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PUT/CALL AGREEMENT
Among
BLACKSTONE CAPITAL PARTNERS II MERCHANT BANKING FUND L.P.,
BLACKSTONE OFFSHORE CAPITAL PARTNERS II L.P.,
BLACKSTONE FAMILY INVESTMENT PARTNERSHIP II L.P.,
PSI MANAGEMENT DIRECT L.P.,
XXXXXX GROUP INTERNATIONAL INC.
And
THE XXXXXX GROUP INC.
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Dated as of: August 26, 1996
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS................................ 2
1.1 Certain Defined Terms.................................................... 2
ARTICLE II
CALL AND PUT OPTIONS............................ 9
2.1 Call Option.............................................................. 9
2.2 Put Option............................................................... 9
2.3 Call Option Exercise Price.............................................. 10
2.4 Put Option Exercise Price............................................... 10
ARTICLE III
CALCULATION OF OPTION PRICE....................... 11
3.1 Calculation of Creation Price........................................... 11
3.2 Calculation of Pro Forma EBITDA for the Entry
Relevant Period and Creation Multiple................................... 12
3.3 Calculation of EBITDA for the Exit Relevant
Period.................................................................. 12
3.4 Access to Information; Resolution of Disputes........................... 12
ARTICLE IV
DETERMINATION OF OPTION CONSIDERATION; CERTAIN CONDITIONS........ 13
4.1 Option Consideration.................................................... 13
4.2 Conditions to Issuance of Xxxxxx Common Stock........................... 14
ARTICLE V
REGISTRATION RIGHTS........................... 15
5.1 Incidental Registration................................................. 15
ARTICLE VI
REPRESENTATIONS AND WARRANTIES...................... 25
6.1 Representations and Warranties of All Parties........................... 25
6.2 Representations and Warranties of LGII and LWN.......................... 26
6.3 Representations and Warranties of BCP and PSIM.......................... 26
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Page
ARTICLE VII
ADDITIONAL AGREEMENTS.......................... 27
7.1 Calculation of EBITDA................................................... 27
7.2 Further Assurances...................................................... 27
7.3 LWN Guarantee........................................................... 28
7.4 Drag-Along Rights....................................................... 29
ARTICLE VIII
CLOSINGS................................ 30
8.1 Payment of the Option Price in Cash or Xxxxxx
Common Stock............................................................ 30
8.2 Exercise of the BCP Liquidity Right..................................... 30
8.3 Default By LGII or LWN.................................................. 31
8.4 Time and Place of Closing............................................... 31
ARTICLE IX
MISCELLANEOUS.............................. 31
9.1 Notices................................................................ 31
9.2 Severability........................................................... 32
9.3 Entire Agreement....................................................... 32
9.4 Amendment and Waiver................................................... 32
9.5 Assignment; Binding on Transferees..................................... 32
9.6 Variations in Pronouns................................................. 33
9.7 Governing Law.......................................................... 33
9.8 Further Assurances..................................................... 33
9.9 Headings............................................................... 33
9.10 Counterparts........................................................... 33
9.11 Submission to Jurisdiction; Waivers.................................... 34
9.12 WAIVERS OF JURY TRIAL.................................................. 34
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PUT/CALL AGREEMENT
PUT/CALL AGREEMENT, dated as of August 26, 1996 (this "Agreement"),
among Blackstone Capital Partners II Merchant Banking Fund L.P., a Delaware
limited partnership ("BCPII"), Blackstone Offshore Capital Partners II L.P., a
Cayman Islands limited partnership ("BOCP"), Blackstone Family Investment
Partnership II L.P., a Delaware limited partnership ("BFIP" and, together with
BCPII, BOCP and each of their respective permitted assigns and transferees as
provided herein, and together with any Affiliate thereof that acquires shares
of the capital stock of Prime Holdings (as defined below) as contemplated by
Section 5.4 of the Stockholders' Agreement referred to below, "BCP" or the "BCP
Entities"), Xxxxxx Group International Inc., a Delaware corporation (together
with its permitted assigns and transferees as provided herein, "LGII"), The
Xxxxxx Group Inc., a British Columbia corporation ("LWN"), and PSI Management
Direct L.P., a Delaware limited partnership ("PSIM"). BCP, LGII and PSIM are
herein collectively referred to as the "Stockholders" and individually as a
"Stockholder."
