
the Amended Credit Agreement and the Ancillary Refinancing
Documents, (A) none of the Company, any applicable
Subsidiary of the Company nor any other party thereto shall be
in default or breach in any material respect under (or shall be
B-6
alleged, by a Person or Persons with the right to cause an
acceleration of or to exercise any other remedy under the
applicable agreement or instrument, to be in default or breach
in any material respect under) the terms of, or shall have
provided to or received from an authorized party any notice of
any intention to terminate, the ABL Agreement, the Amended
Credit Agreement or the Ancillary Refinancing Documents, and
(B) no default shall have occurred and no event or
circumstance shall have occurred or exist that, with or without
notice or lapse of time or both, would constitute a breach,
default or event of default under or result in a termination of
or cause or permit the acceleration or any other change of or in
any right or obligation or the loss or impairment of any benefit
under and of the ABL Agreement, the Amended Credit Agreement or
the Ancillary Refinancing Documents. The Company shall
reasonably believe that the Company and its Subsidiaries will,
assuming receipt of the proceeds of the Investment, be able to
satisfy on a timely basis all terms and conditions to be
satisfied by any of them under the ABL Agreement, the Amended
Credit Agreement and the Ancillary Refinancing Documents. The
Investor shall have received a certificate of the Chief
Executive Officer or Chief Financial Officer of the Company,
certifying the fulfillment of this condition (ix), in form and
substance reasonably satisfactory to the Investor.
(x) The aggregate principal amount of the term loans
outstanding under the Amended Credit Agreement shall not be more
than $150 million after giving effect to the Term Loan
Refinancing or the Alternative Term Loan Refinancing, as the
case may be. The aggregate revolving credit commitments under
the ABL Agreement shall not be less than $125 million and
there shall have been no borrowings under the ABL Agreement.
After giving effect to any issuance of any new letters of credit
or rollover or novation of any existing letters of credit and
after applying any cash of the Company to the purposes set forth
in Section 3(a)(vii), the Company shall have, on a pro forma
basis, not less than $90 million in the aggregate of
(x) unutilized and immediately available revolving credit
commitments under the ABL Agreement and (y) Unrestricted
Cash, and the Company shall be able to satisfy all conditions to
borrowings and other extensions of credit under the ABL
Agreement. The Investor shall have received a certificate of the
Chief Executive Officer or Chief Financial Officer of the
Company, certifying the fulfillment of this condition (x), in
form and substance reasonably satisfactory to the Investor.
(xi) The Board shall have taken all actions necessary and
appropriate to approve this Agreement, the other Transaction
Documents and all of the Transactions, including, but not
limited to, the full exercise of (A) all rights of the
Investor under the terms of the Stockholders Agreement and
(B) all rights, powers and preferences of the Investor and
its Affiliates as holders of Series B Preferred Stock under
the terms of the Series B Preferred Stock CoD,
respectively, pursuant to Article TENTH of the Certificate
of Incorporation.
(xii) To the extent that the Company has authorized and
unissued shares of Common Stock sufficient to permit the
conversion of all or a portion of the shares of Series B
Preferred Stock to be issued at the Closing, (A) such
shares of Common Stock issuable upon conversion of the
Series B Preferred Stock shall have been duly authorized
for listing, subject to official notice of issuance, on the New
York Stock Exchange or such other exchange on which the Common
Stock is then listed or quoted and (B) the number of such
shares of Common Stock issuable upon conversion of the
Series B Preferred Stock that are so duly authorized for
listing shall be no less than 67,351,792. The Board shall have
adopted and declared advisable, and unanimously approved and
recommended to the holders of Common Stock that such holders
approve the Authorized Stock Certificate Amendment.
(d) Notwithstanding the foregoing in this Section 3,
if the Restructuring is being effectuated through the
Prepackaged Plan in the Prepackaged Plan Proceeding,
(i) the conditions set forth in Sections 3(a)(iii),
3(a)(iv), 3(a)(vi) and, to the extent that any Material Contract
may be assumed by the Company without consent, authorization or
approval pursuant to Section 365 of the Bankruptcy Code,
3(c)(iii) shall not be applicable and (ii) the obligation
of the Investor, on the one hand, and the Company, on the other
hand, to consummate the Closing shall be conditioned on the
fulfillment or written waiver by both the Company and the
Investor prior to the Closing of the following additional
conditions:
(i) The Confirmation Order shall be a Final Order.
(ii) All other conditions precedent to the effectiveness of
the Prepackaged Plan contained therein shall have been satisfied
or waived.
B-7
Section 4. Representations
and Warranties of the Company. The Company
hereby represents and warrants to the Investor, that, except as
otherwise disclosed in the Company’s Annual Report on
Form 10-K
for the fiscal year ended November 2, 2008 (the “2008
10-K”)
or its other reports and forms filed with or furnished to the
Securities and Exchange Commission (the “Commission”)
under Sections 12, 13, 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)
after November 2, 2008 (excluding disclosures of risks
included in any forward-looking statement disclaimers or other
statements that are similarly non-specific or forward-looking in
nature) and before the date of this Agreement (the “SEC
Reports”), and as set forth in the disclosure letter (the
“Disclosure Letter”) delivered by the Company to the
Investor concurrently with the execution of this Agreement,
provided, however, that disclosure in any section
or subsection of the Disclosure Letter shall apply to any other
section or subsection of the Disclosure Letter solely to the
extent that it is reasonably apparent from the face of such
disclosure that such disclosure is relevant to another section
or subsection of the Disclosure Letter:
(a) Organization, Authority and Subsidiaries.
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of
Delaware, with all corporate power and authority to own
its properties and conduct its business as currently conducted,
and except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, is
duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts
any business so as to require such qualification; each
Subsidiary of the Company has been duly organized and is validly
existing in good standing under the laws of its jurisdiction of
organization, with all corporate power and authority to own its
properties and conduct its business as currently conducted and
except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, is
duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts
any business so as to require such qualification.
(ii) All of the outstanding shares of capital stock of and
other voting or equity interests in each Subsidiary have been
duly authorized and validly issued, are fully paid and
nonassessable and free of preemptive rights, with no personal
liability attaching to the ownership thereof, and are owned
beneficially and of record by the Company or one of its
wholly-owned Subsidiaries, as set forth on Section 4(a)(ii)
of the Disclosure Letter, free and clear of any Liens other than
Permitted Liens and other than, prior to the Closing, Liens
granted pursuant to the Credit Agreement and the other Credit
Documents and, as of the Closing, Liens granted pursuant to the
Amended Credit Documents and the ABL Documents. No Subsidiary
has or is bound by any outstanding subscriptions, options,
warrants, calls, commitments, contracts, preemptive rights,
rights of first refusal, demands, conversion rights or other
agreements, arrangements or obligations of any character calling
for it to purchase, redeem or otherwise acquire, or to issue,
sell, transfer or otherwise dispose of any shares of capital
stock, any other equity security or Voting Debt of such
Subsidiary, or securities or rights convertible into or
exchangeable therefor. Except as provided above, neither the
Company nor any of its Subsidiaries owns any shares of capital
stock of or equity interests in (including any securities
exercisable or exchangeable for or convertible into capital
stock of or other voting or equity interests in) any other
Person.
(iii) The Company is not in breach or violation of its
certificate of incorporation, by-laws or other organizational
documents. Each Subsidiary of the Company is, in all material
respects, in compliance with its certificate of incorporation,
by-laws or other organizational documents. The Company has
previously made available to the Investor a complete and correct
copy of each of its Certificate of Incorporation, and its
by-laws, as amended (the “By-Laws”), as currently in
effect. Section 4(a)(iii) of the Disclosure Letter sets forth a
complete and correct list of the Subsidiaries of the Company and
their respective jurisdictions of incorporation or organization.
(b) Capitalization. As of the date
hereof and on the Closing Date, the authorized capital stock of
the Company consists of 100,000,000 shares of common stock,
par value $0.01 per share (“Common Stock”), and
1,000,000 shares of preferred stock, par value $1.00 per
share (“Company Preferred Stock,” and, together with
the Common Stock, the “Capital Stock”), of which, as
of August 2, 2009 (the “Capitalization Date”),
(i) 19,981,667 shares of Common Stock were issued and
outstanding of which 648,084 were unvested shares of
B-8
restricted stock granted as compensation to current or former
officers, directors or employees of the Company,
(ii) 1,159,280 shares of Common Stock were reserved
for issuance in respect of outstanding options, warrants, and
convertible securities (other than the Convertible Notes and the
options and restricted stock units referred to in
clause (v) of this sentence), (iii) 10,851,687 shares
of Common Stock were reserved for issuance in respect of the
Convertible Notes issued under the Indenture, (iv) no share
of Company Preferred Stock was issued and outstanding and (v)
(A) 654,203 shares of Common Stock were subject to
outstanding options and (B) 1,371 shares of Common
Stock were subject to outstanding restricted stock units, in
each case under the 2000 Stock Option Plan and the 2003 Long
Term Stock Incentive Plan. Except for the foregoing or in
connection with the Offer, the Company shall not have
(i) issued or authorized the issuance of any shares of
Common Stock or Company Preferred Stock, or any securities
convertible into or exchangeable for shares of Common Stock or
Company Preferred Stock, (ii) reserved for issuance any
shares of Common Stock or Company Preferred Stock, or any
securities convertible into or exchangeable or exercisable for
shares of Common Stock or Company Preferred Stock, or
(iii) repurchased or redeemed, or authorized the repurchase
or redemption of, any shares of Common Stock or Company
Preferred Stock, or any securities convertible into or
exchangeable or exercisable for shares of Common Stock or
Company Preferred Stock. As of the Capitalization Date, the
Company held 2,700,992 shares of Common Stock in its
treasury. All of the issued and outstanding shares of Common
Stock have been duly authorized and validly issued and are fully
paid, nonassessable and free of preemptive rights, with no
personal liability attaching to the ownership thereof. No bonds,
debentures, notes or other indebtedness having the right to vote
on any matters on which the stockholders of the Company may vote
(“Voting Debt”) are issued and outstanding. Other than
the Convertible Notes, options to purchase Common Stock reserved
in respect of outstanding options and Common Stock reserved in
respect of restricted stock units as set forth in
clauses (ii) and (v) of the first sentence of this
Section 4(b), the second sentence of this Section 4(b)
and the rights granted pursuant to this Agreement and the other
Transaction Documents, the Company does not have and is not
bound by any outstanding subscriptions, options, warrants,
calls, commitments, contracts, preemptive rights, rights of
first refusal, demands, conversion rights or other agreements,
arrangements or obligations of any character calling for it to
purchase, redeem or otherwise acquire, or to issue, sell,
transfer or otherwise dispose of any shares of Common Stock,
Company Preferred Stock or any other equity securities of the
Company or Voting Debt, or securities or rights convertible into
or exchangeable therefor, or any securities representing the
right to purchase or redeem or otherwise receive any shares of
capital stock of the Company (including any rights plan or
agreement). To the extent of the Company’s authorized and
unissued shares, the Company will reserve prior to the Closing
that number of shares of Common Stock sufficient for issuance
upon conversion of the Series B Preferred Shares.
(c) Registration Rights; Voting
Rights. Except as provided in the
Registration Rights Agreement and the Stockholders Agreement or
in connection with the Offer or the Prepackaged Plan,
(i) the Company has not granted any right that remains in
effect as of the Closing Date or agreed to grant any right that
will be effective at any time on or after the Closing Date, and
is not under any obligation to provide any rights, to register
under the Securities Act, nor under any applicable state
securities or blue sky laws, any of its presently outstanding
securities or any of its securities that may be issued
subsequently, and (ii) the Company is not bound, and to the
Knowledge of the Company no stockholder of the Company is bound,
by any agreement with respect to the voting of equity securities
of the Company.
(d) Authorization, Enforceability of Transaction
Documents.
(i) Each of the Company and its Subsidiaries has full
right, corporate power, authority and capacity to enter into
this Agreement and the other Transaction Documents to which it
is a party, and to consummate the Transactions (other than, if
the Restructuring is being effectuated through the confirmation
of the Prepackaged Plan in the Prepackaged Plan Proceeding, the
satisfaction of the condition set forth in Section 3(d)(i))
and to carry out its obligations hereunder and thereunder;
provided, however, the right, power, authority and
capacity of holders of the Series B Preferred Shares to
convert into Common Stock and the right, power, authority and
capacity of the Company to permit conversion of the
Series B Preferred Shares into Common Stock shall be
subject to the Company having a sufficient number of authorized
but unissued shares of Common Stock to permit each share of the
Series B Preferred Stock to be validly converted into
Common Stock pursuant to the terms of the Series B
Preferred Stock CoD. Except for any votes required under the
Bankruptcy Code or
B-9
Bankruptcy Rules if the Restructuring is being effectuated
through the confirmation of the Prepackaged Plan in the
Prepackaged Plan Proceeding, no vote of the stockholders of the
Company is required to authorize, approve or consummate any of
the Transactions. The issuance of the Series B Preferred
Shares and the transactions contemplated by this Agreement, the
Stockholders Agreement, the Registration Rights Agreement, the
Indemnification Agreement, and the Series B Preferred Stock
CoD will be in compliance with the New York Stock
Exchange’s stockholder approval policy and the exception
under Paragraph 312.05 of the New York Stock Exchange
Listed Company Manual or the equivalent policy or rule and the
exception to policy or rule of such other exchange on which the
Common Stock is then listed or quoted, in each case, to the
extent applicable to the Company at the time of such issuance
and the time of the consummation of each such transaction.
(ii) Neither the execution, delivery and performance by the
Company of this Agreement, the other Transaction Documents and
any documents ancillary thereto, nor the consummation of the
Transactions, nor compliance by the Company with any of the
provisions hereof or thereof will (A) violate, conflict
with, or result in a breach of any provision of, or constitute a
default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the
termination of, or result in the loss of any benefit or creation
of any right on the part of any third party under, or accelerate
the performance required by, or result in a right of termination
or acceleration of, or result in the creation of any Lien (other
than (1) Permitted Liens and (2) as of the Closing,
Liens granted pursuant to the Credit Agreement and the other
Credit Documents and (3) as of the Closing, Liens granted
pursuant to the ABL Agreement and the other ABL Documents) upon
any of the properties or assets of the Company or any of its
Subsidiaries under any of the terms, conditions or provisions of
(x) its Certificate of Incorporation or By-laws or
(y) the certificate of incorporation, charter, by-laws,
other governing instrument or comparable organizational
documents of any of the Company’s Subsidiaries or
(z) any note, bond, mortgage, indenture, deed of trust,
license, lease, contract, agreement or other instrument or
obligation to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries may be
bound, or to which the Company or any of its Subsidiaries or any
of the properties, assets, or rights of the Company or any of
its Subsidiaries may be subject, or (B) subject to
compliance with the statutes and regulations referred to in
subparagraph (v) below, violate any law, statute,
ordinance, rule or regulation, permit, concession, grant,
franchise or any judgment, ruling, Order, writ, injunction or
decree applicable to the Company or any of its Subsidiaries or
any of their respective properties or assets, except in the case
of clause (A)(z), if the Restructuring is being effectuated
through the confirmation of the Prepackaged Plan in the
Prepackaged Plan Proceeding, for any violations, conflicts and
breaches arising solely from the commencement of the Prepackaged
Plan Proceedings and, in the case of clause (A)(y), for
immaterial violations, conflicts and breaches, and in the case
of clauses (A)(z) and (B), for such violations, conflicts and
breaches that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(iii) The execution, delivery and performance of this
Agreement by the Company and the consummation of the Investment
has been duly authorized by all necessary corporate action on
the part of the Company, other than the filing of the
Series B Preferred Stock CoD with the Secretary of State of
the State of
Delaware pursuant to Section 6(h);
provided,
however, the right, power, authority and
capacity of holders of the Series B Preferred Shares to
convert into Common Stock and the right, power, authority and
capacity of the Company to permit conversion of the
Series B Preferred Shares into Common Stock shall be
subject to the Company having a sufficient number of authorized
but unissued shares of Common Stock to permit each share of the
Series B Preferred Stock to be validly converted into
Common Stock pursuant to the terms of the Series B
Preferred Stock CoD. This Agreement has been duly executed and
delivered by the Company and assuming due authorization,
execution and delivery by the other parties hereto, constitutes
legal, valid and binding obligations of the Company, enforceable
in accordance with its terms, except to the extent that the
enforcement thereof (A) may be limited by the applicable
bankruptcy, insolvency, reorganization, moratorium or similar
Laws of general application affecting the enforcement of
creditors’ rights generally and (B) is subject to
general equitable principles, whether considered in a proceeding
at Law or in equity (the “Bankruptcy Exceptions”).
(iv) As of the Closing Date, the execution, delivery and
performance of the Stockholders Agreement, the Registration
Rights Agreement, the Indemnification Agreement, the Amended
Credit Agreement, the ABL
B-10
Agreement and the Ancillary Refinancing Documents by the Company
and each of its Subsidiaries party thereto and the consummation
of the Transactions, including, without limitation, the Term
Loan Refinancing (or the Alternative Term Loan Refinancing, as
the case may be) and the ABL Financing (or the Alternative ABL
Financing, as the case may be), will have been duly authorized
by all necessary corporate action on the part of the Company and
each of its Subsidiaries (as applicable). Each of the
Stockholders Agreement, the Registration Rights Agreement, the
Indemnification Agreement, the Amended Credit Agreement, the ABL
Agreement and the Ancillary Refinancing Documents will be
validly executed and delivered by the Company and each of its
Subsidiaries party thereto and assuming due authorization,
execution and delivery of such agreement by the other parties
thereto, will constitute a valid and binding obligation of the
Company and such Subsidiaries, enforceable against the Company
and such Subsidiaries in accordance with its terms, except to
the extent that the enforcement thereof may be limited by or
subject to the Bankruptcy Exceptions and except as rights to
indemnification and contribution under the Registration Rights
Agreement or the Indemnification Agreement may be limited under
applicable Law or public policy.
(v) Other than (A) the filing of the Series B
Preferred Stock CoD with the Secretary of State of the State of
Delaware, (B) the passage of the applicable ten
(10) day notice period in compliance with
Paragraph 312.05 of the New York Stock Exchange’s
Listed Company Manual, (C) the filing and approval of
subsequent listing applications with the New York Stock
Exchange, (D) in connection or in compliance with the HSR
Act, (E) the filing with the Commission of the
Schedule TO, the
Form S-4,
the Offer Documents and any Other Required Company Filings and
the filings with the Commission or any other Governmental Entity
pursuant to the applicable requirements of any federal or state
securities or “Blue Sky” laws, (F) such other
consents, approvals, authorizations, registrations,
declarations, filings and notices the failure of which to be
obtained or made would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect and
(G) in the event the Restructuring is being effectuated
through the Prepackaged Plan, notice to, filing with, exemption
or review by, or authorization, consent or approval of, the
Bankruptcy Court (including entry of the Confirmation Order), no
notice to, filing with, exemption or review by, or
authorization, consent or approval of, any Governmental Entity
or any other Person under any provision of any material
agreement or other instrument to which the Company is a party
(nor expiration nor termination of any statutory waiting
periods) is necessary in connection with the execution and
delivery of this Agreement and the other Transaction Documents
by the Company and its Subsidiaries (as applicable) and the
performance of its and their obligations hereunder and
thereunder.
(vi) Assuming that the representations of the Investor set
forth in Section 5(a) are true and correct, the offer,
sale, and issuance of the Series B Preferred Shares in
conformity with the terms of this Agreement are exempt from the
registration requirements of Section 5 of the Securities
Act, and all applicable state securities laws, and neither the
Company nor any authorized agent acting on its behalf will take
any action hereafter that would cause the loss of such
exemptions.
(e) Company Financial Statements and Reports.
(i) The consolidated financial statements of the Company
and its consolidated Subsidiaries included or incorporated by
reference in the 2008
10-K fairly
present in all material respects the consolidated financial
position of the Company and its consolidated Subsidiaries as of
the dates indicated therein and the consolidated results of
their operations and cash flows for the periods specified
therein; and except as stated therein, such financial statements
were prepared in conformity with U.S. generally accepted
accounting principles (“GAAP”) applied on a consistent
basis.
(ii) The Company and its Subsidiaries do not have any
liabilities or obligations (accrued, absolute, contingent, known
or unknown or otherwise) that are, individually or in the
aggregate, material to the Company and its Subsidiaries, taken
as a whole, other than liabilities or obligations
(A) reflected on, reserved against, or disclosed in the
notes to, the Company’s consolidated balance sheet included
in the 2008
10-K,
(B) as disclosed in an SEC Report since November 2,
2008 and filed prior to the date of this Agreement or
(C) as incurred since November 2, 2008 in the ordinary
course of business consistent with past practice.
(iii) Since October 29, 2006, each of the Company and
each Subsidiary has timely filed or furnished all forms,
statements, reports and other documents (other than the SEC
Reports), together with any required
B-11
amendments thereto, that was required to be filed or furnished
by it with the Commission pursuant to the Exchange Act (the
foregoing, collectively, the “Company Reports”) and
has paid all material fees and assessments due and payable in
connection therewith. As of their respective dates of filing,
the Company Reports complied in all material respects with all
statutes and applicable rules and regulations of the Commission.
To the Knowledge of the Company, there are no outstanding
comments from the Commission with respect to any Company Report.
(iv) The SEC Reports, when they became effective or were
filed with the Commission, as the case may be, conformed in all
material respects to the requirements of the Securities Act or
the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder, and none of such documents as of
its date or as amended contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make such statements, in light of
the circumstances in which they were made, not misleading. As of
the date of this Agreement, to the Knowledge of the Company,
there are no outstanding comments from the Commission with
respect to the SEC Reports.
(v) Each filing made by the Company with the Commission
after the date hereof and prior to the Closing, when filed with
the Commission, will conform in all material respects to the
requirements of the Exchange Act and the rules and regulations
of the Commission thereunder, and will not, when filed with the
Commission, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.
