EXECUTION COPY
EQUITY PURCHASE AND COMMITMENT AGREEMENT
THIS EQUITY PURCHASE AND COMMITMENT AGREEMENT (this "Agreement"),
dated as of January 18, 2007, is made by and among A-D Acquisition Holdings,
LLC, a limited liability company formed under the laws of the State of Delaware
("XXXX"), Harbinger Del-Auto Investment Company, Ltd., an exempted company
incorporated in the Cayman Islands ("Harbinger"), Dolce Investments LLC
("Dolce"), a limited liability company formed under the laws of the State of
Delaware, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, a Delaware
corporation ("Merrill"), UBS Securities LLC, a Delaware limited liability
company ("UBS"), and Delphi Corporation, a Delaware corporation (as a
debtor-in-possession and a reorganized debtor, as applicable, the "Company").
XXXX, Harbinger, Dolce, Merrill and UBS are each individually referred to herein
as an "Investor" and collectively as the "Investors". Capitalized terms used in
the agreement have the meanings assigned thereto in the sections indicated on
Schedule 1 hereto.
WHEREAS, the Company and certain of its subsidiaries and affiliates
(the "Debtors") commenced jointly administered cases (the "Chapter 11 Cases")
under United States Bankruptcy Code, 11 U.S.C. xx.xx. 101-1330, as amended and
in effect on October 8, 2005 (the "Bankruptcy Code") in the United States
Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court");
WHEREAS, the Company intends to propose and submit to the Bankruptcy
Court for its approval a plan of reorganization for the Debtors that is
consistent with this Agreement and the PSA;
WHEREAS, the Company has requested that the Investors participate in
the plan of reorganization, and the Investors are willing to participate in the
plan of reorganization, on the terms and subject to the conditions contained in
this Agreement;
WHEREAS, the Company has filed a motion and supporting papers (the
"Initial Approval Motion") seeking an order of the Bankruptcy Court (the
"Initial Approval Order") (i) approving and authorizing the Company to enter
into this Agreement, (ii) authorizing the payment of the Commitment Fees, the
Alternate Transaction Fee and the Transaction Expenses provided for herein, and
(iii) approving and authorizing the Company to enter into the PSA, and the
Bankruptcy Court has entered the Initial Approval Order; and
WHEREAS, each of Appaloosa Management L.P., Harbinger Capital Partners
Master Fund I, Ltd. and Cerberus Capital Management, L.P. (collectively, the
"Commitment Parties") will provide, on the date hereof, commitment letters
addressed to XXXX, Harbinger, and Dolce, respectively, and the Company whereby
each Commitment Party will confirm its commitment to provide equity financing to
XXXX, Harbinger and Dolce, respectively, on the terms and subject to the
limitations set forth in the commitment letters.
NOW, THEREFORE, in consideration of the mutual promises, agreements,
representations, warranties and covenants contained herein, each of the parties
hereto hereby agrees as follows:
1. Rights Offering
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(a) The Company proposes to offer and sell shares of its new common stock,
par value $0.01 per share (the "New Common Stock"), pursuant to a
rights offering (the "Rights Offering") whereby the Company will
distribute at no charge to each holder (each, an "Eligible Holder") of
Common Stock, including, to the extent applicable, the Investors, that
number of rights (each, a "Right") in respect of shares of Common
Stock outstanding and held of record as of the close of business on a
record date (the "Record Date") to be set by the Board of Directors of
the Company that will enable each Eligible Holder to purchase up to
its pro rata portion of 56,700,000 shares in the aggregate of New
Common Stock (each, a "Share") at a purchase price of $35.00 per Share
(the "Purchase Price").
(b) The Company will conduct the Rights Offering pursuant to a plan of
reorganization of the Debtors (such plan of reorganization, the
"Plan"), which shall reflect the Company's proposed restructuring
transactions described in this Agreement, the Summary of Terms of
Preferred Stock attached hereto as Exhibit A (the "Preferred Term
Sheet") and the Plan Framework Support Agreement attached hereto as
Exhibit B (the "PSA").
(c) The Rights Offering will be conducted as follows:
(i) On the terms and subject to the conditions of this Agreement and
subject to applicable law, the Company shall offer Shares for
subscription by holders of Rights as set forth in this Agreement.
(ii) As soon as practicable following the entry of an order by the
Bankruptcy Court approving the Disclosure Statement (the
"Disclosure Statement Approval Date") and the effectiveness under
the Securities Act of 1933, as amended (the "Securities Act"), of
the Rights Offering Registration Statement to be filed with the
Securities and Exchange Commission (the "Commission") relating to
the Rights Offering, the Company shall issue to each Eligible
Holder, Rights to purchase up to its pro rata portion of
56,700,000 Shares in the aggregate and distribute simultaneously
the ballot form(s) in connection with the solicitation of
acceptances of the Plan (the date of such distribution, the
"Distribution Date"). The Company will be responsible for
effecting the distribution of certificates representing the
Rights, the Rights Offering Prospectus and any related materials
to each Eligible Holder.
(iii) The Rights may be exercised during a period (the "Rights
Exercise Period") commencing on the Distribution Date and ending
at the Expiration Time. The Rights shall be transferable.
"Expiration Time" means the date and time by which holders of
claims or interests are entitled to vote on the Plan (or if such
day is not a Business Day, the next Business Day), or such later
date and time as the Company, subject to the prior written
approval of each of XXXX and Dolce, may specify in a notice
provided to the Investors before 9:00 a.m., New York City time,
on the Business Day before the then-effective Expiration Time.
The Company shall use its reasonable best efforts to cause the
effective date of the Plan (the "Effective Date") to occur as
promptly as reasonably practicable after the Expiration Time and
the Confirmation Hearing. For the purpose of this Agreement,
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday that is not a day on which banking institutions in New
York City are generally authorized or obligated by law or
executive order to close. Each Eligible Holder who wishes to
exercise all or a portion of its Rights shall (i) during the
Rights Exercise Period return a duly executed document to a
subscription agent reasonably acceptable to the Company and each
of XXXX and Dolce (the "Subscription Agent") electing to exercise
all or a portion of the Rights held by such Eligible Holder and
(ii) pay an amount equal to the full Purchase Price of the number
of Shares that the Eligible Holder elects to purchase by wire
transfer of immediately available funds by a specified date
reasonably in advance of the date on which the hearing to confirm
the Plan is scheduled to commence (the "Confirmation Hearing") to
an escrow account established for the Rights Offering.
(iv) Unless otherwise required by XXXX and Dolce, there will be no
over-subscription rights provided in connection with the Rights
Offering.
(v) As soon as reasonably practicable following the Effective Date,
the Company will issue to each Eligible Holder who validly
exercised its Rights the number of Shares to which such Eligible
Holder is entitled based on such exercise.
(vi) The Company hereby agrees and undertakes to give each Investor by
electronic facsimile transmission the certification by an
executive officer of the Company of either (i) the number of
Shares elected to be purchased by Eligible Holders pursuant to
validly exercised Rights, the aggregate Purchase Price therefor,
the number of Unsubscribed Shares and the aggregate Purchase
Price therefor (a "Purchase Notice") or (ii) in the absence of
any Unsubscribed Shares, the fact that there are no Unsubscribed
Shares and that the commitment set forth in Section 2(a)(iv) is
terminated (a "Satisfaction Notice") as soon as practicable after
the Expiration Time and, in any event, reasonably in advance of
the Closing Date (the date of transmission of confirmation of a
Purchase Notice or a Satisfaction Notice, the "Determination
Date").
2. The Commitment; Fees and Expenses.
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(a) On the terms and subject to the conditions set forth in this
Agreement:
(i) each Investor agrees, severally and not jointly, to subscribe for
and purchase, or cause one or more Related Purchasers pursuant to
the following paragraph and otherwise in accordance with this
Agreement to subscribe for and purchase, and the Company agrees
to sell and issue, on the Closing Date (A) for the Purchase Price
per Share, each Investor's proportionate share of 6,300,000
Shares as is set forth opposite such Investor's name on Schedule
2 hereto (the "Direct Subscription Shares") and (B) for the
Purchase Price per Share, that number of shares of Series B
Senior Convertible Preferred Stock, par value $0.01 per share
(the "Series B Preferred Stock"), as is set forth opposite such
Investor's name on Schedule 2 hereto, which shares shall be
created pursuant to a Certificate of Designation (the "Series B
Certificate of Designations") that is consistent with the terms
set forth in the Preferred Term Sheet and, to the extent they
have a material impact on the Investors' proposed investment in
the Company, are reasonably satisfactory to each of XXXX and
Dolce; provided that prior to the Due Diligence Expiration Date,
such terms shall be satisfactory to each of XXXX and Dolce in its
sole discretion;
(ii) Dolce agrees to subscribe for and purchase, or cause one or more
Related Purchasers pursuant to the following paragraph and
otherwise in accordance with this Agreement to subscribe for and
purchase, and the Company agrees to sell, on the Closing Date,
for the Purchase Price per share, 8,571,429 shares of Series A-1
Senior Convertible Preferred Stock, par value $0.01 per share
(the "Series A-1 Preferred Stock"), which shares shall be created
pursuant to a Certificate of Designations (the "Series A-1
Certificate of Designations") that is consistent with the terms
set forth in the Preferred Term Sheet and with such other terms
that, to the extent they have a material impact on the Investors'
proposed investment in the Company, are reasonably satisfactory
to each of XXXX and Dolce; provided, that prior to the Due
Diligence Expiration Date, such other terms shall be satisfactory
to each of XXXX and Dolce in its sole discretion;
(iii) XXXX agrees to subscribe for and purchase, or cause one or more
Related Purchasers pursuant to the following paragraph and
otherwise in accordance with this Agreement to subscribe for and
purchase, and the Company agrees to sell, on the Closing Date,
for the Purchase Price per share, 8,571,429 shares of Series A-2
Senior Convertible Preferred Stock, par value $0.01 per share
(the "Series A-2 Preferred Stock", and together with the Series
A-1 Preferred Stock, the "Series A Preferred Stock", which shares
shall be created pursuant to a Certificate of Designations (the
"Series A-2 Certificate of Designations") that is consistent with
the terms set forth in the Preferred Term Sheet and with such
other terms that, to the extent they have a material impact on
the Investors' proposed investment in the Company, are reasonably
satisfactory to each of XXXX and Dolce; provided, that prior to
the Due Diligence Expiration Date, such other terms shall be
satisfactory to each of XXXX and Dolce in its sole discretion;
and
(iv) each Investor agrees, severally and not jointly, to purchase, or
cause one or more Related Purchasers pursuant to the following
paragraph and otherwise in accordance with this Agreement to
purchase, on the Closing Date, and the Company agrees to sell for
the Purchase Price per Share that number of Shares issuable
pursuant to the aggregate number of Rights that were not properly
exercised by the Eligible Holders thereof during the Rights
Exercise Period, in proportion to the Investor's share of the
Direct Subscription Shares (such Shares in the aggregate, the
"Unsubscribed Shares"), rounded among the Investors as they may
determine, in their sole discretion, to avoid fractional shares.
In connection with each of clauses (i) through (iv) above, prior to
the filing of the Rights Offering Registration Statement with the
Commission, each Investor shall have the right to arrange for one or
more of its Affiliates (each, a "Related Purchaser") to purchase
Investor Shares, by written notice to the Company, which notice shall
be signed by the Investor and each Related Purchaser, shall contain
the Related Purchaser's agreement to be bound by this Agreement and
shall contain a confirmation by the Related Purchaser of the accuracy
with respect to it of the representations set forth in Section 4;
provided, that the total number of Investors, Related Purchasers and
Ultimate Purchasers shall not exceed the Maximum Number. The "Maximum
Number" shall be 35 unless the Company consents to a higher number,
such consent not to be unreasonably withheld; provided, that, nothing
in this Agreement shall limit or restrict in any way any Investor's
ability to transfer or otherwise dispose of any Investor's Shares or
any interests therein after the Closing Date pursuant to an effective
registration statement under the Securities Act or an exemption from
the registration requirements thereunder and subject to applicable
state securities laws. The Investors agree that each Related Purchaser
will be a "Qualified Institutional Buyer" under Rule 144A of the
Securities Act.
The Series A-1 Preferred Stock, the Series A-2 Preferred Stock and the
Series B Preferred Stock are referred to herein collectively as the
"Preferred Shares". The Unsubscribed Shares, the Direct Subscription
Shares and the Preferred Shares are referred to herein collectively as
the "Investor Shares". The term "Affiliate" shall have the meaning
ascribed to such term in Rule 12b-2 under the Securities Exchange Act
of 1934 in effect on the date hereof.
(b) Upon the occurrence of an Investor Default or a Limited Termination,
within five (5) Business Days of the occurrence of such Investor
Default or Limited Termination, the Investors (other than any
non-purchasing Investor) shall have the right to agree to purchase on
the Closing Date, in the case of a Limited Termination, or to
purchase, in the case of an Investor Default (or, in either case,
arrange for the purchase through a Related Purchaser pursuant to
Section 2(a) or an Ultimate Purchaser pursuant to Section 2(k)), all
but not less than all, of the Available Investor Shares on the terms
and subject to the conditions set forth in this Agreement and in such
proportions as determined by the Investors in their sole discretion
(an "Alternative Financing"); provided, that only in the case of a
Limited Termination, to the extent that a Limited Termination is
attributable to any Investor other than Xxxxx, XXXX will be required
within ten (10) Business Days of the occurrence of such Limited
Termination to agree to purchase on the Closing Date (or arrange for
the purchase through a Related Purchaser pursuant to Section 2(a) or
an Ultimate Purchaser pursuant to Section 2(k)) any Available Investor
Shares attributable to the Limited Termination and not otherwise
purchased pursuant to the Alternative Financing (unless XXXX has
otherwise terminated this Agreement in accordance with its terms);
provided, further, that the total number of Investors, Related
Purchasers and Ultimate Purchasers pursuant to this Agreement shall
not exceed the Maximum Number. The term "Investor Default" shall mean
the breach by any Investor of its obligation to purchase any Investor
Shares which it is obligated to purchase under this Agreement. The
term "Available Investor Shares" shall mean any Investor Shares which
any Investor is not purchasing as a result of an Investor Default or
Limited Termination. The exercise by any Investor of the right to
purchase (or arrange a purchase of) any Available Investor Shares
shall not relieve any defaulting Investor of any obligation to each
other Investor or the Company of such defaulting Investor's breach of
this Agreement.
(c) As soon as practicable after the Expiration Time, and in any event
reasonably in advance of the Closing Date, the Company will provide a
Purchase Notice or a Satisfaction Notice to each Investor as provided
above, setting forth a true and accurate determination of the
aggregate number of Unsubscribed Shares, if any; provided, that on the
Closing Date, on the terms and subject to the conditions in this
Agreement, the Investors will purchase, and the Company will sell,
only such number of Unsubscribed Shares as are listed in the Purchase
Notice, without prejudice to the rights of the Investors to seek later
an upward or downward adjustment if the number of Unsubscribed Shares
in such Purchase Notice is inaccurate.
(d) Delivery of the Investor Shares will be made by the Company to the
account of each Investor (or to such other accounts as any Investor
may designate in accordance with this Agreement) at 10:00 a.m., New
York City time, on the Effective Date (the "Closing Date") against
payment of the aggregate Purchase Price for the Investor Shares by
wire transfer of immediately available funds in U.S. dollars to the
account specified by the Company to the Investors at least 24 hours
prior to the Closing Date.
(e) All Investor Shares will be delivered with any and all issue, stamp,
transfer, sales and use, or similar Taxes or duties payable in
connection with such delivery duly paid by the Company.
(f) The documents to be delivered on the Closing Date by or on behalf of
the parties hereto and the Investor Shares will be delivered at the
offices of White & Case LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 on the Closing Date.
(g) Subject to the provisions of Sections 2(a), 2(b) and 2(k) hereof, any
Investor may designate that (i) some or all of the Investor Shares be
issued in the name of, and delivered to, one or more Related
Purchasers and (ii) some or all of the Unsubscribed Shares, Direct
Subscription Shares or shares of Series B Preferred Stock be issued in
the name of, and delivered to, one or more Ultimate Purchasers.
(h) On the basis of the representations and warranties herein contained,
the Company shall pay the following fees to the Investors in
accordance with Section 2(i) or 12(h), as the case may be:
(i) an aggregate commitment fee of twenty-one million dollars
($21,000,000) to be paid to the Investors in proportion to their
undertakings herein relative to Preferred Shares as set forth in
Schedule 2 (the "Preferred Commitment Fee");
(ii) an aggregate commitment fee of fifty-five million one-hundred
twenty-five thousand dollars ($55,125,000) to be paid to the
Investors as set forth in Schedule 2 to compensate the Investors
for their undertakings herein relative to Investor Shares other
than Preferred Shares (the "Standby Commitment Fee" and together
with the Preferred Commitment Fee, the "Commitment Fees"); and
(iii) an Alternate Transaction Fee, if any, which shall be paid by the
Company as provided in Section 12(h).
(i) $10 million of the Commitment Fees shall be paid on the first Business
Day following the first date that either (A) each of XXXX and Dolce
has waived in writing the due diligence termination right contained in
Section 12(d)(ii) or (B) the due diligence termination right contained
in Section 12(d)(ii) has expired in accordance with its terms, and
$28,062,500, representing the balance of the first fifty percent (50%)
of the Commitment Fees, on the first Business Day following the date
that each of XXXX and Dolce notify the Company in writing that each of
them has approved the GM Settlement. The balance of $38,062,500,
representing the remaining fifty percent (50%) of the Commitment Fees,
shall be paid on the first Business Day following the Disclosure
Statement Approval Date. Payment of the Commitment Fees and the
Alternate Transaction Fee, if any, will be made by wire transfer of
immediately available funds in U.S. dollars to the account specified
by each Investor to the Company at least 24 hours prior to such
payment. The Commitment Fees and the Alternate Transaction Fee, if
any, will be nonrefundable and non-avoidable when paid. The provision
for the payment of the Commitment Fees is an integral part of the
transactions contemplated by this Agreement and without this provision
the Investors would not have entered into the Agreement and such
Commitment Fees shall constitute an allowed administrative expense of
the Company under Section 503(b)(1) and 507(a)(1) of the Bankruptcy
Code.
(j) The Company will reimburse or pay, as the case may be, the
out-of-pocket costs and expenses reasonably incurred by each Investor
or its Affiliates (which, for the avoidance of doubt, shall not
include any Ultimate Purchaser) to the extent incurred on or before
the Effective Date (and reasonable post-closing costs and expenses
relating to the closing), including reasonable fees, costs and
expenses of counsel to each of the Investors or its Affiliates, and
reasonable fees, costs and expenses of any other professionals
retained by any of the Investors or its Affiliates in connection with
the transactions contemplated hereby (including investigating,
negotiating and completing such transactions) and the Chapter 11 Cases
and other judicial and regulatory proceedings related to such
transactions and the Chapter 11 Cases other than costs and expenses
relating to any transactions with Ultimate Purchasers and, with
respect to expenses that would not otherwise be incurred by the
related Investor, Related Purchasers (collectively, "Transaction
Expenses"), from and after the commencement of negotiations between
such Investor or its Affiliates and the Company with respect to its
non-disclosure agreements in connection with the Chapter 11 Cases
and/or the transactions contemplated hereby, or in the case of UBS and
Merrill, from and after July 30, 2006, in the following manner:
(i) to the extent Transaction Expenses are or were incurred prior to
December 1, 2006, such Transaction Expenses, in an amount not to
exceed $13,000,000 (which amount does not include Transaction
Expenses incurred by XXXX or its Affiliates on or prior to May
17, 2006 in an amount not to exceed $5,000,000), shall be paid
promptly upon the Bankruptcy Court's entry of the Initial
Approval Order; provided, that Transaction Expenses incurred by
XXXX or its Affiliates on or prior to May 17, 2006 in an amount
not to exceed $5,000,000 shall be paid if and when the effective
date of any plan of reorganization for the Company occurs and
only if such plan results in holders of Common Stock receiving
any recovery under such plan;
(ii) to the extent Transaction Expenses are incurred by any Investor
on or after December 1, 2006, such Transaction Expenses shall be
paid promptly upon submission to the Company of summary
statements therefor by such Investor, in each case, without
Bankruptcy Court review or further Bankruptcy Court order,
whether or not the transactions contemplated hereby are
consummated and, in any event, within 30 days of the submission
of such statements; and
(iii) the filing fee, if any, required to be paid in connection with
any filings required to be made by any Investor or its Affiliates
under the HSR Act or any other competition laws or regulations
shall be paid by the Company on behalf of the Investors or such
Affiliate when filings under the HSR Act or any other competition
laws or regulations are made, together with all expenses of the
Investors or its Affiliates incurred to comply therewith.
The provision for the payment of the Transaction Expenses is an
integral part of the transactions contemplated by this Agreement and
without this provision the Investors would not have entered into this
Agreement and such Transaction Expenses shall constitute an allowed
administrative expense of the Company under Section 503(b)(1) and
507(a)(1) of the Bankruptcy Code. In addition, (i) to the extent
permitted under any order authorizing the Debtors to obtain
post-petition financing and/or to utilize cash collateral then or
thereafter in effect (each a "Financing Order") the Transaction
Expenses incurred from and after the date of entry of the Initial
Approval Order shall be protected by and entitled to the benefits of
the carve-out for professional fees provided in any such Financing
Order.