WHEREAS, pursuant to a stock purchase agreement dated as of June 14,
1996 (the "Stock Purchase Agreement"), among Prime Succession, Inc., a Delaware
corporation ("Existing Prime"), the other individuals or entities listed on the
signature pages thereto as selling stockholders (collectively, the "Sellers"),
LWN and Prime Succession Acquisition Corp., a Delaware corporation formerly
known as Blackhawk Acquisition Corp. which is to be renamed Prime Succession,
Inc. ("New Prime") at the Closing described below, New Prime obtained the right
to acquire all of the capital stock of Existing Prime held by the Sellers,
which right has previously been assigned to Blackhawk Onshore Acquisition
Company L.L.C. and Blackhawk Offshore Company L.L.C. and is being further
assigned to Existing Prime at the Closing, such that Existing Prime would
repurchase such capital stock from such Sellers;
WHEREAS, at the Closing and as contemplated by the Stockholders'
Agreement (as defined below), the Stockholders will subscribe for newly issued
shares of capital stock of Existing Prime, such that upon the consummation of
such subscription and the repurchase by Existing Prime of its shares held by the
Sellers as described above, the Stockholders will hold all of the then issued
and outstanding shares of capital stock of Existing Prime (which will then be
renamed Prime Succession Holdings, Inc. ("Prime Holdings")); and
WHEREAS, the parties hereto desire to enter into this Agreement for
the purpose of setting forth certain agreements regarding the rights and
obligations of the Stockholders;
2
NOW, THEREFORE, in consideration of the mutual covenants and
conditions as hereinafter set forth, the parties hereto do hereby agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms. Capitalized terms used
herein and not otherwise defined herein shall have the following meanings:
"Additional BCP Contribution" means the amount in U.S.
Dollars of each additional purchase of Common Stock made by BCP or any of its
Affiliates pursuant to Section 5.4 of the Stockholders' Agreement.
"Additional LGII Contribution" means the amount in U.S.
Dollars of each additional purchase of Common Stock or Preferred Stock made by
LGII or any of its Affiliates pursuant to Section 5.4 of the Stockholders'
Agreement.
"Adjusted BCP Contribution" means the BCP Contribution
less $15,000,000.
"Adjusted Total Equity Value" means, as of the Exercise
Date, the sum of Total Equity Value, the LGII Preferred
Contribution and LGII Accrued Preferred Dividends.
"Affiliate" of any Person means any other Person that
directly or indirectly controls, is controlled by, or is under common control
with, such Person.
"BCP Call Hurdle Profit" means the amount in excess of the
BCP Contribution necessary to provide a 24.14% compound annual return on the
BCP Contribution from and including the Closing Date (or, with respect to
Additional BCP Contributions, measured from and including the date on which
each such Additional BCP Contribution was made) to but excluding the Exercise
Date.
"BCP Common Stock" means the shares of Common Stock held by
the BCP Entities.
"BCP Contribution" means the sum of $52,000,000 (which
includes the investment in Common Stock by PSIM) and the aggregate amount of
any Additional BCP Contributions.
"BCP Liquidity Right" is defined in Section 4.1.
"BCP Put Hurdle Profit" means the amount in excess of the BCP
Contribution necessary to provide a 25% compounded annual return on the BCP
Contribution from and including the Closing Date (or, with respect to
Additional BCP Contributions, measured
3
from and including the date on which each such Additional BCP Contribution was
made) to but excluding the Exercise Date.
"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in the City of New York are authorized or
required by law to close.
"Call Option" is defined in Section 2.1.
"Call Option Exercise Price" is defined in Section 2.3.
"Closing" means the consummation of the transactions
contemplated by the Stock Purchase Agreement.