(vi) The Company (A) has implemented and maintains
disclosure controls and procedures (as defined in
Rule 13a-15(e)
under the Exchange Act) to ensure that material information
relating to the Company, including its consolidated
Subsidiaries, is made known to the Chief Executive Officer and
the Chief Financial Officer of the Company by others within
those entities, and (B) has disclosed, based on its most
recent evaluation prior to the date hereof, to the
Company’s outside auditors and the Audit Committee of the
Board (1) any significant deficiencies and material
weaknesses in the design or operation of internal controls over
financial reporting (as defined in
Rule 13a-15(f)
under the Exchange Act) that are reasonably likely to adversely
affect the Company’s ability to record, process, summarize
and report financial information and (2) any fraud Known to
the Company, whether or not material, that involves management
or other employees who have a significant role in the
Company’s internal controls over financial reporting.
(vii) Since October 29, 2006, (A) neither the
Company nor any Subsidiary of the Company, nor to the Knowledge
of the Company any director, officer, employee, auditor,
accountant, or representative of the Company or any Subsidiary
of the Company, has received or otherwise been made aware of any
material complaint, allegation, assertion or claim, whether
written or oral, regarding the accounting or auditing practices,
procedures, methodologies or methods of the Company or any
Subsidiary of the Company or their respective internal
accounting controls, including any material complaint,
allegation, assertion or claim that the Company or any
Subsidiary of the Company has engaged in questionable accounting
or auditing practices and (B) no attorney representing the
Company or any Subsidiary of the Company, whether or not
employed by the Company or any Subsidiary of the Company, has
reported evidence of a material violation of securities laws,
breach of fiduciary duty or similar violation by the Company or
any of its officers, directors, employees or agents to the
Company’s Board or any committee thereof or to any director
or executive officer of the Company.
(viii) The SEC Reports included all certificates required
to be included therein pursuant to Sections 302 and 906 of
the Xxxxxxxx-Xxxxx Act of 2002, as amended, and the rules and
regulations promulgated thereunder (“SOX”), and the
internal control report and attestation of the Company’s
outside auditors required by Section 404 of SOX.
(f) Absence of Changes. Since the
date of this Agreement, no event or circumstance has occurred
that, individually or in the aggregate, has had or would
reasonably be expected to have a Material Adverse Effect. Other
than with respect to or in connection with the Prepackaged Plan
Proceeding or as required by the Bankruptcy Code (if the
Restructuring is being effectuated through the confirmation of
the Prepackaged Plan in the Prepackaged Plan Proceeding), since
November 2, 2008 to the date hereof, the Company and each
of its
B-12
Subsidiaries has conducted their respective businesses only in
the ordinary course of business consistent with past practice,
and neither the Company nor any of its Subsidiaries has taken
any action (other than, if the Restructuring is being
effectuated through the Prepackaged Plan, in connection with the
Prepackaged Plan Proceeding or as required under the Bankruptcy
Code) that, if taken after the issuance of the Series B
Preferred Shares, would require the written consent of or vote
by holders of such shares pursuant to Section 11 of the
Series B Preferred Stock CoD or would require the consent
of the Investor pursuant to Article VI of the Stockholders
Agreement.
(g) Proceedings. Other than with
respect to or in connection with the Prepackaged Plan Proceeding
(if the Restructuring is being effectuated through the
confirmation of the Prepackaged Plan in the Prepackaged Plan
Proceeding), there is no pending, or to the Company’s
Knowledge, threatened, action, claim, suit, proceeding or
investigation against the Company or any of its Subsidiaries or
to which any property, assets or rights of the Company or any of
its Subsidiaries is subject, nor is the Company or any of its
Subsidiaries subject to any Order, in each case, except as would
not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(h) Compliance with Laws; Permits.
(i) Since October 29, 2006, the Company and each of
its Subsidiaries has complied in all material respects and is
not in default or violation in any respect of, and none of them
is, to the Knowledge of the Company, under investigation with
respect to or has been threatened to be charged with or given
notice of any material violation of, any applicable domestic
(federal, state or local) or foreign Law or applicable stock
exchange requirement, except for any noncompliance, defaults or
violations that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Except
for Laws of general application, no Governmental Entity has
placed any restriction on the business or properties of the
Company or any of its Subsidiaries requiring a material
modification in the manner in which such business is conducted
or such properties are used by the Company or any of its
Subsidiaries.
(ii) The Company and each of its Subsidiaries have all
permits, licenses, franchises, authorizations, Orders and
approvals of, and have made all filings, applications and
registrations with, all Governmental Entities that are required
in order to permit them to own, lease or license their
properties, assets and rights, and to carry on their business as
presently conducted, except where the failure to have such
permits, licenses, authorizations, Orders and approvals or the
failure to make such filings, applications and registrations
that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; and all such
permits, licenses, certificates of authority, Orders and
approvals are in full force and effect and, to the Knowledge of
the Company, no suspension or cancellation of any of them is
threatened, and all such filings, applications and registrations
are current, except where such absence, suspension or
cancellation would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
It is agreed and understood that no representations, warranties
or covenants with respect to labor or Environmental Laws are
made in this Section 4(h) and that the only
representations, warranties or covenants relating to labor and
Environmental Laws are the representations and warranties
contained in Section 4(l) and Section 4(p),
respectively.
(i)
Authorization of Common Stock, Series B
Preferred Stock. Subject to Section 6(p)
in the event the Restructuring is being effectuated through the
Prepackaged Plan and the satisfaction of the Prepackaged Plan
Conditions, upon the filing of the Series B Preferred Stock
CoD with the Secretary of State of the State of
Delaware, the
Series B Preferred Stock shall have been duly authorized by
all necessary corporate action. When issued and sold against
receipt of the consideration therefor as provided in this
Agreement, the Series B Preferred Shares will be validly
issued, fully paid and nonassessable, will not subject the
holders thereof to personal liability, will not be subject to
preemptive rights of any other stockholder of the Company and
will be free of restrictions on transfer other than restrictions
on transfer under the Transaction Documents and under applicable
state and federal securities laws. Subject to Section 6(p)
in the event the Restructuring is being effectuated through the
Prepackaged Plan and the satisfaction of the Prepackaged Plan
Conditions, the shares of Series B Preferred Stock issuable
as dividends on the Series B Preferred Stock in accordance
with the Series B Preferred Stock CoD will, upon filing of
the Series B Preferred Stock CoD with the Secretary of
State
B-13
of the State of
Delaware, have been duly authorized by all
necessary corporate action and when so issued will be validly
issued, fully paid and nonassessable, will not subject the
holders thereof to personal liability, will not be subject to
preemptive rights of any stockholder of the Company and will be
free of restrictions on transfer other than restrictions on
transfer under the Transaction Documents and under applicable
state and federal securities laws. As of the Closing Date,
67,351,792 shares of Common Stock issuable upon the
conversion of the Series B Preferred Stock will have been
duly authorized by all necessary corporate action and when so
issued will be validly issued, fully paid and nonassessable,
will not subject the holders thereof to personal liability, will
not be subject to preemptive rights of any stockholder of the
Company and will be free of restrictions on transfer other than
restrictions on transfer under the Transaction Documents and
under applicable state and federal securities laws.
(j) Taxes.
(i) Except as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect:
(A) Each of the Company and its Subsidiaries has
(A) duly and timely filed (taking into account applicable
extensions) all Tax Returns required to be filed by it and
(B) paid all Taxes when due or made adequate provision for
any such Taxes in accordance with GAAP.
(B) All Taxes required to be withheld, collected or
deposited by or with respect to the Company and each of its
Subsidiaries have been timely withheld, collected or deposited
as the case may be and, to the extent required, have been paid
to the relevant taxing authority except with respect to matters
for which adequate reserves have been established in accordance
with GAAP.
(C) There are no liens or encumbrances for Taxes upon the
assets of either the Company or its Subsidiaries except for
statutory liens for current Taxes not yet due or liens for Taxes
that are being contested in good faith by appropriate
proceedings or for which adequate reserves have been provided.
(ii) No unresolved material deficiencies for any Tax
Returns referred to in Section 4(j)(i)(A) have been
proposed or assessed against or with respect to the Company or
any of its Subsidiaries (and there is no outstanding audit,
assessment, dispute or claim concerning any material Tax
liability of the Company or any of its Subsidiaries pending or
raised) in each case by any taxing authority in writing to the
Company or any of its Subsidiaries, except with respect to
matters for which adequate reserves have been established in
accordance with GAAP.
(iii) Neither the Company nor any of its Subsidiaries has
participated in a “listed transaction” within the
meaning of Treasury
Regulation Section 1.6011-4(b)(2).
(iv) The Company has not been a “distributing
corporation” or a “controlled corporation” in any
distribution occurring during the last two years intended to
qualify under Section 355 of the Code.
(v) The Company does not believe that it is a “United
States real property holding corporation” as defined in the
Code and any applicable regulations promulgated thereunder.
It is agreed and understood that the only representations and
warranties of the Company relating to Taxes are the
representations and warranties contained in this
Section 4(j) and Section 4(k).
(k) Employee Benefit Plans and Related Matters;
ERISA.
(i) Section 4(k) of the Disclosure Letter sets forth a
true and complete list in all material respects of all the
Company Benefit Plans (including a description of any oral
Company Benefit Plans), provided there is no obligation
to list any Company Benefit Plan under which the liability is
not material to the Company or any of its Subsidiaries. With
respect to each Company Benefit Plan set forth in
Section 4(k) of the Disclosure Letter, the Company has
provided or made available to the Investor, to the extent
applicable, true and complete copies of all documents evidencing
all of the material terms and conditions of such Company Benefit
Plans (or, if applicable, a description in the case of an oral
Company Benefit Plan). To the Knowledge of the Company, neither
the Company nor any of its Subsidiaries has communicated to any
current or former employee any intention or commitment to amend
or modify any Company Benefit Plan in any way that materially
increases
B-14
the liability of the Company or any of its Subsidiaries, or
establish or implement any new Company Benefit Plan (other than
any Company Benefit Plan under which the liability is not
material to the Company or any of its Subsidiaries).
(ii) Each Company Benefit Plan intended to be qualified
under section 401(a) of the Code, and the trust (if any)
forming a part thereof, has received a favorable determination
letter from the IRS and to the Knowledge of the Company, there
are no circumstances or events that could reasonably be expected
to adversely affect the qualified status of any such plan. Each
Company Benefit Plan has been operated in all material respects
in accordance with its terms and applicable Law.
(iii) No material liability under Title IV of ERISA
(including plan termination liabilities and withdrawal
liabilities with respect to any multiemployer plan as defined in
Section 3(37) of ERISA) has been incurred or is reasonably
likely to be incurred, in each case which would result in a
material liability to the Company and its Subsidiaries, taken as
a whole. All contributions and premiums required to have been
paid by the Company or any of its Subsidiaries to any Company
Benefit Plan under the terms of any such plan or its related
trust, insurance contract or other funding arrangement, or
pursuant to any applicable Law (including ERISA and the Code) or
collective bargaining agreement have been paid within the time
prescribed by any such plan, agreement or applicable Law.
Neither the Company nor any of its Affiliates has at any time
during the six-year period preceding the date of this Agreement
maintained, contributed to or incurred any liability under any
multiemployer plan (as defined in sections 3(37) or
4001(a)(3) of ERISA) or a “multiple employer plan”
within the meaning of section 4063 or 4064 of ERISA.
(iv) Other than routine claims for benefits, there are no
pending, or to the Knowledge of the Company, threatened or
anticipated claims (A) by or on behalf of any Company
Benefit Plan, by an employee or beneficiary covered under any
Company Benefit Plan, or otherwise involving any Company Benefit
Plan, or (B) by or on behalf of any current or former
employee of the Company or any Subsidiary relating to his or her
employment, termination of employment, compensation or employee
benefits, except, in each case, as would not, individually or in
the aggregate, reasonably be expected to result in a material
liability to the Company and its Subsidiaries, taken as a whole.
(v) To the Knowledge of the Company, no Company Benefit
Plans are presently under audit or examination (nor has notice
been received of a potential audit or examination) by the IRS,
the Department of Labor, or any other Governmental Authority,
domestic or foreign.
(vi) Neither the Company nor any of its Subsidiaries has
any liability in respect of post-retirement health, medical or
life insurance benefits for retired, former or current employees
of the Company or its Subsidiaries except as required under
applicable Law.
(vii) The execution, delivery, and performance of this
Agreement and the other Transaction Documents by the Company and
the consummation by the Company of the Transactions will not
(alone or in combination with any other event) result in an
increase in the amount of compensation or benefits or the
acceleration of the vesting or timing of payment of any
compensation or benefits payable to or in respect of any current
or former employee, officer, director or independent contractor
of the Company or any of its Subsidiaries or any increased or
accelerated funding obligation with respect to any Company
Benefit Plan.
(viii) No officer, employee, director, consultant or other
service provider of the Company or any of its Subsidiaries is
entitled to receive any tax gross up, indemnity or similar
payment from the Company or any of its Subsidiaries as a result
of the imposition of any income taxes or excise taxes under
Section 409A or 280G of the Code.
(l) Labor and Employment. Since
October 29, 2006, the Company and each of its Subsidiaries
is in compliance with all applicable Laws respecting labor,
employment, fair employment practices, terms and conditions of
employment, workers’ compensation, occupational safety and
health requirements, plant closings, wages and hours,
withholding of taxes, employment discrimination, disability
rights or benefits, equal opportunity, affirmative action, labor
relations, worker classifications, employee leave issues and
unemployment insurance and related matters, except as would not,
individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect. Except for instances that would not,
individually or in the
B-15
aggregate, reasonably be expected to have a Material Adverse
Effect: (A) there is no pending or, to the Knowledge of the
Company, threatened labor strike, slowdown or stoppage against
or affecting the Company or any Subsidiary of the Company and
(B) neither the Company nor any Subsidiary has received
notice of (1) any unfair labor practice charge or complaint
pending before the National Labor Relations Board or any other
Governmental Entity against it, (2) any charge or complaint
against it pending before the Equal Employment Opportunity
Commission or any other Governmental Entity responsible for the
prevention of unlawful employment practices, or (3) any
complaint or lawsuit against the Company or any Subsidiary
concerning employees or former employees of the Company or any
Subsidiary alleging employment discrimination or violations of
occupational safety and health requirements pending before a
court of competent jurisdiction. Neither the Company nor any of
its Subsidiaries is a party to a collective bargaining
agreement, and no labor union has been certified to represent
any employee of the Company or any of its Subsidiaries or, to
the Knowledge of the Company, has applied to represent or is
attempting to organize so as to represent such employees.
(m) Intellectual Property.
(i) Owned and Licensed Intellectual
Property. All material Intellectual Property
that is owned by either the Company or its Subsidiaries
(“Owned Intellectual Property”) is owned free and
clear of any Liens other than (1) Permitted Liens,
(2) as of the Closing, Liens granted pursuant to the
Amended Credit Documents and the ABL Documents and
(3) Liens that do not materially interfere with the
ownership of or current use by the Company or any of its
Subsidiaries of such Owned Intellectual Property. The Company
and its Subsidiaries have used commercially reasonable efforts
to (A) ensure protection of the material Owned Intellectual
Property under applicable Laws (including making and maintaining
in full force and effect necessary filings, registrations and
issuances) and (B) maintain the secrecy of confidential
material Intellectual Property used in the Business.
Section 4(m) of the Disclosure Letter sets forth a complete
and correct list of all material licenses, assignments,
settlement agreements and other contracts or arrangements
providing in whole or in part for the use of, or limiting the
use of, any material Intellectual Property.
(ii) No Infringement, etc. As of
the date hereof, to the Knowledge of the Company, no Person is
infringing, misappropriating or otherwise engaging in
unauthorized use of any Owned Intellectual Property except for
infringements, misappropriations or other unauthorized uses that
would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The conduct of the
Business does not infringe, violate or constitute a
misappropriation of any Intellectual Property of any Person,
except for infringements, violations or misappropriations that
would not, individually and in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(n) Real Property.
(i) Owned Real
Property. Section 4(n)(i) of the
Disclosure Letter sets forth a complete and correct list of all
real property owned by the Company or any of its Subsidiaries
(such property, together with all improvements and fixtures
presently or hereafter located thereon or attached or
appurtenant thereto or owned by the Company or any of its
Subsidiaries and located on Leased Real Property, and all
easements, licenses, rights and appurtenances relating to the
foregoing, the “Owned Real Property”).
Section 4(n)(i) of the Disclosure Letter lists the address
and owner of each parcel of Owned Real Property.
(ii) Leased Real
Property. Section 4(n)(ii) of the
Disclosure Letter sets forth a complete and correct list of the
real property leased by the Company or any of its Subsidiaries
(the “Leased Real Property,” and the leases, together
with any amendments and modifications thereto, pursuant to which
such real property is leased, the “Leases”), which
list sets forth each Lease and the address, landlord and tenant
for each Lease. Neither the Company nor any of its Subsidiaries
is a lessor, sublessor or grantor under any lease, sublease or
other instrument granting to any other Person any right to the
possession, lease, occupancy or enjoyment of any Owned Real
Property or Leased Real Property, except as set forth in
Section 4(n)(ii) of the Disclosure Letter.
(o) Title to Assets, Etc. The
Company and its Subsidiaries have good and valid (and, in the
case of Owned Real Property, good, valid and marketable fee
simple) title to, or otherwise have the right to use pursuant to
a valid and enforceable lease, license or similar contractual
arrangement, all of the assets (real and
B-16
personal, tangible and intangible) that are used or held for use
in connection with the Business or are reflected on the 2008
10-K or were
acquired after November 2, 2008, in each case free and
clear of any Lien other than Permitted Liens and, as of the
Closing, Liens granted pursuant to the Amended Credit Documents
and the ABL Documents, except for (i) inventory, real
property or equipment sold in the ordinary course of business
consistent with past practice and (ii) such failure to
possess good and valid title or right to use that would not,
individually or in the aggregate, reasonably be expected to be
material to the Company and its Subsidiaries, taken as a whole.
(p) Environmental Matters.
(i) The Company and each of its Subsidiaries are, and since
March 1, 2004 have been, in compliance in all material
respects with all applicable Environmental Laws and have
obtained and are in compliance in all material respects with all
applicable permits, licenses and authorizations required under
applicable Environmental Laws.
(ii) Neither the Company nor any Subsidiary has received a
notice of any material violation or notification of any material
liability or any potential material liability arising out of any
Environmental Law, and there is no Litigation or claim pending
or, to the Company’s Knowledge, threatened under any
Environmental Law.
(iii) No Release of Hazardous Substances has occurred at,
on, above, under or from any real property currently or formerly
owned, leased, operated or used by the Company or any of its
Subsidiaries that has resulted or would reasonably be expected
to result in a material investigation or remedial action.
(iv) The Company has made available to the Investor all
material environmental site assessments and reports in the
possession, custody or control of the Company and its
Subsidiaries.
(q) Material Contracts.
(i) Except for the Company Benefit Plans and the Contracts
filed as exhibits or incorporated by reference in the 2008
10-K or to
the SEC Reports (including the matters reflected on, reserved
against, or disclosed in the notes to, the Company’s
financial statements included therein), neither the Company nor
any of its Subsidiaries is a party to or bound by any Contract
that: (A) is a “material contract” (as such term
is defined in Item 601(b)(10) of
Regulation S-K
promulgated under the Securities Act) to be performed in full or
in part after the date of this Agreement; (B) creates any
material partnership, limited liability company agreement, joint
venture or similar agreement entered into with any third party;
(C) is a voting agreement or registration rights agreement;
(D) relates to Indebtedness (whether incurred, assumed,
guaranteed or secured by any asset), other than agreements among
direct and indirect wholly-owned Subsidiaries of the Company;
(E) relates to the acquisition or disposition of any
business, a material amount of stock or assets, or any material
assets or material real property other than in the ordinary
course of business consistent with past practice, where such
contract contains continuing material obligations or contains
continuing indemnity obligations of the Company or any of its
Subsidiaries; (F) materially limits the freedom of the
Company or any of its Subsidiaries, or would limit the freedom
of the Investor or its Affiliates (other than the Company or any
of its Subsidiaries) after the Closing or materially limit the
Company or any of its Subsidiaries after the Closing, to compete
in any line of business or with any Person or in any area;
(G) contains exclusivity obligations or restrictions
(x) binding on the Company or any of its Subsidiaries,
(y) that would be binding on the Company or any of its
Subsidiaries after the Closing or (z) that would be binding
on the Investor or any of its Affiliates (other than the Company
and its Subsidiaries) after the Closing, and, in the case of
subclauses (x) and (y) of this clause (G), that
materially affect or limit the Business or the operations of the
Company or any of its Subsidiaries or (H) is a commitment
or agreement to enter into any of the foregoing.
(ii) Except as has not had and would not, individually or
in the aggregate, reasonably be expected to have a Material
Adverse Effect or, if the Restructuring is being effectuated
through the confirmation of the Prepackaged Plan in the
Prepackaged Plan Proceeding, except for any effects arising from
the commencement of the Prepackaged Plan Proceedings,
(A) each Contract disclosed in the Disclosure Letter or
required to be disclosed therein pursuant to
Section 4(q)(i), Section 4(m) or Section 4(n) (each a
“Material Contract”) is a valid and binding agreement
of the Company or a Subsidiary of the Company, as the case may
be, and is in full
B-17
force and effect except to the extent that the enforcement
thereof may be limited by or subject to the Bankruptcy
Exceptions, and (B) none of the Company, any Subsidiary of
the Company nor, to the Knowledge of the Company, any other
party thereto is in default or breach in any material respect
under (or is alleged, by a Person or Persons with the right to
cause an acceleration of or to exercise any other remedy under
the applicable agreement or instrument, to be in default or
breach in any material respect under) the terms of, or has
provided or received any notice of any intention to terminate,
any such Material Contract, and, (C) to the Knowledge of
the Company, no event or circumstance has occurred that, with
notice or lapse of time or both, would constitute an event of
default thereunder or result in a termination thereof or would
cause or permit the acceleration or other changes of any right
or obligation or the loss of any benefit thereunder (any event
or circumstance described pursuant to clause (B) or (C), a
“Default”). Complete copies of each such Material
Contract (including all modifications and amendments thereto and
waivers thereunder) have been made available to the Investor.