(k) The Company acknowledges that the Investors and certain persons and
entities (collectively, the "Ultimate Purchasers") may enter into one
or more agreements (the "Additional Investor Agreements"), pursuant to
which such Investor may arrange for one or more Ultimate Purchasers to
purchase certain of the Unsubscribed Shares, the Direct Subscription
Shares or the Series B Preferred Stock. Each Additional Investor
Agreement entered into prior to the Closing Date shall contain the
Ultimate Purchaser's agreement to be bound by this Agreement and shall
contain a confirmation by such Ultimate Purchaser of the accuracy with
respect to it of the representations set forth in Section 4. Each
Investor proposing to enter into an Additional Investor Agreement
prior to the Closing Date with any Ultimate Purchaser or proposing to
transfer Investor Shares to any Related Purchaser in either case which
would result in the Maximum Number being exceeded agrees to notify the
Company prior to entering into such agreement or effecting such
transfer and will not undertake such agreement or effect such transfer
without the consent of the Company, which shall not be unreasonably
withheld. The Investors agree that with respect to any offer or
transfer to an Ultimate Purchaser prior to the Closing Date, they
shall not offer any Investor Shares to, or enter into any Additional
Investor Agreement with, any person or entity (A) after the initial
filing of the Rights Offering Registration Statement with the
Commission and (B) that is not a "Qualified Institutional Buyer" as
defined in Rule 144A under the Securities Act; provided that the total
number of Investors, Related Purchasers and Ultimate Purchasers
pursuant to this Agreement shall not exceed the Maximum Number;
provided, further, that nothing in this Agreement shall limit or
restrict in any way any Investor's ability to transfer or otherwise
dispose of any Investor's Shares or any interest therein after the
Closing Date pursuant to an effective registration statement under the
Securities Act or an exemption from the registration requirements
thereunder and pursuant to applicable state securities laws.
3. Representations and Warranties of the Company. Except as set forth in a
disclosure letter to be delivered pursuant to Section 5(s) (the "Disclosure
Letter"), the Company represents and warrants to, and agrees with, each of
the Investors as set forth below. Any item disclosed in a section of the
Disclosure Letter shall be deemed disclosed in all other sections of the
Disclosure Letter to the extent the relevance of such disclosure or matter
is reasonably apparent and shall qualify the representations and warranties
contained in this Section 3. Except for representations, warranties and
agreements that are expressly limited as to their date, each
representation, warranty and agreement shall be deemed made as of the date
of delivery of the Disclosure Letter (the "Disclosure Letter Delivery
Date") and as of the Closing Date:
(a) Organization and Qualification. The Company and each of its
Significant Subsidiaries has been duly organized and is validly
existing in good standing under the laws of its respective
jurisdiction of incorporation, with the requisite power and authority
to own its properties and conduct its business as currently conducted.
Each of the Company and its Subsidiaries has been duly qualified as a
foreign corporation or organization 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, except to the extent that the failure to
be so qualified or be in good standing has not had and would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. For the purpose of this Agreement, "Material
Adverse Effect" means (i) any material adverse effect on the business,
results of operations, liabilities, property or condition (financial
or otherwise) of the Company or its Subsidiaries, taken as a whole, or
(ii) any material adverse effect on the ability of the Company,
subject to the approvals and other authorizations set forth in Section
3(g) below, to consummate the transactions contemplated by this
Agreement or the Plan other than, in either case, any effect relating
to or resulting from (i) changes in general economic conditions or
securities or financial markets in general that do not
disproportionately impact the Company and its Subsidiaries; (ii)
general changes in the industry in which the Company and its
Subsidiaries operate and not specifically relating to, or having a
disproportionate effect on, the Companies and its Subsidiaries taken
as a whole (relative to the effect on other persons operating in such
industry); (iii) any changes in law applicable to the Company or any
of its Subsidiaries or any of their respective properties or assets or
interpretations thereof by any governmental authority which do not
have a disproportionate effect on, the Company and its Subsidiaries;
(iv) any outbreak or escalation of hostilities or war (whether
declared or not declared) or any act of terrorism which do not have a
disproportionate effect on, the Company and its Subsidiaries; (v) the
announcement or the existence of, or compliance with, this Agreement
and the transactions contemplated hereby (including without limitation
the impact thereof on relationships with suppliers, customers or
employees); (vi) any accounting regulations or principles or changes
in accounting practices or policies that the Company or its
Subsidiaries are required to adopt, including in connection with the
audit of the Company's financial statements in accordance with GAAP or
any failure to timely file periodic reports or timely prepare
financial statements and the costs and effects of completing the
preparation of the Company's financial statements and periodic
reports; or (vii) any change in the market price or trading volumes of
the Company's securities (it being understood for the purposes of this
subclause (vii) that any facts underlying such change that are not
otherwise covered by the immediately preceding clauses (i) through
(vi) may be taken into account in determining whether or not there has
been a Material Adverse Effect). For the purposes of this Agreement,
(x) a "Subsidiary" of any person means, with respect to such person,
any corporation, partnership, joint venture or other legal entity of
which such person (either alone or through or together with any other
subsidiary), owns, directly or indirectly, more than 50% of the stock
or other equity interests, has the power to elect a majority of the
board of directors or similar governing body, or has the power to
direct the business and policies, and (y) a "Significant Subsidiary"
is a Subsidiary that satisfies the definition contained in Article 1,
Rule 1-02 of Regulation S-X promulgated pursuant to the Securities Act
of 1933, as amended.
(b) Corporate Power and Authority.
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(i) The Company has or, to the extent executed in the future, will
have when executed the requisite corporate power and authority to
enter into, execute and deliver this Agreement and each other
agreement to which it will be a party as contemplated by this
Agreement and the PSA (this Agreement and such other agreements
collectively, the "Transaction Agreements") and, subject to entry
of the Confirmation Order and the expiration, or waiver by the
Bankruptcy Court, of the 10-day period set forth in Rules 6004(h)
and 3020(e) of the Federal Rules of Bankruptcy Procedure (the
"Bankruptcy Rules"), respectively, to perform its obligations
hereunder and thereunder, including the issuance of the Rights
and Investor Shares. The Company has taken or will take all
necessary corporate action required for the due authorization,
execution, delivery and performance by it of this Agreement,
including the issuance of the Rights and Investor Shares.
(ii) Prior to the execution by the Company and filing with the
Bankruptcy Court of the Plan, the Company and each Subsidiary
entering into the Plan will have the requisite corporate power
and authority to execute the Plan and to file the Plan with the
Bankruptcy Court and, subject to entry of the Confirmation Order
and the expiration, or waiver by the Bankruptcy Court, of the
10-day period set forth in Bankruptcy Rule 3020(e), to perform
its obligations thereunder, and will have taken by the Effective
Date all necessary corporate actions required for the due
authorization, execution, delivery and performance by it of the
Plan.
(c) Execution and Delivery; Enforceability.
--------------------------------------
(i) Each Transaction Agreement has been, or prior to its execution
and delivery will be, duly and validly executed and delivered by
the Company, and, upon the expiration, or waiver by the
Bankruptcy Court, of the 10-day period set forth in Bankruptcy
Rule 6004(h), each such document will constitute the valid and
binding obligation of the Company, enforceable against the
Company in accordance with its terms.
(ii) The Plan will be duly and validly filed with the Bankruptcy Court
by the Company and each of its Subsidiaries executing the Plan
and, upon the entry of the Confirmation Order and the expiration,
or waiver by the Bankruptcy Court, of the 10-day period set forth
in Bankruptcy Rule 3020(e), will constitute the valid and binding
obligation of the Company and such Subsidiary, enforceable
against the Company and such Subsidiaries in accordance with its
terms.
(d) Authorized and Issued Capital Stock. The authorized capital stock of
the Company consists of (i) 1,350,000,000 shares of Common Stock and
(ii) 650,000,000 shares of preferred stock, par value $0.10 per share.
At the close of business on November 30, 2006 (the "Capital Structure
Date") (i) 561,781,500 shares of Common Stock were issued and
outstanding, (ii) no shares of the preferred stock were issued and
outstanding, (iii) 3,244,317 shares of Common Stock were held by the
Company in its treasury, (iv) 85,978,864 shares of Common Stock were
reserved for issuance upon exercise of stock options and other rights
to purchase shares of Common Stock and vesting of restricted stock
units (each, an "Option" and, collectively, the "Options") granted
under any stock option or stock-based compensation plan of the Company
or otherwise (the "Stock Plans"), and (v) 200,000 shares of Series A
participating preferred stock were reserved for issuance pursuant to
that certain Rights Agreement by and between the Company and
BankBoston, N.A., as Rights Agent, dated as of February 1, 1999, as
amended (the "Existing Shareholder Rights Plan"). All issued and
outstanding shares of capital stock of the Company and each of its
Subsidiaries have been duly authorized and validly issued and are
fully paid and nonassessable, and the holders thereof do not have any
preemptive rights. Except as set forth in this Section 3(d) or
issuances pursuant to the Stock Plans, at the close of business on the
Capital Structure Date, no shares of capital stock or other equity
securities or voting interest in the Company were issued, reserved for
issuance or outstanding. Since the close of business on the Capital
Structure Date, no shares of capital stock or other equity securities
or voting interest in the Company have been issued or reserved for
issuance or become outstanding, other than shares described in clause
(iv) of the second sentence of this Section 3(d) that have been issued
upon the exercise of outstanding Options granted under the Stock Plans
and other than the shares to be issued hereunder or pursuant to the
PSA. Except as described in this Section 3(d), and except as will be
required by the Plan, neither the Company nor any of its Subsidiaries
is party to or otherwise bound by or subject to any outstanding
option, warrant, call, subscription or other right (including any
preemptive right), agreement or commitment which (w) obligates the
Company or any of its Subsidiaries to issue, deliver, sell or
transfer, or repurchase, redeem or otherwise acquire, or cause to be
issued, delivered, sold or transferred, or repurchased, redeemed or
otherwise acquired, any shares of the capital stock of, or other
equity or voting interests in, the Company or any security convertible
or exercisable for or exchangeable into any capital stock of, or other
equity or voting interest in, the Company, (x) obligates the Company
or any of its Subsidiaries to issue, grant, extend or enter into any
such option, warrant, call, right, security, commitment, contract,
arrangement or undertaking, (y) restricts the transfer of any shares
of capital stock of the Company or (z) relates to the voting of any
shares of capital stock of the Company. On the Effective Date, the
authorized capital stock of the Company and the issued and outstanding
shares of capital stock of the Company will conform to the description
set forth in the Preferred Term Sheet, the PSA and the Plan. On the
Effective Date, the authorized capital stock of the Company shall
consist of such number of shares of New Common Stock as shall be set
forth in the Amended and Restated Constituent Documents and 34,285,716
shares of new preferred stock. On the Effective Date, assuming
consummation of the transactions contemplated by this Agreement: (i)
101,000,000 shares of New Common Stock will be outstanding; (ii)
8,571,429 shares of Series A-1 Preferred Stock will be issued and
outstanding; (iii) 8,571,429 shares of Series A-2 Preferred Stock will
be issued and outstanding; and (iv) 17,142,858 shares of Series B
Preferred Stock will be issued and outstanding.
(e) Issuance. The Investor Shares to be issued and sold by the Company to
the Investors hereunder, when the Investor Shares are issued and
delivered against payment therefor by the Investors hereunder, shall
have been duly and validly authorized, issued and delivered and shall
be fully paid and non-assessable, and free and clear of all Taxes,
liens, preemptive rights, rights of first refusal, subscription and
similar rights, other than (i) any rights contained in the terms of
the Preferred Shares as set forth in the Company's Certificate of
Incorporation and (ii) any rights contained in any shareholders
agreement to which one or more of the Investors shall be a party.
(f) No Conflict. Subject to the entry of the Confirmation Order and the
expiration, or waiver by the Bankruptcy Court, of the 10-day period
set forth in Bankruptcy Rules 6004(h) and 3020(e), as applicable, the
distribution of the Rights, the sale, issuance and delivery of the
Shares upon exercise of the Rights, the consummation of the Rights
Offering by the Company and the execution and delivery (or, with
respect to the Plan, the filing) by the Company of the Transaction
Agreements and the Plan and compliance by the Company with all of the
provisions hereof and thereof and the Preferred Term Sheet and the PSA
and the consummation of the transactions contemplated herein and
therein (including compliance by each Investor with its obligations
hereunder and thereunder) (i) will not conflict with, or result in a
breach or violation of, any of the terms or provisions of, or
constitute a default under (with or without notice or lapse of time,
or both), or result, except to the extent to be specified in the Plan,
in the acceleration of, or the creation of any lien under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is bound or
to which any of the property or assets of the Company or any of its
Subsidiaries is subject, (ii) will not result in any violation of the
provisions of the Certificate of Incorporation or Bylaws of the
Company or any of its Subsidiaries, (iii) will not result in any
material violation of, or any termination or material impairment of
any rights under, any statute or any license, authorization,
injunction, judgment, order, decree, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company or
any of its Subsidiaries or any of their properties, and (iv) will not
trigger the distribution under the Existing Shareholders Rights Plan
of Rights Certificates (as defined therein) or otherwise result in any
Investor being or becoming an Acquiring Person, except in any such
case described in subclause (i) for any conflict, breach, violation,
default, acceleration or lien which has not had and would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(g) Consents and Approvals. No consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body having jurisdiction over the Company or any of its
Subsidiaries or any of their properties is required for the
distribution of the Rights, the sale, issuance and delivery of Shares
upon exercise of the Rights or the Investor Shares to each Investor
hereunder and the consummation of the Rights Offering by the Company
and the execution and delivery by the Company of the Transaction
Agreements or the Plan and performance of and compliance by the
Company with all of the provisions hereof and thereof and the
Preferred Term Sheet and the PSA and the consummation of the
transactions contemplated herein and therein, except (i) the entry of
the Confirmation Order and the expiration, or waiver by the Bankruptcy
Court, of the 10-day period set forth in Bankruptcy Rules 6004(h) and
3020(e), as applicable, (ii) the registration under the Securities Act
of the issuance of the Rights and the Shares pursuant to the exercise
of Rights, (iii) filings with respect to and the expiration or
termination of the waiting period under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and
any other comparable laws or regulations in any foreign jurisdiction
relating to the sale or issuance of Investor Shares to the Investors,
(iv) the filing with the Secretary of State of the State of Delaware
of the Certificate of Incorporation to be applicable to the Company
from and after the Effective Date and (v) such consents, approvals,
authorizations, registrations or qualifications (x) as may be required
under the rules and regulations of the New York Stock Exchange or the
Nasdaq Stock Exchange to consummate the transactions contemplated
herein, (y) as may be required under state securities or Blue Sky laws
in connection with the purchase of the Investor Shares by the
Investors or the distribution of the Rights and the sale of Shares to
Eligible Holders or (z) the absence of which will not have or would
not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect.
(h) Arm's Length. The Company acknowledges and agrees that the Investors
are acting solely in the capacity of an arm's length contractual
counterparty to the Company with respect to the transactions
contemplated hereby (including in connection with determining the
terms of the Rights Offering) and not as a financial advisor or a
fiduciary to, or an agent of, the Company or any other person or
entity. Additionally, the Investors are not advising the Company or
any other person or entity as to any legal, tax, investment,
accounting or regulatory matters in any jurisdiction. The Company
shall consult with its own advisors concerning such matters and shall
be responsible for making its own independent investigation and
appraisal of the transactions contemplated hereby, and the Investors
shall have no responsibility or liability to the Company, its
Affiliates, or their respective shareholders, directors, officers,
employees, advisors or other representatives with respect thereto. Any
review by the Investors of the Company, the transactions contemplated
hereby or other matters relating to such transactions will be
performed solely for the benefit of the Investors and shall not be on
behalf of the Company, its Affiliates, or their respective
shareholders, directors, officers, employees, advisors or other
representatives and shall not affect any of the representations or
warranties contained herein or the remedies of the Investors with
respect thereto.
(i) Financial Statements. The financial statements and the related notes
of the Company and its consolidated Subsidiaries included or
incorporated by reference in the Company SEC Documents, and to be
included or incorporated by reference in the Disclosure Statement and
the Rights Offering Registration Statement and the Rights Offering
Prospectus, comply or will comply, as the case may be, in all material
respects with the applicable requirements of the Securities Act, the
Securities Exchange Act of 1934, as amended, and the rules and
regulation of the Commission thereunder (the "Exchange Act") and the
Bankruptcy Code, as applicable, and present fairly or will present
fairly in all material respects the financial position, results of
operations and cash flows of the Company and its Subsidiaries as of
the dates indicated and for the periods specified; such financial
statements have been prepared in conformity with U.S. generally
accepting accounting principles ("GAAP") applied on a consistent basis
throughout the periods covered thereby (except as disclosed in the
Company SEC Documents filed prior to the date hereof), and the
supporting schedules included or incorporated by reference in the
Company SEC Documents, and to be included or incorporated by reference
in the Disclosure Statement, the Rights Offering Registration
Statement and the Rights Offering Prospectus, present fairly or will
present fairly the information required to be stated therein; and the
other financial information included or incorporated by reference in
the Company SEC Documents, and to be included or incorporated by
reference in the Disclosure Statement, Rights Offering Registration
Statement and the Rights Offering Prospectus, has been or will be
derived from the accounting records of the Company and its
Subsidiaries and presents fairly or will present fairly the
information shown thereby; and the pro forma financial information and
the related notes included or incorporated by reference in the Company
SEC Documents, and to be included or incorporated by reference in the
Disclosure Statement, Rights Offering Registration Statement and the
Rights Offering Prospectus, have been or will be prepared in
accordance with the applicable requirements of the Securities Act and
the Exchange Act, as applicable, and the assumptions underlying such
pro forma financial information are reasonable and are set forth in
the Company SEC Documents and will be set forth in the Disclosure
Statement, Rights Offering Registration Statement and the Rights
Offering Prospectus.
(j) Company SEC Documents and Disclosure Statement. Except for the
Company's Quarterly Report on Form 10-Q for the period ended September
30, 2006, (which has not been filed as of the date hereof) the Company
has filed all required reports, schedules, forms, statements and other
documents (including exhibits and all other information incorporated
therein) with the Commission ("Company SEC Documents"). As of their
respective dates, each of the Company SEC Documents complied in all
material respects with the requirements of the Securities Act or the
Exchange Act and the rules and regulations of the Commission
promulgated thereunder applicable to such Company SEC Documents. The
Company has filed with the Commission all "material contracts" (as
such term is defined in Item 601(b)(10) of Regulation S-K under the
Exchange Act) that are required to be filed as exhibits to the Company
SEC Documents. No Company SEC Document filed after December 31, 2005,
when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
Disclosure Statement, when submitted to the Bankruptcy Court and upon
confirmation and effectiveness, will conform in all material respects
to the requirements of the Bankruptcy Code. The Disclosure Statement,
when submitted to the Bankruptcy Court and upon confirmation and
effectiveness, and any future Company SEC Documents filed with the
Commission prior to the Closing Date, when filed, will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
(k) Rights Offering Registration Statement and Rights Offering Prospectus.
The Rights Offering Registration Statement or any post-effective
amendment thereto, as of the Securities Act Effective Date, will
comply in all material respects with the Securities Act, and will not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and as of the applicable filing
date of the Rights Offering Prospectus and any amendment or supplement
thereto and as of the Closing Date, the Rights Offering Prospectus
will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. On the Distribution Date and the
Expiration Date, the Investment Decision Package will not 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 the light of the circumstances under which they were made,
not misleading. Each Issuer Free Writing Prospectus, at the time of
use thereof, when considered together with the Investment Decision
Package, will not 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 the light of the
circumstances under which they were made, not misleading. Each
Preliminary Rights Offering Prospectus, at the time of filing thereof,
will comply in all material respects with the Securities Act and will
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. Notwithstanding the foregoing, the Company
makes no representation and warranty with respect to any statements or
omissions made in reliance on and in conformity with information
relating to each Investor or the Ultimate Purchasers furnished to the
Company in writing by such Investor or the Ultimate Purchasers
expressly for use in the Rights Offering Registration Statement and
the Rights Offering Prospectus and any amendment or supplement
thereto.
For the purposes of this Agreement, (i) the term "Rights Offering
Registration Statement" means the Registration Statement to be filed
with the Commission relating to the Rights Offering, including all
exhibits thereto, as amended as of the Securities Act Effective Date,
and any post-effective amendment thereto that becomes effective; (ii)
the term "Rights Offering Prospectus" means the final prospectus
contained in the Rights Offering Registration Statement at the
Securities Act Effective Date (including information, if any, omitted
pursuant to Rule 430A and subsequently provided pursuant to Rule
424(b) under the Securities Act ), and any amended form of such
prospectus provided under Rule 424(b) under the Securities Act or
contained in a post-effective amendment to the Rights Offering
Registration Statement; (iii) the term "Investment Decision Package"
means the Rights Offering Prospectus, together with any Issuer Free
Writing Prospectus used by the Company to offer the Shares to Eligible
Holders pursuant to the Rights Offering, (iv) the term "Issuer Free
Writing Prospectus" means each "issuer free writing prospectus" (as
defined in Rule 433 of the rules promulgated under the Securities Act)
prepared by or on behalf of the Company or used or referred to by the
Company in connection with the Rights Offering, (v) the term
"Preliminary Rights Offering Prospectus" means each prospectus
included in the Rights Offering Registration Statement (and any
amendments thereto) before it becomes effective, any prospectus filed
with the Commission pursuant to Rule 424(a) under the Securities Act
and the prospectus included in the Rights Offering Registration
Statement, at the time of effectiveness that omits information
permitted to be excluded under Rule 430A under the Securities Act; and
(vi) "Securities Act Effective Date" means the date and time as of
which the Rights Offering Registration Statement, or the most recent
post-effective amendment thereto, was declared effective by the
Commission.