"Closing Date" means the date on which the Closing pursuant
to the Stock Purchase Agreement occurs.
"Common Stock" means the common stock, par value $.01 per
share, of Prime Holdings.
"Consolidated Cash Flow" has the meaning ascribed to such
term in the Indenture as of the date of this Agreement.
"Creation Multiple" means the quotient of (i) the Creation
Price divided by (ii) Pro Forma EBITDA for the Entry Relevant Period.
"Creation Price" means the sum of (a) the BCP Contribution,
plus (b) the LGII Contribution, plus (c) $190 million, plus (d) the amount as
of the Closing Date of Prime Holdings' liabilities on a consolidated basis
relating to covenants not to compete, consulting agreements and other former
owners' expenses, computed utilizing a 10% discount rate and assuming a
continuation of past payment practices, plus (e) the aggregate amount as of the
Closing Date of Existing Prime's liabilities on a consolidated basis in respect
of its obligations under the Casket Supply Agreement, dated as of January 1,
1993, as amended, between Batesville Casket Company, Inc. and Prime Succession,
Inc., less (f) the amount of any payment made by the Sellers to Prime Holdings
in accordance with the post-closing adjustment provisions of Section 4.6 of the
Stock Purchase Agreement.
"Credit Agreement" means the credit agreement dated as of
August 26, 1996 among New Prime, Existing Prime and the lenders thereunder.
"Default Rate" has the meaning ascribed to such term in the
Credit Agreement as of the date of this Agreement.
"EBITDA" means, for any period, the amount of Consolidated
Cash Flow calculated for Prime Holdings on a consolidated basis for the
relevant period, subject to Section 7.1 of this Agreement.
4
"Excess Value One" means the greater of (i) zero or (ii)
Total Equity Value minus Total Call Hurdle Value (if the calculation is being
made in connection with the Call Option) or Total Put Hurdle Value (if the
calculation is being made in connection with the Put Option), up to a maximum
amount which, when multiplied by 0.5 and added to the BCP Contribution plus the
BCP Call Hurdle Profit (if the calculation is being made in connection with the
Call Option) or the BCP Put Hurdle Profit (if the calculation is being made in
connection with the Put Option), results in an Option Price that produces a
thirty percent (30%) compounded annual return on the BCP Contribution.
"Excess Value Two" means the greater of (i) zero or (ii)
Total Equity Value less Total Call Hurdle Value (if the calculation is being
made in connection with the Call Option) or Total Put Hurdle Value (if the
calculation is being made in connection with the Put Option) less Excess Value
One.
"Exercise Date" means the date specified for the closing of
the exercise of either of the Options, as set forth in a notice given pursuant
to Section 2.1(b) or 2.2(b), as applicable.
"Exercise Date Value" means the value per share of Xxxxxx
Common Stock determined in accordance with Section 4.1(b).
"Exit Relevant Period" means the period of twelve full
calendar months ending immediately prior to or coincident with the Notification
Date.
"GAAP" means generally accepted accounting principles, as in
effect in the United States of America on the date hereof and applied on a
basis consistent with the manner in which such principles were applied in the
preparation of the historical financial statements of Existing Prime included
in the "Pro Forma Financial Information" section of the Offering Memorandum.
"Guarantee" means the guarantee obligation of LWN set
forth in Section 7.3 hereof.
"Holder" shall mean any BCP Entity and any Permitted
Transferee who owns registrable securities.
"Holders' Portion" of the underwriters' discounts and
commissions means, with respect to particular Registrable Securities being sold
pursuant to a registration effected under Section 5.1 or 5.2, the excess, if
any, of the underwriters' discount and commissions charged in connection with
such disposition over the amount that such charge would have otherwise been if
the Registrable Securities being sold were sold at a public offering price
equal to the Exercise Date Value.
5
"Indenture" means the Indenture, dated as of August 15, 1996,
between Prime Succession Acquisition Corp., as issuer, and United States Trust
Company of New York, as trustee.