(r) Finders’ Fees. Except for
X.X. Xxxxxx Securities Inc. and Xxxxxxxxx & Co.,
Inc., and, if the Restructuring is being effectuated through a
Prepackaged Plan Proceeding, one (1) claims and noticing
agent, the fees and expenses of which will be paid by the
Company, and other Persons (i) hired by the Company or the
Debtor Subsidiaries with the consent of the Investor (such
consent not to be unreasonably withheld, delayed or conditioned)
after the date of this Agreement in connection with the
Prepackaged Plan Proceedings or (ii) required to be paid by
the Company or the Debtor Subsidiaries by the Bankruptcy Code or
by an order of the Bankruptcy Court (other than pursuant to a
motion or application by the Company or a Debtor Subsidiary),
there is, and there has been, no investment banker, broker,
financial advisor, finder or other intermediary retained by or
authorized to act on behalf of the Company, any of its
Subsidiaries or any of their respective officers, directors or
employees and neither the Company, nor any of its Subsidiaries,
nor any of their respective officers, directors or employees
have incurred any liability for any financial advisory fees,
brokerage fees, commissions or finders’ fees in connection
with this Agreement, the other Transaction Documents or the
transactions contemplated hereby and thereby, including, without
limitation, the Offer. The Company has delivered to the Investor
a true and complete copy of the engagement letter or agreement
for X.X. Xxxxxx Securities Inc. and Xxxxxxxxx &
Co., Inc., respectively, pursuant to which X.X. Xxxxxx
Securities Inc. and Xxxxxxxxx & Co., Inc.,
respectively, may receive a fee in connection with this
Agreement, the other Transaction Documents or the transactions
contemplated hereby and thereby.
(s) Compliance with New York Stock Exchange Continued
Listing Requirements. The Common Stock is as
of the date of this Agreement listed on the New York Stock
Exchange. The Company is as of the date of this Agreement in
compliance in all material respects with applicable continued
listing requirements of the New York Stock Exchange, and the
Company has not received any notice of the delisting of the
Common Stock from the New York Stock Exchange.
(t) Insurance. The Company and
each of its Subsidiaries currently maintains, and during each of
the last five (5) calendar years (or during such lesser
period of time as the Company has owned such Subsidiary) has
maintained, insurance with reputable insurance companies of the
types and in the amounts that the Company reasonably believes is
adequate for its and their respective businesses (taking into
account the cost and availability of such insurance).
(u) [Intentionally omitted.]
(v) Acknowledgment Regarding Investor’s Purchase
of Company Securities. The Company
acknowledges and agrees that the Investor is acting solely in
the capacity of arm’s length purchaser with respect to the
Transaction Documents and the transactions contemplated hereby
and thereby. The Company further acknowledges that the Investor
is not acting as a financial advisor or fiduciary of the Company
(or in any similar capacity) with respect to the Transaction
Documents and the transactions contemplated hereby and thereby
and any advice given by Investor or any of its representatives
or agents in connection with the Transaction Documents and the
transactions contemplated hereby and thereby is merely
incidental to the Investor’s purchase of the Series B
Preferred Stock. The Company further represents to the Investor
that the Company’s decision to enter into the Transaction
Documents has been based solely on the independent evaluation of
the transactions contemplated hereby and thereby by the Company
and its representatives.
B-18
(w) State Anti-Takeover Statutes; Certificate of
Incorporation. Assuming that the
representations of the Investor set forth in Section 5(d)
are accurate, the Board has taken all necessary actions so that
the restrictions on business combinations set forth in
Section 203 of the DGCL and any other similar applicable
Law are not applicable to the Transaction Documents and the
transactions contemplated hereby and thereby. The Board has
taken all necessary actions so that all restrictions set forth
in Article TENTH of the Certificate of Incorporation are
not applicable to the Transaction Documents and the transactions
contemplated hereby and thereby, including, without limitations,
the full exercise of (A) all rights of the Investor under
the terms of the Stockholders Agreement and (B) all rights,
powers and preferences of the Investor and its Affiliates as
holders of the Series B Preferred Stock under the terms of
the Series B Preferred Stock CoD.
(x) Board Approvals. At a duly
held meeting on August 13, 2009, the Board unanimously
determined that the Transaction Documents to which the Company
or any Subsidiary of the Company is a party and the Transactions
applicable to the Company and such Subsidiaries, including
without limitation the issuance of the Series B Preferred
Shares and the compliance with the terms thereof, the compliance
with the terms of this Agreement and the Offer, are in the best
interests of the Company and the Company’s Subsidiaries.
Pursuant to and in accordance with Article TENTH of the
Certificate of Incorporation, the Disinterested Directors (as
defined in the Certificate of Incorporation) have unanimously
and expressly approved this Agreement, the Series B
Preferred Stock CoD, the Stockholders Agreement, the
Registration Rights Agreement, the Indemnification Agreement and
the Prepackaged Plan and the transactions contemplated herein
and therein, including, without limitation, the full exercise of
(1) all rights, including the preemptive rights set forth
in Article V of the Stockholders Agreement, of the Investor
under the terms of the Stockholders Agreement, (2) all
rights, powers and preferences of the Investor and its
Affiliates as holders of Series B Preferred Stock under the
terms of the Series B Preferred Stock CoD and the
performance of the Corporation’s obligations with respect
thereto and (3) the filing of the Prepackaged Plan
Proceeding if the Offer Conditions are not satisfied upon the
expiration of the Offer and the Requisite Acceptances have been
received. As of the Closing Date, effective as of the Closing,
the Board will have adopted and declared advisable, and approved
and recommended to the Company’s stockholders, each of the
Certificate of Incorporation Amendments (as defined in the
Stockholders Agreement) , including, without limitation the
Authorized Stock Stockholder Approval. The Audit Committee of
the Board has unanimously and expressly approved, and the Board
has unanimously concurred with, the Company’s reliance on
the exception under Paragraph 312.05 of the New York Stock
Exchange Listed Company Manual to issue the Series B
Preferred Shares.
(y) Offer Documents and Other Required Company
Filings. The Tender Offer Statement on
Schedule TO (together with all amendments, supplements and
exhibits thereto, the “Schedule TO”) with respect
to the Offer containing or incorporating by reference a
prospectus and forms of the related letter of transmittal, the
registration statement on
Form S-4
(the
“Form S-4”)
that the Company uses to register the offer and sale of shares
of Company Common Stock pursuant to Offer, all other ancillary
Offer documents, the Solicitation Materials, newspaper
announcements, press releases and other offering materials that
the Company may use, prepare, file, distribute, mail, publish,
approve or authorize for use in connection with the Offer or the
Solicitation (collectively with the prospectus and the letter of
transmittal, together with all amendments, supplements and
exhibits to each of the foregoing, the “Offer
Documents”), as well as any other document that is required
to be filed by the Company with the Commission in connection
with the Transactions (each, an “Other Required Company
Filing” and collectively, the “Other Required Company
Filings”), as then amended or supplemented, will, when
filed with the Commission or first used, filed, distributed,
published or mailed in connection with the Offer and as of the
date or dates on which the Convertible Notes are accepted by the
Company for purchase pursuant to the Offer (the “Tender
Date”), and on the closing date or dates for the Offer (the
“Tender Closing Date”) comply in all material respects
with the applicable requirements of the Securities Act (in the
case of the
Form S-4)
and the Exchange Act (in the case of the Schedule TO and
the Offer Documents) and the rules and regulations of the
Commission thereunder. Each of the Schedule TO, the
Form S-4
and the Offer Documents will not, at the time the
Schedule TO,
Form S-4
and the Offer Documents, respectively, or any amendments or
supplements thereto are filed with the Commission and as of the
Tender Date and the Tender Closing Date, as the case may be,
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
provided, however, that notwithstanding
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the foregoing, no representation or warranty is made by the
Company with respect to information supplied, or required to be
supplied, in writing by the Investor or any of its partners,
members, stockholders, directors, officers, employees,
Affiliates, agents or other representatives with respect to the
Investor or any of its partners, members, stockholders,
directors, officers, employees, Affiliates, agents or other
representatives, specifically for inclusion or incorporation by
reference in the foregoing documents. None of the Other Required
Company Filings will, when filed with the Commission and as of
the Tender Date, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading;
provided, however, that notwithstanding the
foregoing, no representation or warranty is made by the Company
with respect to information supplied, or required to be
supplied, in writing by the Investor or any of its partners,
members, stockholders, directors, officers, employees,
affiliates, agents or other representatives with respect to the
Investor or any of its partners, members, stockholders,
directors, officers, employees, Affiliates, agents or other
representatives specifically for inclusion or incorporation by
reference in any of the Other Required Company Filings.
(z) Fairness Opinion. The Board
has received the opinion of Xxxxxxxxx & Co., Inc.,
dated as of the date of this Agreement, to the effect that,
subject to the various assumptions and qualifications set forth
therein, the consideration to be received by the Company
pursuant to this Agreement is fair from a financial point of
view to the Company (the “Fairness Opinion”). A
correct and complete copy of the Fairness Opinion has been, or
will promptly be, delivered to the Investor. As of the date of
this Agreement, the Fairness Opinion has not been withdrawn or
revoked or otherwise modified in any material respect.
(aa) ABL Agreement. As of the
Closing Date, from and after the execution and delivery of the
ABL Agreement and the other ABL Documents, (1) none of the
ABL Agreement and the other ABL Documents shall have been
amended or modified in any respect, (2) each of the ABL
Agreement and the other ABL Documents constitutes legal, valid
and binding agreements of the Company and each Subsidiary of the
Company party thereto, and is in full force and effect,
(3) none of the Company, any Subsidiary of the Company nor,
to the Knowledge of the Company, any other party thereto is in
default or breach in any material respect under (or is alleged,
by a Person or Persons with the right to cause an acceleration
of or to exercise any other remedy under the applicable
agreement or instrument, to be in default or breach in any
material respect under) the terms of, or has provided to or
received any notice of any intention to terminate from an
authorized party under, the ABL Agreement or the other ABL
Documents, and (4) no default has occurred and no event or
circumstance has occurred or exists that, with or without notice
or lapse of time or both, would constitute a breach, default or
event of default thereunder or result in a termination thereof
or would cause or permit the acceleration or any other change of
or in any right or obligation or the loss or impairment of any
benefit thereunder. The Company will pay when due all fees,
expenses and other obligations arising under or in connection
with the ABL Agreement and the other ABL Documents.
(bb) Credit Agreement and Amended Credit
Agreement.
(i) As of the date hereof and as of the time that is
immediately prior to the execution of the Amended Credit
Agreement (or, if the Restructuring is being effectuated through
the confirmation of the Prepackaged Plan in the Prepackaged Plan
Proceeding, upon the occurrence of the Closing), (A) the
Company has fully paid any and all fees, expenses and other
obligations that are due and payable in connection with Credit
Agreement and the other Credit Documents (as defined in the
Credit Agreement), and (B) there are no revolving loans
outstanding under the Credit Agreement. If the Restructuring is
being effectuated through the confirmation of the Prepackaged
Plan in the Prepackaged Plan Proceeding, subject to the consent
or approval of the Bankruptcy Court, the Company will pay when
due all other fees, expenses and other obligations arising under
or in connection with the Credit Agreement and the other Credit
Documents (as defined in the Credit Agreement), and otherwise
comply with and timely perform all of its obligations under the
Credit Agreement and the other Credit Documents (as defined in
the Credit Agreement).
(ii) As of the Closing Date, from and after the execution
and delivery of the Amended Credit Agreement and the other
Amended Credit Documents, (1) none of the Amended Credit
Agreement and the other Amended Credit Documents have been
amended or modified in any respect, (2) each of the Amended
Credit Agreement
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and the other Amended Credit Documents constitutes a legal,
valid and binding agreement of the Company and each Subsidiary
of the Company party thereto, and is in full force and effect,
(3) none of the Company, any Subsidiary of the Company nor,
to the Knowledge of the Company, any other party thereto is in
default or breach in any material respect under (or is alleged,
by a Person or Persons with the right to cause an acceleration
of or to exercise any other remedy under the applicable
agreement or instrument, to be in default or breach in any
material respect under) the terms of, or has provided to or
received any notice of any intention to terminate from an
authorized party under, the Amended Credit Agreement or any
other Amended Credit Document, and (4) no default has
occurred and no event or circumstance has occurred or exists
that, with or without notice or lapse of time or both, would
constitute a breach, default or event of default under the
Amended Credit Agreement or result in a termination thereof or
would cause or permit the acceleration or any other change of or
in any right or obligation or the loss or impairment of any
benefit thereunder. The Company will pay when due all fees,
expenses and other obligations arising under or in connection
with the Amended Credit Agreement and the other Amended Credit
Documents.
(cc) Solvency. As of the Closing
Date, after giving effect to the Transactions thereon and the
after giving effect to the payment of the Convertible Notes
Expenses, the Company and its Subsidiaries will be Solvent. For
purposes of this Section 4(cc), “Solvent” means,
at any time with respect to any Person, that at such time such
Person (i) is able to pay its debts as they mature and has
sufficient capital (and not unreasonably small capital) to carry
on its business, and (ii) the assets and properties of such
Person at a fair valuation (and including as assets for this
purpose at a fair valuation all rights of subrogation,
contribution or indemnification arising pursuant to any
guarantees given by such Person) are greater than the
indebtedness of such Person, and including subordinated and
contingent liabilities computed at the amount which, such Person
has a reasonable basis to believe, represents an amount which
can reasonably be expected to become an actual or matured
liability (and including as to contingent liabilities arising
pursuant to any guarantee the face amount of such liability as
reduced to reflect the probability of it becoming a matured
liability).
(dd) No Other Representation or
Warranties. Except for the representations
and warranties contained in this Section 4, the Investor
acknowledges that none of the Company, its Subsidiaries, or any
other Person on behalf of the Company makes any other express or
implied representation or warranty in connection with the
transactions contemplated by this Agreement.
Section 5. Representations
and Warranties of the Investor. The Investor
hereby represents and warrants to the Company that:
(a) Investor Status.
(i) It is (A) an “accredited investor”
within the meaning of Rule 501 of Regulation D
promulgated under the Securities Act, (B) aware that the
sale of the Series B Preferred Shares (including the Common
Stock issuable upon conversion of the Series B Preferred
Shares, the “Securities”) to it is being made in
reliance on a private placement exemption from registration
under the Securities Act and (C) acquiring the Securities
for its own account.
(ii) It understands and agrees that the Securities are
being offered in a transaction not involving any public offering
within the meaning of the Securities Act, that such Securities
have not been and, except as contemplated by the Registration
Rights Agreement, will not be registered under the Securities
Act and that such Securities may be offered, resold, pledged or
otherwise transferred only in accordance with the applicable
provisions of the Stockholders Agreement (A) in a
transaction not involving a public offering, (B) pursuant
to an exemption from registration under the Securities Act
provided by Rule 144 thereunder (if available),
(C) pursuant to an effective registration statement under
the Securities Act, or (D) to the Company or one of its
Subsidiaries, in each of cases (A) through (D) in
accordance with any applicable securities Laws of any State of
the United States, and that it will, and each subsequent holder
is required to, notify any subsequent purchaser of Securities
from it of the resale restrictions referred to above, as
applicable, and will provide the Company and the transfer agent
such certificates and other information as they may reasonably
require to confirm that the transfer by it complies with the
foregoing restrictions, if applicable.
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(iii) It understands that, unless sold pursuant to a
registration statement that has been declared effective under
the Securities Act or in compliance with Rule 144, the
Company may require that the Securities will bear a legend or
other restriction substantially to the following effect (it
being agreed that if the Securities are not certificated, other
appropriate restrictions shall be implemented to give effect to
the following):
THIS INSTRUMENT WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED, (THE “SECURITIES ACT”) AND THE
SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OR SECURITIES LAWS OF ANY
STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN
EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN EXEMPTION THEREFROM UNDER SUCH ACT OR SUCH
LAWS.
(iv) In addition, for so long as the holder of the relevant
Securities is subject to transfer restrictions contained in the
Stockholders Agreement, the Company may require that the
Securities bear a legend or other restriction substantially to
the following effect: “THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN
A STOCKHOLDERS AGREEMENT,
DATED [ ],
AMONG THE ISSUER OF SUCH SECURITIES (THE “COMPANY”)
AND THE OTHER PARTY OR PARTIES THERETO. A COPY OF THE PROVISIONS
OF SUCH AGREEMENT SETTING FORTH SUCH RESTRICTIONS ON TRANSFER IS
ON FILE WITH THE SECRETARY OF THE COMPANY.” Such legend
shall be removed at the request of any holder thereof that is
not subject to the transfer restrictions contained in the
Stockholders Agreement.
(v) It:
(A) is able to fend for itself in the transactions
contemplated hereby;
(B) has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and
risks of its prospective investment in the Securities;
(C) has the ability to bear the economic risks of its
prospective investment and can afford the complete loss of such
investment;
(D) acknowledges that (1) it has conducted its own
investigation of the Company and the terms of the Securities,
(2) it has had access to the Company’s public filings
with the Commission and to such financial and other information
as it deems necessary to make its decision to purchase the
Securities, and (3) has been offered the opportunity to ask
questions of the Company and received answers thereto, as it
deemed necessary in connection with the decision to purchase the
Securities; and
(E) understands that the Company will rely upon the truth
and accuracy of the foregoing representations, acknowledgements
and agreements.
(b) Investor Acknowledgement. The
Investor acknowledges that the Common Stock is listed on the New
York Stock Exchange and the Company is required to file reports
containing certain business and financial information with the
Commission pursuant to the reporting requirements of the
Exchange Act, and that it is able to obtain copies of such
reports.
(c) Authorization, Enforceability of Transaction
Documents.
(i) The Investor has full right, power, authority and
capacity to enter into this Agreement, the other Transaction
Documents, to consummate the transactions contemplated hereby
and thereby and to carry out its obligations hereunder and
thereunder. The execution, delivery and performance of this
Agreement and the other Transaction Documents by the Investor
and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate
action on the part of the Investor.
(ii) This Agreement has been duly authorized, validly
executed and delivered by the Investor, and assuming due
authorization, execution and delivery of this Agreement by the
Company, constitutes a valid and
B-22
binding obligation of the Investor, enforceable against the
Investor in accordance with its terms, except to the extent that
the enforcement thereof may be limited by or is subject to the
Bankruptcy Exceptions.
(iii) As of the Closing Date, each of the Stockholders
Agreement, the Registration Rights Agreement and the
Indemnification Agreement will have been duly authorized by the
Investor, and will be validly executed and delivered by the
Investor and assuming due authorization, execution and delivery
of such agreement by the Company, will constitute a valid and
binding obligation of the Investor, enforceable against the
Investor in accordance with its terms, except to the extent that
the enforcement thereof may be limited by or subject to the
Bankruptcy Exceptions and except as rights to indemnification
and contribution under the Registration Rights Agreement or the
Indemnification Agreement may be limited under applicable Law or
policy.
(iv) Other than (A) in connection or in compliance
with the HSR Act and the Austrian Act, and (B) such other
consents, approvals, authorizations, registrations,
declarations, filings and notices the failure of which to be
obtained or made would not, individually or in the aggregate,
materially impair the ability of the Investor to perform its
obligations under this Agreement or to consummate the
Investment, no notice to, filing with, exemption or review by,
or authorization, consent or approval of, any Governmental
Entity or any other Person under any provision of any material
agreement or other instrument to which the Investor is a party
(nor expiration nor termination of any statutory waiting
periods) is necessary in connection with the execution and
delivery of this Agreement, the Stockholders Agreement, the
Registration Rights Agreement and the Indemnification Agreement
by the Investor and the performance of its obligations hereunder
and thereunder.
(d) Ownership of Company Capital
Stock. This Investor is not, nor at any time
during the last three (3) years has it been, an
“interested stockholder” of the Company as defined in
Section 203 of the DGCL (other than as contemplated by this
Agreement).
(e) Funding. As of the date of
this Agreement, the Investor has uncalled capital commitments in
excess of the Aggregate Purchase Price and has the unrestricted
right to call, subject only to the giving of timely notice, on
such commitments for amounts equal to or in excess of the
Aggregate Purchase Price, and, at the Closing, the Investor will
have available funds sufficient to pay the Aggregate Purchase
Price on the terms and conditions contemplated by this Agreement.
(f) Offer Documents and Other Required Company
Filings. The information supplied in writing
by the Investor or any of its partners, members, stockholders,
directors, officers, employees, Affiliates, agents or other
representatives with respect to the Investor or any of its
partners, members, stockholders, directors, officers, employees,
Affiliates, agents or other representatives specifically for
inclusion or incorporation by reference in the Schedule TO,
Form S-4
and the Offer Documents or any amendments or supplements thereto
will not, at the time that the applicable document is filed with
the Commission or at the time such document is first published,
sent or given to the holders of Convertible Notes, as the case
may be, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The
information supplied in writing by the Investor or any of its
partners, members, stockholders, directors, officers, employees,
Affiliates, agents or other representatives with respect to the
Investor or any of its partners, members, stockholders,
directors, officers, employees, Affiliates, agents or other
representatives specifically for inclusion or incorporation by
reference in any of the Other Required Company Filings will not,
at the time the applicable Other Required Company Filing is
filed with the Commission, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are
made, not misleading. The information supplied in writing by the
Investor or any of its partners, members, stockholders,
directors, officers, employees, Affiliates, agents or other
representatives with respect to the Investor or any of its
partners, members, stockholders, directors, officers, employees,
Affiliates, agents or other representatives with respect to the
Investor or any of its partners, members, stockholders,
directors, officers, employees, Affiliates, agents or other
representatives specifically for inclusion or incorporation by
reference in the Prepackaged Plan Filings or any amendments or
supplements thereto will not, at the time that the applicable
document is filed with the Bankruptcy Court or at the time such
document is or first used, filed, distributed, published or
mailed in connection with the Solicitation and as of the
Confirmation Date, contain any untrue statement of a material
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fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not
misleading.