(l) Free Writing Prospectuses. Each Issuer Free Writing Prospectus will
conform in all material respects to the requirements of the Securities
Act as of the date of first use or as otherwise provided for in Rule
433 under the Securities Act, and the Company will comply with all
prospectus delivery and all filing requirements applicable to such
Issuer Free Writing Prospectus under the Securities Act. The Company
has retained in accordance with the Securities Act all Issuer Free
Writing Prospectuses that were not required to be filed pursuant to
the Securities Act.
(m) Absence of Certain Changes. Since December 31, 2005, other than as
disclosed in the Company SEC Documents filed prior to the date hereof,
and except for actions to be taken pursuant to the Transaction
Agreements and the Plan:
(i) there has not been any change in the capital stock from that set
forth in Section 3(d) or any material change in long-term debt of
the Company or any of its Subsidiaries, or any dividend or
distribution of any kind declared, set aside for payment, paid or
made by the Company on any class of capital stock;
(ii) no event, fact or circumstance has occurred which has had or
would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect;
(iii) neither the Company nor any of its Subsidiaries has made any
changes with respect to accounting policies or procedures, except
as required by law or changes in GAAP;
(iv) neither the Company nor any of its Subsidiaries has paid,
discharged, waived, compromised, settled or otherwise satisfied
any material Legal Proceeding, whether now pending or hereafter
brought, (A) at a cost materially in excess of the amount accrued
or reserved for it in the Company SEC Documents filed prior to
the date hereof, (B) pursuant to terms that impose material
adverse restrictions on the business of the Company and its
Subsidiaries as currently conducted or (C) on a basis that
reveals a finding or an admission of a material violation of law
by the Company or its Subsidiaries;
(v) other than in the ordinary course of business, neither the
Company nor any of its Subsidiaries has (A) made, changed or
revoked any material Tax election, (B) entered into any
settlement or compromise of any material Tax liability, (C) filed
any amended Tax Return with respect to any material Tax, (D)
changed any annual Tax accounting period, (E) entered into any
closing agreement relating to any material Tax, (F) knowingly
failed to claim a material Tax refund for which it is entitled,
or (G) made material changes to their Tax accounting methods or
principles;
(vi) there has not been (A) any increase in the base compensation
payable or to become payable to the officers or employees of the
Company or any of its Subsidiaries with annual base compensation
in excess of $500,000 (except for compensation increases in the
ordinary course of business and consistent with past practice) or
(B) except in the ordinary course of business and consistent with
past practice, any establishment, adoption, entry into or
material amendment of any collective bargaining, bonus, profit
sharing, thrift, compensation, employment, termination, severance
or other plan, agreement, trust, fund, policy or arrangement for
the benefit of any director, or for the benefit of a group of
employees or for any individual officer or employee with annual
base compensation in excess of $500,000, in each case;
(vii) except in a manner consistent with the Company's transformation
plan previously disclosed in the Company SEC Documents filed
prior to the date hereof, (the "Transformation Plan") neither the
Company nor any of its Subsidiaries have sold, transferred,
leased, licensed or otherwise disposed of any assets or
properties material to the Company and its Subsidiaries, taken as
a whole, except for (A) sales of inventory in the ordinary course
of business consistent with past practice and (B) leases or
licenses entered into in the ordinary course of business
consistent with past practice; and
(viii) except in a manner consistent with the Transformation Plan,
neither the Company nor any of its Subsidiaries have acquired any
business or entity material to the Company and its Subsidiaries,
taken as a whole, by merger or consolidation, purchase of assets
or equity interests, or by any other manner, in a single
transaction or a series of related transactions, or entered into
any contract, letter of intent or similar arrangement (whether or
not enforceable) with respect to the foregoing.
(n) Descriptions of the Transaction Agreement. The statements in the
Rights Offering Registration Statement and the Rights Offering
Prospectus insofar as they purport to constitute summaries of each of
the Transaction Agreements, the Plan, the Initial Approval Order and
the Confirmation Order, or the terms of statutes, rules or
regulations, legal or governmental proceedings or contracts, will
constitute accurate summaries in all material respects.
(o) No Violation or Default; Compliance with Laws. Neither the Company nor
any of its Significant Subsidiaries is in violation of its charter or
by-laws or similar organizational documents. Neither the Company nor
any of its Subsidiaries is, except as a result of the Chapter 11 Cases
or the failure to file its Quarterly Report on Form 10-Q for the
period ended September 30, 2006, in default, and no event has occurred
that, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any
of its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound or to which any of the property or assets of the
Company or any of its Subsidiaries is subject, except for any such
default that has not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. Neither
the Company nor any of its Subsidiaries is, or has been at any time
since January 1, 2002, in violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except for any such violation
that has not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
(p) Legal Proceedings. Except as described in the Company SEC Documents
filed prior to the date hereof, there are no legal, governmental or
regulatory actions, suits, proceedings or, to the knowledge of the
Company, investigations pending to which the Company or any of its
Subsidiaries is or may be a party or to which any property of the
Company or any of its Subsidiaries is or may be the subject that,
individually or in the aggregate, has had or, if determined adversely
to the Company or any of its Subsidiaries, would reasonably be
expected to have a Material Adverse Effect, and no such actions, suits
or proceedings or, to the knowledge of the Company, investigations are
pending, threatened or contemplated, by any governmental or regulatory
authority or by others. There are no current or pending legal,
governmental or regulatory actions, suits or proceedings that are
required under the Exchange Act to be described in the Company SEC
Documents or the Rights Offering Registration Statement or Rights
Offering Prospectus that are not or will not be so described, and
there are no statutes, regulations or contracts or other documents
that are required under the Exchange Act to be filed as exhibits to
the Company SEC Documents or the Rights Offering Registration
Statement or Rights Offering Prospectus or described in the Company
SEC Documents or the Rights Offering Registration Statement or Rights
Offering Prospectus that are not so filed or described.
(q) Independent Accountants. Ernst & Young LLP ("E&Y"), the Company's
public accountants, are independent public accountants with respect to
the Company and its Subsidiaries as required by the Securities Act.
(r) Labor Relations. Except as set forth in the Company SEC Documents
filed prior to the date hereof:
(i) neither the Company nor any of its Subsidiaries is a party to, or
bound by, any material collective bargaining agreement, contract
or other agreement or understanding with a labor union or labor
organization (other than contracts or other agreements or
understandings with labor unions or labor organizations in
connection with products and services offered and sold to such
unions and organizations by the Company or its Subsidiaries);
(ii) neither the Company nor any of its Subsidiaries is the subject of
any proceeding asserting that it or any Subsidiary has committed
an unfair labor practice or sex, age, race or other
discrimination or seeking to compel it to bargain with any labor
organization as to wages or conditions of employment, which,
individually or in the aggregate, has had or would reasonably be
expected to have a Material Adverse Effect;
(iii) there are no material current or, to the knowledge of the
Company, threatened organizational activities or demands for
recognition by a labor organization seeking to represent
employees of the Company or any Subsidiary and no such activities
have occurred during the past 24 months;
(iv) no grievance, arbitration, litigation or complaint or, to the
knowledge of the Company, investigations relating to labor or
employment matters is pending or, to the knowledge of the
Company, threatened against the Company or any of its
Subsidiaries which, except as has not had, and would not
reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect;
(v) the Company and each of its Subsidiaries has complied and is in
compliance in all respects with all applicable laws (domestic and
foreign), agreements, contracts, and policies relating to
employment, employment practices, wages, hours, and terms and
conditions of employment and is not engaged in any material
unfair labor practice as determined by the National Labor
Relations Board (or any foreign equivalent) except where the
failure to comply has not had or would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse
Effect;
(vi) the Company has complied in all respects with its payment
obligations to all employees of the Company and its Subsidiaries
in respect of all wages, salaries, commissions, bonuses, benefits
and other compensation due and payable to such employees under
any Company policy, practice, agreement, plan, program or any
statute or other law, except to the extent that any
noncompliance, either individually or in the aggregate, has not
had and would not reasonably be expected to have a Material
Adverse Effect; and
(vii) the Company has complied and is in compliance in all material
respects with its obligations pursuant to the Worker Adjustment
and Retraining Notification Act of 1988 (and any similar state or
local law) to the extent applicable, and all material other
employee notification and bargaining obligations arising under
any collective bargaining agreement or statute.
(s) Title to Intellectual Property. The Company and its Subsidiaries own
or possess valid and enforceable rights to use all material patents,
patent applications, trademarks, service marks, trade names, trademark
registrations, service xxxx registrations, copyrights, licenses and
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) (collectively, "Intellectual Property") used in the
conduct of their respective businesses other than Intellectual
Property, the failure to own or possess which has not had and would
not reasonably be expected to have, individually or in the aggregate,
Material Adverse Effect. All registrations with and applications to
governmental or regulatory authorities in respect of such Intellectual
Property are valid and in full force and effect, have not, except in
accordance with the ordinary course practices of the Company and its
Subsidiaries, lapsed, expired or been abandoned (subject to the
vulnerability of a registration for trademarks to cancellation for
lack of use), are not the subject of any opposition filed with the
United States Patent and Trademark Office or any other applicable
Intellectual Property registry. The consummation of the transaction
contemplated hereby and by the Plan will not result in the loss or
impairment of any rights to use such Intellectual Property or obligate
any of the Investors to pay any royalties or other amounts to any
third party in excess of the amounts that would have been payable by
Company and its Subsidiaries absent the consummation of this
transactions. The Company and its Subsidiaries have taken reasonable
security measures to protect the confidentiality and value of its and
their trade secrets (or other Intellectual Property for which the
value is dependent upon its confidentiality), and no such information,
has been misappropriated or the subject of an unauthorized disclosure,
except to the extent that such misappropriation or unauthorized
disclosure has not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. The
Company and its Subsidiaries have not received any notice that it is
or they are, in default (or with the giving of notice or lapse of time
or both, would be in default) under any contract relating to such
Intellectual Property. No Intellectual Property rights of the Company
or its Subsidiaries are being infringed by any other person, except to
the extent that such infringement has not had and would not have,
individually or in the aggregate, a Material Adverse Effect. The
conduct of the businesses of the Company and its Subsidiaries will not
conflict in any respect with any Intellectual Property rights of
others, and the Company and its Subsidiaries have not received any
notice of any claim of infringement or conflict with any such rights
of others which has had or would in any such case be reasonably
expected to have, individually or in the aggregate, a Material Adverse
Effect.
(t) Title to Real and Personal Property. The Company and its Subsidiaries
have good and marketable title to all real property owned by the
Company and its Subsidiaries and good title to all other tangible and
intangible properties (other than Intellectual Property covered by
Section 3(s)) owned by them, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (i) are described in the
consolidated balance sheets included in the Company SEC Documents
filed prior to the date hereof or (ii) individually and in the
aggregate, have not had and would not reasonably be expected to have a
Material Adverse Effect. All of the leases and subleases to which the
Company or its Subsidiaries are a party are in full force and effect
and enforceable by the Company or such Subsidiary in accordance with
their terms, and neither the Company nor any Subsidiary has received
any notice of any claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any Subsidiary under any of
the leases or subleases mentioned above, or affecting or questioning
the rights of the Company or such Subsidiary to the continued
possession of the leased or subleased property by under any such lease
or sublease, except where any such claim or failure to be enforceable
would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(u) No Undisclosed Relationships. As of the date hereof, no relationship,
direct or indirect, exists between or among the Company or any of its
Subsidiaries, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its
Subsidiaries, on the other, that is required by the Exchange Act to be
described in the Company SEC Documents and that are not so described,
except for the transactions pursuant to this Agreement.
(v) Investment Company Act. As of the date hereof, the Company is not and,
after giving effect to the consummation of the Plan, including the
offering and sale of the Investor Shares and Shares upon exercise of
Rights, and the application of the proceeds thereof, will not be
required to register as an "investment company" or an entity
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder.
(w) Licenses and Permits. The Company and its Subsidiaries possess all
licenses, certificates, permits and other authorizations issued by,
and have made all declarations and filings with, the appropriate
federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of their
respective properties or the conduct of their respective businesses as
described in the Company SEC Documents except any such licenses,
certificates, permits or authorization the absence of which would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. Except as described in the Company SEC
Documents filed prior to the date hereof and except as, individually
and in the aggregate, has not had and would not reasonably be expected
to have a Material Adverse Effect, neither the Company nor any of its
Subsidiaries has received notice of any revocation or modification of
any such license, certificate, permit or authorization or has any
reason to believe that any such license, certificate, permit or
authorization will not be renewed in the ordinary course.
(x) Compliance with Environmental Laws.
(i) The Company and its Subsidiaries have complied and are in
compliance with any and all applicable federal, state, local and
foreign laws, rules, regulations, decisions and orders, including
all civil and common law, relating to the protection of human
health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively,
"Environmental Laws");
(ii) the Company and its Subsidiaries have (a) received and are in
compliance with all permits, licenses or other approvals required
of them under applicable Environmental Laws to conduct their
respective businesses, (b) are not subject to any action to
revoke, terminate, cancel, limit, amend or appeal any such
permits, licenses or approvals, and (c) have paid all fees,
assessments or expenses due under any such permits, licenses or
approvals;
(iii) the Company and its Subsidiaries have not received notice from
any governmental authority of any actual or potential liability
for the investigation or remediation of any disposal or release
of hazardous or toxic substances or wastes, pollutants or
contaminants, or for any violation of Environmental Laws;
(iv) there are no facts, circumstances or conditions relating to the
past or present business or operations of the Company, its
Subsidiaries or any of their predecessors (including the disposal
of any hazardous or toxic substances or wastes, pollutants or
contaminants), or to any real property currently or formerly
owned or operated by the Company, its Subsidiaries or any of
their predecessors, that would reasonably be expected to give
rise to any claim, proceeding or action, or to any liability,
under any Environmental Law;
(v) neither the Company nor any of its Subsidiaries has agreed to
assume or accept responsibility for, by contract or otherwise,
any liability of any other person under Environmental Laws;
(vi) neither the Company nor any of its Subsidiaries is required or
reasonably expected to incur material capital expenditures during
the current and the subsequent five fiscal years to reach or
maintain compliance with existing or reasonably anticipated
Environmental Laws;
(vii) none of the transactions contemplated under this Agreement will
give rise to any obligations to obtain the consent of or provide
notice to any governmental or regulatory authority under any
Environmental Laws; and
(viii) none of the Company, nor any of its subsidiaries nor their
respective predecessors has manufactured, marketed, distributed,
or sold asbestos or any products containing asbestos.
except, in the case of each of subclauses (i) through (vi) and in subclause
(viii) above, as disclosed in the Company SEC Documents filed prior to the
date hereof, as have been, as of the date of this Agreement, adequately
provided for in accordance with GAAP in the financial statements of the
Company included in the Company SEC Documents filed prior to the date
hereof, or as, individually and in the aggregate, has not had and would not
reasonably be expected to have a Material Adverse Effect.
(y) Tax Matters. Except as described in the Company SEC Documents filed
with the Commission prior to the date hereof:
(i) The Company has timely filed or caused to be timely filed (taking
into account any applicable extension of time within which to
file) with the appropriate taxing authorities all material tax
returns, statements, forms and reports (including elections,
declarations, disclosures, schedules, estimates and information
Tax Returns) for Taxes ("Tax Returns") that are required to be
filed by, or with respect to, the Company and its Subsidiaries on
or prior to the Closing Date. The Tax Returns accurately reflect
all material liability for Taxes of the Company and its
Subsidiaries for the periods covered thereby;
(ii) all material Taxes and Tax liabilities due by or with respect to
the income, assets or operations of the Company and its
Subsidiaries for all taxable years or other taxable periods that
end on or before the Closing Date have been or will, prior to the
Closing, be timely paid in full or accrued and fully provided for
in accordance with GAAP on the financial statements of the
Company included in the Company SEC Documents;
(iii) neither the Company nor any of its Subsidiaries has received any
written notices from any taxing authority relating to any
material issue that has not been adequately provided for in
accordance with GAAP in the financial statements of the Company
included in the Company SEC Documents filed prior to the date
hereof;
(iv) all material Taxes which the Company and each or any of its
Subsidiaries is (or was) required by law to withhold or collect
in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other third
party have been duly withheld or collected, and have been timely
paid to the proper authorities to the extent due and payable;
(v) neither the Company nor any of its subsidiaries has been included
in any "consolidated," "unitary" or "combined" Tax Return
provided for under the law of the United States, any foreign
jurisdiction or any state or locality with respect to Taxes for
any taxable period for which the statute of limitations has not
expired (other than a group of which the Company and/or its
subsidiaries are the only members);
(vi) except for the tax sharing allocations and similar agreements
entered into with GM at the time of the spin-off, there are no
tax sharing, allocation, indemnification or similar agreements in
effect as between the Company or any of its Subsidiaries or any
predecessor or affiliate thereof and any other party (including
any predecessors or affiliates thereof) under which the Company
or any of its Subsidiaries would be liable for any material Taxes
or other claims of any party;
(vii) the Company has not been a "United States real property holding
corporation" within the meaning of Section 897(c)(2) of the Code
at any time during the five-year period ending on the date
hereof; and
(viii) the Company is not a party to any agreement other than certain
Change In Control Agreements in the Company SEC Documents filed
prior to the date hereof that would require the Company or any
affiliate thereof to make any material payment that would
constitute an "excess parachute payment" for purposes of Sections
280G and 4999 of the Code.
For purposes of this Agreement, "Taxes" shall mean all taxes, assessments,
charges, duties, fees, levies or other governmental charges, including,
without limitation, all federal, state, local, foreign and other income,
franchise, profits, gross receipts, capital gains, capital stock, transfer,
property, sales, use, value-added, occupation, property, excise, severance,
windfall profits, stamp, license, payroll, social security, withholding and
other taxes, assessments, charges, duties, fees, levies or other
governmental charges of any kind whatsoever (whether payable directly or by
withholding and whether or not requiring the filing of a Tax Return), all
estimated taxes, deficiency assessments, additions to tax, penalties and
interest and shall include any liability for such amounts as a result
either of being a member of a combined, consolidated, unitary or affiliated
group or of a contractual obligation to indemnify any person or other
entity.
(z) Compliance With ERISA.
----------------------
(i) Correct and complete copies of the following documents, with
respect to all material domestic and foreign benefit and
compensation plans, programs, contracts, commitments, practices,
policies and arrangements, whether written or oral, that have
been established, maintained or contributed to (or with respect
to which an obligation to contribute has been undertaken) or with
respect to which any potential liability is borne by the Company
or any of its Subsidiaries, including, but not limited to,
"employee benefit plans" within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and deferred compensation, stock option, stock
purchase, restricted stock, stock appreciation rights, stock
based, incentive and bonus plans (the "Company Plans"), have been
or will be delivered or made available to the Investors by the
Company, to the extent applicable: (i) all material Company Plan
documents, together with all amendments and attachments thereto
(including, in the case of any Company Plan not set forth in
writing, a written description thereof); (ii) all material trust
documents, declarations of trust and other documents establishing
other funding arrangements, and all amendments thereto and the
latest financial statements thereof; (iii) the most recent annual
report on IRS Form 5500 for each of the past three years and all
schedules thereto and the most recent actuarial report; (iv) the
most recent IRS determination letter; (v) summary plan
descriptions and summaries of material modifications; and (vi)
the two most recently prepared actuarial valuation reports.
(ii) Except as has not had and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse
Effect, or except as described in the Company SEC Documents filed
prior to the date hereof: (A) each Company Plan, other than any
"multiemployer plans" within the meaning of Section 3(37) of
ERISA ("Multiemployer Plans"), is in compliance with ERISA, the
Internal Revenue Code of 1986, as amended (the "Code") and other
applicable laws; (B) each Company Plan that is intended to be a
qualified plan under Section 401(a) of the Code has received a
favorable determination letter from the IRS covering all Tax law
changes prior to the Economic Growth and Tax Relief
Reconciliation Act of 2001 or has applied to the IRS for such
favorable determination within the applicable remedial amendment
period under Section 401(b) of the Code, and the Company is not
aware of any circumstances likely to result in the loss of the
qualification of such Company Plan under Section 401(a) of the
Code; (C) no liability under Subtitle C or D of Title IV of ERISA
has been or is reasonably expected to be incurred by the Company
or any of its Subsidiaries with respect to any ongoing, frozen or
terminated "single-employer plan," within the meaning of Section
4001(a)(15) of ERISA ("Single-Employer Plan") currently
maintained or contributed to (or with respect to which an
obligation to contribute has been undertaken), or the
Single-Employer Plan of any entity which is considered one
employer with the Company under Section 4001 of ERISA or Section
414 of the Code (a "Company ERISA Affiliate"); (D) the Company
and its Subsidiaries have not incurred any withdrawal liability
(including any contingent or secondary withdrawal liability) with
respect to a Multiemployer Plan under Subtitle E of Title IV of
ERISA (regardless of whether based on contributions of a Company
ERISA Affiliate) that has not been satisfied in full and no
condition or circumstance has existed that presents a risk of the
occurrence of any withdrawal from or the partition, termination,
reorganization or insolvency of any such Multiemployer Plan; (E)
no notice of a "reportable event," within the meaning of Section
4043 of ERISA has occurred or is expected to occur for any
Company Plan or by any Company ERISA Affiliate; (F) all
contributions required to be made under the terms of any Company
Plan have been timely made or have been reflected in the
financial statements of the Company included in the Company SEC
Reports filed prior to the date hereof; and (G) there has been no
amendment to, announcement by the Company or any of its
Subsidiaries relating to, or change in employee participation or
coverage under, any Company Plan which would increase the expense
of maintaining such plan above the level of the expense incurred
therefor for the most recent fiscal year.