"LGII Accrued Preferred Dividends" means, as of the date of
determination, the aggregate liquidation preference of the LGII Preferred less
the LGII Preferred Contribution.
"LGII Common Contribution" means the sum of $16,000,000 and
the aggregate amount of any Additional LGII Contributions made in respect of
Common Stock.
"LGII Contribution" means the sum of the LGII Common
Contribution and the LGII Preferred Contribution.
"LGII Hurdle Profit" means the amount in excess of the LGII
Common Contribution necessary to provide a 25% compounded annual return on the
LGII Common Contribution from and including the Closing Date (or, with respect
to Additional LGII Contributions made in respect of Common Stock, measured from
and including the date on which each such Additional LGII Contribution was
made) to but excluding the Exercise Date.
"LGII Preferred" means the shares of Preferred Stock
held by LGII and its Affiliates.
"LGII Preferred Contribution" means the sum of $62,000,000
and the aggregate amount of any Additional LGII Contributions made in respect
of Preferred Stock which sum shall not be reduced by any redemption of such
Preferred Stock.
"Xxxxxx Common Stock" means the common stock, par value $.01
per share, of LWN.
"Management Equity Indebtedness" means the aggregate amount
of outstanding loans, including accrued interest thereon (whether or not
capitalized), provided by New Prime to PSIM or its management for purposes of
the acquisition of PSIM Common Stock.
"Market Value" means the average of the daily closing prices
of the Xxxxxx Common Stock for the 20 trading day period ending on the third
calendar day prior to the Exercise Date or such other relevant date of
determination, as the case may be. The closing price for each day shall be the
last reported sales price regular way or, in case no such reported sale takes
place on such day, the average of the reported closing bid and asked prices
regular way, in either case on the New York Stock Exchange, or, if the Xxxxxx
Common Stock is not listed or admitted to trading on the New York Stock
Exchange, on the American Stock Exchange, or, if the Xxxxxx Common Stock is not
listed or admitted to trading on the American Stock Exchange, the average of
the closing bid and asked prices of the Xxxxxx Common Stock in the
over-the-counter market as reported on the NASDAQ
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system of the National Association of Securities Dealers, Inc. or if the Xxxxxx
Common Stock is not so quoted, the average of the closing bid and asked price
of the Xxxxxx Common Stock in the over-the-counter market as furnished by any
nationally recognized New York Stock Exchange member firm selected by LWN for
such purpose.
"Notification Date" means the date notification is given by
an exercising party under any of the Options in accordance with Section 2.1(b)
or 2.2(b).
"Offering Memorandum" the offering memorandum dated August
13, 1996 relating to the offering of New Prime's 10-3/4% Senior Subordinated
Notes due 2004.
"Obligations" means the obligation of LGII to pay on the
Exercise Date the cash portion, if any, of the Option Price, including, without
limitation, interest accruing at the Default Rate after the Exercise Date after
the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to LGII whether or not
a claim for post-filing or post-petition interest is allowed in such
proceeding.
"Option" means the Call Option or the Put Option, as
applicable.
"Option Shares" means shares of Xxxxxx Common Stock issuable
in connection with the exercise of an Option.
"Option Price" means the Call Option Exercise Price or the
Put Option Exercise Price, as applicable and as determined in accordance with
this Agreement.
"Option Shares" means shares of Xxxxxx Common Stock, if any,
issuable in connection with the Option.
"Permitted Transferee" means any Person to whom a Stockholder
transfers shares of Common Stock or Preferred Stock, as the case may be, in
accordance with the Stockholders' Agreement and who is required to, and does,
become bound by the terms of this Agreement, and includes any Person to whom a
Permitted Transferee (as thus defined) of a Stockholder (or a Permitted
Transferee of a Permitted Transferee) so further transfers shares and who is
required to, and does, become bound by the terms of this Agreement.
"Person" means any individual, corporation, partnership,
joint venture, trust, unincorporated organization or other entity.
"Preferred Stock" means the 10% Pay In-Kind Cumulative
Preferred Stock, par value $.01 per share, of Prime Holdings.