(g) Lack of Competitive
Businesses. For purposes of the Notification
and Report Form to be filed under the HSR Act in connection with
the transactions contemplated by this Agreement, Investor is its
own ultimate parent entity. To the knowledge of Investor, the
Investor does not have any Affiliate that receives a material
amount of its revenues from the production or sale of
(i) metal building systems or components (including,
without limitation, primary and secondary framing systems,
roofing panels
and/or
systems, end or side wall panels, sectional or
roll-up
doors, insulated metal panels, windows, or other metal
components of a building structure), (ii) coated or painted
steel or metal coils, or (iii) coil coating or coil
painting services.
(h) No Other Representation or
Warranties. Except for the representations
and warranties contained in this Section 5 or in any Tax
form or certificate, the Company acknowledges that neither the
Investor nor any other Person on behalf of the Investor makes
any other express or implied representation or warranty in
connection with the transactions contemplated by this Agreement.
Section 6. Certain
Additional Agreements of the Parties.
(a) Regulatory Filings; Third Party Consents.
(i) Each of the Investor and the Company agrees to
cooperate and consult with the other and use its best efforts to
take, or cause to be taken, all actions, and to file, or cause
to be filed, all documents and to do, or cause to be done, and
to help the other party to do, or cause to be done, all things
necessary, proper or advisable to cause the Offer Conditions and
the Closing to be satisfied as promptly as practicable and to
consummate and make effective, in the most expeditious manner
practicable, the Transactions, including (A) preparing and
filing as promptly as practicable all documentation, effecting
all necessary applications, notices, petitions, filings and
other documents and obtaining all necessary permits, consents,
waivers, clearances, approvals, authorizations, permits, orders,
consents of, or any exemptions by, all Governmental Entities,
(B) seeking all necessary or advisable consents of third
parties to the Transactions and (C) using best efforts to
cause the satisfaction, but not waiver, of the conditions to
closing of the other party or parties set forth in
clause (i) of Section 3(a). In particular, each of the
Investor and the Company will use its best efforts to obtain,
and will use its best efforts to help the other obtain, as
promptly as practicable, all approvals, authorizations,
consents, clearances, expirations or terminations of waiting
periods or exemptions required from all necessary Governmental
Entities for the Transactions, including, but not limited to,
filings and notifications with respect to, and expiration or
termination of any applicable waiting period under, the HSR Act
and any other applicable competition or merger control laws. In
furtherance and not in limitation of the foregoing, each party
hereto agrees (1) to make or cause to be made an
appropriate filing of a Notification and Report Form pursuant to
the HSR Act with respect to the Investment as promptly as
practicable (and in any event within ten (10) Business
Days) after the date hereof and to request and use best efforts
to obtain early termination of the waiting period under the HSR
Act and (2) to supply as promptly as reasonably practicable
any additional information and documentary material that may be
requested by any Governmental Entity pursuant to the HSR Act.
Neither Investor nor the Company shall agree or commit to
contest the enforceability of this Agreement under the
Bankruptcy Code, or, except as otherwise provided in this
Agreement, agree or commit to delay or not to close any of the
transactions contemplated by this Agreement, without the express
written consent of the other party.
(ii) Without limiting the generality of
Section 6(a)(i), each of the parties shall cooperate in all
respects with each other in connection with any filing or
submission and in connection with any investigation or other
inquiry and shall promptly (A) furnish to the other such
necessary information and reasonable assistance as the other
parties may request in connection with the foregoing,
(B) inform the other of any communication from any
Governmental Entity regarding any of the Transactions and of any
communication received or given in connection with any legal,
administrative, arbitral or other proceeding by a private party
or any investigation, proceeding or other action by the New York
Stock Exchange, or such other stock exchange on which the Common
Stock is then listed or quoted, in each case regarding the
Investment and the other Transactions and (C) provide
counsel for the other parties with copies of all filings made by
such party, and all correspondence between such party (and its
advisors) with any Governmental Entity, or with the New York
Stock Exchange (or such other stock exchange on which the Common
Stock is then listed or quoted), and any other information
supplied by such party and such party’s Subsidiaries to a
Governmental Entity, or to the New York Stock Exchange (or such
other stock exchange on which the Common
B-24
Stock is then listed or quoted), or received from such a
Governmental Entity, or from the New York Stock Exchange (or
such other stock exchange on which the Common Stock is then
listed or quoted), in connection with the Transactions;
provided, however, that materials may be redacted
to remove references concerning valuation of the Company. Each
party hereto shall, subject to applicable Law, permit counsel
for the other parties to review in advance, and consider in good
faith the views of the other parties in connection with, any
proposed written communication to any Governmental Entity, or to
the New York Stock Exchange (or such other stock exchange on
which the Common Stock is then listed or quoted), in connection
with the Transactions. The parties agree not to participate, or
to permit their Subsidiaries to participate, in any meeting or
discussion, either in person or by telephone, with any
Governmental Entity, or with the New York Stock Exchange (or
such other stock exchange on which the Common Stock is then
listed or quoted), in connection with the Transactions unless it
consults with the other parties in advance and, to the extent
not prohibited by such Governmental Entity, or the New York
Stock Exchange (or such other stock exchange on which the Common
Stock is then listed or quoted), gives the other parties the
opportunity to attend and participate.
(iii) The Investor and the Company shall not, and shall not
permit any of their Subsidiaries or Affiliates to, acquire or
agree to acquire by merger or consolidation, 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
corporation, partnership, association or other business
organization or division thereof or otherwise acquire or agree
to acquire any assets that would delay or make materially more
difficult the obtaining of any approvals, authorizations,
consents, clearances, expirations or terminations of waiting
periods or exemptions approval or authorization required under
the HSR Act for the Investment.
(b) Conduct of Business.
(i) Except as otherwise expressly permitted or required by
the Transaction Documents or otherwise consented to by Investor,
permitted by Section 6(k), contemplated by
Section 6(p) or as set forth on Section 6(b) of the
Disclosure Letter and subject to the terms and upon the
conditions therein, during the period from the date of this
Agreement until the earlier of the Closing Date and the
termination of this Agreement in accordance with Section 8,
the Company shall conduct its business, and cause its
Subsidiaries to conduct their respective businesses, in all
material respects in the ordinary course, including, without
limitation, paying its obligations, including customer signing
bonuses, capital expenditures, Taxes and other accounts payable,
in the ordinary course of business consistent with past
practice; provided that if the Prepackaged Plan
Proceeding is commenced, the Company may make such changes to
the manner in which it conducts business as are required by the
Prepackaged Plan Proceeding. Prior to the earlier of the Closing
Date and the termination of this Agreement in accordance with
Section 8, except as expressly permitted or required by the
Transaction Documents, without the prior written consent of the
Investor, neither the Company nor its Subsidiaries shall
(A) take any action that, if taken after the issuance of
the Series B Preferred Shares, (x) would require the
written consent of or vote by holders of such shares pursuant to
Section 11 of the Series B Preferred Stock CoD or
would require the consent of the Investor pursuant to
Article VI of the Stockholders Agreement, (y) would
trigger a redemption right under Section 8 of the Series B
Preferred Stock CoD or (z) would result in an adjustment to
be made under Section 10 of the Series B Preferred
Stock CoD; (B) amend, supplement, modify, waive, terminate
or otherwise make any change to, directly or indirectly, the
Credit Agreement or any of the other Credit Documents (or obtain
any waiver in respect thereof); provided, that the
Company may extend the Waiver, dated July 15, 2009, by and
among the Company, certain Subsidiaries of the Company party
thereto and Wachovia Bank, National Association, as
administrative agent for the Lenders party to the Credit
Agreement as in effect on the date hereof; (C) other than
with respect to the Prepackaged Plan Proceeding, consent to,
approve of or formally acquiesce to any case, proceeding or
other action (x) under any existing or future law of any
jurisdiction, relating to bankruptcy, insolvency, reorganization
or similar laws relating to relief of debtors, seeking to have
an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, seeking reorganization,
arrangement, adjustment, winding up, liquidation, dissolution or
composition or similar action with respect to it or its debts
generally or (y) seeking appointment of a receiver,
trustee, custodian, conservator or other similar official for it
or for all or any substantial part of its assets (a
“Proceeding”), whether or not commenced by the Company
or any of its Subsidiaries or (D) take any action that is
in furtherance of the delisting of the Common Stock from the New
York Stock Exchange or the listing of the Common Stock on any
other stock exchange or automated quotation system.
B-25
(ii) The Company shall not declare or pay any dividend or
distribution on any securities of the Company on or prior to the
Closing. If, prior to the Closing, the Company shall take any
action that would require any adjustment to be made under
Section 10 of the Series B Preferred Stock CoD as if
shares of Series B Preferred Stock were issued on the date
of this Agreement, the Company must make appropriate and
equitable adjustments with respect to the Investor such that the
Investor will receive the benefit of such transaction as if all
of the Series B Preferred Stock to be acquired by the
Investor had been outstanding as of the date of such action.
(c) Governance Matters. The
Company shall take all actions necessary (i) (A) to cause
all directors serving on the Board immediately prior to the
Closing (other than the Company’s Chief Executive Officer
and two other directors) to resign from the Board, effective as
of the Closing and (B) to cause vacancies on the Board to
be filled, effective as of the Closing, by persons designated by
the Investor (the “Investor Directors”) no later than
three Business Days prior to the Closing, and for the Investor
Directors to serve from the Closing until their successors are
duly elected and qualified in accordance with the organizational
documents of the Company and the Stockholders Agreement, with
the Investor Directors divided as nearly evenly as possible
among Class I, Class II and Class III of the
Board, and to cause the representation of the Investor
Directors, effective as of the Closing, on each committee of the
Board to be proportionate to the membership of the Investor
Directors on the Board, (ii) to ensure that the By-laws,
the charters of the committees of the Board and any corporate
guidelines of the Company, effective as of the Closing, are
consistent with the provisions of the Stockholders Agreement and
the transactions contemplated thereby and (iii) to elect,
effective as of the Closing, to take advantage of the exemptions
to the requirements of Paragraphs 303A.01, 303A.04 and
303A.05 of the New York Stock Exchange Listed Company Manual.
(d) Offer.
(i) Provided that this Agreement shall not have been
terminated in accordance with Section 8, the Company shall
commence (within the meaning of
Rule 13e-4(a)(4)
promulgated under the Exchange Act) the Offer to purchase all of
the Convertible Notes and solicit acceptances of the Prepackaged
Plan with the Solicitation Materials prior to the open of
business on the date that is the tenth Business Day after the
date of this Agreement. The Investor shall cooperate with the
Company and use its best efforts to help the Company do, or
cause to be done, all things that the Investor (in its
reasonable discretion) determines are necessary, proper or
advisable in connection with the Offer and the Solicitation,
including in connection with the commencement of the Offer and
the Solicitation. The Offer and the Solicitation shall be
commenced and conducted on the terms and subject to the
conditions set forth on Annex A hereto and such other terms
and conditions as may be agreed to by the Investor and the
Company in writing prior to the commencement of the Offer.
Subject to the right of the parties to terminate this Agreement
in accordance with Section 8(a), the Company may extend the
Offer beyond the Initial Expiration Date without the prior
consent of the Investor for a period of not more than ten
(10) business days (as defined in
Rule 14d-1
under the Exchange Act), if, at such scheduled expiration date
of the Offer, any of the Offer Conditions shall not have been
satisfied or, with the prior written consent of the Investor,
waived.
(ii) The Company shall indemnify and hold harmless the
Investor and its partners, members, stockholders, directors,
officers, employees, affiliates, agents and other
representatives from and against any and all liabilities,
losses, damages, claims, costs, expenses, interest, awards,
judgments and penalties suffered or incurred by them in
connection with the Offer and the Transactions and any
information utilized in connection therewith, except with
respect to information supplied in writing by the Investor or
any of its partners, members, stockholders, directors, officers,
employees, Affiliates, agents or other representatives, with
respect to the Investor or any of its partners, members,
stockholders, directors, officers, employees, Affiliates, agents
or other representatives, specifically for inclusion or
incorporation by reference in the Schedule TO,
Form S-4,
Offer Documents and any Other Required Company Filings and
except with respect to any gross negligence, fraud or willful
misconduct of the Investor and its partners, members,
stockholders, directors, officers, employees, affiliates, agents
and other representatives.
(iii) As soon as practicable on the date of commencement of
the Offer, the Company shall file with the Commission the
Schedule TO and
Form S-4
with respect to the Offer and the Solicitation Materials with
respect to the Prepackaged Plan. The
Form S-4
and Schedule TO shall contain or incorporate the Offer
Documents. The Company shall, or shall cause, the Offer
Documents to be disseminated to the holders of the Convertible
Notes as and to the extent required by applicable federal
securities Laws and rules and regulations promulgated
thereunder. The Company, on the one hand, and the Investor, on
the other hand, shall promptly correct any information provided
B-26
by them for use in the Schedule TO, the
Form S-4,
the Offer Documents and any Other Required Company Filings if
and to the extent that it shall be or shall have become false or
misleading in any material respect, and the Company shall cause
Schedule TO, the
Form S-4,
the Offer Documents and any Other Required Company Filings as so
corrected to be filed with the Commission and, in the case of
any corrected Offer Documents, disseminated to holders of the
Convertible Notes, in each case, as and to the extent required
by applicable federal securities Laws and rules and regulations
promulgated thereunder. The Investor and its counsel shall be
given a reasonable opportunity to review and comment upon the
Schedule TO, the
Form S-4,
the Offer Documents and the Required Company Filings, and, in
each case, any amendment, supplement or exhibit thereto, before
they are filed with the Commission and disseminated to holders
of Convertible Notes, the Company shall consider in good faith
the comments of the Investor in connection therewith and shall
not file with the Commission, disseminate to holders or
otherwise use the Schedule TO, the
Form S-4
or any Offer Documents or Required Company Filings, or, in each
case, any amendment, supplement or exhibit thereto, without the
prior consent of the Investor (which consent shall not be
unreasonably delayed or withheld). In addition, the Company
shall provide the Investor and its counsel with any comments
that the Company or their counsel may receive from time to time
from the Commission or its staff with respect to the
Schedule TO, the
Form S-4,
the Offer Documents and the Other Required Company Filings
promptly after the receipt of such comments, consult with the
Investor and its counsel prior to responding to any such
comments, and consider in good faith the views of the Investor
in connection with, any proposed written communication to the
Commission and provide the Investor with copies of all such
written responses. Each party agrees not to participate, or to
permit its Subsidiaries or Affiliates to participate, in any
meeting or discussion, either in person or by telephone, with
the Commission, in connection with the Offer unless it consults
with the other party in advance and, to the extent not
prohibited by the Commission, gives the other party the
opportunity to attend and participate. The Company will use
reasonable best efforts to respond to any comments from the
Commission as promptly as possible and to have the
Form S-4
declared effective as promptly as possible.
(iv) The obligation of the Company to accept for exchange
and exchange for Convertible Notes tendered pursuant to the
Offer shall be subject to the satisfaction of the Offer
Conditions.
(v) Subject to (A) the terms of this Agreement and
(B) the satisfaction or, with the prior written consent of
the Investor, waiver of all of the Offer Conditions as of the
expiration of the Offer, if the Restructuring is not being
effectuated through the confirmation of the Prepackaged Plan in
the Prepackaged Plan Proceeding, at the Closing, after the
receipt by the Company of the proceeds of the Investment, the
Company shall accept for exchange all Convertible Notes validly
tendered and not withdrawn pursuant to the Offer. If the
Restructuring is not being effectuated through the confirmation
of the Prepackaged Plan in the Prepackaged Plan Proceeding, in
accordance with Section 6(i)(ii) and Section 6(m), the
Company shall pay the cash consideration and issue the Company
Common Stock consideration for all Convertible Notes validly
tendered and not withdrawn pursuant to the Offer as promptly as
practicable following the acceptance for exchange pursuant to
the immediately prior sentence (but in no event later than three
(3) Business Days after the expiration of the Offer).
(vi) The Investor shall not be responsible or liable for,
any payment, damages or obligation arising from the failure of
the Company to comply with the provisions of this
Section 6(d), including, without limitation, any such
failure which would result in the closing of the Offer on terms
or conditions other than those consented to by the Investor.
(e) New York Stock Exchange
Listing. The Company shall use its best
efforts to cause the shares of Common Stock to be issued upon
conversion of the Series B Preferred Shares (to the extent
of the Company’s authorized and unissued stock) to be
approved for listing on the New York Stock Exchange or such
other exchange on which the Common Stock is then listed or
quoted, subject to official notice of issuance, prior to the
Closing.
(f) ABL Financing.
(i) The Company shall use its reasonable best efforts to
take, or cause to be taken (and the Investor shall use
commercially reasonable efforts to cooperate with the Company in
such efforts), all reasonable actions and to do, or cause to be
done, all things reasonably necessary, proper or advisable, to
arrange and obtain revolving credit commitments for general
corporate purposes from the ABL Lenders on terms and conditions
that reflect the terms and conditions summarized in the ABL Term
Sheet and otherwise (i) are consistent with and no less
favorable (as to each item (other than immaterial items) and in
the aggregate) to the Company and the Investor in its capacity
as a
B-27
prospective shareholder of the Company than the terms and
conditions of asset-based revolving credit financing
transactions for companies sponsored by CD&R Inc., as
determined by the Investor in its reasonable discretion
(exercised in good faith), or (ii) are acceptable to the
Investor in its sole discretion (exercised in good faith) (the
“ABL Financing”).
(ii) In the event the ABL Financing becomes unavailable, as
promptly as practicable following the occurrence of such event
the Company shall use its reasonable best efforts (and the
Investor shall use commercially reasonable efforts to cooperate
with the Company in such efforts, including by actively
assisting the Company in its negotiation of related definitive
documentation) to obtain alternative financing from alternative
sources that (A) is on terms and conditions that are
(1) no less favorable (as to each item and in the
aggregate) to the Company and the Investor as a prospective
shareholder of the Company than the terms and conditions
summarized in the ABL Term Sheet, as determined by the Investor
in its sole discretion (exercised in good faith),
(2) otherwise (x) are consistent with and no less
favorable to the Company and the Investor in its capacity as a
prospective shareholder of the Company than the terms and
conditions of asset-based revolving credit financing
transactions for companies sponsored by CD&R Inc., as
determined by the Investor in its reasonable discretion
(exercised in good faith) or (y) are acceptable to the
Investor in its sole discretion (exercised in good faith), and
(B) provides revolving credit commitments in an aggregate
principal amount that is not less than $125 million (an
“Alternative ABL Financing”), as promptly as
practicable following the occurrence of such event but in any
event no later than the Outside Date.
(iii) It is understood and agreed that both the Company and
the Investor will participate in the negotiation of the ABL
Financing or Alternative ABL Financing (including, but not
limited to, the negotiation of a definitive revolving credit
agreement and other definitive documentation therefor (such
definitive revolving credit agreement, the “ABL
Agreement,” and together with such other documentation, the
“ABL Documents”)).
(g) Credit Agreement and Amended Credit
Agreement.
(i) The Company will pay when due all interest, fees,
expenses and other obligations arising under the Credit
Agreement and the other Credit Documents (as defined in the
Credit Agreement) as and when they become payable, and otherwise
comply with and timely perform all of its obligations under the
Credit Agreement and the other Credit Documents (as defined in
the Credit Agreement) at all times during the term of this
Agreement, including in the Prepackaged Plan Proceeding (subject
to the consent or approval of the Bankruptcy Court).
(ii) The Company shall use its reasonable best efforts to
take, or cause to be taken (and the Investor shall use
reasonable best efforts to cooperate with the Company in such
efforts), all reasonable actions and to do, or cause to be done,
all things reasonably necessary, proper or advisable, to amend
and restate the Credit Agreement on the terms and conditions
provided in the Form of Amended Credit Agreement or otherwise
contemplated thereby.
(iii) In the event the Term Loan Refinancing is not
available on the terms and conditions contemplated in the Form
of Amended Credit Agreement for any reason, the Company shall
use its reasonable best efforts (and the Investor shall use
commercially reasonable efforts to cooperate with the Company in
such efforts, including by actively assisting the Company in its
negotiation of related definitive documentation) to amend and
restate the terms of the Credit Agreement (A) on terms and
conditions (x) that are no less favorable (as to each item
(other than immaterial items) and in the aggregate) to the
Company and the Investor as a prospective shareholder of the
Company than the terms and conditions contemplated in the Form
of Amended Credit Agreement, as determined by the Investor in
its sole discretion (exercised in good faith) or
(y) otherwise acceptable to the Investor in its sole
discretion (exercised in good faith), and (B) to extend the
maturity of $150 million principal amount of the term loans
outstanding under the Credit Agreement (an “Alternative
Term Loan Refinancing”), as promptly as practicable but in
any event no later than the Outside Date.
(iv) It is understood and agreed that both the Company and
the Investor will participate in the negotiation of the Term
Loan Refinancing or Alternative Term Loan Refinancing
(including, but not limited to, the negotiation of a definitive
credit agreement and other definitive documentation therefor
(such definitive credit agreement, the “Amended Credit
Agreement,” and together with such other definitive
documentation, the “Amended Credit Documents”)).
B-28
(h)
Series B Preferred Stock Certificate of
Designations. Prior to the Closing, the
Company shall duly file with the Secretary of State of the State
of
Delaware the Series B Preferred Stock CoD in accordance
with all applicable provisions of Law and the Certificate of
Incorporation.
(i) Use of Proceeds. If the
Restructuring is not being effectuated through the confirmation
of the Prepackaged Plan in the Prepackaged Plan Proceeding, on
and after the Closing, the Company shall, as applicable,
(i) apply the funds in the Non-Convertible Notes Account to
(w) pay the principal amount of the term loans outstanding
under the Amended Credit Agreement that shall be due and payable
as of Closing and all accrued and unpaid interest thereon, and
all other interest due and payable under the Amended Credit
Agreement and other Amended Credit Documents, (x) pay all
fees, expenses and other obligations payable under the Amended
Credit Agreement, the other Amended Credit Documents, and the
ABL Agreement and the other ABL Documents, (y) pay all
costs, expenses and other obligations relating to or arising out
of the Transactions and any related transactions (other than any
amounts due the holders of any Convertible Notes and the
Convertible Notes Expenses), and (z) cash collateralize
letters of credit outstanding under the Amended Credit Agreement
that are not backstopped, replaced with, rolled over or novated
into letters of credit issued and outstanding under the ABL
Agreement; and
(ii) apply the funds in the Convertible Notes Account
(A) to pay the full cash consideration due to (w) the
holders of all Convertible Notes tendered under the Offer,
(x) the holders of any Convertible Notes not tendered under
the Offer upon the exercise by any of such remaining holders of
the put rights arising under Sections 3.05 or 3.06 of the
Indenture, (y) on November 20, 2009, the holders of
all Convertible Notes then outstanding upon the exercise by the
Company of its redemption right under Section 3.01 of the
Indenture and (B) to pay the Convertible Notes Expenses.