(iii) Except as disclosed in the Company SEC Documents filed prior to
the date hereof: (A) neither any Company Plan nor any
Single-Employer Plan of a Company ERISA Affiliate has an
"accumulated funding deficiency" (whether or not waived) within
the meaning of Section 412 of the Code or Section 302 of ERISA
and neither the Company nor any of its Subsidiaries nor any
Company ERISA Affiliate has applied for or obtained a funding
waiver; (B) the Company expects that required minimum
contributions to any Company Plan under Section 412 of the Code
will not be materially increased by application of Section 412(l)
of the Code; (C) neither the Company nor any of its Subsidiaries
has provided, or is required to provide, security to any Company
Plan or to any Single-Employer Plan of a Company ERISA Affiliate
pursuant to Section 401(a)(29) of the Code; and (D) neither the
execution of this Agreement, stockholder approval of this
Agreement nor the consummation of the transactions contemplated
hereby will limit or restrict the right of the Company to merge,
amend or terminate any of the Company Plans.
(aa) Internal Control Over Financial Reporting. Except as set forth in the
Company SEC Documents filed prior to the date hereof, the Company and
its Subsidiaries (i) make and keep books and records that accurately
and fairly represent the Company's transactions, and (ii) maintain and
have maintained effective internal control over financial reporting as
defined in Rule 13a-15 under the Exchange Act and a system of internal
accounting controls sufficient to provide reasonable assurance that:
(A) transactions are executed in accordance with management's general
or specific authorizations; (B) transactions are recorded as necessary
to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset
accountability; (C) access to assets is permitted only in accordance
with management's general or specific authorization; and (D) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company has disclosed, based on the
most recent evaluation of its chief executive officer and its chief
financial officer prior to the date hereof, to the Company's auditors
and the audit committee of the Company's board of directors (i) any
significant deficiencies in the design or operation of its internal
controls over financial reporting that are reasonably likely to
adversely affect the Company's ability to record, process, summarize
and report financial information and has identified for the Company's
auditors and the audit committee of the Company's board of directors
any material weaknesses in internal control over financial reporting
and (ii) any fraud, whether or not material, that involves management
or other employees who have a significant role in the Company's
internal control over financial reporting.
(bb) Disclosure Controls and Procedures. Except as disclosed in the Company
SEC Documents filed prior to the date hereof, the Company maintains
disclosure controls and procedures required by Rule 13a-15 or 15d-15
under the Exchange Act. Such disclosure controls and procedures are
effective to ensure that information required to be disclosed by the
Company is recorded and reported on a timely basis to the individuals
responsible for the preparation of the Company's filings with the
Commission and other public disclosure documents.
(cc) Insurance. The Company and its Subsidiaries have insurance covering
their respective properties, operations, personnel and businesses,
including business interruption insurance, which insurance is in
amounts and insures against such losses and risks as are customary for
companies whose businesses are similar to the Company and its
Subsidiaries. Neither the Company nor any of its Subsidiaries has (i)
received written notice from any insurer or agent of such insurer that
capital improvements or other expenditures are required or necessary
to be made to continue such insurance or (ii) any reason to believe
that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage at
reasonable cost from similar insurers as may be necessary to continue
its business.
(dd) No Unlawful Payments. Neither the Company nor any of its Subsidiaries
nor, to the knowledge of the Company, any director, officer, agent,
employee or other person associated with or acting on behalf of the
Company or any of its Subsidiaries has: (i) used any corporate funds
for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; (ii) made any direct or
indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; (iii) violated or is in
violation of any provision of the Foreign Corrupt Practices Act of
1977; or (iv) made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment in each case other than clause
(iii) that has been or would reasonably be expected to be,
individually or in the aggregate, material to the Company and its
Subsidiaries, taken as a whole.
(ee) Compliance with Money Laundering Laws. The Company and its
Subsidiaries are and have been conducted at all times in compliance
with applicable financial recordkeeping and reporting requirements of
the Bank Secrecy Act, as amended, the money laundering statutes of all
jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or
enforced by any governmental agency (collectively, the "Money
Laundering Laws") and no action, suit or proceeding by or before any
court or governmental agency, authority or body or any arbitrator
involving the Company or any of its Subsidiaries with respect to Money
Laundering Laws is pending or, to the knowledge of the Company,
threatened.
(ff) Compliance with Sanctions Laws. Neither the Company nor any of its
Subsidiaries nor, to the knowledge of the Company, any director,
officer, agent, employee or affiliate of the Company or any of its
Subsidiaries is currently subject to any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Treasury
Department ("OFAC"). The Company will not directly or indirectly use
the proceeds of the Rights Offering or the sale of the Investor
Shares, or lend, contribute or otherwise make available such proceeds
to any Subsidiary, joint venture partner or other person or entity,
for the purpose of financing the activities of any person that, to the
Company's knowledge, is currently subject to any U.S. sanctions
administered by OFAC.
(gg) No Restrictions on Subsidiaries. Except as described in the Company
SEC Documents filed prior to the date hereof or otherwise set forth in
the record of the Chapter 11 Cases on or prior to the date hereof, and
subject to the Bankruptcy Code, no Subsidiary of the Company is
currently prohibited, directly or indirectly, under any agreement or
other instrument to which it is a party or is subject, from paying any
dividends to the Company, from making any other distribution on such
Subsidiary's capital stock, from repaying to the Company any loans or
advances to such Subsidiary from the Company or from transferring any
of such Subsidiary's properties or assets to the Company or any other
Subsidiary of the Company.
(hh) No Broker's Fees. Neither the Company nor any of its Subsidiaries is a
party to any contract, agreement or understanding with any person
(other than this Agreement) that would give rise to a valid claim
against the Investors for a brokerage commission, finder's fee or like
payment in connection with the Rights Offering or the sale of the
Investor Shares.
(ii) No Registration Rights. Except as provided for pursuant to the
registration rights agreement contemplated by Section 8(c)(iv), no
person has the right to require the Company or any of its Subsidiaries
to register any securities for sale under the Securities Act by reason
of the filing of the Rights Offering Registration Statement with the
Commission or in connection with Rights Offering or the sale of the
Investor Shares.
(jj) No Stabilization. The Company has not taken and will not take,
directly or indirectly, any action designed to or that would
reasonably be expected to cause or result in any stabilization or
manipulation of the price of the Shares.
(kk) Margin Rules. Neither the issuance, sale and delivery of the Rights or
the Shares in connection with Rights Offering or the sale of the
Investor Shares nor the application of the proceeds thereof by the
Company as to be described in the Rights Offering Registration
Statement and the Rights Offering Prospectus will violate Regulation
T, U or X of the Board of Governors of the Federal Reserve System or
any other regulation of such Board of Governors.
(ll) Forward-Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act) contained in the Company SEC Documents has been made or
reaffirmed, and in the case of the Rights Offering Registration
Statement and the Rights Offering Prospectus, will be made or
reaffirmed, without a reasonable basis or has been disclosed other
than in good faith.
(mm) Statistical and Market Data. Nothing has come to the attention of the
Company that has caused the Company to believe that the statistical
and market-related data to be included in the Disclosure Statement,
Rights Offering Registration Statement and the Rights Offering
Prospectus is not based on or derived from sources that are reliable
and accurate in all material respects.
(nn) Rights Agreement. The Board of Directors of the Company has taken all
necessary action to render the Existing Shareholder Rights Plan
inapplicable to the sale and issuance of the Investor Shares and the
other transactions contemplated hereby and by the Preferred Term
Sheet, the Plan and the Transaction Agreements (including any transfer
of Investor Shares to any Related Purchaser or Ultimate Purchaser).
(oo) Takeover Statutes; Charter. The Board of Directors of the Company has
taken all such action necessary to render the restrictions contained
in Section 203 of the General Corporation Law of the State of Delaware
(the "DGCL") and Article IX of the Company's Certificate of
Incorporation inapplicable to the Investors and the sale and issuance
of the Investor Shares and the other transactions contemplated by this
Agreement, the Preferred Term Sheet, the PSA, the Plan and the
Transaction Agreements (including any transfer of Investor Shares to
any Related Purchaser or Ultimate Purchaser). Except for Section 203
of the DGCL (which has been rendered inapplicable), no other "fair
price," "moratorium," "control share acquisition", "business
combination" or other similar anti-takeover statute or regulation (a
"Takeover Statute") is applicable to the Company, the Common Stock,
the Shares, the sale and issuance of the Investor Shares or the other
transactions contemplated by this Agreement, the Preferred Term Sheet,
the PSA, the Plan and the Transaction Agreements. Other than Article
IX of the Company's Certificate of Incorporation, which has been
rendered inapplicable, no anti-takeover provision in the Company's
certificate of incorporation or by-laws is applicable to the Company,
the Common Stock, the Shares, the sale and issuance of the Investor
Shares or the other transactions contemplated by the Preferred Term
Sheet, the Plan or the Transaction Agreements.
4. Representations and Warranties of the Investors. Each Investor represents
and warrants as to itself only, and agrees with the Company, severally and
not jointly, as set forth below. Each such representation, warranty and
agreement is made as of the date hereof and as of the Closing Date.
(a) Incorporation. The Investor has been duly organized and, if
applicable, is validly existing as a corporation, limited partnership
or limited liability company, in good standing under the laws of the
jurisdiction of its incorporation or organization.
(b) Corporate Power and Authority. The Investor has the requisite
corporate, limited partnership or limited liability company power and
authority to enter into, execute and deliver this Agreement and to
perform its obligations hereunder and has taken all necessary
corporate, limited partnership or limited liability company action
required for the due authorization, execution, delivery and
performance by it of this Agreement .
(c) Execution and Delivery. This Agreement has been duly and validly
executed and delivered by the Investor and constitutes its valid and
binding obligation, enforceable against it in accordance with its
terms.
(d) No Registration. The Investor understands that the Investor Shares
have not been registered under the Securities Act by reason of a
specific exemption from the registration provisions of the Securities
Act, the availability of which depends upon, among other things, the
bona fide nature of the investment intent and the accuracy of such
Investor's representations as expressed herein or otherwise made
pursuant hereto.
(e) Investment Intent. The Investor is acquiring the Investor Shares for
investment for its own account, not as a nominee or agent, and not
with the view to, or for resale in connection with, any distribution
thereof not in compliance with applicable securities laws, and such
Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same, except in
compliance with applicable securities laws. Notwithstanding the
foregoing, as to XXXX, subject to the provisions of Sections 2(a),
2(b) and 2(k), the Company acknowledges that XXXX may provide for a
participation interest or other arrangement whereby the economic
benefits of ownership of the Series A-2 Preferred Stock are shared
with Xxxxxxx and Harbinger or their Affiliates, but XXXX shall not,
pursuant to such arrangements, transfer any voting or investment power
or control over the Series A-2 Preferred Stock.
(f) Securities Laws Compliance. The Investor Shares will not be offered
for sale, sold or otherwise transferred by the Investor except
pursuant to a registration statement or in a transaction exempt from,
or not subject to, registration under the Securities Act and any
applicable state securities laws and any sale or placement of Investor
Shares pursuant to Sections 2(a), 2(b) or 2(k) will not affect the
validity of the private placement to the Investors under this
Agreement.
(g) Sophistication. The Investor has such knowledge and experience in
financial and business matters that it is capable of evaluating the
merits and risks of its investment in the Investor Shares being
acquired hereunder. The Investor is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act. The Investor
understands and is able to bear any economic risks associated with
such investment (including, without limitation, the necessity of
holding the Investor Shares for an indefinite period of time).
(h) No Conflict. The execution and delivery by the Investor of each of the
Transaction Agreements to which it is a party and the compliance by
the Investor with all of the provisions hereof and thereof and the
Preferred Term Sheet and the PSA and the consummation of the
transactions contemplated herein and therein (i) will not conflict
with, or result in a breach or violation of, any of the terms or
provisions of, or constitute a default under (with or without notice
or lapse of time, or both), or result, in the acceleration of, or the
creation of any lien under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Investor
is a party or by which the Investor is bound or to which any of the
property or assets of the Investor or any of its Subsidiaries is
subject, (ii) will not result in any violation of the provisions of
the certificate of incorporation or bylaws or similar governance
documents of the Investor, and (iii) will not result in any material
violation of, or any termination or material impairment of any rights
under, any statute or any license, authorization, injunction,
judgment, order, decree, rule or regulation of any court or
governmental agency or body having jurisdiction over the Investor or
any of their properties, except in any such case described in
subclause (i) for any conflict, breach, violation, default,
acceleration or lien which has not and would not reasonably be
expected, individually or in the aggregate, to prohibit, materially
delay or materially and adversely impact the Investor's performance of
its obligations under this Agreement.
(i) Consents and Approvals. No consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body having jurisdiction over the Investor or any of its
properties is required to be obtained or made by the Investor for the
purchase of the Investor Shares hereunder and the execution and
delivery by the Investor of this Agreement or the Transaction
Agreements to which it is a party and performance of and compliance by
the Investor with all of the provisions hereof and thereof and the
Preferred Term Sheet and the PSA and the consummation of the
transactions contemplated herein and therein, except filings with
respect to and the expiration or termination of the waiting period
under the HSR Act or any comparable laws or regulations in any foreign
jurisdiction relating to the purchase of Investor Shares and except
for any consent, approval, authorization, order, registration or
qualification which, if not made or obtained, has not and would not
reasonably be expected, individually or in the aggregate, to prohibit,
materially delay or materially and adversely impact the Investor's
performance of its obligations under this Agreement.
(j) Arm's Length. The Investor acknowledges and agrees that the Company is
acting solely in the capacity of an arm's length contractual
counterparty to the Investor with respect to the transactions
contemplated hereby (including in connection with determining the
terms of the Rights Offering). Additionally, the Investor is not
relying on the Company for any legal, tax, investment, accounting or
regulatory advice, except as specifically set forth in this Agreement.
The Investor shall consult with its own advisors concerning such
matters and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated hereby.
(k) No Violation or Default; Compliance with Laws. The Investor is not in
default, and no event has occurred that , with notice or lapse of time
or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Investor is a party or by which the
Investor is bound or to which any of the property or assets of the
Investor is subject, individually or in the aggregate, that would
prohibit, materially delay or materially and adversely impact the
Investor's performance of its obligations under this Agreement. The
Investor is not and has not been at any time since January 1, 2002, in
violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or regulatory
authority, except for any such violation that has not and would not
reasonably be expected, individually or in the aggregate, to prohibit,
materially delay or materially and adversely impact the Investor's
performance of its obligations under this Agreement.
(l) Legal Proceedings. There are no actions, suits or proceedings to which
the Investor is a party or to which any property of the Investor is
the subject that, individually or in the aggregate, has or, if
determined adversely to the Investor, would reasonably be expected to
prohibit, materially delay or materially and adversely impact the
Investor's performance of its obligations under this Agreement and no
such actions, suits or proceedings are threatened or, to the knowledge
of the Investor, contemplated and, to the knowledge of the Investor,
no investigations are threatened by any governmental or regulatory
authority or threatened by others that has or would reasonably be
expected, individually or in the aggregate, to prohibit, materially
delay or materially and adversely impact the Investor's performance of
its obligations under this Agreement.
(m) No Broker's Fees. The Investor is not a party to any contract,
agreement or understanding with any person (other than this Agreement)
that would give rise to a valid claim against the Company for a
brokerage commission, finder's fee or like payment in connection with
the Rights Offering or the sale of the Investor Shares.
(n) No Undisclosed Written Agreements. The Investor has not entered into
any material written agreements between or among the Investors
directly relating to such Investor's Investor Shares or the
performance of the Transaction Agreements, and any such written
agreement hereafter entered into will be disclosed promptly to the
Company.
(o) Available Funds. To the extent the Investor is XXXX, Dolce or
Harbinger, the Investor has provided the Company with a true and
complete copy of an executed commitment letter from the parties
signatory thereto to provide equity financing to such Investor (the
"Equity Commitment Letter"). Each such Investor represents as to
itself that its Equity Commitment Letter is in full force and effect
and is a valid and binding obligation of the parties thereto
enforceable in accordance with its terms except as the enforcement
thereof is subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors rights and to general equitable
principles. The Equity Commitment Letters are not subject to any
condition or contingency with respect to financing that is not set
forth in such letter other than the terms and conditions of this
Agreement.
5. Additional Covenants of the Company. The Company agrees with each of the
Investors as set forth below.
(a) Initial Approval Motion and Initial Approval Order. The Company agrees
that it shall use reasonable best efforts to cause the Initial
Approval Order to become a Final Approval Order as soon as practicable
following the filing of the Approval Motion.
(b) Plan and Disclosure Statement. The Company shall authorize, execute,
file with the Bankruptcy Court and seek confirmation of, a Plan (and a
related disclosure statement (the "Disclosure Statement")) (i) the
terms of which are consistent with this Agreement, the Preferred Term
Sheet, the PSA and the GM Settlement, and with such other terms that,
to the extent they have a material impact on the Investors' proposed
investment in the Company, are reasonably satisfactory to each of XXXX
and Dolce; provided, however, that prior to the Due Diligence
Expiration Date, the standard for the approval by each of XXXX and
Dolce of such other terms shall be each in its sole discretion, (ii)
that provides for the release and exculpation of each Investor, its
Affiliates, shareholders, partners, directors, officers, employees and
advisors from liability for participation in the transactions
contemplated by this Agreement, the Preferred Term Sheet, the PSA and
the Plan to the fullest extent permitted under applicable law and
(iii) that has conditions to confirmation and the Effective Date of
the Plan (and to what extent any such conditions can be waived and by
whom) that are consistent with this Agreement, the Preferred Term
Sheet, the PSA and the GM Settlement and with such other terms that,
to the extent they have a material impact on the Investors' proposed
investment in the Company, are reasonably satisfactory to each of XXXX
and Dolce; provided, however, that prior to the Due Diligence
Expiration Date, the standard for the approval by each of XXXX and
Dolce of such other terms shall be each in its sole discretion. The
Company will (i) provide to each Investor and its counsel a copy of
the Plan and the Disclosure Statement, and any amendments thereto, and
a reasonable opportunity to review and comment on such documents prior
to such documents being filed with the Bankruptcy Court, and (ii) duly
consider in good faith any comments consistent with this Agreement,
the Preferred Term Sheet and the PSA, and any other reasonable
comments of each of the Investors and their respective counsel, and
shall not reject such comments without first discussing the reasons
therefor with XXXX and Dolce or their counsel and giving due
consideration to the views of XXXX and Dolce and their counsel. In
addition, the Company will (i) provide to each Investor and its
counsel a copy of the Confirmation Order and a reasonable opportunity
to review and comment on such order prior to such order being filed
with the Bankruptcy Court and (ii) duly consider in good faith any
comments consistent with this Agreement, the Preferred Term Sheet and
the PSA and any other reasonable comments of each of the Investors and
their respective counsel, into such Confirmation Order, and shall not
reject such comments without first discussing the reasons therefor
with XXXX and Dolce or their counsel and giving due consideration to
the views of XXXX and Dolce and their counsel.
(c) Rights Offering. The Company shall use its reasonable best efforts to
effectuate the Rights Offering as provided herein.
(d) Securities Laws; Rights Offering Registration Statement. The Company
shall take all action as may be necessary or advisable so that the
Rights Offering and the issuance and sale of the Investor Shares and
the other transactions contemplated by this Agreement will be effected
in accordance with the Securities Act and the Exchange Act and any
state or foreign securities or Blue Sky laws. As promptly as
practicable following the later of the Due Diligence Expiration Date
and the date the GM Settlement is agreed, the Company shall file a
Rights Offering Registration Statement with the Commission. The
Company shall: (i) provide the Investors with a reasonable opportunity
to review the Rights Offering Registration Statement, and any
amendment or supplement thereto, before any filing with the Commission
and shall duly consider in good faith any comments consistent with
this Agreement, the Preferred Term Sheet and the PSA, and any other
reasonable comments of the Investors and their respective counsel, and
shall not reject such comments without first discussing the reasons
therefor with XXXX and Dolce or their counsel and giving due
consideration to the views of XXXX and Dolce and their counsel; (ii)
advise the Investors, promptly after it receives notice thereof, of
the time when the Rights Offering Registration Statement has been
filed or has become effective or any Rights Offering Prospectus or
Rights Offering Prospectus supplement has been filed and shall furnish
the Investors with copies thereof; (iii) advise the Investors promptly
after it receives notice of any comments or inquiries by the
Commission (and furnish the Investors with copies of any
correspondence related thereto), of the issuance by the Commission of
any stop order or of any order preventing or suspending the use of the
Rights Offering Prospectus or Issuer Free Writing Prospectus, of the
initiation or threatening of any proceeding for any such purpose, or
of any request by the Commission for the amending or supplementing of
the Rights Offering Registration Statement or a Rights Offering
Prospectus or for additional information, and in each such case,
provide the Investors with a reasonable opportunity to review any such
comments, inquiries, request or other communication from the
Commission and to review any amendment or supplement to the Rights
Offering Registration Statement or the Rights Offering Prospectus
before any filing with the Commission, and to duly consider in good
faith any comments consistent with this Agreement, the Preferred Term
Sheet and the PSA, and any other reasonable comments of the Investors
and their respective counsel, and not reject such comments without
first discussing the reasons therefor with XXXX and Dolce or their
counsel and giving due consideration to the views of XXXX and Dolce
and their counsel; and (iv) in the event of the issuance of any stop
order or of any order preventing or suspending the use of a Rights
Offering Prospectus or any Issuer Free Writing Prospectus or
suspending any such qualification, to use promptly its reasonable best
efforts to obtain its withdrawal.
