Exhibit 10.41
______________________________________________________
SUBSCRIPTION AGREEMENT
by and among
LEUCADIA NATIONAL CORPORATION
AND
EACH OF THE ENTITIES NAMED IN SCHEDULE I HERETO
______________________________________________________
Dated as of December 23, 2002
______________________________________________________
TABLE OF CONTENTS
Page
1. Definitions....................................................1
2. Purchase and Sale..............................................1
3. Purchase Price.................................................1
4. The Closing....................................................2
5. Representations and Warranties of the Company.......... .......2
6. Representations and Warranties of each Purchaser...............2
7. Conditions.....................................................4
8. Restrictions on Transfer.......................................4
9. Agreement......................................................4
10. Miscellaneous.................................................5
SCHEDULE I............................................................9
EXHIBIT A............................................................10
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (the "Agreement") is made and entered into as
of December 23, 2002 by and among Leucadia National Corporation, a New York
corporation (the "Company") and each of the entities named in Schedule I hereto
(each a "Purchaser" and, together, the "Purchasers").
W I T N E S S E T H:
WHEREAS, the Company desires to sell to each Purchaser, and each Purchaser
desires to purchase from the Company, upon the terms and conditions hereinafter
provided, the number of common shares, par value $1.00 per share, of the Company
(the "Common Shares") and the number of shares of Series A Convertible Preferred
Stock (the "Series A Preferred Stock") set forth opposite its name in Schedule I
hereto (such Common Shares and Series A Preferred Stock being collectively
referred to as the "Securities"); and
WHEREAS pursuant to this Agreement and subject to and conditioned upon the
terms and provisions hereof, the parties desire to set forth certain rights and
obligations of the Purchasers with respect to the Securities acquired by the
Purchasers pursuant hereto, and the Company and each of the Purchasers wish to
make various additional agreements, all as expressly set forth below.
NOW, THEREFORE, in consideration of the premises and the respective
agreements hereinafter set forth, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms have the
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following meanings:
"Closing" shall have the meaning given to such term in Section 4.
"Closing Date" shall have the meaning given to such term in Section 4.
"Excluded Liens" means Liens imposed by or arising from this Agreement.
"Liens" means liens, security interests, claims, pledges and encumbrances
of any kind.
"Material Adverse Effect" with respect to any person means a material
adverse effect on (a) the business, financial condition or results of operations
of such person and its subsidiaries, taken as a whole, or (b) the ability of
such person to perform its obligations under this Agreement.
"Registration Rights Agreement" means a registration rights agreement
between the Company and the Purchasers dated as of the Closing Date and in the
form of Exhibit A attached hereto.
"Securities Act" means the Securities Act of 1933, as amended.
2. Purchase and Sale. On the Closing Date, and upon the terms and subject
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to the conditions herein set forth, the Company agrees to issue and sell to each
Purchaser, free and clear of all Liens other than any Excluded Liens, and each
Purchaser hereby agrees to purchase and accept from the Company, a face amount
of Securities equal to the amount set forth opposite each Purchaser's name in
Schedule I hereto (with respect to each Purchaser, its "Allocated Securities").
Subject to the terms and conditions of this Agreement and in reliance upon the
representations, warranties and agreements of each Purchaser hereunder, the
Company shall deliver to each Purchaser on the Closing Date (against payment of
the Purchase Price provided for in Section 3) certificates representing the
Allocated Securities registered in the name of each Purchaser or a designated
affiliate thereof.
3. Purchase Price. On the Closing Date, each Purchaser shall pay to the
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Company $35.25 per Common Share and $4,750,713.00 per share of Series A
Preferred Stock, aggregating to the amount set forth opposite such Purchaser's
name in Schedule I hereto (with respect to such Purchaser, the "Purchase Price")
for the purchase of its Allocated Securities. The Purchase Price shall be paid
in immediately available funds by wire transfer to a bank account designated by
the Company.
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4. The Closing.
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(a) Upon the terms and subject to the conditions herein set forth, the
purchase and sale provided for herein (the "Closing") will take place (a) at the
offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, at
10:00 a.m., New York City time, on December 24, 2002 or (b) at such other time,
date and place as shall be fixed by agreement among the parties hereto. The date
and time of Closing are herein referred to as the "Closing Date".
(b) The Closing shall be conditioned upon the Company having received
the consent of WilTel Communications Group, Inc. to the sale of the Securities
pursuant to this Agreement. Until such consent is received, the Company shall
have no obligation to close.