7
"Pro Forma EBITDA for the Entry Relevant Period" means the
quotient of (a) the sum of (i) EBITDA for calendar year 1997 divided by 1.06
raised to a power equal to the quotient of (x) the number of days elapsed
between the Closing Date and December 31, 1997 and (y) 365 and (ii) EBITDA for
calendar year 1998 divided by 1.06 raised to a power equal to the quotient of
(x) the number of days elapsed between the Closing Date and December 31, 1998
and (y) 365, and (b) 2, and may be expressed as a formula calculation as
follows:
1997 EBITDA + 1998 EBITDA
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(1.06)(# days since CD to 12/31/97/365) (1.06)(# days since CD to 12/31/98/365)
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2
"PSIM Common Stock" means the shares of Common Stock
held by PSIM.
"Put Option" is defined in Section 2.2.
"Put Option Exercise Price" is defined in Section 2.4.
"Registrable Securities" means any Xxxxxx Common Stock (i)
issued to BCP and as to which BCP, as contemplated by Section 4.1(b), is not
exercising the BCP Liquidity Right, or (ii) which is issued or distributed in
respect of any shares covered by the preceding clause (i) by way of stock
dividend or stock split or other distribution, recapitalization or
reclassification. As to any particular Registrable Securities, once issued such
securities shall cease to be Registrable Securities when (w) a registration
statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, (x) they shall have been
sold pursuant to Rule 144 (or any successor provision) under the Securities
Act, (y) they shall have been otherwise transferred, new certificates for them
not bearing a legend restricting further transfer shall have been delivered by
LWN and subsequent disposition of them shall not require registration or
qualification of them under the Securities Act or any state securities or blue
sky law then in force, or (z) they shall have ceased to be outstanding.
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance with Sections 5.2 and 5.3 of this
Agreement, including, without limitation, (i) all SEC and securities exchange
or National Association of Securities Dealers, Inc. registration and filing
fees, (ii) all fees and expenses of complying with securities or blue sky laws
(including fees and disbursements of counsel for the underwriters in connection
with blue sky qualifications of the Registrable Securities), (iii) all
printing, messenger and delivery expenses, (iv) all fees and expenses incurred
in connection with the listing of the Registrable Securities on any securities
exchange
8
pursuant to Section 5.3(h), (v) the fees and disbursements of counsel for LWN
and of its independent public accountants, including the expenses of any
special audits and/or "cold comfort" letters required by or incident to such
performance and compliance, (vi) the reasonable fees and disbursements of one
counsel, other than LWN's counsel, selected by the Holders of a majority of the
Registrable Securities being registered to represent all Holders of the
Registrable Securities being registered in connection with each such
registration (it being understood that any Holder may, at its own expense,
retain separate counsel to represent it in connection with such registration),
(vii) any fees and disbursements of underwriters customarily paid by the
issuers or sellers of securities, and the reasonable fees and expenses of any
special experts retained in connection with the requested registration, but
excluding underwriting discounts and commissions and transfer taxes, if any,
and (viii) subject to the obligation of Holders under Sections 5.1 and 5.2 to
pay any Holders' Portion thereof, all underwriting discounts and commissions or
other brokers' commissions charged in connection with the sale of Registrable
Securities.
"Revolver" means the revolving credit facility made available
to New Prime by a syndicate of commercial lenders on the Closing Date, or any
other similar facility subsequently replacing such facility.
"Securities Act" shall mean the Securities Act of 1933, and
the rules and regulations promulgated thereunder, as the same may be amended
from time to time.
"SEC" shall mean the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act or the
Exchange Act.
"Stockholders' Agreement" means the Stockholders' Agreement,
dated as of August 26, 1996, among the Stockholders and Prime Holdings.
"Total Call Hurdle Value" means the sum of the BCP
Contribution, the LGII Common Contribution, the BCP Call Hurdle Profit and the
LGII Hurdle Profit.
"Total Contribution" means the sum of (i) the BCP
Contribution and (ii) the LGII Contribution.