(e) Listing. The Company shall use its commercially reasonable efforts to
list and maintain the listing of the New Common Stock on the New York
Stock Exchange or, if approved by each of XXXX and Dolce, the Nasdaq
Global Select Market.
(f) Rule 158. The Company will generally make available to the Company's
security holders as soon as practicable an earnings statement of the
Company covering a twelve-month period beginning after the date of
this Agreement, which shall satisfy the provisions of Section 11(a) of
the Securities Act.
(g) Notification. The Company shall notify, or cause the Subscription
Agent to notify the Investors, on each Friday during the Rights
Exercise Period and on each Business Day during the five Business Days
prior to the Expiration Time (and any extensions thereto), or more
frequently if reasonably requested by any of the Investors, of the
aggregate number of Rights known by the Company or the Subscription
Agent to have been exercised pursuant to the Rights Offering as of the
close of business on the preceding Business Day or the most recent
practicable time before such request, as the case may be.
(h) Unsubscribed Shares. The Company shall determine the number of
Unsubscribed Shares, if any, in good faith, shall provide a Purchase
Notice or a Satisfaction Notice that accurately reflects the number of
Unsubscribed Shares as so determined and shall provide to the
Investors a certification by the Subscription Agent of the
Unsubscribed Shares or, if such certification is not available, such
written backup to the determination of the Unsubscribed Shares as any
Investor may reasonably request.
(i) HSR. The Company shall use its reasonable best efforts to promptly
prepare and file all necessary documentation and to effect all
applications and seek all approvals or consents that are necessary or
advisable under the HSR Act and any comparable laws or regulations in
any foreign jurisdiction so that any applicable waiting period shall
have expired or been terminated thereunder with respect to the
purchase of Investor Shares hereunder, and shall not take any action
that is intended or reasonably likely to materially impede or delay
the ability of the parties to obtain any necessary approvals required
for the transactions contemplated by this Agreement. The Company shall
file, to the extent that it is required to file, the Notification and
Report Form required under the HSR Act with respect to the
transactions contemplated by this Agreement with the Antitrust
Division of the United States Department of Justice and the United
States Federal Trade Commission no later than 30 calendar days
following the date the Initial Approval Order is entered by the
Bankruptcy Court (and if such date is not a Business Day on the next
succeeding Business Day).
(j) Clear Market. For a period of 180 days after the Closing Date (the
"Restricted Period"), the Company will not (i) offer, pledge, announce
the intention to sell, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, any shares of capital stock of the
Company or any securities convertible into or exercisable or
exchangeable for capital stock of the Company or (ii) enter into any
swap or other agreement that transfers, in whole or in part, any of
the economic consequences of ownership of the capital stock of the
Company, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of capital stock of the Company or
such other securities, in cash or otherwise, without the prior written
consent of each of the XXXX and Dolce, except for (A) Rights and New
Common Stock issuable upon exercise of Rights, (B) shares of New
Common Stock issued upon the exercise of any stock options outstanding
as of the Effective Date and (C) the issuance of New Common Stock and
other equity interests as set forth in the Preferred Term Sheet, the
PSA and pursuant to the Plan. Notwithstanding the foregoing, if (i)
during the last 17 days of the Restricted Period, the Company issues
an earnings release or material news or a material event relating to
the Company occurs or (ii) prior to the expiration of the Restricted
Period, the Company announces that it will release earnings results
during the 16-day period beginning on the last day of the Restricted
Period, the restrictions imposed by this Agreement shall continue to
apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the occurrence of the material
news or material event.
(k) Use of Proceeds. The Company will apply the net proceeds from the sale
of the Rights and the Investor Shares as provided in the Rights
Offering Prospectus.
(l) No Stabilization. The Company will not take, directly or indirectly,
any action designed to or that would reasonably be expected to cause
or result in any stabilization or manipulation of the price of the
Shares.
(m) Reports. So long as any Investor holds Shares, the Company will
furnish to such Investor, as soon as they are available, copies of all
reports or other communications (financial or other) furnished to
holders of the Rights or the Shares, as the case may be, and copies of
any reports and financial statements furnished to or filed with the
Commission or any national securities exchange or automatic quotation
system.
(n) Conduct of Business. During the period from the date of this Agreement
to the Closing Date (except as otherwise expressly provided by the
terms of this Agreement (including the Disclosure Letter), the PSA,
the Plan or any other order of the Bankruptcy Court entered on or
prior to the date hereof in the Chapter 11 Cases), the Company and its
Subsidiaries shall carry on their businesses in the ordinary course
(subject to any actions which are consistent with the Transformation
Plan) and, to the extent consistent therewith, use their commercially
reasonable efforts to preserve intact their current business
organizations, keep available the services of their current officers
and employees and preserve their relationships with customers,
suppliers, licensors, licensees, distributors and others having
business dealings with the Company or its Subsidiaries. Without
limiting the generality of the foregoing, except as set forth in the
Disclosure Letter, on and after the date on which the Business Plan is
approved and accepted by XXXX and Dolce, the Company and its
Subsidiaries shall carry on their businesses in all material respects
in accordance with such Business Plan and shall not enter into any
transaction that would be inconsistent with such Business Plan and
shall use its commercially reasonable efforts to effect such Business
Plan. Without limiting the generality of the foregoing, and except as
otherwise expressly provided or permitted by this Agreement (including
the Disclosure Letter), the PSA, the Plan or any other order of the
Bankruptcy Court entered as of the date hereof in these Chapter 11
Cases, prior to the Closing Date, the Company shall not, and shall
cause its Subsidiaries not to, take any of the following actions
without the prior written consent of each of XXXX and Dolce, which
consent shall not be unreasonably withheld, conditioned or delayed:
(i) (A) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, (B) split,
combine or reclassify any of its capital stock or issue or
authorize the issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock or (C)
purchase, redeem or otherwise acquire, except in connection with
the Plan, any shares of capital stock of the Company or any other
securities thereof or any rights, warrants or options to acquire
any such shares or other securities;
(ii) except for intercompany transactions and any financing activities
which are consistent with the Company's existing financing,
issue, deliver, grant, sell, pledge, dispose of or otherwise
encumber any of its capital stock or any securities convertible
into, or any rights, warrants or options to acquire, any such
capital stock at less than fair market value;
(iii) acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial portion of the stock, or other
ownership interests in, or substantial portion of assets of, or
by any other manner, any business or any corporation,
partnership, association, joint venture, limited liability
company or other entity or division thereof except in the
ordinary course of business;
(iv) sell, lease, mortgage, pledge, xxxxx x xxxx, mortgage, pledge,
security interest, charge, claim or other encumbrance of any kind
or nature on or otherwise encumber or dispose of any of its
properties or assets, except (A) in the ordinary course of
business consistent with past practice and (B) other transactions
involving not in excess of $100 million in any 12 month period;
(v) (A) incur any indebtedness for borrowed money or guarantee any
such indebtedness of another individual or entity, issue or sell
any debt securities or warrants or other rights to acquire any
debt securities of the Company, guarantee any debt securities of
another individual or entity, enter into any "keep well" or other
agreement to maintain any financial statement condition of
another person (other than a Subsidiary) or enter into any
arrangement having the economic effect of any of the foregoing in
excess of $100 million in any 12 month period, except for (x)
working capital borrowings and increases in letters of credit
necessary in the ordinary course of business under the Company's
existing or any amended or replacement revolving credit
facilities, and (y) indebtedness solely between the Company and
its Subsidiaries or between such Subsidiaries or (B) except for
transactions between the Company and any of its Subsidiaries or
between such Subsidiaries, make any loans, advances or capital
contributions to, or investments in, any other individual or
entity, other than customary advances of business and travel
expenses to employees of the Company in the ordinary course of
business consistent with past practice;
(vi) enter into any new, or amend or supplement any existing,
collective bargaining agreement, which is inconsistent with the
Transformation Plan, this Agreement, the PSA, the Plan and the GM
Settlement; or
(vii) authorize any of, or commit or agree to take any of, the
foregoing actions.
(o) Actions Regarding Conditions. During the period from the date of this
Agreement to the Closing Date, the Company shall not take any action
or omit to take any action that would reasonably be expected to result
in the conditions to the Agreement set forth in Section 9 not being
satisfied.
(p) GM Settlement. The Company shall use its reasonable best efforts to
agree on, prior to January 31, 2007, a settlement agreement (the "GM
Settlement") between the Company and GM that is consistent with this
Agreement, the PSA and the Plan, and satisfactory to each of XXXX and
Dolce in its sole discretion. The Company will (i) provide to the
Investors and their respective counsel a copy of the GM Settlement and
a reasonable opportunity to review and comment on such documents prior
to such documents being executed or delivered or filed with the
Bankruptcy Court, and (ii) duly consider in good faith any comments of
each of XXXX and Dolce and their respective counsel consistent with
this Agreement, the Preferred Term Sheet and the PSA and any other
reasonable comments of each of the Investors and their respective
counsel, and shall not reject such comments without first discussing
the reasons therefor with XXXX and Dolce or their counsel and giving
due consideration to the views of XXXX and Dolce and their counsel.
The Company shall not enter into any other agreement with GM that (i)
is materially inconsistent with this Agreement, the PSA and the Plan,
(ii) is outside the ordinary course of business or (iii) the terms of
which would have a material impact on the Investors' proposed
investment in the Company.
(q) Access to Information. Subject to applicable law and existing
confidentiality agreements between the parties, upon reasonable
notice, the Company shall (and shall cause its Subsidiaries to) afford
the Investors (and any prospective Ultimate Purchaser that executes a
confidentiality agreement reasonably acceptable to the Company, which
agreement will provide that, unless otherwise determined by the
Company, all contact between such Ultimate Purchaser and the Company
shall be through XXXX or Dolce) and their directors, officers,
employees, investment bankers, attorneys, accountants and other
advisors or representatives, reasonable access, throughout the period
prior to the Closing Date, to its employees, properties, books,
contracts and records and, during such period, the Company shall (and
shall cause its Subsidiaries to) furnish promptly to the Investors all
information concerning its business, properties and personnel as may
reasonably be requested by any Investor; provided, that the foregoing
shall not require the Company (i) to permit any inspection, or to
disclose any information, that in the reasonable judgment of the
Company would cause the Company to violate any of its obligations with
respect to confidentiality to a third party if the Company shall have
used commercially reasonable efforts to obtain the consent of such
third party to such inspection or disclosure, (ii) to disclose any
privileged information of the Company or any of its Subsidiaries or
(iii) to violate any laws; provided, further, that the Company shall
deliver to the Investors a schedule setting in forth in reasonable
detail a description of any information not provided to the Investors
pursuant to subclauses (i) through (iii) above. All requests for
information and access made pursuant to this Section 5(q) shall be
directed to the Chief Restructuring Officer or such other person as
may be designated by such person.
(r) Financial Information. For each month, beginning November 2006 until
the Closing Date, the Company shall provide to each Investor an
unaudited consolidated balance sheet and related unaudited
consolidated statements of operations, consolidated statements of
stockholders' equity and consolidated statements of cash flows for the
month then ended within 30 days of the end of such month (the "Monthly
Financial Statements"). The Monthly Financial Statements, except as
indicated therein, shall be prepared in accordance with the Company's
normal financial reporting practices. The Monthly Financial Statements
shall fairly present in all material respects the financial position,
results of operations and cash flows of the Company and its
Subsidiaries as of the dates indicated and for the periods specified.
(s) Business Plan and Disclosure Letter. The Company shall use its
commercially reasonable efforts to provide to the Investors as soon as
practicable a final five-year business plan approved by the Company's
board of directors and prepared in good faith and based on reasonable
assumptions, which business plan shall provide for the amount of
EBITDA for each of fiscal years 2007 through 2011 (the "Business
Plan"); provided, that the Company shall not be required to deliver
and neither XXXX nor Dolce shall be required to approve or accept for
consideration by them any Business Plan that does not reflect a final
and binding GM Settlement. The Company shall deliver with the Business
Plan a Disclosure Letter which provides for exceptions from the
representations and warranties of the Company in Section 3.
(t) Financing Assistance. The Company and its Subsidiaries shall obtain
the debt financing from financing sources reasonably satisfactory to
Dolce and XXXX and in amounts sufficient to consummate the
transactions contemplated by this Agreement, the Preferred Term Sheet,
the PSA, the GM Settlement and the Plan, such financing to be on
then-prevailing market terms with respect to the applicable interest
rate, redemption provisions and fees, and otherwise to be on terms
that are acceptable to each of XXXX and Dolce not to be unreasonably
withheld (the "Debt Financing"). Subject to applicable regulatory or
NASD requirements, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx, Incorporated
and UBS Securities LLC (or their Affiliates) shall be entitled to
participate in such Debt Financing on market terms. The Company and
its Subsidiaries shall execute and deliver any commitment letters,
underwriting or placement agreements, registration statements, pledge
and security documents, other definitive financing documents, or other
requested certificates or documents necessary or desirable to obtain
the Debt Financing. The Company will (i) provide to the Investors and
their respective counsel a copy of all marketing information, term
sheets, commitment letters and agreements related to the Debt
Financing and a reasonable opportunity to review and comment on such
documents prior to such document being distributed, executed or
delivered or filed with the Bankruptcy Court, (ii) duly consider in
good faith any comments of the Investors and their respective counsel
consistent with the Agreement, the Preferred Term Sheet and the PSA
and any other reasonable comments of the Investors and their
respective counsel and shall not reject such comments without first
discussing the reasons therefor with XXXX and Dolce or their counsel
and giving due consideration to the views of XXXX and Dolce and their
counsel, and (iii) keep the Investors reasonably informed on a timely
basis of developments in connection with the Debt Financing and
provide the Investors with an opportunity to attend and participate in
meetings and/or roadshows with potential providers of the Debt
Financing.
(u) Labor Agreements. The Company and its Subsidiaries shall use their
reasonable best efforts to enter into (A) tentative labor agreements
with each of The International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America ("UAW"), the International
Union of Electronic, Electrical, Salaried, Machine and Furniture
Workers - Communications Workers of America ("IUE-CWA") and the United
Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied
Industrial and Service Workers International Union, AFL-CIO/CLC (the
"USW") that each of XXXX and Dolce shall have approved in its sole
discretion and which adequately address, among other things, the
following matters: (i) permit achievement of the transactions
contemplated by this Agreement, the Preferred Term Sheet, the PSA and
the Plan (including plant closings, asset dispositions and resolution
of union claims), (ii) permit achievement of the Business Plan and the
EBITDA Target; and (B) an agreement that GM will be responsible for
certain hourly labor costs (compensation, benefits and other labor
costs) acceptable to each of XXXX and Dolce in each of its sole
discretion at certain of the Company's facilities. The Company will
(i) provide to the Investors and their respective counsel a copy of
any labor agreement and a reasonable opportunity to review and comment
on such document prior to such document being executed or delivered or
filed with the Bankruptcy Court, and (ii) duly consider in good faith
any comments of the Investors and their respective counsel consistent
with this Agreement, the Preferred Term Sheet and the PSA and any
other reasonable comments of the Investors and their respective
counsel, and shall not reject such comments without first discussing
the reasons therefor with XXXX and Dolce or their counsel and giving
due consideration to the views of XXXX and Dolce and their counsel.
(v) Other Actions by the Company.
----------------------------
(i) Existing Shareholder Rights Plan. The Company and the Board of
Directors of the Company (A) has taken all necessary action to
amend the Existing Shareholder Rights Plan to provide that none
of the Investors (including any Related Purchaser or Ultimate
Purchaser) shall be deemed an "Acquiring Person" as defined in
the Existing Shareholder Rights Plan and that the rights will not
separate from the Common Stock pursuant to the Existing
Shareholder Rights Plan as a result of entering into this
Agreement or the PSA or consummating the transactions
contemplated hereby (including any transfer of Investor Shares to
any Related Purchaser or Ultimate Purchaser) or by the Preferred
Term Sheet, the PSA or the Plan, and (B) will take all such
action as is necessary to terminate the Existing Shareholder
Rights Plan effective as of the Closing Date.
(ii) Takeover Statutes and Charter. The Company and the Board of
Directors of the Company has taken all action necessary (A) to
ensure that no Takeover Statute or similar statue or regulation
is or becomes applicable to this Agreement or any transaction
contemplated hereby (including any transfer of Investor Shares to
any Related Purchaser or Ultimate Purchaser) or by the Preferred
Term Sheet, the PSA or the Plan, (B) if any Takeover Statute is
or may become applicable to the transactions contemplated by this
Agreement (including any transfer of Investor Shares to any
Related Purchaser or Ultimate Purchaser) or the Plan, to grant
such approvals and take such actions as are necessary so that
such transactions may be consummated as promptly as practicable
on the terms contemplated by this Agreement and the Plan and
otherwise act to eliminate or minimize the effects of such
statute or regulation on such transactions and (C) to ensure that
this Agreement or any transaction contemplated hereby (including
any transfer of Investor Shares to any Related Purchaser or
Ultimate Purchaser) or by the Preferred Term Sheet, the PSA or
the Plan are approved for purposes of Article IX of the Company's
Amended and Restated Certificate of Incorporation, dated January
26, 1999, as amended to date, and that such provision shall not
apply to the transactions contemplated hereby or by the Preferred
Term Sheet, the PSA or the Plan.
(w) Agreement on Key Documentation . The Company shall use its
commercially reasonable efforts to agree on or prior to January 31,
2007 on (a) the terms of the GM Settlement, (b) the agreements
contemplated by Section 5(u), and (c) the terms of the Amended and
Restated Constituent Documents, the Series A-1 Certificate of
Designations, the Series A-2 Certificate of Designations and the
Series B Certificate of Designations, the Shareholders Agreement and
the Registration Rights Agreement with XXXX and Dolce.
(x) Investment Decision Package (y) . If at any time prior to the
Expiration Date, any event occurs as a result of which the Investment
Decision Package, as then amended or supplemented, would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it
shall be necessary to amend or supplement the Investment Decision
Package to comply with applicable law, the Company will promptly
notify the Investors of any such event and prepare an amendment or
supplement to the Investor Decision Package that is reasonably
acceptable in form and substance to each of XXXX and Dolce that will
correct such statement or omission or effect such compliance.
6. Additional Covenants of the Investors. Each Investor agrees, severally and
not jointly, with the Company:
(a) Information. To provide the Company with such information as the
Company reasonably requests regarding the Investor for inclusion in
the Rights Offering Registration Statement and the Disclosure
Statement.
(b) HSR Act. To use reasonable best efforts to promptly prepare and file
all necessary documentation and to effect all applications and to
obtain all authorizations, approvals and consents that are necessary
or advisable under the HSR Act and any comparable laws or regulations
in any foreign jurisdiction so that any applicable waiting period
shall have expired or been terminated thereunder and any applicable
notification, authorization, approval or consent shall have been made
or obtained with respect to the purchase of Investor Shares hereunder,
and not to take any action that is intended or reasonably likely to
materially impede or delay the ability of the parties to obtain any
necessary approvals required for the transactions contemplated by this
Agreement. Each Investor shall file, to the extent that it is required
to file, the Notification and Report Form required under the HSR Act
with respect to the transactions contemplated by this Agreement with
the Antitrust Division of the United States Department of Justice and
the United States Federal Trade Commission no later than 30 calendar
days following the date the Initial Approval Order is entered by the
Bankruptcy Court (and if such date is not a Business Day on the next
succeeding Business Day).
(c) Bankruptcy Court Filings. To not file any pleading or take any other
action in the Bankruptcy Court with respect to this Agreement, the
Plan, the Disclosure Statement or the Confirmation Order or the
consummation of the transactions contemplated hereby or thereby that
is inconsistent in any material respect with this Agreement or the
Company's efforts to obtain the entry of the Confirmation Order
consistent with this Agreement.
(d) Reasonable Best Efforts. Each Investor shall use its reasonable best
efforts to take all actions, and do all things, reasonably necessary,
proper or advisable on its part under this Agreement and applicable
laws to cooperate with the Company and to consummate and make
effective the transactions contemplated by this Agreement, the
Preferred Term Sheet, the PSA, the GM Settlement and the Plan.
7. Additional Joint Covenant of Company And Each Investor. Without limiting
the generality of the undertakings pursuant to Sections 5(i) and 6(b), the
Company and each Investor shall use its reasonable best efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
necessary under the HSR Act and any comparable laws or regulations in any
foreign jurisdiction to consummate and make effective the transactions
contemplated by this Agreement and the other Transaction Agreements,
including furnishing all information required by applicable law in
connection with approvals of or filings with any governmental authority,
and filing, or causing to be filed, as promptly as practicable, any
required notification and report forms under other applicable competition
laws with the applicable governmental antitrust authority. The parties
shall consult with each other as to the appropriate time of filing such
notifications and shall agree upon the timing of such filings. Subject to
appropriate confidentiality safeguards, each party shall (i) respond
promptly to any request for additional information made by the antitrust
agency; (ii) promptly notify counsel to the other party of, and if in
writing, furnish counsel to the other party with copies of (or, in the case
of material oral communications, advise the other party orally of) any
communications from or with the antitrust agency in connection with any of
the transactions contemplated by this Agreement; (iii) not participate in
any meeting with the antitrust agency unless it consults with counsel to
the other party in advance and, to the extent permitted by the agency, give
the other party a reasonable opportunity to attend and participate thereat;
(iv) furnish counsel to the other party with copies of all correspondence,
filings and communications between it and the antitrust agency with respect
to any of the transactions contemplated by this Agreement; and (v) furnish
counsel to the other party with such necessary information and reasonable
assistance as may be reasonably necessary in connection with the
preparation of necessary filings or submission of information to the
antitrust agency. The Parties shall use their reasonable best efforts to
cause the waiting periods under the applicable competitions laws to
terminate or expire at the earliest possible date after the date of filing.