5. Representations and Warranties of the Company. The Company represents
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and warrants to each Purchaser as follows:
5.1 Authority of Seller. The Company has been duly formed and is validly
--------------------
existing under the laws of the State of New York. The issuance, sale and
delivery by the Company of the Securities has been duly authorized by the
Company. Upon issuance and delivery as contemplated by Section 2 of this
Agreement and upon payment therefor as contemplated by Section 3 of this
Agreement, the Securities will have been duly authorized, validly issued, fully
paid and nonassessable. This Agreement has been duly and validly executed and
delivered by the Company and is the legal, valid and binding obligation of the
Company enforceable against the Company in all material respects in accordance
with its terms. No action, consent or approval by, or filing with, any Federal,
state, municipal, foreign or other court or governmental or administrative body
or agency, or any other regulatory or self-regulatory body (a "Governmental
Authority"), by reason of authority over the affairs of the Company, is required
to be made by the Company in connection with the execution and delivery by the
Company of this Agreement or the consummation by the Company of the transactions
contemplated hereby, other than (a) those which may be required solely by reason
of any Purchaser's (as opposed to any other third party's) participation in the
transaction contemplated hereby and (b) such other consents, approvals and
filings, the failure of which to obtain would not have a Material Adverse Effect
on the Company.
5.2 No Conflicts; No Violations. None of the execution, delivery or
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performance of this Agreement by the Company will (a) result in any violation of
or be in conflict with or constitute a default under any term of the
constitutive documents of the Company, (b) result in any material breach of any
terms or provisions of, or constitute a material default under, any material
contract, agreement or instrument to which the Company is a party or by which
the Company or its property is bound or (c) violate any judgment, order, decree,
statute, law, rule or regulation applicable to the Company except for in the
case of the foregoing clauses (b) and (c), any violation, conflict, breach or
default which would not have a Material Adverse Effect on the Company.
5.3 Brokers. No broker, investment banker, financial advisor or other
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person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Company,
other than Xxxxxxxxx & Company, Inc.
6. Representations and Warranties of each Purchaser. Each Purchaser,
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severally and not jointly, represents and warrants to the Company as follows:
6.1 Authority of Purchaser. Such Purchaser has been duly formed and is
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validly existing under the laws of the state or other jurisdiction of its
incorporation or formation. Such Purchaser has full right, power and authority
to consummate the transactions contemplated herein. This Agreement has been duly
and validly executed and delivered by such Purchaser and is the legal, valid and
binding obligation of such Purchaser enforceable against such Purchaser in all
material respects in accordance with its terms. No action, consent or approval
by, or filing with, any Governmental Authority, by reason of authority over the
affairs of such Purchaser, is required to be made or obtained by such Purchaser
in connection with the execution and delivery by such Purchaser of this
Agreement or the consummation by such Purchaser of the transactions contemplated
hereby other than such consents, approvals and filings, the failure of which to
obtain would not have a Material Adverse Effect on such Purchaser.
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6.2 No Conflicts; No Violations. None of the execution, delivery or
------------------------------
performance of this Agreement or the receipt of the Securities by such Purchaser
will (a) result in any violation of or be in conflict with or constitute a
default under any term of constitutive documents of such Purchaser, (b) result
in any material breach of any terms or provisions of, or constitute a material
default under, any material contract, agreement or instrument to which such
Purchaser is a party or by which such Purchaser or its property is bound or (c)
violate any judgment, order, decree, statute, law, rule or regulation applicable
to such Purchaser, except for in the case of the foregoing clauses (b) and (c),
any violation, conflict, breach or default which would not have a Material
Adverse Effect on such Purchaser.
6.3 Investment Intention; No Resales. Such Purchaser is acquiring the
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Securities hereunder for investment, solely for its own account and not with a
view to, or for resale in connection with, the distribution thereof. Such
Purchaser will not resell, transfer, assign or distribute the Securities except
in compliance with this Agreement, the Registration Rights Agreement and the
registration requirements of the Securities Act and applicable state securities
laws or pursuant to an available exemption therefrom.
6.4 Accredited Investor; Ability to Bear Risk; Evaluation of Risks.
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(a) Such Purchaser is an "Accredited Investor" as defined in Rule 501(a)
promulgated under Regulation D of the Securities Act.
(b) Such Purchaser is in a financial position to bear the risk of
holding the Securities and is able to withstand a complete loss of its
investment in the Securities.