Any funds remaining in the Convertible Notes Account after the
time that all the amounts described in the first sentence of
this Section 6(i)(ii) have been paid and none of the
Convertible Notes is outstanding may be released from such
account and applied for any general corporate purposes.
(j) Employee Benefits
Covenants. The Company agrees that, prior to
the Closing Date, it will take all actions set forth on
Exhibit G.
(k) No Solicitation.
(i) The Company shall, and shall cause its Subsidiaries and
its and their respective directors, executive officers,
employees, representatives and agents to, immediately cease any
discussions or negotiations with any parties that may be ongoing
with respect to a Company Transaction Proposal. After the
execution and delivery of this Agreement, the Company shall not,
nor shall it authorize or permit any of its Subsidiaries, any of
its or their respective directors, executive officers,
employees, representatives or agents to, directly or indirectly,
(A) solicit, initiate or knowingly encourage any inquiry
with respect to, or the making, submission or announcement of,
any proposal that constitutes or could reasonably be expected to
lead to a Company Transaction Proposal, (B) participate in
any negotiations regarding a Company Transaction Proposal with,
or furnish any nonpublic information relating to a Company
Transaction Proposal to, any Person that has made or, to the
Knowledge of the Company, is considering making a Company
Transaction Proposal, (C) engage in discussions regarding a
Company Transaction Proposal with any Person that has made or,
to the Knowledge of the Company, is considering making a Company
Transaction Proposal, except to notify such Person of the
existence of the provisions of this Section 6(k),
(D) approve, endorse or recommend any Company Transaction
Proposal, (E) enter into any letter of intent or agreement
in principle or any agreement providing for any Company
Transaction Proposal (except for Qualifying Confidentiality
Agreements permitted under Section 6(k)(ii)) or
(F) propose or agree to do any of the foregoing. The
Company agrees that any violations of the restrictions set forth
in Section 6(k) by any representative of the Company shall
be deemed to be a breach by the Company.
(ii) Notwithstanding Section 6(k)(i):
(A) If at any time prior to the Closing, the Company
receives a bona fide, written and unsolicited Company
Transaction Proposal and the Board determines in good faith,
after consultation with outside counsel and its independent
financial advisor, that such Company Transaction Proposal
constitutes a Superior Proposal or is reasonably likely to
result in a Superior Proposal, the Company may take the
following actions: (I) furnish nonpublic information to the
Person making such Company Transaction Proposal, if, and only
if, (x) prior to so furnishing such information, the
Company has (1) complied with the following sentence of
this
B-29
Section 6(k)(ii), and (2) received from such Person a
Qualifying Confidentiality Agreement, and (y) all such
information has previously been provided to the Investor or is
provided to the Investor prior to or substantially
contemporaneously with the time it is provided to the Person
making such Company Transaction Proposal or such Person’s
representative, and (II) engage in discussions or
negotiations with such Person with respect to the Company
Transaction Proposal. The Company promptly (and in any event
within 48 hours) shall advise the Investor orally and in
writing of the receipt of (X) any proposal that constitutes
or could reasonably be expected to lead to a Company Transaction
Proposal, including the identity of the Person(s) making such
proposal and the material terms and conditions of such proposal,
and providing copies of any document or correspondence
evidencing such proposal and (Y) any request for non-public
information relating to the Company or any of its Subsidiaries
other than requests for information not reasonably expected to
be related to a Company Transaction Proposal. The Company shall
use its best efforts to keep the Investor fully informed on a
current basis of the status of any such proposal (including any
material change to the terms and conditions thereof).
(B) If, on or after September 30, 2009, (x) any
of the Offer Conditions shall not have been satisfied (or, with
the prior written consent of the Investor, waived), the
Requisite Acceptances have not been received or any other
condition to the Investment has not been satisfied (and in the
Company’s reasonable judgment, there is material
uncertainty as to whether any such condition will be satisfied
by the Outside Date) and (y) the Company is not in material
breach of any of its material covenants and agreements contained
in this Agreement, then at any time following September 30,
2009 and prior to the later of (I) any scheduled expiration
date of the Offer on which all of the Offer Conditions have been
satisfied (or, with the prior written consent of the Investor,
waived) or the Requisite Acceptances have been received and
(II) the date on which all conditions to the Investment
have been satisfied (or in the Company’s reasonable
judgment, such conditions are reasonably certain to be satisfied
by the Outside Date), the Company may, and it may authorize or
permit any of its Subsidiaries, any of its or their respective
directors, executive officers, employees, representatives or
agents to, directly or indirectly, (1) propose a
Contingency Plan Proposal to any Person that, to the Knowledge
of the Company, is not considering making, and in the case of a
Person other than a holder of Convertible Notes or a Term Lender
has not since April 1, 2009 made, a Company Transaction
Proposal other than a Contingency Plan Proposal,
(2) participate in negotiations and engage in discussions
regarding a Contingency Plan Proposal with, or furnish nonpublic
information relating to a Contingency Plan Proposal to, any
Person that, to the Knowledge of the Company, is not considering
making, and in the case of a Person other than a holder of
Convertible Notes or a Term Lender has not since April 1,
2009 made, a Company Transaction Proposal other than a
Contingency Plan Proposal and (3) propose or agree to do
any of the foregoing, in each case set forth in clauses (1)
through (3), if, and only if, the Company complies with the
following two sentences of this Section 6(k)(ii)(B). Prior
to furnishing any nonpublic information in connection with a
Contingency Plan Proposal, (x) the Company shall have
received a Qualifying Confidentiality Agreement from the Person
to whom such nonpublic information is being furnished, and
(y) all such information shall have previously been
provided to the Investor or shall be provided to the Investor
substantially contemporaneously with the time it is provided to
the Person to whom such nonpublic information is being
furnished. The Company promptly (and in any event within
48 hours) shall advise the Investor orally and in writing
of any Contingency Plan Proposal, including the identity of the
Person(s) to whom such proposal is being made and the material
terms and conditions of such proposal, and provide copies of any
document or correspondence evidencing such proposal. The Company
shall use its best efforts to keep the Investor reasonably fully
informed on a current basis of the status of any such proposal
(including any material change to the terms and conditions
thereof).
(C) After the Filing Date the Company may take any action
otherwise restricted by such Section to the extent ordered by
the Bankruptcy Court (entered other than pursuant to a motion or
application by the Company or a Debtor Subsidiary).
(iii) At any time prior to the Closing, if the Company has
received a Superior Proposal (after giving effect to the terms
of any revised offer by the Investor pursuant to this
Section 6(k)(iii)), the Board may terminate this Agreement
to substantially contemporaneously enter into a definitive
agreement with respect to such Superior Proposal,
provided that the Board may not take such actions unless:
(A) the Company shall have provided prior written notice to
the Investor at least five (5) calendar days in advance
(the “Notice Period”), of its intention to take such
actions, which notice shall specify the terms and
B-30
conditions of any such Superior Proposal (including the identity
of the party making such Superior Proposal and copies of any
documents or correspondence evidencing such Superior Proposal)
and any material modifications to any of the foregoing,
(B) during the Notice Period, the Company shall, and shall
cause its independent financial advisor and outside counsel to,
negotiate with the Investor in good faith (to the extent the
Investor desires to negotiate) to make such adjustments in the
terms and conditions of this Agreement so that such Company
Transaction Proposal ceases to constitute a Superior
Proposal, and
(C) at or prior to the time of termination of this
Agreement, the Company shall have paid the Termination Fee
pursuant to Section 8(b).
In the event of any material revisions to the Superior Proposal,
the Company shall deliver a new written notice to the Investor
and shall comply with the requirements of this
Section 6(k)(iii) with respect to such new written notice,
except that the new Notice Period shall be two (2) calendar
days.
(iv) [Intentionally Ommitted.]
(v) Nothing contained in this Section 6(k)
shall prohibit the Company from complying with
Rule 14a-9,
14d-9 or
14e-2
promulgated under the Exchange Act.
(vi) As used in this Agreement, the terms:
(A) “Company Transaction Proposal” means
any inquiry, proposal or offer from any person or group of
persons other than the Investor or its Affiliates relating to
any (1) direct or indirect acquisition or purchase of a
business that constitutes 20% or more of the net revenues, net
income or assets of the Company and the Company’s
Subsidiaries, taken as a whole, or 20% or more of any class or
series of equity securities (or any indebtedness or other
obligation that is exchangeable for or convertible into any such
security, or any other right to acquire any such security,
contingent or otherwise) of the Company, any tender offer or
exchange offer or (2) any merger, reorganization,
restructuring, consolidation, share exchange, business
combination, recapitalization, liquidation, dissolution, equity
infusion or similar transaction involving the Company (or any
Subsidiary or Subsidiaries of the Company whose business
constitutes 20% or more of the net revenues, net income or
assets of the Company and its Subsidiaries, taken as a whole)
that, in the case of either clause (1) or clause (2), if
consummated would result in any person or group of persons
beneficially owning 20% or more of the voting rights of any
class or series of capital stock of the Company;
(B) “Contingency Plan Proposal” means any
proposal relating to any merger, restructuring, reorganization,
recapitalization, liquidation, dissolution or similar
transaction involving the Company or any Subsidiary that the
Board in good faith determines, does not constitute a Superior
Proposal or a Superior Lender Proposal and is not reasonably
likely to result in a Superior Proposal or a Superior Lender
Proposal, which determination is made after consultation with
outside counsel and its independent financial advisor and
assumes consummation of the Transactions contemplated by this
Agreement.
(C) “Superior Lender Proposal” means any
proposal involving any Person making more than a
de minimus investment or commitment (other than a
Person who is as of the date hereof a holder of Convertible
Notes or a Term Lender) relating to a restructuring,
reorganization, liquidation, dissolution or similar transaction
pursuant to which (x) the holders of the Convertible Notes
would receive consideration in respect of the Convertible Notes
that is of equal or greater total market value (measured per
$1,000 face amount of the Convertible Notes and at the time such
consideration is delivered) than such holders would receive
pursuant to the Offer, assuming that all of the outstanding
Convertible Notes participated in such transaction or in the
Offer, as applicable or (y) the Term Lenders would receive
cash in repayment of the outstanding borrowings under the Credit
Agreement in an amount equal to or greater than pursuant to the
Term Loan Refinancing, or would receive consideration in respect
of their rights under the Credit Agreement and other Credit
Documents (as defined in the Credit Agreement) that is of equal
or greater total market value and security than such Term
Lenders would receive pursuant to the Term Loan Refinancing and
that does not include any equity security;
B-31
(D) “Superior Proposal” means a bona fide
written proposal or offer from any person or group of persons
other than the Investor or its Affiliates not solicited in
violation of Section 6(k) relating to any direct or
indirect acquisition or purchase of a business that constitutes
50% or more of the net revenues, net income or assets of the
Company and the Company’s Subsidiaries, taken as a whole,
or 50% or more of any class or series of securities of the
Company, any tender offer or exchange offer that if consummated
would result in any person or group of persons beneficially
owning 50% or more of the voting rights of any class or series
of capital stock of the Company, any merger, reorganization,
consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution, equity infusion or
similar transaction involving the Company (or any Subsidiary or
Subsidiaries of the Company whose business constitutes 50% or
more of the net revenues, net income or assets of the Company
and its Subsidiaries, taken as a whole) or any restructuring or
reorganization of the Company, in each case, that the Board in
good faith determines, would, if consummated, result in a
transaction that is more favorable to the Company and its
existing stockholders than the transactions contemplated hereby
(after given effect to the terms of any revised offer by the
Investor pursuant to Section 6(k)(iii)), which
determination is made, (x) after receiving the advice of
its independent financial advisor, (y) after taking into
account the likelihood (and likely timing) of consummation of
such transaction on the terms set forth therein (as compared to
the terms herein) and (z) after taking into account all
relevant legal (with the advice of outside counsel), financial
(including the financing terms of any such proposal, the
additional transaction costs and the effect of any termination
fee, expenses or amounts payable hereunder), regulatory or other
aspects of such proposal and any other relevant factors
permitted by applicable Law; and
(E) “Qualifying Confidentiality Agreement”
means an executed agreement with provisions requiring any
Person receiving nonpublic information with respect to the
Company to keep such information confidential, which provisions
to keep such information confidential are no less restrictive to
such Person than the Confidentiality Agreement is to the
Investor, its Affiliates, and their respective personnel and
representatives, provided that no such confidentiality
agreement shall conflict with any rights of the Company or
obligations of the Company and its Subsidiaries under this
Agreement.
(l) Tax Matters. All transfer,
documentary, sales, use, stamp, registration, value-added and
other such Taxes (including any penalties and interest) imposed
on or as a result of the Investment, except for any such Taxes
that may be imposed by the Cayman Islands, shall be paid by the
Company when due, and the Company will, at its own expense, file
all necessary Tax returns and other documentation with respect
to all such Taxes and fees and, if required by law, the Investor
will, and will cause its Affiliates to, join in the execution of
any such Tax returns and other documentation.
(m) Convertible Notes Account. The
Company agrees that before the wire transfer into the
Convertible Notes Account described in Section 2(b)(i), the
balance of the Convertible Notes Account shall be zero dollars
($0.00), and that until the time that all of the amounts
described in Section 6(i)(ii) have been paid and none of
the Convertible Notes is outstanding, it shall not
(i) deposit or cause to be deposited any funds into the
Convertible Notes Account or (ii) withdraw or cause to be
withdrawn any funds from the Convertible Notes Account for any
purpose other than to pay any cash consideration due to the
holders of the Convertible Notes. The Company further agrees
that it shall not use any funds other than funds from the
Convertible Notes Account to pay the holders of the Convertible
Notes any of the amounts described in clause (A) of the
first sentence of Section 6(i)(ii) or to pay the
Convertible Notes Expenses, or, if the Restructuring is being
effectuated through the confirmation of the Prepackaged Plan in
the Prepackaged Plan Proceeding, to apply the proceeds of the
Investment in accordance with the Prepackaged Plan.
(n) [Intentionally omitted.]
(o) Insurance Policy. At the
Company’s option, the Company may purchase, prior to the
Closing Date, a six-year prepaid “tail” policy on
terms and conditions providing equivalent benefits to those
provided by the current policies of directors’ and
officers’ liability insurance and fiduciary liability
insurance maintained by the Company and its Subsidiaries with
respect to matters arising on or before the Closing Date,
covering without limitation the transactions contemplated
hereby; provided that the cost of such “tail”
policy shall not exceed three (3) times the current annual
premium paid by the Company for directors’ and
officers’ liability insurance and fiduciary liability
insurance. If such “tail” prepaid policy has been
obtained by the Company, the Investor shall cooperate with the
B-32
Company after the Closing to cause such policy to be maintained
in full force and effect, for its full term, and shall not
interfere with the Company’s honoring of all obligations
thereunder after the Closing.
(p) Prepackaged Plan.
(i) As promptly as practicable after the date hereof, the
Company shall, with the cooperation and assistance of the
Investor, prepare the Solicitation Materials and the Prepackaged
Plan Filings and provide drafts of such documents to the
Investor sufficiently in advance of the Prepackaged Plan Filing
such that the Investor has the opportunity to review and provide
comments to the Company and its Subsidiaries. The Investor will
provide all information regarding the Investor and its
Subsidiaries, officers and directors that is necessary to permit
the Company to prepare the Disclosure Statement. As soon as
possible after the Prepackaged Plan and Disclosure Statement and
such other documents are finalized, the Company shall mail such
documents to the Term Lenders and the holders of the Convertible
Notes. The solicitation period shall expire on a date no later
than the minimum period required by the Bankruptcy Code and the
rules under the Bankruptcy Code (the “Bankruptcy
Rules”) for solicitation of acceptances of a
Chapter 11 plan of reorganization. The Company shall use
its reasonable best efforts to receive acceptances of the
Prepackaged Plan from a sufficient number of creditors in a
sufficient number of classes of creditors to allow the
Prepackaged Plan to be confirmed under the Bankruptcy Code,
including confirmation through the cramdown provisions of
Section 1129(b) of the Bankruptcy Code with respect to
non-accepting creditor classes (the “Requisite
Acceptances”).
(ii) As promptly as practicable after the date on which the
Company mails the Solicitation Materials to its creditors, the
Company shall, with the cooperation and assistance of the
Investor, prepare (A) petitions for relief under the
Bankruptcy Code (the “Chapter 11 Petitions”) for
the Company and the Debtor Subsidiaries, (B) motions for
customary
first-day
orders and such orders as described in the Disclosure Statement
including but not limited to an order authorizing the Company to
pay to the Investor the fees and Transaction Expenses payable to
the Investor pursuant to Section 8 and Section 6(n)
hereof (the “Investment Motion” and, collectively, the
“First Day Orders”) and (C) notices to creditors
and other parties required by the Bankruptcy Code with respect
to the filing of the Chapter 11 Petitions, the hearing for
confirmation of the Prepackaged Plan and other matters (the
“Bankruptcy Notices” and, collectively with the
Solicitation Materials, Chapter 11 Petitions and First Day
Orders, the “Prepackaged Plan Filings”). Such
documents shall be prepared in sufficient time to provide the
Investor and its legal and financial advisors with adequate time
to review all such documents prior to the Filing Date and
provide comments thereon, provided that the Investment Motion
and order with respect thereto shall (i) approve the
payment of the Termination Fee and the reimbursement of
Transaction Expenses on the terms set forth in Section 8,
(ii) be consistent in all respect with this Agreement and
(iii) otherwise be acceptable to the Investor in its
reasonable discretion.
(iii) In the event that the Offer Conditions are not
satisfied or waived, with the prior written consent of the
Investor, by the Restructuring Deadline:
(A) On the day following the Restructuring Deadline, the
Company shall, and, subject to the terms of the Prepackaged
Plan, shall cause each of the Debtor Subsidiaries to,
(1) file the Chapter 11 Petitions in the Bankruptcy
Court and commence cases under the Bankruptcy Code (the
“Prepackaged Plan Proceeding”) in the Bankruptcy Court
(the date on which such Chapter 11 Petitions is filed, the
“Filing Date”), (B) file the motions relating to
the First Day Orders and seek to obtain entry of the First Day
Orders by the Bankruptcy Court and (C) schedule a hearing
(the “Confirmation Hearing”) in the Bankruptcy Court
on the earliest date possible to consider confirmation of the
Prepackaged Plan and approve the Disclosure Statement. As soon
as practicable after the Filing Date, the Company shall send the
Bankruptcy Notices to all Persons to whom such notices are
required to be sent under the Bankruptcy Code and such to other
Persons to whom it is ordered by the Bankruptcy Court to send
the Bankruptcy Notices.
(B) The Company shall use its reasonable best efforts to
obtain confirmation of the Prepackaged Plan by the Bankruptcy
Court at the Confirmation Hearing. Upon entry of an order
confirming the Prepackaged Plan (the “Confirmation
Order”), the Company shall use its reasonable best efforts
to obtain the dismissal of any and all appeals and motions for
reconsideration filed with respect to the Prepackaged Plan or
with respect to the Confirmation Order. The date on which the
Prepackaged Plan is confirmed is referred to herein as the
“Confirmation Date.”
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(C) The Company shall cause the Prepackaged Plan to become
effective and the distributions provided for under the
Prepackaged Plan (the “Distributions”) to be commenced
as promptly as possible on or following the day on which the
Confirmation Order is entered if no stay of the Confirmation
Order pending appeal has been entered and all other conditions
to effectiveness set forth in the Prepackaged Plan shall have
been satisfied or waived. The date on which the Prepackaged Plan
becomes effective is referred to herein as the “Effective
Date.”
(q) Company Approvals. At the
request of the Investor, the Board shall approve (i) the
Amended Credit Documents so long as (A) in the case of the
Term Loan Refinancing, the Amended Credit Agreement is in the
form of the Form of Amended Credit Agreement or (B) in the
case of the Alternative Term Loan Refinancing, the Amended
Credit Agreement is on terms and conditions that are (x) no
less favorable (as to each item (other than immaterial items)
and in the aggregate) to the Company and the Investor in its
capacity as a prospective shareholder of the Company than the
terms and conditions contemplated in the Form of Amended Credit
Agreement, as determined by the Investor in its sole discretion
(exercised in good faith) or (y) otherwise consented to by
the Company, such consent not to be unreasonably withheld;
(ii) the ABL Documents so long as the ABL Agreement is on
terms and conditions that are no less favorable (as to each item
and in the aggregate) to the Company and the Investor as a
prospective shareholder of the Company than the terms and
conditions summarized in the ABL Term Sheet, as determined by
the Investor in its sole discretion (exercised in good faith)
and are otherwise (1) consistent with and no less favorable
to the Company and the Investor in its capacity as a prospective
shareholder of the Company than the terms and conditions of
asset-based revolving credit financing transactions for
companies sponsored by CD&R, Inc., as determined by the
Investor in its reasonable discretion (exercised in good faith),
or (2) consented to by the Company, such consent not to be
unreasonably withheld and (iii) the Ancillary Refinancing
Agreements are consistent with and no less favorable (as to each
item (other than immaterial items) and in the aggregate) to the
Company and the Investor in its capacity as a prospective
shareholder of the Company than the terms and conditions of the
respective document or agreement for companies sponsored by
CD&R, Inc., as determined by the Investor in its reasonable
discretion (exercised in good faith), or consented to by the
Company, such consent not to be unreasonably withheld.
Section 7. Indemnity.