Notwithstanding anything in this Agreement to the contrary, nothing shall
require any Investor or its Affiliates to dispose of any of its or its
Subsidiaries' or its Affiliates' assets or to limit its freedom of action
with respect to any of its or its Subsidiaries' businesses, or to consent
to any disposition of the Company's or the Company Subsidiaries' assets or
limits on the Company's or the Company Subsidiaries' freedom of action with
respect to any of its or the Company Subsidiaries' businesses, or to commit
or agree to any of the foregoing, and nothing in this Agreement shall
authorize the Company or any Company Subsidiary to commit or agree to any
of the foregoing, to obtain any consents, approvals, permits or
authorizations to remove any impediments to the transactions contemplated
hereby or by any Transaction Agreement relating to antitrust or competition
laws or to avoid the entry of, or to effect the dissolution of, any
injunction, temporary restraining order or other order in any action
relating to antitrust or competition laws.
8. Reasonable Best Efforts.
------------------------
The Company shall use its reasonable best efforts (and shall cause its
Subsidiaries to use their respective reasonable best efforts) to take or cause
to be taken all actions, and do or cause to be done all things, reasonably
necessary, proper or advisable on its or their part under this Agreement and
applicable laws to cooperate with the Investors and to consummate and make
effective the transactions contemplated by this Agreement, the Preferred Term
Sheet, the PSA, the GM Settlement and the Plan, including:
(a) preparing and filing as promptly as practicable all documentation to
effect all necessary notices, reports and other filings and to obtain
as promptly as practicable all consents, registrations, approvals,
permits and authorizations necessary or advisable to be obtained from
any third party or governmental entity; provided, however, that,
notwithstanding the foregoing, in connection with obtaining such
consents, the Company shall not, without the prior written consent of
each of XXXX and Dolce in their sole discretion, pay or commit to pay
any person or entity whose consent is being solicited in cash or other
consideration to the extent such payment could reasonably be expected
to prevent the Company from achieving the EBITDA targets set forth in
Section 9(a)(xviii) hereof;
(b) defending any lawsuits or other actions or proceedings, whether
judicial or administrative, challenging this Agreement, the Preferred
Term Sheet, the PSA, the GM Settlement or the Plan or any other
agreement contemplated by this Agreement, the Preferred Term Sheet,
the PSA, the GM Settlement or the Plan or the consummation of the
transactions contemplated hereby and thereby, including seeking to
have any stay or temporary restraining order entered by any court or
other governmental entity vacated or reversed;
(c) executing, delivering and filing, as applicable, any additional
ancillary instruments or agreements necessary to consummate the
transactions contemplated by this Agreement, the Preferred Term Sheet,
the PSA, the GM Settlement or the Plan and to fully carry out the
purposes of this Agreement, the Preferred Term Sheet, the PSA, the GM
Settlement, the Plan and the transactions contemplated hereby and
thereby including, without limitation: (i) employment agreements and
other compensation arrangements with senior management of the Company
relating to compensation, benefits, supplemental retirement benefits,
stock options and restricted stock awards, severance and change in
control provisions and other benefits on market terms (as determined
by the Company's board of directors based on the advice of
Xxxxxx-Xxxxx and reasonably acceptable to XXXX and Dolce); (ii)
agreements and other arrangements acceptable to each of XXXX and Dolce
or otherwise ordered by the Bankruptcy Court with respect to claims
against the Company of former members of the Company's management and
members of the Company's management, if any, who are resigning or
being terminated in accordance with the implementation of the Plan;
(iii) a shareholders agreement among the Company, XXXX and Dolce
reasonably satisfactory to XXXX and Dolce (the "Shareholders
Agreement"); (iv) a registration rights agreement (the "Registration
Rights Agreement") among the Company and the Investors, reasonably
satisfactory to each of XXXX and Dolce to the extent that the material
terms of such Registration Rights Agreement would have a material
impact on the Investors' proposed investment in the Company, and
providing that the Company shall (a) as soon as practicable after the
Closing Date, and in any event no later than seven (7) days after the
Closing Date, prepare and file with the Commission a registration
statement, including all exhibits thereto, pursuant to Rule 415 under
the Securities Act registering offers and sales by the Investors and
the Ultimate Purchasers of the Unsubscribed Shares, the Direct
Subscription Shares and the Series B Preferred Stock (the "Resale
Registration Statement" and, together with the final prospectus
contained in the Resale Registration Statement as of its effective
date (including information, if any, omitted pursuant to Rule 430A and
subsequently provided pursuant to Rule 424(b) under the Securities
Act), and any amended form of such prospectus provided under Rule
424(b) under the Securities Act or contained in a post-effective
amendment to the Resale Registration Statement) and any issuer free
writing prospectus as defined in Rule 433 under the Securities Act
used in connection with the resale of such shares, the "Resale
Registration Documents"); (b) cause the Resale Registration Statement
to be declared effective by the Commission as soon as practicable
after the filing thereof, and in any event no later than thirty (30)
days after the Closing Date; (c) obtain such comfort letters from the
Company's independent certified public accountants addressed to the
Investors covering such matters of the type customarily covered by
comfort letters and as XXXX and Dolce reasonably request; and (d)
cause a customary opinion or opinions and negative assurance
statement, in customary form and scope from counsel to the Company to
be furnished to each Investor; (v) an amended and restated certificate
of incorporation and amended by-laws of the Company, in each case,
that is consistent with this Agreement, the PSA and the Preferred Term
Sheet and reasonably satisfactory to each of XXXX and Dolce to the
extent that the material terms of such certificate of incorporation
and by-laws would have a material impact on the Investors' proposed
investment in the Company; provided, that the amended and restated
certificate of incorporation of the Company to be effective
immediately following the Effective Date shall prohibit; (A) for so
long as XXXX or Dolce or their respective Affiliates, as the case may
be, owns any shares of Series A Preferred Stock, any transactions
between the Company or any of its Subsidiaries, on the one hand, and
XXXX or Dolce or their respective Affiliates, as the case may be, on
the other hand (including any "going private transaction" sponsored by
XXXX or Dolce or their respective Affiliates) unless such transaction
shall have been approved by (x) directors constituting not less than
75% of the number of Common Directors and (y) in the case of any
transaction with XXXX or its Affiliates, Dolce, and in the case of any
transaction with Dolce or its Affiliates, XXXX, and (B) any
transaction between the Company or any of its Subsidiaries, on the one
hand, and a director, on the other hand, other than a director
appointed by holders of Series A Preferred Stock, unless such
transaction shall have been approved by directors having no material
interest in such transaction (a "Disinterested Director") constituting
not less than 75% of the number of Disinterested Directors; provided,
that nothing in this provision shall require any approval of any
arrangements in effect as of December 18, 2006 with either General
Motors Acceptance Corporation ("GMAC") or General Motors ("GM") as a
result of the ownership by Dolce and its Affiliates of securities of
GMAC or Dolce's and its Affiliates' other arrangements in effect as of
December 18, 2006 with GM with respect to GMAC (such amended and
restated certificate of incorporation and amended bylaws are herein
referred to as the "Amended and Restated Constituent Documents"); and
(vi) the Series A-1 Certificate of Designations, the Series A-2
Certificate of Designations and the Series B Certificate of
Designations, in each case, that is consistent with the terms set
forth in the Preferred Term Sheet and that, to the extent they have a
material impact on the Investors' proposed investment in the Company,
are reasonably satisfactory to each of XXXX and Dolce; provided, that
prior to the Due Diligence Expiration Date, the standard for the
approval by each of XXXX and Dolce shall be each in its sole
discretion. Subject to applicable laws and regulations relating to the
exchange of information, the Investors and the Company shall have the
right to review in advance, and to the extent practicable each will
consult with the other on all of the information relating to Investors
or the Company, as the case may be, and any of their respective
Subsidiaries, that appears in any filing made with, or written
materials submitted to, any third party and/or any governmental entity
in connection with the transactions contemplated by this Agreement or
the Plan. In exercising the foregoing rights, each of the Company and
the Investors shall act reasonably and as promptly as practicable.
9. Conditions to the Obligations of the Parties.
---------------------------------------------
(a) Subject to Section 9(b), the obligations of each of the Investors
hereunder to consummate the transactions contemplated hereby shall be
subject to the satisfaction prior to the Closing Date of each of the
following conditions:
(i) Initial Approval Order. The Initial Approval Order shall have
become a Final Approval Order. "Final Approval Order" shall mean
an Initial Approval Order of the Bankruptcy Court, which has not
been reversed, stayed, modified or amended, and as to which (a)
the time to appeal, seek certiorari or request reargument or
further review or rehearing has expired and no appeal, petition
for certiorari or request for reargument or further review or
rehearing has been timely filed, or (b) any appeal that has been
or may be taken or any petition for certiorari or request for
reargument or further review or rehearing that has been or may be
filed has been resolved by the highest court to which the order
or judgment was appealed, from which certiorari was sought or to
which the request was made and no further appeal or petition for
certiorari or request for reargument or further review or
rehearing has been or can be taken or granted.
(ii) Approval of Plan. To the extent that the material terms of the
following have a material impact on the Investors' proposed
investment in the Company, each of XXXX and Dolce shall be
reasonably satisfied with, prior to filing with the Bankruptcy
Court: (i) the Plan and any related documents, agreements or
arrangements, (A) the terms of which are consistent in all
material respects with this Agreement, the Preferred Term Sheet,
the PSA and the GM Settlement, (B) that provide for the release
and exculpation of each Investor, its Affiliates, shareholders,
partners, directors, officers, employees and advisors from any
liability for participation in the transactions contemplated by
this Agreement, the Preferred Term Sheet, the PSA and the Plan to
the fullest extent permitted under applicable law and (C) that
have conditions to confirmation and the Effective Date of the
Plan (and to what extent any such conditions can be waived and by
whom) that are consistent with this Agreement, the Preferred Term
Sheet, the PSA and the GM Settlement; (ii) a Disclosure Statement
that is consistent in all material respects with the Plan, this
Agreement, the Preferred Term Sheet, the PSA and the GM
Settlement; (iii) a Confirmation Order, that is consistent in all
material respects with the provisions of the Plan, this
Agreement, the Preferred Term Sheet, the PSA and the GM
Settlement; and (iv) any amendments or supplements to any of the
foregoing. Notwithstanding the foregoing, prior to the Due
Diligence Expiration Date, the standard for the approval by each
of XXXX and Dolce of the documents referred to in subsections
(i), (ii), (iii) and (iv) shall be each in its sole discretion.
(iii) Plan of Reorganization. The Company shall have complied in all
material respects with the terms and conditions of the Plan that
are to be performed by the Company prior to the Closing Date.
(iv) GM Settlement. Each of XXXX and Dolce shall have approved in its
sole discretion the GM Settlement prior to its filing with the
Bankruptcy Court. The GM Settlement shall remain in full force
and effect and shall not have been rescinded, terminated,
challenged or repudiated by any party thereto and shall not have
been amended in any manner that is not acceptable to each of XXXX
and Dolce in its sole discretion. The parties to the GM
Settlement shall have performed and complied with all of their
respective covenants and agreements contained in the GM
Settlement in all material respects through the Closing Date.
(v) Alternate Transaction. The Company shall not have entered into
any letter of intent, memorandum of understanding, agreement in
principle or other agreement (other than a confidentiality
agreement with terms that are not materially less favorable to
the Company than the terms of that certain Amended
Confidentiality Information, Standstill and Nondisclosure
Agreement, dated August 25, 2006, among the Company, Appaloosa
Management L.P. and Harbinger Capital Partners Master Fund I,
Ltd.) or taken any action to seek any Bankruptcy Court approval
relating to, any Alternate Transaction (an "Alternate Transaction
Agreement"). For the purpose of this Agreement, an "Alternate
Transaction" means any plan, proposal, offer or transaction that
is inconsistent with this Agreement, the Preferred Term Sheet,
the PSA and the GM Settlement or the Plan, other than a Chapter 7
liquidation.
(vi) Change of Recommendation. There shall not have been a Change of
Recommendation. For purposes of this Agreement, a "Change of
Recommendation" shall mean, (i) the Company or its board of
directors or any committee thereof shall have withheld,
withdrawn, qualified or modified (or resolved or proposed to
withhold, withdraw, qualify or modify), in a manner adverse to
the Investors, its approval or recommendation of this Agreement,
the Preferred Term Sheet, the PSA, the GM Settlement or the Plan
or the transactions contemplated hereby or thereby or (ii) the
Company or its board of directors or any committee thereof shall
have approved or recommended, or proposed to approve or recommend
(including by filing any pleading or document with the Bankruptcy
Court), any Alternate Transaction.
(vii) Confirmation Order. The Confirmation Order approving the Plan in
form and substance approved by each of XXXX and Dolce in
accordance with Section 9(a)(ii) above, shall have been entered
by the Bankruptcy Court and such order shall be non-appealable,
shall not have been appealed within ten calendar days of entry
or, if such order is appealed, shall not have been stayed pending
appeal, and there shall not have been entered by any court of
competent jurisdiction any reversal, modification or vacation, in
whole or in part, of such order (the "Confirmation Order").
(viii) Plan and Confirmation Order. To the extent that the material
terms of the following have a material impact on the Investors'
proposed investment in the Company, (a) the Plan confirmed by the
Bankruptcy Court in the Confirmation Order (the "Confirmed Plan")
and the Confirmation Order shall be in the form and with such
terms as are reasonably satisfactory to each of XXXX and Dolce in
accordance with Section 9(a)(ii) above and (b) the Disclosure
Statement approved by the Bankruptcy Court shall be in form and
substance reasonably satisfactory to each of XXXX and Dolce in
accordance with Section 9(a)(ii) above. Notwithstanding the
foregoing, prior to the Due Diligence Expiration Date, the
standard for the approval by each of XXXX and Dolce of the
Confirmed Plan, the Confirmation Order and the Disclosure
Statement shall be each in its sole discretion.
(ix) Conditions to Effective Date. The conditions to the occurrence of
the Effective Date of the Confirmed Plan shall have been
satisfied or waived by the Company and each of XXXX and Dolce in
accordance with the Plan.
(x) Rights Offering Registration Statement. The Rights Offering
Registration Statement shall be effective not later than the
Distribution Date and shall continue to be effective and no stop
order shall have been entered by the Commission with respect
thereto.
(xi) Rights Offering. The Rights Offering shall have been conducted in
all material respects in accordance with this Agreement and the
Disclosure Statement and the Expiration Time shall have occurred.
(xii) Purchase Notice. Each of the Investors shall have received a
Purchase Notice from the Company, dated as of the Determination
Date, certifying as to the number of Unsubscribed Shares to be
purchased or a Satisfaction Notice.
(xiii) Antitrust Approvals. All terminations or expirations of waiting
periods imposed by any governmental or regulatory authority
necessary for the consummation of the transactions contemplated
by this Agreement, including under the HSR Act and any comparable
regulations in any foreign jurisdiction, shall have occurred and
all other notifications, consents, authorizations and approvals
required to be made or obtained from any competition or antitrust
authority shall have been made or obtained for the transactions
contemplated by this Agreement.
(xiv) Consents. All other governmental and third party notifications,
filings, consents, waivers and approvals required for the
consummation of the transactions contemplated by this Agreement,
the Preferred Term Sheet, the PSA and the Plan shall have been
made or received.
(xv) No Legal Impediment to Issuance. No action shall have been taken
and no statute, rule, regulation or order shall have been
enacted, adopted or issued by any federal, state or foreign
governmental or regulatory authority, and no judgment,
injunction, decree or order of any federal, state or foreign
court shall have been issued, that prohibits the implementation
of the Plan or the Rights Offering or the transactions
contemplated by this Agreement, the Preferred Term Sheet, the PSA
and the GM Settlement.
(xvi) Representations and Warranties. The representations and
warranties of Company contained in this Agreement shall be true
and correct (disregarding all qualifications and exceptions
contained therein relating to materiality, Material Adverse
Effect or similar qualifications, other than such qualifications
contained in Sections 3(i) and 3(j)) as of the Disclosure Letter
Delivery Date and as of the Closing Date with the same effect as
if made on and as of the Disclosure Letter Delivery Date and the
Closing Date (except for representations and warranties made as
of a specified date, which shall be true and correct only as of
the specified date), except where the failure to be so true and
correct, individually or in the aggregate, has not had, and would
not reasonably be expected to have, a Material Adverse Effect,
other than with respect to the representations in Sections 3(b),
3(c), 3(d), 3(e), and 3(m)(ii) and 3(oo), which shall be true and
correct in all respects. The representations and warranties of
each Investor (other than the Investor asserting the failure of
this condition) contained in this Agreement and in any other
document delivered pursuant to this Agreement shall be true and
correct (disregarding all qualifications and exceptions contained
therein relating to materiality or material adverse effect on the
Investor's performance of its obligations or similar
qualifications) as of the Disclosure Letter Delivery Date and as
of the Closing Date with the same effect as if made on the
Disclosure Letter Delivery Date and the Closing Date (except for
the representations and warranties made as of a specified date
which shall be true and correct only as of such specified date);
except where the failure to be so true and correct, individually
or in the aggregate, has not and would not reasonably be
expected, to prohibit, materially delay or materially and
adversely impact the Investor's performance of its obligations
under this Agreement.
(xvii) Covenants. The Company and each Investor (other than the
Investor asserting the failure of this condition) shall have
performed and complied with all of its covenants and agreements
contained in this Agreement and in any other document delivered
pursuant to this Agreement (including in any Transaction
Agreement) in all material respects through the Closing Date.
(xviii) EBITDA. Each of XXXX and Dolce shall be reasonably satisfied
that the Company will achieve EBITDA at least equal to the 2008
EBITDA Amount in 2008 and $2.4 billion in each of 2009 and 2010
(exclusive of the Restructuring Charges to the extent the same
had been deducted to determine EBITDA) (the "EBITDA Target").
(xix) Financing. The Company shall have received the proceeds of the
Debt Financings and the Rights Offering that, together with the
proceeds of the sale of the Investor Shares, are sufficient to
fund fully the transactions contemplated by this Agreement, the
Preferred Term Sheet, the PSA, the GM Settlement (to the extent
the Company is to fund such transactions) and the Plan.
(xx) Labor Agreements. Each of XXXX and Dolce shall have been
presented with and approved, in its sole discretion, on or before
the Specified Date, tentative labor agreements between the
Company and its applicable Subsidiaries, on the one hand, and
each of the UAW, the IUE-CWA and the USW, on the other hand. Such
tentative labor agreements as so approved shall remain in full
force and effect and shall not have been rescinded, terminated,
challenged or repudiated by any party thereto and shall not have
been amended in any manner that is not acceptable to each of XXXX
and Dolce in its sole discretion. The parties to the tentative
labor agreements shall have performed and complied with all of
their respective covenants and agreements contained in such
tentative labor agreements approved by each of XXXX and Dolce in
all material respects through the Closing Date.
(xxi) Management Compensation. The Company shall have (i) entered into
employment agreements and other compensation arrangements with
senior management of the Company relating to compensation,
benefits, supplemental retirement benefits, stock options and
restricted stock awards, severance and change in control
provisions and other benefits on market terms (as determined by
the Company's board of directors based on the advice of
Xxxxxx-Xxxxx and reasonably acceptable to XXXX and Dolce); and
(ii) resolved any claims of former executive officers, or
executive officer's that have resigned or been terminated, on
terms acceptable to each of XXXX and Dolce or otherwise ordered
by the Bankruptcy Court.
(xxii) Shareholders Agreement. The Company shall have entered into the
Shareholders Agreement with XXXX and Dolce in accordance with
Section 8(c)(iii);
(xxiii) Registration Rights Agreement. The Company shall have entered
into the Registration Rights Agreement with the Investors in
accordance with Section 8(c)(iv), reasonably satisfactory to each
of XXXX and Dolce to the extent that the material terms of such
Registration Rights Agreement would have a material impact on the
Investors' proposed investment in the Company; provided, that
prior to the Due Diligence Expiration Date, such Registration
Rights Agreement shall be satisfactory to each of XXXX and Dolce
in its sole discretion.
(xxiv) Amended and Restated Constituent Documents. The Company shall
have adopted the Amended and Restated Constituent Documents, the
Series A-1 Certificate of Designations, the Series A-2
Certificate of Designations and the Series B Certificate of
Designations consistent with this Agreement, the PSA and the Term
Sheet and otherwise reasonably satisfactory to each of XXXX and
Dolce to the extent that the material terms of such documents
would have a material impact on the Investors' proposed
investment in the Company; provided, that prior to the Due
Diligence Expiration Date, such documents shall be satisfactory
to each of XXXX and Dolce in its sole discretion.
(b) All or any of the conditions set forth in Section 9(a) may be waived
in whole or in part with respect to all Investors by both XXXX and
Dolce, acting together, in their sole discretion.
(c) The obligation of the Company to issue and sell the Investor Shares
are subject to the following conditions, provided that the failure of
a condition set forth in Sections 9(c)(vii) through (x) to be
satisfied may not be asserted by the Company if such failure results
from the failure of the Company to fulfill an obligation hereunder:
(i) Initial Approval Order. The Initial Approval Order shall have
become a Final Approval Order.