"Total Enterprise Value" means the product of (i) the
Creation Multiple multiplied by (ii) EBITDA for the Exit Relevant Period.
"Total Equity Value" as of the Exercise Date (each of the
following shall be determined as of the Exercise Date except for Total
Enterprise Value, which shall be determined in accordance with the definition
thereof) means the excess, if any,
9
of (i) Total Enterprise Value over (ii) the sum of (a) the aggregate
outstanding principal amount (including accrued but unpaid interest thereon) of
Prime Holdings' consolidated total indebtedness (excluding any amounts
outstanding under the Revolver), plus (b) the LGII Preferred Contribution, plus
(c) LGII Accrued Preferred Dividends, less (d) the aggregate amount of Prime
Holdings' consolidated total cash, cash equivalents and any other marketable
securities, less (e) the aggregate amount of Management Equity Indebtedness.
"Total Put Hurdle Value" means the sum of the BCP
Contribution, the LGII Common Contribution, the BCP Put Hurdle Profit and the
LGII Hurdle Profit.
ARTICLE II
CALL AND PUT OPTIONS
2.1 Call Option. (a) On the terms and subject to the
conditions set forth herein, each of the BCP Entities and PSIM hereby grants to
LGII an irrevocable option (the "Call Option") exercisable beginning on the
fourth anniversary of the Closing Date and ending on the day before the sixth
anniversary of the Closing Date, to purchase (and, upon exercise of such Call
Option in accordance herewith, each BCP Entity and PSIM irrevocably agrees to
sell to LGII) all, but not less than all, of the BCP Common Stock or PSIM
Common Stock, as the case may be, respectively owned by them. The aggregate
purchase price with respect to all the shares of BCP Common Stock and PSIM
Common Stock being purchased shall be equal to the Call Option Exercise Price
(as defined in Section 2.3). The consideration to be paid for each share of BCP
Common Stock and each share of PSIM Common Stock shall equal the Call Option
Exercise Price divided by the aggregate number of shares of BCP Common Stock
and PSIM Common Stock being purchased, provided that the BCP Entities may
reallocate the Call Option Exercise Price among themselves to the extent
necessary to take into account differences among them, if any, in making
Additional BCP Contributions.
(b) LGII shall give Blackstone Management Associates II
L.L.C., a Delaware limited liability company ("BMAII"), as agent for each of
the BCP Entities and PSIM, written notice of exercise of the Call Option no
less than 90 nor more than 120 days prior to the Business Day specified in such
notice for exercise of the Call Option. Subject to the preceding sentence, a
notice of exercise of the Call Option may be given during or prior to the
commencement of the period in which the Call Option is exercisable and shall
irrevocably commit the Stockholders to the purchase and sale of the BCP Common
Stock and PSIM Common Stock in accordance with the Call Option.
2.2 Put Option. (a) On the terms and subject to the
conditions set forth herein, LGII hereby grants to each BCP
10
Entity and PSIM an irrevocable option (the "Put Option"), exercisable beginning
on the sixth anniversary of the Closing Date and ending on the eighth
anniversary of the Closing Date, to require LGII to purchase (and, upon
exercise of such Put Option in accordance herewith, LGII agrees to purchase
from the BCP Entities and PSIM) all, but not less than all, of the BCP Common
Stock and PSIM Common Stock respectively owned by them; provided that the Put
Option may be exercised only with respect to all the BCP Common Stock and PSIM
Common Stock, and provided further, BMAII, as agent for each of the BCP
Entities and PSIM, shall have the exclusive authority to deliver notice of such
exercise to LGII. The aggregate purchase price with respect to all the shares
of BCP Common Stock and PSIM Common Stock being purchased shall be equal to the
Put Option Exercise Price (as defined in Section 2.4). The consideration to be
paid for each share of BCP Common Stock and PSIM Common Stock shall equal the
Put Option Exercise Price divided by the aggregate number of shares of BCP
Common Stock and PSIM Common Stock being purchased, provided that the BCP
Entities may reallocate the Put Option Exercise Price among themselves to the
extent necessary to take into account differences among them, if any, in making
Additional BCP Contributions.