(c) The knowledge and experience of such Purchaser in financial and
business matters is such that it, together with its advisors, is capable of
reading and interpreting financial statements and evaluating the merits and
risks of the investment in the Securities and has the net worth to undertake
such risks.
(d) Such Purchaser acknowledges that no representations, express or
implied, are being made with respect to the Company, the Securities, or
otherwise, other than those expressly set forth herein.
6.5 Securities Unregistered. Such Purchaser has been advised by the Company
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that (a) the offer and sale of the Securities have not been registered under the
Securities Act and (b) the offering and sale of the Securities is intended to be
exempt from registration under the Securities Act pursuant to Section 4(2) of
the Securities Act and (c) there is no established market for the Series A
Preferred Stock and it is not anticipated that there will be any public market
for the Series A Preferred Stock in the foreseeable future.
6.6 Brokers. No broker, investment banker, financial advisor or other
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person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of such Purchaser.
6.7 Investment Decision. Each Purchaser is making its own investment
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decision and each investment decision is not based on the investment decision of
any other Purchaser.
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7. Conditions.
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7.1 Conditions to Obligations of the Purchasers. The obligations of each
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Purchaser to perform under this Agreement are subject to the satisfaction or
waiver by such Purchaser of each of the following conditions: (a) the delivery
to the Purchaser by the Company of its Allocated Securities and a duly executed
Registration Rights Agreement and (b) the absence on the Closing Date of any
injunction or other order, or statute, rule or regulation, of any Governmental
Authority prohibiting the consummation of the sale and purchase of the
Securities hereunder.
7.2 Conditions to Obligations of the Company. The obligations of the
-------------------------------------------
Company to perform under this Agreement are subject to the satisfaction or
waiver by the Company of each of the following conditions: (a) each Purchaser
shall have delivered to the Company the Purchase Price specified on Schedule I
in accordance with the provisions of Section 3, (b) the execution and delivery
to the Company by each Purchaser of the Registration Rights Agreement and (c)
the absence on the Closing Date of any injunction or other order, or statute,
rule or regulation, of any Governmental Authority preventing or the prohibiting
the consummation of the sale and purchase of the Securities hereunder.
8. Restrictions on Transfer.
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8.1 General Restriction. The Securities are "restricted securities" within
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the meaning of Rule 144(a)(3) under the Securities Act (the "Restricted
Securities"), and will be transferable only upon the satisfaction of the terms
and conditions set forth in (x) this Section 8, (y) the Registration Rights
Agreement and (z) the Company's restated certificate of incorporation (the
"Charter"). Any transfer or purported transfer in violation of this Section 8
will be void.
8.2 Notice of Transfer. Subject to the terms of the Registration Rights
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Agreement and the Charter, prior to any transfer of any Restricted Securities,
the holder thereof will give written notice to the Company describing in
reasonable detail the manner and terms of the proposed transfer and the identity
of the proposed transferee, accompanied by the written agreement of the proposed
transferee to be bound by all of the provisions hereof applicable to holders of
such Restricted Securities hereunder or thereunder.
8.3 Restrictive Legends. For so long as the Securities remain subject to
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the restrictions on transfer set forth in this Section 8, the certificates
representing such securities will bear restrictive legends in addition to those
required by the Charter in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES
LAW AND MAY NOT BE SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO (A) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR (B) AN APPLICABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT."
8.4 Termination of Restrictions. The restrictions imposed by this Section 8
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upon the transferability of Restricted Securities will terminate as to any
particular Restricted Securities when such Restricted Securities have been sold
pursuant to an effective registration statement under the Securities Act, or
pursuant to Rule 144 under the Securities Act or any other exemption from the
registration requirements of the Securities Act pursuant to which the transferee
receives securities that are not "restricted securities" within the meaning of
that term as defined in Rule 144(a)(3). Whenever any of such restrictions
terminates as to any Restricted Securities, the holder thereof will be entitled
to receive from the Company, at the Company's expense, new certificates
representing such Securities, without the restrictive legend set forth in
Section 8.3, but containing any other legend required by the Charter at that
time. Notwithstanding the foregoing, the restrictions on transferability set
forth in the Charter shall remain unaffected by any sale referred to in this
Section.
9. Agreement.
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9.1 Registration Rights Agreement. The Company and each of the Purchasers
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hereby agree to duly execute and deliver on the Closing Date the Registration
Rights Agreement.