(ii) Antitrust Approvals. All terminations or expirations of waiting
periods imposed by any governmental or regulatory authority
necessary for the consummation of the transactions contemplated
by this Agreement, including under the HSR Act and any comparable
regulations in any foreign jurisdiction, shall have occurred and
all other notifications, consents, authorizations and approvals
required to be made or obtained from any competition or antitrust
authority shall have been made or obtained for the transactions
contemplated by this Agreement.
(iii) No Legal Impediment to Issuance. No action shall have been taken
and no statute, rule, regulation or order shall have been
enacted, adopted or issued by any federal, state or foreign
governmental or regulatory authority, and no judgment,
injunction, decree or order of any federal, state or foreign
court shall have been issued, that prohibits the implementation
of the Plan or the Rights Offering or the transactions
contemplated by this Agreement, the Preferred Term Sheet, the PSA
and the GM Settlement.
(iv) Representations and Warranties. The representations and
warranties of each Investor, each Related Purchaser and each
Ultimate Purchaser contained in this Agreement or pursuant to
Sections 2(a), 2(b) or 2(k) shall be true and correct
(disregarding all qualifications and exceptions contained therein
relating to materiality or material adverse effect on the
Investor's performance of its obligations or similar
qualifications) as of the Disclosure Letter Delivery Date and as
of the Closing Date with the same effect as if made on the
Disclosure Letter Delivery Date and the Closing Date (except for
the representations and warranties made as of a specified date,
which shall be true and correct only as such specified date),
except with respect to the Investors' representations in all
Sections other than Sections 4(b) and 4(c) where the failure to
be so true and correct, individually or in the aggregate, has not
and would not reasonably be expected, to prohibit, materially
delay or materially and adversely impact the Investor's
performance of its obligations under this Agreement.
(v) Covenants. Each Investor shall have performed and complied with
all of its covenants and agreements contained in this Agreement
and in any other document delivered pursuant to this Agreement
(including in any Transaction Agreement) in all material respects
through the Closing Date.
(vi) Bankruptcy Court Approval. This Agreement shall have been
approved by the Bankruptcy Court and the approval of the
Bankruptcy Court shall not have been modified, amended or
withdrawn in any manner adverse to the Company.
(vii) Confirmation Order. The Confirmation Order approving the Plan
shall have been entered by the Bankruptcy Court and such order
shall be non-appealable, shall not have been appealed within ten
calendar days of entry or, if such order is appealed, shall not
have been stayed pending appeal, and there shall not have been
entered by any court of competent jurisdiction any reversal,
modification or vacation, in whole or in part, of such order.
(viii) Conditions to Effective Date. The conditions to the occurrence
of the Effective Date of the Confirmed Plan shall have been
satisfied or waived by the Company and each of XXXX and Dolce in
accordance with the Plan.
(ix) Rights Offering. The Rights Offering shall have been conducted in
all material respects in accordance with this Agreement and the
Disclosure Statement and the Expiration Time shall have occurred.
(x) Financing. The Company shall have received the proceeds of the
Debt Financings and the Rights Offering that, together with the
proceeds of the sale of the Investor Shares, are sufficient to
fund fully the transactions contemplated by this Agreement, the
Preferred Term Sheet, the PSA, the GM Settlement (to the extent
the Company is to fund such transactions) and the Plan.
(d) All of the conditions set forth in Section 9(c) may be waived in whole
or in part by the Company in its sole discretion.
10. Indemnification and Contribution.
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(a) Whether or not the Rights Offering is consummated or this Agreement is
terminated or the transactions contemplated hereby or the Plan are
consummated, the Company (in such capacity, the "Indemnifying Party")
shall indemnify and hold harmless each Investor and the Ultimate
Purchasers, their respective Affiliates and their respective officers,
directors, employees, agents and controlling persons (each, an
"Indemnified Person") from and against any and all losses, claims,
damages, liabilities and reasonable expenses, joint or several,
arising out of circumstances existing on or prior to the Closing Date
("Losses") to which any such Indemnified Person may become subject
arising out of or in connection with any claim, challenge, litigation,
investigation or proceeding ("Proceedings") instituted by a third
party with respect to the Rights Offering, this Agreement or the other
Transaction Documents, the Rights Offering Registration Statement, any
Preliminary Rights Offering Prospectus, the Rights Offering
Prospectus, any Issuer Free Writing Prospectus, the Investment
Decision Package, the Resale Registration Documents, any amendment or
supplement thereto or the transactions contemplated by any of the
foregoing and shall reimburse such Indemnified Persons for any
reasonable legal or other reasonable out-of-pocket expenses as they
are incurred in connection with investigating, responding to or
defending any of the foregoing; provided that the foregoing
indemnification will not apply to Losses (i) arising out of or in
connection with any Proceedings between or among any one or more
Indemnified Persons, Related Purchasers and/or Ultimate Purchasers,
any Additional Investor Agreement or the failure of such Indemnified
Person to comply with the covenants and agreements contained in this
Agreement with respect to the sale or placement of Investor Shares; or
(ii) to the extent that they resulted from (a) any breach by such
Indemnified Person of this Agreement, (b) gross negligence, bad faith
or willful misconduct on the part of such Indemnified Person or (c)
statements or omissions in the Rights Offering Registration Statement,
any Preliminary Rights Offering Prospectus, the Rights Offering
Prospectus, any Issuer Free Writing Prospectus, the Resale
Registration Documents or any amendment or supplement thereto made in
reliance upon or in conformity with information relating to such
Indemnified Person furnished to the Company in writing by or on behalf
of such Indemnified Person expressly for use in the Rights Offering
Registration Statement, any Rights Offering Preliminary Prospectus,
the Rights Offering Prospectus, any Issuer Free Writing Prospectus,
the Resale Registration Documents or any amendment or supplement
thereto. If for any reason the foregoing indemnification is
unavailable to any Indemnified Person or insufficient to hold it
harmless, then the Indemnifying Party shall contribute to the amount
paid or payable by such Indemnified Person as a result of such Losses
in such proportion as is appropriate to reflect not only the relative
benefits received by the Indemnifying Party on the one hand and such
Indemnified Person on the other hand but also the relative fault of
the Indemnifying Party on the one hand and such Indemnified Person on
the other hand as well as any relevant equitable considerations. It is
hereby agreed that the relative benefits to the Indemnifying Party on
the one hand and all Indemnified Persons on the other hand shall be
deemed to be in the same proportion as (i) the total value received or
proposed to be received by the Company pursuant to the sale of the
Shares and the Investor Shares contemplated by this Agreement bears to
(ii) the Commitment Fees paid or proposed to be paid to the Investors.
The indemnity, reimbursement and contribution obligations of the
Indemnifying Party under this Section 10 shall be in addition to any
liability that the Indemnifying Party may otherwise have to an
Indemnified Person and shall bind and inure to the benefit of any
successors, assigns, heirs and personal representatives of the
Indemnifying Party and any Indemnified Person.
(b) Promptly after receipt by an Indemnified Person of notice of the
commencement of any Proceedings with respect to which the Indemnified
Person may be entitled to indemnification hereunder, such Indemnified
Person will, if a claim is to be made hereunder against the
Indemnifying Party in respect thereof, notify the Indemnifying Party
in writing of the commencement thereof; provided that (i) the omission
so to notify the Indemnifying Party will not relieve the Indemnifying
Party from any liability that it may have hereunder except to the
extent it has been materially prejudiced by such failure and (ii) the
omission so to notify the Indemnifying Party will not relieve it from
any liability that it may have to an Indemnified Person otherwise than
on account of this Section 10. In case any such Proceedings are
brought against any Indemnified Person and it notifies the
Indemnifying Party of the commencement thereof, the Indemnifying Party
will be entitled to participate therein, and, to the extent that it
may elect by written notice delivered to such Indemnified Person, to
assume the defense thereof, with counsel reasonably satisfactory to
such Indemnified Person; provided that if the defendants in any such
Proceedings include both such Indemnified Person and the Indemnifying
Party and such Indemnified Person shall have concluded that there may
be legal defenses available to it that are different from or
additional to those available to the Indemnifying Party, such
Indemnified Person shall have the right to select separate counsel to
assert such legal defenses and to otherwise participate in the defense
of such Proceedings on behalf of such Indemnified Person. Upon receipt
of notice from the Indemnifying Party to such Indemnified Person of
its election so to assume the defense of such Proceedings and approval
by such Indemnified Person of counsel, the Indemnifying Party shall
not be liable to such Indemnified Person for expenses incurred by such
Indemnified Person in connection with the defense thereof (other than
reasonable costs of investigation) unless (i) such Indemnified Person
shall have employed separate counsel in connection with the assertion
of legal defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that the Indemnifying Party
shall not be liable for the expenses of more than one separate counsel
in any jurisdiction, approved by the Investors, representing the
Indemnified Persons who are parties to such Proceedings), (ii) the
Indemnifying Party shall not have employed counsel reasonably
satisfactory to such Indemnified Person to represent such Indemnified
Person within a reasonable time after notice of commencement of the
Proceedings or (iii) the Indemnifying Party shall have authorized in
writing the employment of counsel for such Indemnified Person.
(c) The Indemnifying Party shall not be liable for any settlement of any
Proceedings effected without its written consent (which consent shall
not be unreasonably withheld). If any settlement of any Proceeding is
consummated with the written consent of the Indemnifying Party or if
there is a final judgment for the plaintiff in any such Proceedings,
the Indemnifying Party agrees to indemnify and hold harmless each
Indemnified Person from and against any and all Losses by reason of
such settlement or judgment in accordance with, and subject to the
limitations of, the provisions of this Section 10. Notwithstanding
anything in this Section 10 to the contrary, if at any time an
Indemnified Person shall have requested the Indemnifying Party to
reimburse such Indemnified Person for legal or other expenses
aggregating in excess of $250,000 in connection with investigating,
responding to or defending any Proceedings in connection with which it
is entitled to indemnification or contribution pursuant to this
Section 10, the Indemnifying Party shall be liable for any settlement
of any Proceedings effected without its written consent if (i) such
settlement is entered into more than (x) 60 days after receipt by the
Indemnifying Party of such request for reimbursement and (y) 30 days
after receipt by the Indemnified Party of the material terms of such
settlement and (ii) the Indemnifying Party shall not have reimbursed
such Indemnified Person in accordance with such request prior to the
date of such settlement. The Indemnifying Party shall not, without the
prior written consent of an Indemnified Person (which consent shall
not be unreasonably withheld), effect any settlement of any pending or
threatened Proceedings in respect of which indemnity has been sought
hereunder by such Indemnified Person unless (i) such settlement
includes an unconditional release of such Indemnified Person in form
and substance satisfactory to such Indemnified Person from all
liability on the claims that are the subject matter of such
Proceedings and (ii) such settlement does not include any statement as
to or any admission of fault, culpability or a failure to act by or on
behalf of any Indemnified Person.
(d) All amounts paid by the Company to an Indemnified Person under this
Section 10 shall, to the extent the transactions contemplated hereby
or the Plan are consummated and to the extent permitted by applicable
law, be treated as adjustments to Purchase Price for all Tax purposes.
11. Survival of Representations and Warranties, Etc.
------------------------------------------------
(a) The representations and warranties made in this Agreement shall not
survive the Closing Date. Other than Sections 2(b), 2(c), 2(e), 2(h),
2(i), 2(j), 2(k), 5(e), 5(f), 5(j), 5(k), 5(l), 5(m), 10, 11, 13, 14,
15, 16, 18 and 20, which shall survive the Closing Date in accordance
with their terms (except Section 5(l) which shall survive for 90 days
following the Closing Date), the covenants contained in this Agreement
shall not survive the Closing Date.
(b) Other than with respect to Sections 2(h), 2(i) and 2(j) and Sections
10 through 18, which shall continue and survive any termination of
this Agreement, (i) none of the Investors may assert any claim against
the Company (both as Debtors-in-possession or the reorganized
Debtors), and the Company (both as Debtors-in-possession or the
reorganized Debtors), may not assert any claim against any Investor,
in either case, arising from this Agreement other than for willful
breach, and (ii) the Investors hereby release the Company (both as
Debtors-in-possession and the reorganized Debtors) from any such
claims, and the Company (both as Debtors-in-possession or the
reorganized Debtors) hereby releases the Investors from any such
claims. Notwithstanding the foregoing (w) the aggregate liability of
all of the Investors under this Agreement for any reason (under any
legal theory) including for any willful breach occurring on or prior
to the Disclosure Statement Approval Date shall not exceed $100
million, (x) the aggregate liability of all of the Investors under
this Agreement for any reason (under any legal theory) including for
any willful breach occurring after the Disclosure Statement Approval
Date shall not exceed $250 million, (y) the aggregate liability of all
of the Debtors under this Agreement for any reason (under any legal
theory) including for any willful breach occurring on or prior to the
Disclosure Statement Approval Date shall not exceed $100 million, and
(z) the aggregate liability of all of the Debtors under this Agreement
for any reason (under any legal theory) including for any willful
breach occurring after the Disclosure Statement Approval Date shall
not exceed $250 million. The Investors and the Company acknowledge
that such liability under subclauses (w) and (x) shall be on a several
and not joint basis with respect to any willful breach occurring on or
prior to the Due Diligence Expiration Date. The Investors and the
Company acknowledge and agree that such liability under subclauses (w)
and (x) shall be on a joint and several basis with respect to any
willful breach occurring after the Due Diligence Expiration Date;
provided, that the aggregate liability of Harbinger shall not exceed
$38,442,731, the aggregate liability of Xxxxxxx shall not exceed
$32,038,546 and the aggregate liability of UBS shall not exceed
$25,743,392. Subject to the terms, conditions and limitation set forth
in this Section 11(b), (i) the joint and several obligations referred
to in the immediately preceding sentence mean that each Investor (an
"Assuming Investor") assumes liability on a joint and several basis
for any willful breach of this Agreement by any other Investor (a
"Breaching Investor"), whether or not the Assuming Investor has
breached this Agreement or is in any way responsible for such willful
breach by the Breaching Investor and (ii) the Assuming Investors'
obligations shall be a commitment to assure payment, not collection.
Under no circumstances shall any Investor be liable to the Company (as
Debtors-in-possession or reorganized Debtors) for any punitive damages
under this Agreement or any Equity Commitment Letter. Under no
circumstances shall the Company (both as Debtors-in-possession and
reorganized Debtors) be liable to any Investor for any punitive
damages under this Agreement.
12. Termination.
------------
This Agreement may be terminated and the transactions contemplated
hereby may be abandoned at any time prior to the Closing Date:
(a) by mutual written consent of the Company and both of XXXX and Dolce;
(b) by any Investor if any of the Chapter 11 Cases shall have been
dismissed or converted to a case under chapter 7 of the Bankruptcy
Code, or an interim or permanent trustee shall be appointed in any of
the Chapter 11 Cases, or a responsible officer or an examiner with
powers beyond the duty to investigate and report (as set forth in
Sections 1106(a)(3) and (4) of the Bankruptcy Code) shall be appointed
in any of the Chapter 11 Cases;
(c) by any party to this Agreement if (i) any statute, rule, regulation or
order shall have been enacted, adopted or issued by any federal, state
or foreign governmental or regulatory authority or any judgment,
injunction, decree or order of any federal, state or foreign court
shall have become final and non-appealable, that prohibits the
implementation of the Plan or the Rights Offering or the transactions
contemplated by this Agreement, the Preferred Term Sheet, the PSA or
the GM Settlement or (ii) the PSA shall have been terminated in
accordance with its terms; provided, that the right to terminate this
Agreement under this Section 12(c)(ii) shall not be available to any
party whose breach of the PSA is the cause of the termination of the
PSA; provided, further, that (A) the Company shall not have any right
to terminate this Agreement under this Section 12(c)(ii) if the PSA is
terminated in accordance with Article 3.2(b) of the PSA as a result of
or arising from a notice of termination of the PSA delivered by either
the Company or GM as described in Article 3.1(b) of the PSA and (B) no
Investor shall have any right to terminate this Agreement under this
Section 12(c)(ii) if the PSA is terminated in accordance with Article
3.2(b) of the PSA as a result of or arising from a notice of
termination of the PSA delivered by any Investor as described in
Article 3.1(b) of the PSA;
(d) by XXXX or Dolce upon written notice to the Company and each other
Investor:
(i) if the Initial Approval Order has not become a Final Approval
Order on or prior to the earlier of (A) the tenth (10th) day
after the Bankruptcy Court enters the Initial Approval Order, or,
if such day is not a Business Day, the next Business Day and (B)
January 22, 2007; provided, that notice of termination pursuant
to this Section 12(d)(i) must be given on or prior to February
28, 2007;
(ii) prior to the later of (A) January 31, 2007 and (B) the date that
is twenty (20) calendar days after the date on which the Company
has delivered to each Investor both the Business Plan reflecting
the GM Settlement and the Disclosure Letter (such date, the "Due
Diligence Expiration Date"), if any Investor is not satisfied in
its sole discretion with (x) the results of its due diligence
investigation of the Company and its Subsidiaries, the Disclosure
Letter and the Business Plan (the "Due Diligence Investigation")
or (y) the terms of the Shareholders Agreement, Registration
Rights Agreement, the Amended and Restated Constituent Documents,
the Series A-1 Certificate of Designations, the Series A-2
Certificate of Designations, the Series B Certificate of
Designations or any other Transaction Agreement;
(iii) on or after the earlier of (A) August 31, 2007, or (B) the later
of (x) June 30, 2007 (such date, being the "Closing Date Outside
Date"), or (y) the first Business Day that is one-hundred eighty
(180) days after the Due Diligence Expiration Date, provided
that, in either case, the Closing Date has not occurred by such
date;
(iv) on or after the later of (x) May 1, 2007 (such date, being the
"Disclosure Statement Outside Date"), or (y) the first Business
Day that is one-hundred twenty (120) days after the Due Diligence
Expiration Date, provided that, in either case, the Disclosure
Statement has not been filed for approval with the Bankruptcy
Court by such date;
(v) if the Company or any Investor shall have breached any provision
of this Agreement, which breach would cause the failure of any
condition set forth in Section 9(a)(xvi) or (xvii) hereof to be
satisfied, which failure cannot be or has not been cured on the
earliest of (A) the tenth (10th) Business Day after the giving of
written notice thereof to the Company or such Investor by any
Investor and (B) the third (3rd) Business Day prior to the
Closing Date Outside Date; provided, that the right to terminate
this Agreement under this Section 12(d)(v) shall not be available
to any Investor whose breach is the cause of the failure of the
condition in Section 9(a)(xvi) or (xvii) to be satisfied;
(vi) either of XXXX or Dolce shall have determined in its reasonable
discretion that the Company will not achieve EBITDA for 2008 at
least equal to the 2008 EBITDA Amount and EBITDA of at least $2.4
billion in each of 2009 and 2010 (exclusive of the Restructuring
Charges to the extent the same had been deducted to determine
EBITDA);
(vii) (A) there shall have been a Change of Recommendation or (B) the
Company shall have entered into an Alternate Transaction
Agreement; or
(viii) if, subsequent to the Company, XXXX and Dolce having previously
approved in writing the form of document referred to in Sections
9(a)(iv), (xx), (xxii), (xxiii) or (xxiv), the conditions set
forth in Sections 9(a)(iv), (xx), (xxii), (xxiii) or (xxiv),
shall become not satisfied as a result of an amendment or
modification thereto.
provided, that notwithstanding anything in the foregoing to the
contrary, any Investor other than XXXX and Dolce shall be entitled to
terminate this Agreement as to itself (but not as to any other party)
(A) in any of the circumstances described in Section 12(d)(i)-(viii)
at any time prior to the Due Diligence Expiration Date, and (B) at any
time on or after December 31, 2007 (each of (A) and (B) being a
"Limited Termination"); provided, further, that if there is a Limited
Termination, any deadline contained in Section 12(d)(i), (ii), (v) and
(vi) by which XXXX must exercise a termination right under Section 12
shall be extended by ten (10) Business Days so as to give it
sufficient time to comply with its obligations under Section 2(b);
(e) on or prior to the Due Diligence Expiration Date, by XXXX or Dolce by
notice to the other parties if, on or prior to such date, (i) a target
amount of EBITDA for fiscal year 2008 (but in any event not to exceed
$2.4 billion) has not been agreed to by each of XXXX and Dolce in its
sole discretion and included in the Business Plan (the "2008 EBITDA
Amount") or (ii) restructuring charges for 2009 and 2010 have not been
agreed to by each of XXXX or Dolce in its sole discretion and included
in the Business Plan (the "Restructuring Charges");
(f) by the Company upon written notice to each Investor:
(i) subject to the establishment of Alternative Financing in
accordance with Section 2(b), if any Investor shall have breached
any provision of this Agreement, which breach would cause the
failure of any condition set forth in Section 9(c)(iv) or (v)
hereof to be satisfied, which failure cannot be or has not been
cured on the earliest of (A) the tenth (10th) Business Day after
the giving of written notice thereof to the Company or such
Investor by any Investor and (B) the third (3rd) Business Day
prior to the Closing Date Outside Date;
(ii) if the Company enters into any Alternate Transaction Agreement;
provided, that the Company may only terminate this Agreement
under the circumstances set forth in this Section 12(f)(ii) if:
(x) the Company's board of directors has determined in good
faith, after having consulted with its outside legal counsel and
its independent financial advisors, that such Alternate
Transaction is a Superior Transaction and the failure to enter
into such an Alternate Transaction Agreement would result in a
breach of the applicable fiduciary duties of the board of
directors, (y) before taking such action the Company has given
the Investors at least ten (10) Business Days' (or, in the event
of any Alternate Transaction that has been materially revised or
modified, at least five (5) Business Days') prior written notice
(the "Consideration Period") of the terms of such Alternate
Transaction and of its intent to take such action, and, during
the Consideration Period, the Company has, if requested by the
Investors, engaged in good faith negotiations regarding any
revisions to this Agreement, the Plan or any other agreement or
document proposed by XXXX and Dolce and again has determined in
good faith, after consultation with its outside legal counsel and
its independent financial advisors, that such Alternate
Transaction remains a Superior Transaction and (z) prior to or
contemporaneously with such termination the Company shall pay to
the Investors the Alternate Transaction Fee; or
(iii) on or after August 31, 2007; provided, that the Closing Date has
not occurred by such date.