(a) In the case of clauses (i) and (ii) below,
from and after the Closing and, in the case of clause (iii)
below, from and after the date of this Agreement, subject to
this Section 7, the Company shall indemnify, defend and
hold harmless the Investor and its Affiliates and each of their
respective officers, directors, partners, employees and agents,
and each person who controls the Investor within the meaning of
the Exchange Act and the regulations thereunder (the
“Investor Indemnified Parties” and each, an
“Investor Indemnified Party”) from and against, and
pay or reimburse the Investor Indemnified Parties for, any and
all losses, liabilities, damages, and expenses (including
reasonable expenses of investigation, enforcement, and
collection and reasonable attorney’s and accountants’
fees and expenses in connection with any Litigation, any
incidental, indirect or consequential damages, losses,
liabilities or expenses, any amounts paid in settlement, and any
lost profits or diminution in value), whether or not involving a
Third Party Claim (collectively, “Losses”)
(i) arising from or relating to any inaccuracy in or breach
of any representation or warranty when made or deemed made by
the Company in or pursuant to this Agreement, (ii) arising
from or relating to the failure of the Company to perform any
covenant or agreement under this Agreement or (iii) arising
out of or resulting from the Company’s authorization and
approval and the Company’s
and/or the
Investor’s execution, delivery, performance or termination
of this Agreement or the transactions contemplated hereby (other
than any Losses attributable to acts, errors or omissions (other
than acts or omissions in conformity with this Agreement) on the
part of the Investor or any Investor Indemnified Parties and
other than any Losses attributable to the economic risks of the
Investor’s investment decision)), in the event (in the case
of this clause (iii) only) that the Investor or Investor
Indemnified Parties are subject to, named in or made party to
any Litigation by any Governmental Entity, stockholder of the
Company or any other Person (other than the Company).
(b) From and after the Closing, and subject to this
Section 7, the Investor shall indemnify, defend and hold
harmless the Company and its Affiliates and each of their
respective officers, directors, partners, employees and agents
(the “Company Indemnified Parties” and each, an
“Company Indemnified Party”) from and against, and pay
or reimburse the Company Indemnified Parties for, any and all
Losses arising from or relating to (i) any inaccuracy
B-34
in or breach of any representation or warranty when made or
deemed made by the Investor in or pursuant to this Agreement, or
(ii) the failure of the Investor to perform any covenant or
agreement under this Agreement.
(c) An Investor Indemnified Party or Company Indemnified
Party (each, an “Indemnified Party”) seeking
indemnification pursuant to this Section 7 in respect of,
arising out of or involving any claim or demand asserted by a
third party (a “Third Party Claim”) against such
Indemnified Party entitled to indemnification under this
Agreement shall give written notice to the Company or the
Investor, as applicable (each, as applicable, an
“Indemnifying Party”), as promptly as practicable
after receipt by such Indemnified Party of written notice of
such third party’s Litigation in the case of a Litigation,
or as promptly as practicable after the Indemnified Party has
reasonably determined that the pending or threatened claim has
given or would reasonably be expected to give rise to a right of
indemnification hereunder in the case of any pending or
threatened claim; provided that the failure of any
Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under this
Section 7 except to the extent such Indemnifying Party is
actually prejudiced by such failure to give notice. Such notice
shall describe in reasonable detail such Third Party Claim. The
Indemnified Party shall permit the Indemnifying Party (at the
expense of the Indemnifying Party and so long as the
Indemnifying Party acknowledges in writing its obligation to
indemnify the Indemnified Party for Losses related to such Third
Party Claim) to assume the defense of such Third Party Claim;
provided that counsel for the Indemnifying Party who shall
conduct the defense of such Third Party Claim shall be
reasonably satisfactory to the Indemnified Party, and the
Indemnified Party may participate in such defense at such
Indemnified Party’s expense. If the Indemnifying Party does
not timely assume the defense of such Third Party Claim
following notice thereof, the Indemnified Party shall be
entitled to assume and control such defense and to settle or
agree to pay in full such Third Party Claim without the consent
of the Indemnifying Party without prejudice to the ability of
the Indemnified Party to enforce its claim for indemnification
against the Indemnifying Party hereunder. Except with the prior
written consent of the Indemnified Party (which shall not be
unreasonably withheld), the Indemnifying Party, in the defense
of any such Third Party Claim, shall not consent to a
settlement, compromise or discharge of, or the entry of any
judgment arising from, such Third Party Claim, unless such
settlement, compromise or discharge does not involve any finding
or admission of any violation of Law or admission of any
wrongdoing by the Indemnified Party and the Indemnifying Party
shall (i) pay or cause to be paid all amounts arising out
of such settlement or judgment concurrently with the
effectiveness of such settlement, (ii) not encumber any of
the assets of any Indemnified Party or agree to any restriction
or condition that would apply to or adversely affect and
Indemnified Party and (iii) obtain, as a condition of any
settlement or other resolution, a complete and unconditional
release of each Indemnified Party from any and all liability in
respect of such Third Party Claim. If the Indemnified Party in
good faith determines that the conduct of the defense or any
proposed settlement of any Third Party Claim would reasonably be
expected to affect adversely the Indemnified Party’s Tax
liability, or that the Indemnified Party may have available to
it one or more defenses or counterclaims that are inconsistent
with one or more of those that may be available to the Company
in respect of such Third Party Claim, the Indemnified Party
shall have the right at all times to take over and control the
defense, settlement, negotiation or litigation relating to any
such Third Party Claim at the sole cost of the Indemnifying
Party; provided that if the Indemnified Party does so
take over and control, the Indemnified Party shall not settle
such Third Party Claim without the written consent of the
Indemnifying Party, such consent not to be unreasonably withheld
or delayed. In any event, the Indemnifying Party and the
Indemnified Party shall cooperate in the defense of any Third
Party Claim subject to this Section 7 and the records of
each shall be reasonably available to the other with respect to
such defense.
(d) Notwithstanding anything to the contrary contained
herein, the Company shall be required to indemnify and hold
harmless the Investor Indemnified Parties pursuant to
Section 7(a) with respect to Losses only:
(i) in the event that the aggregate amount of Losses in
connection with or related to any individual claim (or any
series of related claims (including any class action)) exceeds
$50,000 (the “De Minimis Amount”), which amount is
intended to be a qualifying claim threshold, and shall not
operate as a deductible;
(ii) in the event that the aggregate amount of Losses
(other than Losses excluded by the immediately preceding
clause (i) because they do not meet the De Minimis Amount)
exceeds $5,000,000 (the “Threshold Amount”), following
which time all Losses above the Threshold Amount shall be
subject to indemnification (other than Losses excluded by the
immediately preceding clause (i) because they do not meet
the De Minimis Amount); and
B-35
(iii) up to (and not exceeding) the point at which the
aggregate amount of the indemnification payments actually made
by the Company equals $75,000,000 (the “Cap”);
provided, however, that (x) Losses payable in
connection with clause (i) of Section 7(a) with
respect to an inaccuracy in or breach of any Fundamental
Representation or payable in connection with clauses (ii)
and (iii) of Section 7(a) shall be payable without
regard to the Cap; provided that Losses payable in
connection with clause (i) of Section 7(a) with
respect to an inaccuracy in or breach of any Fundamental
Representation and Losses payable in connection with
clauses (ii) of Section 7(a) shall be taken into
account in determining whether the Cap has been reached, and
(y) Losses payable in connection with clause (iii) of
Section 7(a) shall be payable without regard to whether the
Threshold Amount has been reached and shall not be taken into
account in determining, with respect to other Losses, whether
the Threshold Amount has been reached. Notwithstanding anything
to the contrary contained herein, the Company’s aggregate
obligations to make indemnification payments pursuant to
Section 7(a), and to pay any Termination Fee or Deal Fee or
Transaction Expenses shall be limited to and shall not exceed
the Aggregate Purchase Price, and in no event shall the Company
be required to pay any amounts that would cause the total amount
paid by the Company in the aggregate with respect to all such
matters in the aggregate to exceed the Aggregate Purchase Price.
(e) Notwithstanding anything to the contrary contained
herein, the Investor shall be required to indemnify and hold
harmless the Company Indemnified Parties pursuant to
Section 7(b) with respect to Losses only:
(i) in the event that the aggregate amount of Losses in
connection with or related to any individual claim (or any
series of related claims (including any class action)) exceeds
the De Minimis Amount;
(ii) in the event that the aggregate amount of Losses
(other than Losses excluded by the immediately preceding
clause (i) because they do not meet the De Minimis Amount)
exceeds the Threshold Amount, following which time all Losses
above the Threshold Amount shall be subject to indemnification
(other than Losses excluded by the immediately preceding
clause (i) because they do not meet the De Minimis
Amount); and
(iii) up to (and not exceeding) the point at which the
aggregate amount of the indemnification payments actually made
by the Investor equals the Cap;
provided, however, Losses payable in connection
with clause (i) of Section 7(b) with respect to an
inaccuracy in or breach of any Fundamental Representation or
payable in connection with clause (ii) of Section 7(b)
shall be payable without regard to the Cap; provided that
such Losses shall be taken into account in determining whether
the Cap has been reached. Notwithstanding anything to the
contrary contained herein, the Investor’s aggregate
obligations to make indemnification payments pursuant to
Section 7(b) shall be limited to and shall not exceed the
Aggregate Purchase Price.
(f) Any Indemnified Party seeking indemnification hereunder
shall give to the Indemnifying Party a notice (a “Claim
Notice”) describing in reasonable detail, to the extent
known by the Indemnified Party at the time, the facts giving
rise to the claim for indemnification hereunder and shall
include in such Claim Notice (if then known) the amount or the
method of computation of the amount of such claim, and a
reference to the provision of this Agreement upon which such
claim is based; provided, however, that a Claim
Notice in respect of any action at law or suit in equity by or
against a third Person as to which indemnification will be
sought shall be given no later than promptly after the action or
suit is commenced; provided, further, that to the
extent an Indemnified Party first pursues recoveries from third
parties with respect to a claim for indemnification, such claim
shall be deemed timely and validly given pursuant to this
Section 7(f), so long as a Claim Notice stating only that
the Indemnified Party is currently seeking recoveries from third
parties shall be given within the time periods required by this
Section 7.
(g) The obligations of the Indemnifying Party under this
Section 7 shall survive the transfer, redemption or
conversion of the Series B Preferred Stock issued pursuant
to this Agreement or the Series B Preferred Stock CoD (and
the transfer of the Common Stock issued upon conversion of such
Series B Preferred Stock) or the closing or termination of
this Agreement and any other Transaction Document. The
agreements contained in this Section 7 shall be in addition
to any other rights of the Indemnified Party against the
Indemnifying Party or others, at common law or otherwise,
including as set forth in Section 23 hereof.
B-36
(h) Any Indemnified Party who brings an action against an
Indemnifying Party to enforce an indemnity set forth in
subparagraph Section 7(a) or Section 7(b) and who is
successful in such action shall also be entitled to recover,
from the Indemnifying Party, the reasonable costs and
attorneys’ fees actually incurred in prosecuting such
action.
Section 8. Termination.
(a) This Agreement may be terminated at any time prior to
the Closing:
(i) by either the Investor or the Company if (x) by
November 12, 2009 (the “Outside Date”)
(A) the Closing with respect to the Offer shall not have
occurred and (B) the Requisite Acceptances have not been
received or (y) the Prepackaged Plan Proceeding has been
commenced pursuant to Section 6(p)(iii) and the Effective
Date has not occurred by a date that is no later than four
(4) weeks and 10 days after the entry of the
Confirmation Order; provided, that the party seeking to
terminate this Agreement pursuant to this Section 8(a)(i)
shall not have breached in any material respect its obligations
under this Agreement in any manner that shall have been a
proximate cause of the failure to consummate the Investment on
or before such date;
(ii) by either the Investor or the Company in the event
that any Governmental Entity shall have issued an Order or taken
any other action restraining, enjoining or otherwise prohibiting
the Closing or prohibiting or restricting the Investor or its
Affiliates from owning, and exercising in full all exchange,
conversion and voting rights of the Series B Preferred
Stock contemplated to be exercisable by the Investor or
prohibiting or restricting the Investor from exercising its
consent rights pursuant to Article VI of the Stockholders
Agreement and such Order or other action shall have become final
and nonappealable; provided that the party seeking to
terminate this Agreement pursuant to this Section 8(a)(ii)
shall not have breached in any material respect its obligations
under this Agreement in any manner that shall have been a
proximate cause of such Order or action;
(iii) by the Investor if (A) the Company shall have
terminated the Offer or (B) the Offer shall have expired in
accordance with the terms of this Agreement without the Company
having accepted for purchase the Convertible Notes pursuant to
the Offer, unless in either case the Prepackaged Plan shall have
been commenced by the day following the Restructuring Deadline
or if the Offer shall have expired on or after the Outside Date
and the Offer Conditions shall not have been satisfied and the
Requisite Acceptances shall not have been received;
(iv) by the Investor, and in the case of clause (I), the
Company, if:
(A) the Board shall have (v) approved or recommended
to the stockholders of the Company a Superior Proposal,
(w) formally withdrawn its support for the Offer,
(x) made a recommendation against the Offer or the
Prepackaged Plan, (y) recommended another Company
Transaction Proposal or (z) resolved to effect any of the
foregoing;
(B) any of the Company and its Subsidiaries shall have
commenced any Proceeding other than the Prepackaged Plan
Proceeding;
(C) there shall have been commenced any Proceeding against
any of the Company and its Subsidiaries other than the
Prepackaged Plan Proceeding and such Proceeding has not been
dismissed within 30 days of such commencement;
(D) any of the Company and its Subsidiaries shall become
unable, admit in writing its inability or fail generally to pay
its debts as they become due, in each case, assuming the
Transactions contemplated hereby are consummated;
(E) any of the Company and its Subsidiaries shall make a
general assignment for the benefit of its creditors;
(F) the Company fails to comply with
Section 6(p)(iii)(A) hereof;
(G) at any time after twenty-five days after the filing of
the Prepackaged Plan Proceeding if the Bankruptcy Court has not
entered the order approving the Investment Fee Motion on or
prior to such date;
B-37
(H) at any time after eight (8) weeks after the filing
of the Prepackaged Plan Proceeding if the Bankruptcy Court has
not entered the Confirmation Order with respect to the
Prepackaged Plan on or prior to such date;
(I) the Bankruptcy Court shall have entered an order
denying confirmation of the Prepackaged Plan or the Confirmation
Order is vacated or reversed and does not become a Final Order
within four (4) weeks and ten (10) days after the
entry of the Confirmation Order;
(J) upon the dismissal of the Prepackaged Plan Proceeding
or conversion of the Prepackaged Plan Proceeding from a case
under Chapter 11 to one under Chapter 7 of the
Bankruptcy Code, or the Company files a motion or other pleading
with the Bankruptcy Court seeking the dismissal or conversion of
any of the Prepackaged Plan Proceeding;
(K) if at any time the Company or any of its Subsidiaries
file a plan of reorganization or liquidation other than the
Prepackaged Plan and the Disclosure Statement; or
(L) at any time, if the Bankruptcy Court (x) grants
relief that is materially inconsistent with this Agreement or
the Prepackaged Plan in any respect or (y) enters an order
confirming any plan of reorganization other than the Prepackaged
Plan.
(v) by the Company, in accordance with, and subject to the
terms and conditions of Section 6(k)(iii) or if the
Bankruptcy Court has ordered the Company to terminate this
Agreement in order to accept any Qualifying Transaction; or
(vi) by the mutual written consent of the Investor and the
Company.
(b) In the event that (i) this Agreement is terminated
(x) by the Company pursuant to Section 8(a)(v) or
(y) by the Investor pursuant to Section 8(a)(iv)(A) or
(ii) (A) this Agreement (1) is terminated pursuant to
Section 8(a)(iv) (other than pursuant to
Section 8(a)(iv)(A)) or pursuant to Section 8(a)(iii)
and at the time of such termination the Investor was not in
material breach of any of its material covenants and agreements
contained in this Agreement or its representations and
warranties contained in this Agreement or (2) is terminated
by the Investor pursuant to Section 8(a)(i) and at the time
of such termination the conditions set forth in
Section 3(a)(i) and Section 3(a)(ii) shall have been
satisfied and the Investor was not in material breach of any of
its material covenants and agreements contained in this
Agreement or its representations and warranties contained in
this Agreement and (B) the Company enters into a definitive
agreement with respect to, or consummates, a transaction
contemplated by any Qualified Transaction within twelve months
of the date this Agreement is terminated, then the Company shall
pay the Termination Fee and the Company shall reimburse the
Investor for all of the Transaction Expenses (net of any amounts
previously paid or reimbursed pursuant to Section 8(c) and
net of the Pre-Signing Expenses that have been previously paid
or reimbursed by the Company), to the accounts specified on
Schedule 8(b) hereto, with such Termination Fee being paid
(I) at or prior to the time of termination in the case of a
termination pursuant to Section 8(a)(v) or (II) on the
earlier of entering into a definitive agreement with respect to
or consummating a transaction contemplated by a Qualifying
Transaction in the case of a termination for any of the reasons
specified in clause (ii) of this paragraph and, in each
case, such Transaction Expenses paid not later than two
(2) Business Days after submission of reasonable supporting
documentation thereof. Anything to the contrary notwithstanding,
in no event shall the Company be required to pay the Termination
Fee on more than one occasion.
(c) If (1) this Agreement is terminated in accordance
with Section 8(a) (other than 8(a)(vi)) for any reason
other than solely as a result of the failure of the parties
hereto to obtain the clearance or approval under the HSR Act and
(2) the Investor has not taken any action, or failed to
take any action, in breach of this Agreement which proximately
caused the event, condition or passage of time giving rise to
the termination of this Agreement or the failure of the Closing
to occur, then the Company shall reimburse the Investor for all
of the Transaction Expenses (net of any amounts previously paid
or reimbursed pursuant to Section 8(c) and net of the
Pre-Signing Expenses that have been previously paid or
reimbursed by the Company) not later than two (2) Business
Days after submission of reasonable supporting documentation
thereof.
(d) Each of the parties hereto acknowledges that
(i) the agreements contained in Section 8(b) and
Section 8(c) are an integral part of the transactions
contemplated by this Agreement; (ii) the damages resulting
from termination
B-38
of this Agreement under circumstances where a Termination Fee is
payable are uncertain and incapable of accurate calculation and
therefore, the amounts payable pursuant to Section 8(b) are
not a penalty, but rather are liquidated damages in a reasonable
amount that will compensate the Investor for the efforts and
resources expended and opportunities foregone while negotiating
this Agreement and in reliance on this Agreement and on the
expectation of the consummation of the transactions contemplated
hereby, which amount would otherwise be impossible to calculate
with precision; and (iii) without the agreements contained
in Section 8(b) and Section 8(c), the Investor would
not have entered into this Agreement. Accordingly, if the
Company fails to promptly pay any amount due pursuant to
Section 8(b) or Section 8(c) and, in order to obtain
such payment, the Investor commences a suit that results in a
judgment against the Company for the amount set forth in
Section 8(b) or Section 8(c) or any portion thereof,
the Company shall pay to the Investor costs and expenses
(including attorneys’ fees) incurred by the Investor and
its Affiliates in connection with such suit, together with
interest on the amount of such amount or portion thereof at the
prime rate of Citibank N.A. in effect on the date such payment
was required to be made through the date of payment.”
Following payment of the Termination Fee
and/or
Transaction Expenses, if, as and when provided for in
Section 8(b) or Section 8(c), the Company shall have
no further liability to Investor of any nature or for any reason
under this Agreement other than pursuant to Section 7(iii)
and other than liability arising out of or related to the
willful breach of this Agreement on the part of the Company.
(e) In the event of termination of this Agreement as
provided in Section 8(a), this Agreement shall forthwith
become void and there shall be no liability on the part of
either party hereto except that nothing herein shall relieve
either party from liability for any breach of any covenant of
this Agreement and except that the provisions of this
Section 8 and Sections 7, 9, 10, 11, 12, 13, 14, 15,
16, 17, 18, 19, 22, 23, 24, 25 and 26 will survive any
termination of this Agreement.
Section 9. Certain
Definitions. For purposes of this Agreement,
the following terms will have the following meanings when used
herein with initial capital letters:
(1) “2008
10-K”
has the meaning set forth in Section 4.
(2) “ABL Agreement” has the meaning set
forth in Section 6(f)(iii).
(3) “ABL Documents” has the meaning set
forth in Section 6(f)(iii).
(4) “ABL Financing” has the meaning set
forth in the Section 6(f)(i).
(5) “ABL Lenders” has the meaning set
forth in the Recitals.
(6) “ABL Term Sheet” has the meaning set
forth in the Recitals.
(7) “Affiliate” means, with respect to any
Person, any other Person that directly, or through one or more
intermediaries, controls or is controlled by or is under common
control with such Person. For purposes of this Agreement,
“control” shall mean, as to any Person, the power to
direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities,
by contract or otherwise (and the terms “controlled
by” and “under common control with” shall have
correlative meanings).
(8) “Aggregate Purchase Price” has the
meaning set forth in Section 1.
(9) “Agreement” has the meaning set forth
in the Preamble.
(10) “Alternative ABL Financing” has the
meaning set forth in Section 6(f)(ii).
(11) “Alternative Term Loan Refinancing”
has the meaning set forth in Section 6(g)(iii).
(12) “Amended Credit Agreement” has the
meaning set forth in Section 6(g)(iv).
(13) “Amended Credit Documents” has the
meaning set forth in Section 6(g)(iv).
(14) “Ancillary Refinancing Documents”
means the ABL Documents (other than the ABL Agreement), the
Amended Credit Documents (other than the Amended Credit
Agreement) and any and all other agreements, instruments and
documents (other than the ABL Agreement and the Amended Credit
Agreement) entered into or delivered pursuant to or in
connection with any of the transactions contemplated by the ABL
B-39
Agreement and the Amended Credit Agreement, including but not
limited to any intercreditor agreement between the agents
and/or the
lenders party to the ABL Agreement and the Amended Credit
Agreement.
(15) “Austrian Act” has the meaning set
forth in Section 3(a)(i).