9.2 Best Efforts; Further Actions. Each of the Company and the Purchasers
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will use its best efforts to take or cause to be taken all action and to do or
cause to be done all things necessary, proper or advisable under applicable laws
and regulations to consummate and make effective the transactions contemplated
by this Agreement. If, at any time after the Closing Date, any further action is
necessary or desirable to carry out the purposes of this Agreement or to vest
each Purchaser with full title to the Securities, the proper officers,
directors, partners or duly authorized representatives of each party to this
Agreement shall take all such necessary action.
9.3 Consents. Each of the Company and the Purchasers will cooperate with
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each other, and use its best efforts, in filing any necessary applications,
reports or other documents with, giving any notices to, and seeking any consents
from, all regulatory bodies and all governmental agencies and authorities and
all third parties (including, without limitation, any other equityholders) as
may be necessary or desirable in connection with the consummation of the
transactions contemplated by this Agreement.
9.4 Public Announcements. Each of the Company, the Purchasers, and their
---------------------
respective affiliates, will consult with each other before issuing, and provide
each other the opportunity to review and comment upon, any press release or
other public statement with respect to the sale and purchase of the Securities
and the transactions contemplated by this Agreement and shall not issue any
press release, disclose the name of any Purchaser or make any such public
statement without the advance approval of the other parties following such
consultation (such approval not to be unreasonably withheld or delayed), except
as may be required by applicable law, court process or by the requirements of
any securities exchange.
10. Miscellaneous.
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10.1 Amendment and Waiver. This Agreement may not be amended or
----------------------
supplemented except by an instrument in writing duly executed by an authorized
officer of the Company and an authorized officer of Purchasers holding a
majority of the Securities being issued pursuant to this Agreement. Any term or
provision of this Agreement may be waived, but only in writing by the party
which is entitled to the benefit thereof. The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any preceding or succeeding breach and no failure by either party to
exercise any right or privilege hereunder shall be deemed a waiver of such
party's rights or privileges hereunder or shall be deemed a waiver of such
party's rights to exercise the same at any subsequent time or times hereunder.
10.2 Counterparts. This Agreement may be executed in one or more
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counterparts, each of which when so executed and delivered will be deemed an
original, and all of which together shall constitute one and the same agreement.
It shall not be necessary for each party to sign each counterpart so long as
every party has signed at least one counterpart.
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10.3 Facsimile Signatures. This Agreement may be executed and delivered by
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facsimile and upon such delivery the facsimile signature will be deemed to have
the same effect as if the original signature had been delivered to the other
party.
10.4 Notices. All notices and other communications hereunder shall be in
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writing and shall be deemed to have been given if delivered personally or sent
by registered or certified mail (return receipt requested), postage prepaid, or
by facsimile transmission to the parties to this Agreement at the following
addresses or at such other address for a party as shall be specified by like
notice:
If to the Company, at:
Leucadia National Corporation
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Orlando
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
If to the Purchasers, at:
Franklin Mutual Advisers, LLC
00 Xxxx X. Xxxxxxx Xxxxxxx
Xxxxx Xxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxx
All such notices and communications shall be deemed to have been received on the
date of delivery, on the date that the facsimile transmission is confirmed as
having been received or on the third business day in New York after the mailing
thereof, as the case may be.
10.5 Assignment. Neither this Agreement nor any right, remedy, obligation
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or liability arising hereunder or by reason hereof shall be assignable by any
party to this Agreement without the prior written consent of the other parties,
and any attempt to assign any right, remedy, obligation or liability arising
hereunder without such consent shall be void.
10.6 Entire Agreement. This Agreement constitutes the entire agreement
-----------------
between the parties with respect to the subject matter hereof and supersedes all
prior agreements and undertakings, written and oral.
10.7 Binding Effect; Parties in Interest. This Agreement shall be binding
------------------------------------
upon and inure to the benefit of the parties to this Agreement and their
respective successors and permitted assigns, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
rights, benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
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10.8 Expenses, Indemnification.
--------------------------
(a) Whether or not the purchase and sale of the Securities is
consummated, each party hereto shall pay its own fees and expenses incident to
preparing for, entering into and carrying out this Agreement and the
consummation of the transactions contemplated hereby.
(b) A party in breach of this Agreement shall, on demand, indemnify and
hold harmless the other parties for and against all reasonable out-of-pocket
expenses, including legal fees, incurred by such other parties by reason of the
enforcement and protection of its rights under this Agreement. The payment of
such expenses is in addition to any other relief to which such other party may
be entitled.
10.9 Applicable Law and Jurisdiction; Service of Process; Waiver of Jury
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Trial.