For the purposes of this Section 12(f), a "Superior Transaction" shall
mean an Alternate Transaction, which the board of directors of the
Company, after consultation with its outside legal counsel and its
independent financial advisors, determines in good faith to be more
favorable to the bankruptcy estate of the Company than the
transactions contemplated by this Agreement, the Preferred Term Sheet,
the PSA and the Plan, taking into account, all legal, financial,
regulatory and other aspects of such Alternate Transaction, the
likelihood of consummating the Alternate Transaction, the likely
consummation date of the Alternate Transaction and the identity of the
parties or proposed parties to such Alternate Transaction and after
taking into account any revisions to the terms of this Agreement, the
Plan and/or any other agreement or document proposed during the
Consideration Period.
(g) by XXXX, Dolce or the Company by notice given to the other parties on
or before February 28, 2007 (unless this date is extended by agreement
of XXXX, Dolce and the Company (as it may be so extended, the
"Specified Date")) if the Company and its Subsidiaries have not
entered into on or prior to January 31, 2007, (x) tentative labor
agreements between the Company and its applicable Subsidiaries, on the
one hand, and each of the UAW, the IUE-CWA and the USW, on the other
hand or (y) the GM Settlement, in each case, on terms and conditions
presented by the Company and satisfactory to each of XXXX and Dolce in
its sole discretion.
(h) In addition to any other rights or remedies any Investor may have
under this Agreement (for breach or otherwise) but subject to Section
11(b), the Company shall pay a fee of $100,000,000 (the "Alternate
Transaction Fee") to the Investors in such proportions as are set
forth on Schedule 2 hereto, and, in any case, the Company shall pay to
the Investors any Transaction Expenses and any other amounts certified
by the Investors to be due and payable hereunder that have not been
paid theretofore if this Agreement is terminated pursuant to one of
the following:
(i) pursuant to (x) Section 12(d)(vii)(B) or (y) Section 12(f)(ii);
(ii) pursuant to Section 12(d)(vii)(A) and, within the twenty-four
(24) month period following the date of such termination, an
Alternate Transaction Agreement is entered into or an Alternate
Transaction is consummated; or
(iii) pursuant to Section 12(d)(v) based on a willful breach by the
Company and within the twenty-four (24) month period following
the date of such termination, an Alternate Transaction Agreement
is entered into or an Alternate Transaction is consummated.
Payment of the amounts due under this Section 12(h) will be made (i)
no later than the close of business on the next Business Day following
the date of such termination in the case of a payment pursuant to
Section 12(h)(i)(x), (ii) prior to or contemporaneously with such
termination by the Company in the case of a payment pursuant to
Section 12(h)(i)(y) and (iii) prior to or contemporaneously with the
entry into an Alternate Transaction Agreement or the consummation of
an Alternate Transaction in the case of a payment pursuant to Section
12(h)(ii) or (iii). Under no circumstances shall the Company be
required to pay more than one Alternate Transaction Fee. The provision
for the payment of the Alternate Transaction Fee is an integral part
of the transactions contemplated by this Agreement and without this
provision the Investors would not have entered into this Agreement and
shall constitute an allowed administrative expense of the Company
under Section 503(b)(1) and 507(a)(1) of the Bankruptcy Code.
(i) Upon termination under this Section 12, all rights and obligations of
the parties under this Agreement shall terminate without any liability
of any party to any other party except that (x) nothing contained
herein shall release any party hereto from liability for any willful
breach and (y) the covenants and agreements made by the parties herein
in Sections 2(h), 2(i) and 2(j), and Sections 10 through 18 will
survive indefinitely in accordance with their terms.
13. Notices. All notices and other communications in connection with this
Agreement will be in writing and will be deemed given (and will be deemed
to have been duly given upon receipt) if delivered personally, sent via
electronic facsimile (with confirmation), mailed by registered or certified
mail (return receipt requested) or delivered by an express courier (with
confirmation) to the parties at the following addresses (or at such other
address for a party as will be specified by like notice):
(a) If to:
Dolce Investments LLC
c/o Cerberus Capital Management L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000 / (000) 000-0000 / (000) 000-0000
Attention: Xxxxx Xxxxx / Dev Xxxxxxx / Xxxx Xxxxxxx
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
and
Milbank, Tweed, Xxxxxx & XxXxxx LLP
000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxx
(b) If to:
A-D Acquisition Holdings, LLC
c/o Appaloosa Management L.P.
00 Xxxx Xxxxxx,
Xxxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxx
with a copy to:
White & Case LLP
Wachovia Financial Center
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000-0000
Facsimile: (000) 000-0000/5766
Attention: Xxxxxx X. Xxxxxx
White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxx
Xxxxxxx Xxxxx
(c) If to:
Harbinger Del-Auto Investment Company, Ltd.
c/o Harbinger Capital Partners Offshore Manager, LLC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
with a copy to:
Xxxxxxx Management Corp.
Xxx Xxxxxxxxxx Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: General Counsel
with a copy to:
White & Case LLP
Wachovia Financial Center
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000-0000
Facsimile: (000) 000-0000/5766
Attention: Xxxxxx X. Xxxxxx
White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxx X. Xxxxx
Xxxxxxx Xxxxx
with a copy to:
Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx Xxxxx and Xxxx Xxxx Xxxxxx
(d) If to:
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxx / Xxxx Xxxxxx
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx
(e) If to:
UBS Securities LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000 / (000) 000-0000
Attention: Xxxxx Xxxxx / Xxxxx Xxxxxxxx
with a copy to:
Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx LLP
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx
(f) If to the Company, to:
Delphi Corporation
0000 Xxxxxx Xxxxx
Xxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxx - Facsimile: (000) 000-0000
Xxxxx Xxxxxxx / Xxxx Xxxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000/1
Attention: Xxxx X. Xxxxxxx
Xxxxx X. Xxxxxx
and
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xx. Xxxxxx, Jr.
Xxxxxx Xxxxxxxxx
14. Assignment; Third Party Beneficiaries. Neither this Agreement nor any of
the rights, interests or obligations under this Agreement will be assigned
by any of the parties (whether by operation of law or otherwise) without
the prior written consent of the other parties, except to an Ultimate
Purchaser or to a Related Purchaser pursuant to Sections 2(a), 2(b) and
2(k). Notwithstanding the previous sentence, subject to the provisions of
Sections 2(a), 2(b) and 2(k): (1) this Agreement, or the Investors'
obligations hereunder, may be assigned, delegated or transferred, in whole
or in part, by any Investor to any Affiliate of such Investor over which
such Investor or any of its Affiliates exercise investment authority,
including, without limitation, with respect to voting and dispositive
rights; provided, that any such assignee assumes the obligations of such
Investor hereunder and agrees in writing to be bound by the terms of this
Agreement in the same manner as such Investor; and (2) XXXX may provide for
a participation interest or other arrangement whereby the economic benefits
of ownership of the Series A-2 Preferred Stock are shared with Merrill,
Harbinger or their Affiliates, but XXXX shall not, pursuant to such
arrangements, transfer any voting or investment power or control over the
Series A-2 Preferred Stock. Notwithstanding the foregoing or any other
provisions herein, except pursuant to an Additional Investor Agreement
acceptable to the Company, XXXX and Dolce no such assignment will relieve
an Investor of its obligations hereunder if such assignee fails to perform
such obligations. Except as provided in Section 10 with respect to the
Indemnified Persons, this Agreement (including the documents and
instruments referred to in this Agreement) is not intended to and does not
confer upon any person other than the parties hereto any rights or remedies
under this Agreement.
15. Prior Negotiations; Entire Agreement. This Agreement (including the
agreements attached as exhibits to and the documents and instruments
referred to in this Agreement constitutes the entire agreement of the
parties and supersedes all prior agreements, arrangements or
understandings, whether written or oral, between the parties with respect
to the subject matter of this Agreement, except that the parties hereto
acknowledge that any confidentiality agreements heretofore executed among
the parties will continue in full force and effect.
16. GOVERNING LAW; VENUE. THIS AGREEMENT WILL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. THE INVESTORS
HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF, AND VENUE IN, THE UNITED
STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND WAIVE ANY
OBJECTION BASED ON FORUM NON CONVENIENS. EACH PARTY ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION OR
VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.
17. Counterparts. This Agreement may be executed in any number of counterparts,
all of which will be considered one and the same agreement and will become
effective when counterparts have been signed by each of the parties and
delivered to the other party (including via facsimile or other electronic
transmission), it being understood that each party need not sign the same
counterpart.
18. Waivers and Amendments. This Agreement may be amended, modified,
superseded, cancelled, renewed or extended, and the terms and conditions of
this Agreement may be waived, only by a written instrument signed by all
the parties or, in the case of a waiver, by the party waiving compliance,
and subject, to the extent required, to the approval of the Bankruptcy
Court. No delay on the part of any party in exercising any right, power or
privilege pursuant to this Agreement will operate as a waiver thereof, nor
will any waiver on the part of any party of any right, power or privilege
pursuant to this Agreement, nor will any single or partial exercise of any
right, power or privilege pursuant to this Agreement, preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege pursuant to this Agreement. The rights and remedies provided
pursuant to this Agreement are cumulative and are not exclusive of any
rights or remedies which any party otherwise may have at law or in equity.
19. Adjustment to Shares. If, in accordance with the terms of this Agreement,
the Company effects a reclassification, stock split (including a reverse
stock split), stock dividend or distribution, recapitalization, merger,
issuer tender or exchange offer, or other similar transaction with respect
to any shares of its capital stock, references to the numbers of such
shares and the prices therefore shall be equitably adjusted to reflect such
change and, as adjusted, shall, from and after the date of such event, be
subject to further adjustment in accordance herewith.
20. Headings. The headings in this Agreement are for reference purposes only
and will not in any way affect the meaning or interpretation of this
Agreement.
21. Publicity. The initial press release regarding this Agreement shall be a
joint press release. Thereafter, the Company and Investors each shall
consult with each other prior to issuing any press releases (and provide
each other a reasonable opportunity to review and comment upon such
release) or otherwise making public announcements with respect to the
transactions contemplated by this Agreement and the Plan, and prior to
making any filings with any third party or any governmental entity
(including any national securities exchange or interdealer quotation
service) with respect thereto, except as may be required by law or by the
request of any governmental entity.
22. Knowledge; Sole Discretion. The phrase "knowledge of the Company" and
similar phrases shall mean the actual knowledge of the Chief Restructuring
Officer of the Company and such other officers as the Company, XXXX and
Dolce shall reasonably agree. Whenever in this Agreement any party is
permitted to take an action or make a decision in its "sole discretion,"
the parties hereto acknowledge that such party is entitled to make such
decision or take such action in such party's sole and absolute and
unfettered discretion and shall be entitled to make such decision or take
such action without regard for the interests of any other party and for any
reason or no reason whatsoever. Each party hereto acknowledges, and agrees
to accept, all risks associated with the granting to the other parties of
the ability to act in such unfettered manner.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by their respective officers thereunto duly authorized, all as of the
date first written above.
DELPHI CORPORATION
By:-------------------------------
Name:
Title:
A-D ACQUISITION HOLDINGS, LLC
By:-------------------------------
Name:
Title:
HARBINGER DEL-AUTO INVESTMENT
COMPANY, LTD.
By:-------------------------------
Name:
Title:
DOLCE INVESTMENTS LLC
By: Cerberus Capital Management L.P.,
its Managing Member
By:-------------------------------
Name:
Title:
XXXXXXX LYNCH, PIERCE, XXXXXX &
XXXXX INCORPORATED
By:-------------------------------
Name:
Title:
UBS SECURITIES LLC
By:-------------------------------
Name:
Title:
By:-------------------------------
Name:
Title:
SCHEDULE 1
Defined Term Section
------------ --------
2008 EBITDA Amount................................ Section 12 (e)
XXXX.............................................. Recitals
Additional Investor Agreements.................... Section 2 (k)
Affiliate......................................... Section 2 (a)
Agreement......................................... Recitals
Alternative Financing............................. Section 2 (b)
Alternate Transaction............................. Section 9 (a)(v)
Alternate Transaction Agreement................... Section 9 (a)(v)
Alternate Transaction Fee......................... Section 12 (h)
Amended and Restated Constituent Documents........ Section 8 (c)
Assuming Investor................................. 11(b)
Available Investor Shares......................... Section 2 (b)
Bankruptcy Code................................... Recitals
Bankruptcy Court.................................. Recitals
Bankruptcy Rules.................................. Section 3 (b)(i)
Breaching Investor................................ 11(b)
Business Day...................................... Section 1 (c)(iii)
Business Plan..................................... Section 5 (s)
Capital Structure Date............................ Section 3 (d)
Change of Recommendation.......................... Section 9 (a)(vi)
Chapter 11 Cases.................................. Recitals
Closing Date...................................... Section 2 (d)
Closing Date Outside Date......................... Section 12 (d)(iii)
Code.............................................. Section 3 (z)(ii)
Commission........................................ Section 1 (c)(ii)
Commitment Fees................................... Section 2 (h)(ii)
Commitment Parties................................ Recitals
Company........................................... Recitals
Company ERISA Affiliate........................... Section 3 (z)(ii)
Company Plans..................................... Section 3 (z)(i)
Company SEC Documents............................. Section 3 (j)
Confirmation Hearing.............................. Section 1 (c)(iii)
Confirmation Order................................ Section 9 (a)(vii)
Confirmed Plan.................................... Section 9 (a)(viii)
Consideration Period.............................. Section 12 (f)(ii)
Debt Financing.................................... Section 5 (t)
Debtors........................................... Recitals
Determination Date................................ Section 1 (c)(vi)
DGCL.............................................. Section 3 (oo)
DIP Order......................................... Section 2(j)
Direct Subscription Shares........................ Section 2 (a)(i)
Disclosure Letter................................. Section 3
Disclosure Letter Delivery Date................... Section 3
Disclosure Statement.............................. Section 5 (b)
Disclosure Statement Approval Date................ Section 1 (c)(ii)
Disclosure Statement Outside Date................. Section 12 (d)(iv)
Disinterested Director............................ Section 8 (c)
Distribution Date................................. Section 1 (c)(ii)
Dolce............................................. Recitals
Due Diligence Expiration Date..................... Section 12 (d)(ii)
Due Diligence Investigation....................... Section 12 (d)(ii)
EBITDA Target..................................... Section 9 (a)(xviii)
Effective Date.................................... Section 1 (c)(iii)
Eligible Holder................................... Section 1 (a)
Environmental Laws................................ Section 3 (x)(i)
E&Y............................................... Section 3 (q)
Equity Commitment Letter.......................... Section 4 (o)
ERISA............................................. Section 3 (z)(i)
Exchange Act...................................... Section 3 (i)
Existing Shareholder Rights Plan.................. Section 3 (d)
Expiration Time................................... Section 1 (c)(iii)
Final Approval Order.............................. Section 9 (a)(i)
GAAP.............................................. Section 3 (i)
GM ............................................... Section 8 (c)
GM Settlement..................................... Section 5 (p)
GMAC.............................................. Section 8 (c)
Harbinger......................................... Recitals
HSR Act........................................... Section 3 (g)
IUE-CWA........................................... Section 5 (u)
Indemnified Person................................ Section 10 (a)
Indemnifying Party................................ Section 10 (a)
Intellectual Property............................. Section 3 (s)
Initial Approval Motion........................... Recitals
Initial Approval Order............................ Recitals
Investment Decision Package....................... Section 3 (k)
Investor.......................................... Recitals
Investors......................................... Recitals
Investor Default.................................. Section 2 (b)
Investor Shares................................... Section 2 (a)
Issuer Free Writing Prospectus.................... Section 3 (k)
Limited Termination............................... Section 12 (d)
Losses............................................ Section 10 (a)
Material Adverse Effect........................... Section 3 (a)
Maximum Number.................................... Section 2(a)
Merrill........................................... Recitals
Money Laundering Laws............................. Section 3 (ee)
Monthly Financial Statements...................... Section 5 (r)
Multiemployer Plans............................... Section 3 (z)(ii)
New Common Stock.................................. Section 1 (a)
OFAC.............................................. Section 3 (ff)
Option............................................ Section 3 (d)
Options........................................... Section 3 (d)
Plan.............................................. Section 1 (b)
Preferred Commitment Fee.......................... Section 2 (h)(i)
Preferred Shares.................................. Section 2 (a)
Preferred Term Sheet.............................. Section 1 (b)
Preliminary Rights Offering Prospectus............ Section 3 (k)
Proceedings....................................... Section 10 (a)
PSA............................................... Section 1 (b)
Purchase Notice................................... Section 1 (c)(vi)
Purchase Price.................................... Section 1 (a)
Record Date....................................... Section 1 (a)
Related Purchaser................................. Section 2 (a)
Registration Rights Agreement..................... Section 8 (c)
Resale Registration Documents..................... Section 8 (c)
Resale Registration Statement..................... Section 8 (c)
Restricted Period................................. Section 5 (j)
Restructuring Charges............................. Section 12 (e)
Right............................................. Section 1 (a)
Rights Exercise Period............................ Section 1 (c)(iii)
Rights Offering................................... Section 1(a)
Rights Offering Prospectus........................ Section 3 (k)
Rights Offering Registration Statement............ Section 3 (k)
Satisfaction Notice............................... Section 1 (c)(vi)
Securities Act.................................... Section 1 (c)(ii)
Securities Act Effective Date..................... Section 3 (k)
Series A-1 Certificate of Designations............ Section 2 (a)(ii)
Series A-1 Preferred Stock........................ Section 2 (a)(ii)
Series A Preferred Stock.......................... Section 2 (a)(ii)
Series A-2 Certificate of Designations............ Section 2 (a)(iii)
Series A-2 Preferred Stock........................ Section 2 (a)(iii)
Series B Certificate of Designations.............. Section 2 (a)(i)
Series B Preferred Stock.......................... Section 2 (a)(i)
Share............................................. Section 1 (a)
Shareholders Agreement............................ Section 8 (c)
Significant Subsidiary............................ Section 3 (a)
Single-Employer Plan.............................. Section 3 (z)(ii)
Specified Date.................................... Section 12(g)
Standby Commitment Fee............................ Section 2 (h)(ii)
Stock Plans....................................... Section 3 (d)
Subscription Agent................................ Section 1 (c)(iii)
Subsidiary........................................ Section 3 (a)
Superior Transaction.............................. Section 12 (f)
Takeover Statute.................................. Section 3 (oo)
Taxes............................................. Section 3 (y)
Tax Returns....................................... Section 3 (y)(i)
Transaction Agreements............................ Section 3 (b)(i)
Transaction Expenses.............................. Section 2 (j)
Transformation Plan............................... Section 3 (m)(vii)
UAW............................................... Section 5 (u)
UBS............................................... Recitals
Ultimate Purchasers............................... Section 2 (k)
Unsubscribed Shares............................... Section 2 (a)(iv)
USW............................................... Section 5 (u)
SCHEDULE 2
Direct Series A-1 Series A-2 Series B Total
Subscription Purchase Preferred Purchase Preferred Purchase Preferred Purchase Purchase
Shares Price Stock Price Stock Price Stock Price Price
------------ ---------- --------- ---------------------- ---------- ----------- ----------- --------------
Dolce Investments LLC 3,150,000 $110,250,000 8,571,429 $300,000,000 - $ - 8,571,429 $300,000,000 $710,250,000
A-D Acquisition 1,890,000 66,150,000 - - 8,571,429 300,000,000 5,142,857 180,000,000 546,150,000
Holdings, LLC.......
Harbinger Del-Auto 472,500 16,537,500 - - - - 1,285,714 45,000,000 61,537,500
Investment Company,
Ltd.................
Xxxxxxx Lynch, Pierce, 393,750 13,781,250 - - - - 1,071,429 37,500,000 51,281,250
Xxxxxx & Xxxxx
Incorporated........
UBS Securities LLC.. 393,750 13,781,250 - - - - 1,071,429 37,500,000 51,281,250
----------- ------------ --------- ------------ --------- ------------ ---------- ------------ --------------
Total............ 6,300,000 $220,500,000 8,571,429 $300,000,000 8,571,429 $300,000,000 17,142,858 600,000,000 $1,420,500,000
Proportionate Share
of Preferred
Commitment Fee:
Dolce Investments LLC 50%
A-D Acquisition 40%
Holdings, LLC.......
Harbinger Del-Auto 3.750%
Investment
Company, Ltd
Xxxxxxx Lynch, Pierce, 3.125%
Xxxxxx & Xxxxx
Incorporated........
UBS Securities LLC.. 3.125%
Total.......... 100%
Proportionate Share of
Standby Commitment Fee:
Dolce Investments LLC 50%
A-D Acquisition 30%
Holdings, LLC.......
Harbinger Del-Auto 7.5%
Investment Company,
Ltd.................
Xxxxxxx Lynch, Pierce, 6.25%
Xxxxxx & Xxxxx
Incorporated........
UBS Securities LLC.. 6.25%
Total.......... 100%