(16) “Authorized Stock Certificate
Amendment” means the amendment set forth in
paragraph 1 of Exhibit A of the Stockholders Agreement.
(17) “Authorized Stock Stockholder
Approval” means the affirmative vote (in person or in
proxy) by the holders of at least a majority in voting power of
the outstanding shares of Common Stock voting as a separate
class, at the Stockholders Meeting (as defined in the
Stockholders Agreement) or any adjournment or postponement of
the Stockholders Meeting, in favor of Authorized Stock
Certificate Amendment.
(18) “Bankruptcy Code” means Title 11
of the United States Code.
(19) “Bankruptcy Court” has the meaning
set forth in the Recitals.
(20) “Bankruptcy Exceptions” has the
meaning set forth in Section 4(d)(iii).
(21) “Bankruptcy Notices” has the meaning
set forth in Section 6(p)(i).
(22) “Bankruptcy Rules” has the meaning
set forth in Section 6(p)(i).
(23) “Beneficially Own” shall mean, with
respect to any securities, having “beneficial
ownership” of such securities for purposes of
Rule 13d-3
or 13d-5
under the Exchange Act as in effect on the date hereof.
(24) “Board” has the meaning set forth in
the Recitals.
(25) “Business” means the business and
operations of the Company and its Subsidiaries as conducted as
of the date hereof and at any time between the date hereof and
the Closing.
(26) “Business Day” means any day other
than a Saturday, Sunday or a legal holiday in New York City or
Houston, or any other day on which commercial banks in New York
City or Houston are authorized or required by Law or government
decree to close.
(27) “By-Laws” has the meaning set forth
in Section 4(a)(iii).
(28) “Cap” has the meaning set forth in
Section 7(d)(iii).
(29) “Capital Stock” has the meaning set
forth in Section 4(b).
(30) “Capitalization Date” has the meaning
set forth in Section 4(b).
(31)
“CD&R Inc.” means Xxxxxxx,
Dubilier & Rice, Inc., a
Delaware corporation and
investment manager with respect to the Investor, and its
successors and assigns.
(32) “Certificate of Incorporation” means
the Company’s Restated Certificate of Incorporation, as
amended from time to time.
(33) “Chapter 11 Petitions” has the
meaning set forth in Section 6(p)(ii).
(34) “Claim Notice” has the meaning set
forth in Section 7(f).
(35) “Closing” means (a) if the
Restructuring is not being effectuated through the confirmation
of the Prepackaged Plan in the Prepackaged Plan Proceeding, the
consummation of the transactions contemplated hereby but
excluding the transactions contemplated by the Prepackaged Plan
and (b) if the Restructuring is being effectuated through
the confirmation of the Prepackaged Plan in the Prepackaged Plan
Proceeding, the consummation of the transactions contemplated by
the Prepackaged Plan.
(36) “Closing Date” means the date on
which the Closing occurs, which, if the Restructuring is being
effectuated through the confirmation of the Prepackaged Plan in
the Prepackaged Plan Proceeding, shall be the Effective Date.
(37) “Code” means the Internal Revenue
Code of 1986, as amended.
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(38) “Commission” has the meaning set
forth in Section 4.
(39) “Common Stock” has the meaning set
forth in Section 4(b).
(40) “Company” has means NCI Building
Systems, Inc. and if the Restructuring is being effectuated
through the confirmation of the Prepackaged Plan in the
Prepackaged Plan Proceeding, during the pendency of the
Prepackaged Plan Proceeding, NCI Building Systems, Inc., as
debtor and
debtor-in-possession,
and from and after the Closing, the Reorganized Debtor (as
defined in the Prepackaged Plan).
(41) “Company Benefit Plan” means each
“employee benefit plan” within the meaning of
Section 3(3) of ERISA, including multiemployer plans within
the meaning of Section 3(37) of ERISA, and each other stock
purchase, stock option, restricted stock, severance, retention,
employment, consulting, advisory,
change-of-control,
termination, supplemental retirement benefit, collective
bargaining, bonus, incentive, deferred compensation, employee
loan, fringe benefit and other benefit plan, agreement, program,
policy, commitment or other arrangement, whether or not subject
to ERISA (including any related funding mechanism now in effect
or required in the future), whether formal or informal, oral or
written, sponsored or maintained by the Company or any of its
Subsidiaries or to which the Company or any of its Subsidiaries
contributes or is obligated to contribute or could have any
liability, in each case under which any past or present
director, officer, employee, consultant or independent
contractor of the Company or any of its Subsidiaries, or of any
Person acquired by the Company or any of such Person’s
Subsidiaries, has any present or future right to benefits.
(42) “Company Indemnified Party” and
“Company Indemnified Parties” have the meanings
set forth in Section 7(b).
(43) “Company Preferred Stock” has the
meaning set forth in Section 4(b).
(44) “Company Reports” has the meaning set
forth in Section 4(e)(iii).
(45) “Company Transaction Proposal” has
the meaning set forth in Section 6(k)(vi)(A).
(46) “Confidentiality Agreement” has the
meaning set forth in Section 22.
(47) “Confirmation Date” has the meaning
set forth in Section 6(p)(iii)(B).
(48) “Confirmation Hearing” has the
meaning set forth in Section 6(p)(iii)(A).
(49) “Confirmation Order” has the meaning
set forth in Section 6(p)(iii)(B).
(50) “Contingency Plan Proposal” has the
meaning set forth in Section 6(k)(vi)(B).
(51) “Contract” means any agreement,
arrangement, commitment, plan or other instrument or obligation.
(52) “Convertible Notes” has the meaning
set forth in the Recitals.
(53) “Convertible Notes Account” means a
separate account of the Company at a Qualified Bank set forth on
Section 2(b)(i) of the Disclosure Letter or such other
segregated account of the Company at a Qualified Bank designated
in writing to the Investor not less than two (2) Business
Days prior to the Closing or such escrow account or other
separate account of the Company required by the lenders party to
the Amended Credit Agreement which meets the requirements
specified by such lenders with respect to such account.
(54) “Convertible Notes Expenses” has the
meaning set forth in the Section 2(b)(i).
(55) “Convertible Notes Portion” has the
meaning set forth in the Section 2(b)(i).
(56) “Credit Agreement” has the meaning
set forth in the Recitals.
(57) “Credit Documents” has the meaning
set forth in the Credit Agreement.
(58) “De Minimis Amount” has the meaning
set forth in Section 7(d)(i).
(59) “Deal Fee” means an amount equal to
$8,250,000.
B-41
(60) “Debtor Subsidiaries” means any
Subsidiaries of the Company that are debtors under the
Prepackaged Plan.
(61) “Default” has the meaning set forth
in Section 4(q)(ii).
(62) “Disbursing Agent” has the meaning
set forth in Section 2(i).
(63) “Disclosure Letter” has the meaning
set forth in Section 4.
(64) “Disclosure Statement” has the
meaning set forth in the Recitals.
(65) “Distributions” has the meaning set
forth in Section 6(p)(iii)(C).
(66) “Effective Date” has the meaning set
forth in Section 6(p)(iii)(C).
(67) “Environmental Law” means any Law
regulating or relating to the protection of human health,
safety, natural resources or the environment.
(68) “ERISA” means the Employment
Retirement Income Security Act of 1974, as amended.
(69) “Exchange Act” has the meaning set
forth in Section 4.
(70) “Fairness Opinion” has the meaning
set forth in Section 4(z).
(71) “Filing Date” has the meaning set
forth in Section 6(p)(iii)(A).
(72) “Final Order” means an order or
judgment of the Bankruptcy Court which has not been reversed,
stayed or modified or amended in a manner inconsistent with this
Agreement.
(73) “First Day Orders” has the meaning
set forth in Section 6(p)(ii).
(74) “Form of Amended Credit Agreement”
means the form attached hereto as Exhibit A, with such
additions, modifications, alterations, corrections or other
changes as the Investor deems advisable in its sole discretion
(exercised in good faith) (i) to add, provide or complete
any schedule, annex, exhibit, numerical amount or other
information that is omitted, missing or incomplete, or to
modify, alter, correct or change (including without limitation
by deleting or replacing) any wording that is in brackets,
(ii) to cure any ambiguity, mistake, omission or defect,
(iii) to cure any inconsistency, including with any other
provision of the same agreement or of the ABL Agreement or any
other Transaction Document, (iv) to address a material risk
that (x) the Company will be unable to comply with the
terms or conditions of the agreement or (y) by complying
with the terms and conditions of the agreement the Company will
be subject to a material risk of not complying with the terms
and conditions of the ABL Agreement or any other Transaction
Document, (v) to effect the intent evidenced by the form
attached hereto as Exhibit A or (vi) to avoid adverse
tax consequences to the Company or any of its Subsidiaries, in
each case under clauses (i) through (vi) above, as
determined by the Investor in its sole discretion (exercised in
good faith).
(75) “Form S-4”
has the meaning set forth in Section 4(y).
(76) “Fundamental Representations” has the
meaning set forth in Section 10.
(77) “GAAP” has the meaning set forth in
Section 4(e)(i).
(78) “Governmental Entity” means any
international, national, federal, state, provincial or local
governmental, regulatory or administrative authority, agency,
commission, court, tribunal, arbitral body, self regulated
entity or similar body, whether domestic or foreign.
(79) “Hazardous Substances” means any
substance that: (i) is or contains asbestos,
polychlorinated biphenyls, petroleum or petroleum products,
(ii) requires investigation or remedial action pursuant to
any Environmental Law, or is defined, listed or identified as a
“hazardous waste,” “hazardous substance,”
“toxic substance” or words of similar import
thereunder, or (iii) is regulated under any Environmental
Law.
(80) “HSR Act” has the meaning set forth
in Section 3(a)(i).
B-42
(81) “Indebtedness” means, with respect to
any Person, without duplication, (i) all obligations of
such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or similar
instruments, (iii) all obligations of such Person upon
which interest charges are customarily paid (other than trade
payables incurred in the ordinary course of business consistent
with past practices), (iv) all obligations of such Person
under conditional sale or other title retention agreements
relating to any property purchased by such Person, (v) all
obligations of such Person incurred or assumed as the deferred
purchase price of property or services (excluding obligations of
such Person to creditors for raw materials, inventory, services
and supplies incurred in the ordinary course of business
consistent with past practices), (vi) all lease obligations
of such Person capitalized on the books and records of such
Person, (vii) all obligations of others secured by a Lien
on property or assets owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed,
(viii) all obligations of such Person under interest rate,
currency or commodity derivatives or hedging transactions,
(ix) all letters of credit or performance bonds issued for
the account of such Person (excluding (a) letters of credit
issued for the benefit of suppliers to support accounts payable
to suppliers incurred in the ordinary course of business
consistent with past practices, (b) standby letters of
credit relating to workers’ compensation insurance and
(c) surety bonds and customs bonds) and (x) all
guaranties and arrangements having the economic effect of a
guaranty by such Person of any Indebtedness of any other Person.
For purposes of Section 4(q)(i), “Indebtedness”
shall be limited to those obligations, guaranties and
arrangements described in (A) clauses (i), (ii), (v),
(vii), (viii), (ix) and (x) of the foregoing
definition, in each case, in excess of amounts agreed between
the parties as of the date of this Agreement and
(B) clauses (iii), (iv) and (vi) of the foregoing
definition, in each case, in excess of amounts agreed between
the parties as of the date of this Agreement.
(82) “Indemnification Agreement” means an
Indemnification Agreement substantially in the form attached
hereto as Exhibit D.
(83) “Indemnified Party” has the meaning
set forth in Section 7(c).
(84) “Indenture” has the meaning set forth
in the Recitals.
(85) “Initial Expiration Date” means 12:00
midnight, New York City time, on the 20th business day (as
defined in
Rule 14d-1
under the Exchange Act) following the commencement of the Offer;
provided, that if the Offer Condition set forth in
clause 4 under the caption “— Conditions to
the Offer” set forth in Annex A hereto has not been
satisfied by 12:00 midnight, New York City time, on the
20th business day (as defined in
Rule 14d-1
under the Exchange Act) following the commencement of the Offer,
the Company shall, subject to the provisions of
Section 8(a), extend the Offer until the Offer Condition
set forth in clause 3 under the caption
“— Conditions to the Offer” set forth in
Annex A hereto has been satisfied and the “Initial
Expiration Date” shall mean the first scheduled expiration
date following the date on which such Offer Condition shall have
been satisfied.
(86) “Intellectual Property” means all
trademarks, service marks, trade names, trade dress, including
all goodwill associated with the foregoing, domain names,
copyrights, Software and Internet websites, and registrations
and applications to register or renew the registration of any of
the foregoing, patents and patent applications, Trade Secrets
and all similar intellectual property rights.
(87) “Investment” has the meaning set
forth in the Recitals.
(88) “Investor” has the meaning set forth
in the Preamble.
(89) “Investor Indemnified Party” and
“Investor Indemnified Parties” have the meanings set
forth in Section 7(a).
(90) “Knowledge” means (i) in the
case of the Company, the actual knowledge, after due inquiry, of
the Company’s the President, Chief Executive Officer, Chief
Operating Officer, Chief Financial Officer or General Counsel
and (ii) in the case of the Investor, the actual knowledge,
after due inquiry, of any principal or partner of the Investor.
B-43
(91) “Laws” mean federal, state, local or
foreign Law, statute, ordinance, rule, regulation, writ,
judgment, order, injunction, decree, agency requirement, license
or permit of any Governmental Entity.
(92) “Leased Real Property” has the
meaning set forth in Section 4(n)(ii).
(93) “Leases” has the meaning set forth in
Section 4(n)(ii).
(94) “Liability Cap” has the meaning set
forth in Section 16(a).
(95) “Lien” means, with respect to any
property or asset, any mortgage, lien, pledge, charge, security
interest, lease, encumbrance or other adverse claim of any kind
in respect of such property or asset. For purposes of this
Agreement, a Person shall be deemed to own subject to a Lien any
property or asset that it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement
relating to such property or asset.
(96) “Litigation” means any action, cause
of action, claim, cease and desist letter, demand, suit,
arbitration proceeding, citation, summons, subpoena or
investigation or proceeding of any nature, civil, criminal,
regulatory or otherwise, in law or in equity.
(97) “Losses” has the meaning set forth in
Section 7(a).
(98) “Material Adverse Effect” means any
event, change, development, effect or occurrence that
(1) is material and adverse to the business, assets,
results of operations or financial condition of the Company and
its Subsidiaries, taken as a whole, or (2) would materially
impair the ability of the Company to perform its obligations
under this Agreement or the other Transaction Documents or to
consummate the Investment, the other Transactions or the other
transactions contemplated by the Transaction Documents;
provided, however, that in determining whether a
Material Adverse Effect has occurred, there shall be excluded
any effect to the extent resulting from the following:
(A) any change, development, occurrence or event affecting
the businesses or industries in which the Company and its
Subsidiaries operate (including general pricing changes),
(B) changes in general domestic economic conditions,
including changes in the financial, securities or credit
markets, or changes in such conditions in any area in which the
Company or its Subsidiaries operate, (C) changes in global
or national political conditions (including any outbreak or
escalation of hostilities, declared or undeclared acts of war or
terrorism), (D) the announcement of this Agreement and the
other Transaction Documents and the transactions contemplated
hereby and thereby, (E) the failure of the Company to meet
any internal or published projections, forecasts or revenue or
earning predictions for any period (provided that the
underlying causes of such failure may be considered in
determining whether there is a Material Adverse Effect on the
Company), (F) any change in the trading prices of the
Common Stock on the New York Stock Exchange or of the
Convertible Notes (provided that the underlying causes of
such change may be considered in determining whether there is a
Material Adverse Effect on the Company) or (G) the
announcement or commencement of the Prepackaged Plan Proceeding;
except, with respect to clauses (A), (B), or (C), to the extent
that the effects of such changes have a disproportionate impact
on the Company and its Subsidiaries, taken as a whole, relative
to other businesses supplying to the non-residential
construction industry.
(99) “Material Contract” shall have the
meaning set forth in Section 4(q)(ii).
(100) “Minimum Condition” shall have the
meaning set forth in Annex A hereto.
(101) “Non-Convertible Note Account” means
the account of the Company at a Qualified Bank set forth on
Section 2(b)(ii) of the Disclosure Letter or such other
account of the Company at a Qualified Bank as is designated in
writing to the Investor not less than two (2) Business Days
prior to the Closing, in each case, provided that such
account is different from the Convertible Notes Account.
(102) “Notice Period” has the meaning set
forth in Section 6(k)(iii)(A).
(103) “Offer” has the meaning set forth in
the Recitals.
(104) “Offer Conditions” has the meaning
set forth in Annex A hereto.
(105) “Offer Documents” has the meaning
set forth in Section 4(y).
B-44
(106) “Order” means any injunction,
judgment, decree or other order issued by any court of competent
jurisdiction.
(107) “Organizational Documents” means the
articles of incorporation, certificate of incorporation,
charter, bylaws, articles of formation, certificate of
formation, regulations, operating agreement, certificate of
limited partnership, partnership agreement, and all other
similar documents, instruments or certificates executed,
adopted, or filed in connection with the creation, formation, or
organization of a Person, including any amendments thereto.
(108) “Other Required Company Filing” and
“Other Required Company Filings” have the
meanings set forth in Section 4(y).
(109) “Outside Date” has the meaning set
forth in Section 8(a)(i).
(110) “Owned Intellectual Property” has
the meaning set forth in Section 4(m)(i).
(111) “Owned Real Property” has the
meaning set forth in Section 4(n)(i).
(112) “Owned Software” means all Software
owned by either the Company or its Subsidiaries and used or held
for use in connection with, necessary for the conduct of, or
otherwise material to, the Business.
(113) “Permitted Investor Assignee” has
the meaning set forth in Section 12.
(114) “Permitted Liens” means
(i) Liens for Taxes and other governmental charges and
assessments not yet due and payable or that are being contested
in good faith and for which adequate accruals or reserves have
been established on the financial statements of the Company or
the applicable Subsidiary, (ii) Liens of carriers,
warehousemen, mechanics, materialmen and other like Liens
arising in the ordinary course of business that are being
contested in good faith and for which adequate accruals or
reserves have been established on the financial statements of
the Company or the applicable Subsidiary, (iii) easements,
rights of way, zoning ordinances and other similar encumbrances
affecting real property, (iv) prior to the Closing, Liens
granted pursuant to the Credit Agreement and the other Credit
Documents and (v) statutory Liens in favor of lessors
arising in connection with any property leased to the Company or
any of its Subsidiaries, which Liens and other encumbrances
described in clauses (i) — (v) do not materially
interfere with the current use by the Company or any of its
Subsidiaries of the assets, properties or rights affected
thereby and would not reasonably be expected to have or result
in a Material Adverse Effect.
(115) “Person” means any natural person,
firm, corporation, partnership, company, limited liability
company, trust, joint venture, association, Governmental Entity
or other entity or group (as defined in the Exchange Act).
(116) “Prepackaged Plan” means a
prepackaged joint plan of reorganization of the Company and the
Debtor Subsidiaries that will effectuate, consistent with the
Bankruptcy Code, the Restructuring on the terms set forth on
Exhibit I hereto and otherwise as contemplated by this
Agreement and the Transaction Documents and containing such
other terms and provisions, not inconsistent with the foregoing,
as may be reasonably agreed by the Company and the Investor.
(117) “Prepackaged Plan Conditions” means
the conditions set forth in Sections 3(a), 3(b), 3(c) and
3(d) other than Sections 3(a)(iii), 3(a)(iv), 3(a)(vi) and,
to the extent that any Material Contract may be assumed and
assigned by the Company without consent, authorization or
approval pursuant to Section 365 of the Bankruptcy Code,
3(c)(iii).
(118) “Prepackaged Plan Filings” has the
meaning set forth in Section 6(p)(ii).
(119) “Prepackaged Plan Proceeding” has
the meaning set forth in Section 6(p)(iii)(A).
(120) “Pre-Signing Transaction Expenses”
means any Transaction Expenses reimbursed by and paid to the
Company pursuant to this Agreement (other than pursuant to
Section 8(b), Section 8(c) or Section 2(g)) or
any other agreement of even-date herewith to which Investor and
the Company are a party.
(121) “Proceeding” has the meaning set
forth in Section 6(b)(i).
B-45
(122) “Qualified Bank” means any
commercial bank organized under the laws of the United States of
America or any state thereof or the District of Columbia that
(a) is at least “adequately capitalized” (as
defined in the regulations of its primary Federal banking
regulator), (b) has Tier 1 capital (as defined in such
regulations) of not less than $1,000,000,000 and (c) has a
rating of at least AA- from S&P and Aa3 from Xxxxx’x.
(123) “Qualifying Confidentiality
Agreement” has the meaning set forth in
Section 6(k)(vi)(E).
(124) “Qualifying Transaction” means any
Company Transaction Proposal, which, in the case of Company
Transaction Proposal that is a restructuring, reorganization,
liquidation, dissolution or similar transaction, is a Superior
Lender Proposal (determined without giving effect to the first
parenthetical in the definition thereof).
(125) “Registration Rights Agreement” a
Registration Rights Agreement having the terms set forth in
Exhibit E hereto and such other terms as are reasonably and
mutually acceptable to the Investor and the Company.
(126) “Release” means any releasing,
disposing, discharging, injecting, spilling, leaking, leaching,
pumping, dumping, emitting, escaping, emptying, seeping,
dispersal, migration, transporting, placing and the like,
including without limitation, the moving of any materials
through, into or upon, any land, soil, surface water,
groundwater or air, or otherwise entering into the indoor or
outdoor environment.
(127) “Representatives” has the meaning
set forth in Section 16.
(128) “Requisite Acceptances” has the
meaning set forth in Section 6(p)(i).
(129) “Restructuring” has the meaning set
forth in the Recitals.
(130) “Restructuring Deadline” means the
date on which the Requisite Acceptances have been received and
the Offer has expired pursuant to Section 6(d)(i) hereof.
(131) “Schedule TO” has the meaning
set forth in Section 4(y).
(132) “SEC Reports” has the meaning set
forth in Section 4.