-----
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without reference to any applicable principles
of conflict of laws to the extent that the application of the laws of another
jurisdiction would be required thereby. Any and all suits, legal actions or
proceedings against any party hereto arising out of this Agreement shall be
brought in the United States Federal court sitting in the Southern District of
New York, or, if such court shall not have jurisdiction, in the Supreme Court of
the State of New York sitting in the County of New York, and each party hereby
submits to and accepts the exclusive jurisdiction of such courts for the purpose
of such suits, legal action or proceedings. Each party hereto hereby irrevocably
waives any objection which it may now or hereafter have to the laying of venue
of any such suit, legal action or proceeding in any such court and hereby
further waives any claim that any suit, legal action or proceeding brought in
any such court has been brought in an inconvenient forum. The parties hereto
agree that service of process in connection with any suit, legal action or
proceeding brought hereunder or in connection herewith may be made by any means
of service of process permitted by law.
(b) Each party waives, to the fullest extent permitted by applicable
law, any right it may have to a trial by jury in respect of any litigation
arising out of or relating to this Agreement. Each party (x) certifies that no
representative, agent or attorney of another party has presented, expressly or
otherwise, that such other party would not, in the event of litigation, seek to
enforce the foregoing waiver and (y) acknowledges that it has been induced to
enter into this Agreement by, among other things, the mutual waivers and
certifications set forth in this Section 10.9.
10.10 Section Headings. The section and other headings contained in this
-----------------
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
10.11 Termination. This Agreement may be terminated at any time prior to
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the Closing by the mutual consent of each of the Purchasers and the Company.
10.12 Specific Enforcement. Each of the parties hereto acknowledges and
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agrees that in the event of any breach of this Agreement, the non-breaching
party would be irreparably harmed and could not be made whole by monetary
damages. It is accordingly agreed that the parties hereto will waive the defense
in any action for specific performance that a remedy at law would be adequate
and that the parties hereto, in addition to any other remedy to which they may
be entitled at law or in equity, shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof without the necessity of
proving actual damage or securing or posting any bond or providing prior notice.
10.13 Further Assurances. Subject to the specific terms of this Agreement,
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each of the parties hereto shall make, execute, acknowledge and deliver such
other instruments and documents, and take all such other actions, as may be
reasonably required in order to effectuate the purposes of this Agreement and to
consummate the transactions contemplated hereby.
[REMAINDER OF PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each party hereto has executed this Agreement as of the
day and year first above written.
LEUCADIA NATIONAL CORPORATION
By: __________________________
Name:
Title:
MUTUAL BEACON FUND
By: __________________________
Name:
Title:
MUTUAL DISCOVERY FUND
By: __________________________
Name:
Title:
MUTUAL FINANCIAL SERVICES FUND
By: __________________________
Name:
Title:
MUTUAL QUALIFIED FUND
By: __________________________
Name:
Title:
MUTUAL SHARES FUND
By: __________________________
Name:
Title:
MUTUAL BEACON FUND (Ontario, Canada)
By: __________________________
Name:
Title:
MUTUAL DISCOVERY SECURITIES FUND
By: __________________________
Name:
Title:
MUTUAL SHARES SECURITIES FUND
By: __________________________
Name:
Title:
FRANKLIN MUTUAL BEACON FUND
By: __________________________
Name:
Title:
MASTERS' SELECT VALUE FUND
By: __________________________
Name:
Title:
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SCHEDULE I
Names Type of Securities Number of Shares Purchase Price
----- ------------------ ---------------- --------------
Mutual Beacon Fund Common 595,496 $20,991,234.00
Series A Preferred 2 $9,501,426.00
Mutual Discovery Fund Common 415,236 $14,637,069.00
Series A Preferred 2 $9,501,426.00
Mutual Financial Services Fund Common 87,450 $3,082,612.50
Mutual Qualified Fund Common 422,096 $14,878,884.00
Series A Preferred 2 $9,501,426.00
Mutual Shares Fund Common 1,012,141 $35,677,970.25
Series A Preferred 4 $19,002,852.00
Mutual Beacon Fund (Ontario) Common 22,060 $777,615.00
Mutual Discovery Securities Fund Common 34,780 $1,225,995.00
Mutual Shares Securities Fund Common 184,830 $6,515,257.50
Franklin Mutual Beacon Fund Common 84,290 $2,971,222.50
Masters' Select Value Fund Common 49,220 $1,735,005.00
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Total $149,999,994.75
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EXHIBIT A
[REGISTRATION RIGHTS AGREEMENT]
10