(133) “Securities” has the meaning set
forth in Section 5(a)(i).
(134) “Securities Act” means the
Securities Act of 1933, as amended.
(135) “Series B Preferred Shares” has
the meaning set forth in the Recitals.
(136) “Series B Preferred Stock” has
the meaning set forth in the Recitals.
(137) “Series B Preferred Stock CoD”
has the meaning set forth in the Recitals.
(138) “Software” means all computer
software, including but not limited to, application software,
system software and firmware, including all source code and
object code versions thereof, in any and all forms and media,
and all related documentation.
(139) “Solicitation” has the meaning set
forth in the Recitals.
(140) “Solicitation Materials” has the
meaning set forth in the Recitals.
(141) “SOX” has the meaning set forth in
Section 4(e)(viii).
(142) “Stockholders Agreement” means a
Stockholders Agreement substantially in the form attached hereto
as Exhibit C.
(143) “Subsidiary” means, with respect to
any Person, any corporation, partnership, joint venture, limited
liability company or other entity of which a majority of the
voting securities or other voting interests, or a majority of
the securities or other interests of which having by their terms
ordinary voting power to elect a majority of the board of
directors or persons performing similar functions with respect
to such entity, is, directly or indirectly, owned by such Person
and/or one
or more Subsidiaries thereof.
B-46
(144) “Superior Lender Proposal” has the
meaning set forth in Section 6(k)(vi)(C).
(145) “Superior Proposal” has the meaning
set forth in Section 6(k)(vi)(D).
(146) “Tax Returns” means any and all
reports, returns, declarations, disclosures, or statements
supplied or required to be supplied to a taxing authority in
connection with Taxes, including any schedule, attachment or
amendment thereto.
(147) “Taxes” means any and all federal,
state, local or foreign taxes, imposts, levies or other like
assessments, including all net income, gross receipts, capital,
sales, use, ad valorem, value added, transfer, franchise,
profits, inventory, capital stock, license, withholding,
payroll, employment, social security, unemployment, excise,
severance, stamp, occupation, property and estimated taxes,
customs duties, and other taxes of any kind whatsoever,
including any and all interest, penalties, additions to tax or
additional amounts imposed by any Governmental Entity in
connection or with respect thereto, in all cases whether
disputed or not.
(148) “Tender Closing Date” has the
meaning set forth in Section 4(y).
(149) “Tender Date” has the meaning set
forth in Section 4(y).
(150) “Term Lenders” has the meaning set
forth in the Recitals.
(151) “Term Loan Refinancing” has the
meaning set forth in the Recitals.
(152) “Termination Fee” means $8,250,000.
(153) “Third Party Claim” has the meaning
set forth in Section 7(c).
(154) “Threshold Amount” has the meaning
set forth in Section 7(d)(ii).
(155) “Trade Secrets” means all
inventions, processes, designs, formulae, trade secrets,
know-how, ideas, research and development, data, databases and
confidential information.
(156) “Transaction Documents” refers
(a) if the Restructuring is not being effectuated through
the confirmation of the Prepackaged Plan in the Prepackaged Plan
Proceeding, collectively to this Agreement, the Stockholders
Agreement, the Registration Rights Agreement, the
Indemnification Agreement, the Series B Preferred Stock
CoD, the ABL Agreement, the Amended Credit Agreement and the
Ancillary Refinancing Documents (b) if the Restructuring is
being effectuated through the confirmation of the Prepackaged
Plan in the Prepackaged Plan Proceeding, the Prepackaged Plan
and Exhibit I to the Prepackaged Plan.
(157) “Transaction Expenses” means all
out-of-pocket
expenses reasonably incurred by the Investor or on its behalf in
connection with the Investor’s due diligence on the
Company, the negotiation, preparation, execution, delivery and
performance of this Agreement and the other Transaction
Documents and the undertaking, structuring and consummation of
the Transactions (including, without limitation, in connection
with obtaining the consents, approvals, authorizations of or
delivering any notices or filings in connection therewith to,
Governmental Entities necessary in connection with the
execution, delivery and performance of this Agreement, the other
Transaction Documents or the transactions contemplated hereby or
thereby), including, without limitation, fees and expenses of
legal, accounting and financial advisors, up to a maximum of
(i) with respect to Section 2(g), $14,500,000 and
(ii) with respect to Section 8(b) and
Section 8(c), $9,500,000 in the aggregate.
(158) “Transactions” refers (a) if
the Restructuring is not being effectuated through the
confirmation of the Prepackaged Plan in the Prepackaged Plan
Proceeding, collectively to this Agreement, the transactions
contemplated hereby to take place on or before the Closing Date,
including, without limitation, the Investment and the Offer, the
other Transaction Documents and the transactions contemplated
thereby, including the Term Loan Refinancing (or the Alternative
Term Loan Refinancing, as the case may be) and the ABL Financing
(or the Alternative ABL Financing, as the case may be) but
excluding the transactions contemplated by the Prepackaged Plan
and (b) if the Restructuring is being effectuated through
the confirmation of the Prepackaged Plan in the Prepackaged Plan
Proceeding, the transactions contemplated by the Prepackaged
Plan.
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(159) “Unrestricted Cash” means aggregate
cash and cash equivalents excluding any cash or cash equivalents
that are used in the determination of the borrowing base under
the ABL Agreement.
(160) “Voting Debt” has the meaning set
forth in Section 4(b).
Section 10. Survival
of Representations, Warranties and
Agreements. Each of the representations and
warranties set forth in this Agreement (or in any instrument
delivered pursuant hereto) shall survive the execution and
delivery of this Agreement and the Closing but only for a period
of twelve (12) months following the Closing Date and
thereafter shall expire and have no further force and effect;
provided that the representations and warranties set
forth in Section 4(a), Section 4(b),
Section 4(d), Section 4(w), Section 4(x) and
Section 5(a) and Section 5(c) (collectively, the
“Fundamental Representations”) and any corresponding
representations and warranties in any instrument delivered
pursuant hereto, shall survive the execution and delivery of
this Agreement and the Closing indefinitely or until the latest
date permitted by law. Except as otherwise provided herein, all
covenants and agreements contained herein shall survive for the
duration of any statutes of limitations applicable thereto or
until, by their respective terms, they are no longer operative.
Notwithstanding the preceding sentences, any breach of
representation, warranty, covenant or agreement in respect of
which indemnity may be sought under this Agreement shall survive
the time at which it would otherwise terminate pursuant to the
preceding sentences, if notice of the inaccuracy or breach
thereof giving rise to such right of indemnity shall have been
given to the party against whom such indemnity may be sought
prior to such time. The Confidentiality Agreement will survive
termination of this Agreement in accordance with its terms.
Section 11. Notices.
Except as otherwise provided in this Agreement,
all notices, requests, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed
to have been duly given when delivered by hand or overnight
courier service, or when received by facsimile transmission if
promptly confirmed, as follows:
(a) if to the Company, to it at:
NCI Building Systems, Inc.
Attention: General Counsel
00000 Xxxxx Xxx Xxxxxxx Xxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000
Fax:
(000) 000-0000
with a copy to (which shall not constitute notice):
Wachtell, Lipton, Xxxxx & Xxxx
Attention: Xxxx Xxxxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax:
(000) 000-0000
(b) if to the Investor, to it at:
Xxxxxxx, Dubilier & Rice Fund VIII, L.P.
c/o Clayton,
Dubilier & Rice, Inc.
Attention: Xxxxxxx Xxxx
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx XX 00000
Fax:
(000) 000-0000
with a copy to (which shall not constitute notice):
Debevoise & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx
Fax:
(000) 000-0000
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or to such other address, facsimile number or telephone as
either party may, from time to time, designate in a written
notice given in a like manner.
Section 12. Successors
and Assigns. Neither this Agreement nor any
of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto, in whole or in part
(whether by operation of law or otherwise), without the prior
written consent of each of the other parties; provided
that, following the Closing, the Company may assign the rights
and obligations under this Agreement to a successor and the
Investor may, without the prior written consent of the Company,
assign all or a portion of its rights and obligations to
purchase shares of Series B Preferred Stock at the Closing
to one or more parallel or co-invest vehicles under common
control or management with the Investor (each assignee parallel
or co-invest vehicles, a “Permitted Investor
Assignee”), in which case such parallel or co-invest
vehicle(s) shall become party to this Agreement by execution of
a joinder hereto and each such parallel or co-invest vehicle
shall thereafter be included in the term “Investor”
with respect to such rights; provided, further,
that any assignment pursuant to the preceding proviso shall not
relieve the assigning Investor of its obligations to purchase
shares of Series B Preferred Stock at the Closing until the
Closing has occurred and the assignee has funded its obligation
to purchase Series B Preferred Stock hereunder. The number
of Permitted Investor Assignees shall not exceed two (2).
Subject to the first and second sentences of this
Section 12, this Agreement will be binding upon, inure to
the benefit of and be enforceable by the parties and their
respective successors and assigns. Any attempted assignment in
violation of this Section 12 shall be void. For purposes of
this Agreement, “successor” for any entity other than
a natural person shall mean a successor to such entity as a
result of such entity’s merger, consolidation, sale of
substantially all of its assets, or similar transaction.
Section 13. Amendments;
Waiver . This Agreement may not be
modified or amended except pursuant to an instrument in writing
signed by the Company and the Investor. Any party may waive in
whole or in part any benefit or right provided to it under this
Agreement, such waiver being effective only if contained in a
writing executed by the waiving party. No failure by any party
to insist upon the strict performance of any covenant, duty,
agreement or condition of this Agreement or to exercise any
right or remedy consequent upon breach thereof shall constitute
a waiver of any such breach or of any other covenant, duty,
agreement or condition, nor shall any delay or omission of any
party to exercise any right hereunder in any manner impair the
exercise of any such right accruing to it thereafter.
Section 14. Headings. The
descriptive headings of the several sections in this Agreement
are for convenience only and do not constitute a part of this
Agreement and shall not be deemed to limit or affect in any way
the meaning or interpretation of this Agreement.
Section 15. Severability.
If any term or provision of this Agreement or any application
thereof shall be declared or held invalid, illegal or
unenforceable, in whole or in part, whether generally or in any
particular jurisdiction, such provision shall be deemed amended
to the extent, but only to the extent, necessary to cure such
invalidity, illegality or unenforceability, and the validity,
legality and enforceability of the remaining provisions, both
generally and in every other jurisdiction, shall not in any way
be affected or impaired thereby.
Section 16. Liability
Limitations.
(a) No former current or future director, officer,
employee, incorporator, shareholder, managing member, member,
manager, general partner, limited partner, stockholder,
principal agent, other representative or Affiliate
(collectively, “Representatives”) of any of the
Investor or the Company and no former, current, or future
Representative of any of the foregoing shall have any liability
for any obligations of the Investor or the Company, as
applicable, under this Agreement or for any claim based on, in
respect of, or by reason of, the performance of the respective
obligations of the Investor or the Company hereunder or the
negotiation, execution or delivery of this Agreement whether by
the enforcement of any assessment or by any legal or equitable
proceeding, or by virtue of any statute, regulation or other
applicable law or otherwise. Each party hereto hereby waives and
releases all such liability. This waiver and release is a
material inducement to each party’s entry into this
Agreement. Notwithstanding anything to the contrary contained
herein, (i) in no event shall the Investor’s aggregate
liability under this Agreement in connection with a failure by
the Investor to close on the Investment in violation of this
Agreement exceed an amount equal to the Aggregate Purchase Price
(“Liability Cap”) and (ii) in no event shall the
Investor be liable for any consequential, incidental, indirect
or punitive damages. In addition, the Investor shall not be
liable for diminution of value, loss of business opportunity or
loss of future revenue, income or profits (except to the extent
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that such items constitute direct damages sought by the Company
for breach of contract rather than indirect or consequential
damages (subject to the limitations in clause (i) of this
sentence)).
(b) In the event that the Company or any of its Affiliates
(i) asserts in any Litigation that the provisions of this
Section 16 are illegal, invalid or unenforceable in whole
or in part, or that the Investor is liable under this Agreement
in connection with a failure by the Investor to close on the
Investment in violation of this Agreement in excess of the
Liability Cap or (ii) asserts any theory of liability
against any of the Investor’s Representatives or any
Representative of Investor’s Representatives with respect
to the performance of the obligations of the Investor hereunder
or the negotiation, execution or delivery of this Agreement,
then none of the Investor, any Representative of the Investor or
any Representative of the Investor’s Representatives shall
have any liability to the Company or any of its Affiliates with
respect to the performance of the obligations of the Investor
hereunder, including in connection with a failure by the
Investor to close on the Investment in violation of this
Agreement, or the negotiation, execution or delivery of this
Agreement.
Section 17. Integration.
This Agreement, the Confidentiality Agreement, the other
Transaction Documents and the schedules and exhibits attached to
any such documents constitute the entire agreement and
understanding between the Company and the Investor with respect
to the matters referred to herein and supersede all prior
agreements (but not any even-dated agreements), understandings
or representations, in each case among the parties, with respect
to such matters.
Section 18. Governing
Law. This Agreement will be governed by and
construed in accordance with the Laws of the State of Delaware
applicable to contracts made and to be performed within the
State of Delaware, without giving effect to conflicts of law
rules that would require or permit the application of the laws
of another jurisdiction.
Section 19. Counterparts.
This Agreement may be signed in one or more counterparts, each
of which shall constitute an original and all of which together
shall constitute one and the same agreement.
Section 20. Access;
Information. From the date hereof until the
Closing Date or the termination of this Agreement, the Company
hereby agrees that it shall ensure that upon reasonable notice,
the Company and its Subsidiaries (i) will afford to the
Investor and its representatives (including, without limitation,
officers and employees of the Investor, and counsel, accountants
and other professionals retained by the Investor) such
reasonable access during normal business hours to its books,
records (including, without limitation, Tax Returns and
appropriate work papers of independent auditors under normal
professional courtesy), properties, personnel (but not including
directors who are not employees of the Company), accountants and
other professional retained by the Company and to such other
information as such Investor may reasonably request;
(ii) will furnish the Investor such financial and operating
data and other information with respect to the business and
properties of the Company as the Company prepares and compiles
for members of its Board in the ordinary course and as such
Investor may from time to time reasonably request; and
(iii) permit such Investor to discuss the affairs, finances
and accounts of the Company, and to furnish advice with respect
thereto, with the principal officers of the Company within
thirty days after the end of each fiscal quarter of the Company.
All requests for access and information shall be coordinated
through senior corporate officers of the Company. The foregoing
notwithstanding, the Company shall not be required to afford
such access if it would unreasonably disrupt the operations of
the Company or any of its Subsidiaries, would cause a violation
of any agreement to which the Company or any of its Subsidiaries
is a party, would cause a loss of privilege to the Company or
any of its Subsidiaries or would constitute a violation of any
applicable Law, nor shall Investor or any of its representatives
be permitted to perform any onsite procedure with respect to any
property of the Company or any of its Subsidiaries.
Section 21. Publicity .
On the date hereof, the Company shall issue a press release
substantially in the form of Exhibit F hereto. No other
written public release or written announcement concerning the
execution of this Agreement or concerning any of the
Transactions shall be issued by any party without the prior
written consent of the other party (which consent shall not be
unreasonably withheld), except as such release or announcement
may be required by Law or the rules or regulations of any
securities exchange, in which case the party required to make
the release or announcement shall, to the extent reasonably
practicable, allow the other party reasonable time to comment on
such release or announcement in advance of such issuance. The
provisions of this Section 21 shall not restrict the
ability of a party to summarize or describe the Transactions
contemplated by this Agreement in any
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prospectus or similar offering document so long as the other
party is provided a reasonable opportunity to review such
disclosure in advance.
Section 22. Confidentiality
Agreement. The Investor will treat as
strictly confidential all information provided to it by or on
behalf of the Company in connection with the matters
contemplated hereby in accordance with the Confidentiality
Agreement, dated December 23, 2008, by and between the
Company and CD&R Inc. (the “Confidentiality
Agreement”).
Section 23. Specific
Performance; Jurisdiction.
(a) The parties agree that irreparable damage would occur
for which money damages would not suffice in the event that any
of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached
and that the parties would not have any adequate remedy at Law.
It is accordingly agreed that the non-breaching party shall be
entitled to an injunction, temporary restraining order or other
equitable relief exclusively (i) if the Company has
commenced a case under the Bankruptcy Code, in the Bankruptcy
Court or (ii) if the Company has not commenced a case under
the Bankruptcy Code, in the Delaware Court of Chancery enjoining
any such breach and enforcing specifically the terms and
provisions hereof, or in the event (but only in the event) that
such court does not have subject matter jurisdiction over such
action or proceeding, in the United States District Court for
the District of Delaware or another court sitting in the state
of Delaware. The foregoing is in addition to any other remedy to
which any party is entitled at Law, in equity or otherwise.
(b) Each of the parties hereto irrevocably agrees that any
legal action or proceeding with respect to this Agreement and
the rights and obligations arising hereunder, or for recognition
and enforcement of any judgment in respect of this Agreement and
the rights and obligations arising hereunder brought by the
other party hereto or its successors or assigns shall be brought
and determined exclusively (i) if the Company has commenced
a case under the Bankruptcy Code, in the Bankruptcy Court or
(ii) if the Company has not commenced a case under the
Bankruptcy Code, in the Delaware Court of Chancery, or in the
event (but only in the event) that such court does not have
subject matter jurisdiction over such action or proceeding, in
the United States District Court for the District of Delaware or
another court sitting in the state of Delaware. Each of the
parties hereto hereby irrevocably submits with regard to any
such action or proceeding for itself and in respect of its
property, generally and unconditionally, to the personal
jurisdiction of the aforesaid courts and agrees that it will not
bring any action relating to this Agreement or any of the
transactions contemplated by this Agreement in any court other
than the aforesaid courts. Each of the parties hereto hereby
irrevocably waives, and agrees not to assert, by way of motion,
as a defense, counterclaim or otherwise, in any action or
proceeding with respect to this Agreement, (i) any claim
that it is not personally subject to the jurisdiction of the
above-named courts for any reason other than the failure to
serve in accordance with this Section 23, (ii) any
claim that it or its property is exempt or immune from
jurisdiction of any such court or from any legal process
commenced in such courts (whether through service of notice,
attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise) and (iii) to
the fullest extent permitted by the applicable Law, any claim
that (A) the suit, action or proceeding in such court is
brought in an inconvenient forum, (B) the venue of such
suit, action or proceeding is improper or (C) this
Agreement, or the subject matter hereof, may not be enforced in
or by such courts.
(c) Each of the parties hereto irrevocably consents to the
service of any summons and complaint and any other process in
any other action relating to this Agreement, on behalf of itself
or its property, by the personal delivery of copies of such
process to such party or by sending or delivering a copy of the
process to the party to be served at the address and in the
manner provided for the giving of notices in Section 11.
Nothing in this Section 23 shall affect the right of any
party hereto to serve legal process in any other manner
permitted by Law.
Section 24. Waiver
of Jury Trial. Each party hereby waives, to
the fullest extent permitted by applicable law, any right it may
have to a trial by jury in respect of any suit, action or other
proceeding arising out of this Agreement or any transaction
contemplated hereby. Each party (i) certifies and
acknowledges that no representative, agent or attorney of any
other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to
enforce the foregoing waiver, and (ii) acknowledges that it
understands and has considered the implications of this waiver
and makes this waiver voluntarily, and that it and the other
parties have been induced to enter into the Agreement by, among
other things, the mutual waivers and certifications in this
Section 24.
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Section 25. Interpretation.
(a) When a reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement
unless otherwise indicated. Whenever the words
“include,” “includes” or
“including” are used in this Agreement, they shall be
deemed to be followed by the words “without
limitation.” The words “hereof,”
“herein” and “hereunder” and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement. The word “or” shall be deemed to mean
“and/or.” All terms defined in this Agreement shall
have the defined meanings when used in any certificate or other
document made or delivered pursuant thereto unless otherwise
defined therein. The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such
terms and to the masculine as well as to the feminine and neuter
genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument
that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver
or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments
thereto and instruments incorporated therein. Each of the
parties has participated in the drafting and negotiation of this
Agreement. If an ambiguity or question of intent or
interpretation arises, this Agreement must be construed as if it
is drafted by all the parties, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of
authorship of any of the provisions of this Agreement.
(b) It is understood and agreed that in each instance in
which, pursuant to the terms of this Agreement, the Investor is
entitled to act in the Investor’s sole discretion
(exercised in good faith), or otherwise act in good faith,
“good faith” shall not prevent the Investor from
acting in its own interests as a prospective shareholder of the
Company, but shall require that the Investor refrain from
engaging in arbitrary or commercially unreasonable conduct
having as its purpose (as opposed to its possible result)
avoiding closing under this Agreement.
Section 26. No
Third Party Beneficiaries. Nothing in this
Agreement, expressed or implied, is intended to confer upon any
Person, other than the parties hereto, permitted assignees of
the Investor and their respective successors, any rights,
remedies, obligations or liabilities under or by reason of this
Agreement, except, solely with respect to the payment of the
payment of the Deal Fee in accordance with Section 2(g),
CD&R Inc. and the provisions of Section 6(d)(ii),
Section 7 and Section 16 shall inure to the benefit of
the persons referred to in such Sections.
Section 27. Certain
Considerations Relating to Bankruptcy. It is
the intention of the parties hereto that this Agreement be
enforceable in the Prepackaged Plan Proceeding, and in
furtherance of this intent the Investor and the Company each
hereby waive, to the fullest extent permissible under law, the
provisions of Section 365(c)(2) of the Bankruptcy Code.
[REMAINDER
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Please confirm that the foregoing correctly sets forth the
agreement between us by signing in the space provided below for
that purpose.
XXXXXXX, DUBILIER & RICE FUND VIII, L.P.
By: CD&R Associates VIII, Ltd., its general partner
Name: Xxxxxxx X. Xxxx
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Title:
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Vice President, Treasurer and
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Assistant Secretary
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NCI BUILDING SYSTEMS, INC.
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By:
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/s/ Xxxxxx
X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Title:
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Chief Executive Officer
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