(b) BMAII, as exclusive agent for BCP and PSIM, shall give
LGII written notice of exercise of the Put Option no less than 90 nor more than
120 days prior to the Business Day specified in such notice for exercise of the
Put Option. Subject to the preceding sentence, a notice of exercise of the Put
Option may be given at any time during or prior to the commencement of the
period in which the Put Option is exercisable and shall irrevocably commit the
Stockholders to the purchase and sale of the BCP Common Stock and the PSIM
Common Stock in accordance with the Put Option.
2.3 Call Option Exercise Price. The Call Option
Exercise Price shall be determined as of the Exercise Date and
shall be equal to:
(i) the sum of the BCP Contribution and the BCP Call Hurdle
Profit, if Total Equity Value is equal to or less than Total Call
Hurdle Value; or
(ii) the sum of (a) the BCP Contribution, (b) the BCP Call
Hurdle Profit, (c) 50% of Excess Value One, if any and (d) 25% of Excess Value
Two, if any, if Total Equity Value is greater than the Total Call Hurdle Value.
2.4 Put Option Exercise Price. The Put Option
Exercise Price shall be determined as of the Exercise Date and
shall be equal to:
(i) Adjusted Total Equity Value, if Adjusted Total Equity
Value is equal to or less than Adjusted BCP Contribution;
11
(ii) Adjusted BCP Contribution plus the product of (a) Adjusted
Total Equity Value minus Adjusted BCP Contribution and (b) the ratio of the BCP
Put Hurdle Profit to the sum of (1) BCP Put Hurdle Profit and (2) LGII Accrued
Preferred Dividends, if Adjusted Total Equity Value is greater than Adjusted
BCP Contribution but less than or equal to the sum of (x) Adjusted BCP
Contribution, (y) LGII Accrued Preferred Dividends and (z) BCP Put Hurdle
Profit;
(iii) Adjusted BCP Contribution plus BCP Put Hurdle Profit, if
Adjusted Total Equity Value is greater than the sum of (a) Adjusted BCP
Contribution, (b) BCP Put Hurdle Profit and (c) LGII Accrued Preferred
Dividends, but equal to or less than the sum of (v) Adjusted BCP Contribution,
(w) BCP Put Hurdle Profit, (x) LGII Common Contribution, (y) LGII Preferred
Contribution and (z) LGII Accrued Preferred Dividends;
(iv) Total Equity Value less the LGII Common Contribution, if
Adjusted Total Equity Value is greater than the sum of (a) Adjusted BCP
Contribution, (b) BCP Put Hurdle Profit, (c) LGII Common Contribution, (d) LGII
Preferred Contribution and (e) LGII Accrued Preferred Dividends but equal to or
less than the sum of (u) Adjusted BCP Contribution, (v) BCP Put Hurdle Profit,
(w) LGII Common Contribution, (x) LGII Preferred Contribution, (y) LGII Accrued
Preferred Dividends and (z) $15 million;
(v) BCP Contribution plus BCP Put Hurdle Profit, if Total
Equity Value is greater than BCP Contribution plus BCP Put Hurdle Profit plus
LGII Common Contribution but less than Total Put Hurdle Value; or
(vi) BCP Contribution plus BCP Put Hurdle Profit plus 50% of
Excess Value One plus 25% of Excess Value Two, if Total Equity
Value is greater than Total Put Hurdle Value.
ARTICLE III
CALCULATION OF OPTION PRICE
3.1 Calculation of Creation Price. Within 30 days of the
Closing Date, the Stockholders shall cause the chief financial officer of Prime
Holdings to calculate the Creation Price and provide to the Stockholders his
written certification of his calculation of such amount. Unless the amount so
calculated is disputed by any Stockholder by written notice given to the other
Stockholders within 30 days of its being so certified, it shall be final and
binding on the parties in calculating the Creation Multiple. If such amount is
so disputed by written notice as aforesaid, such dispute shall be resolved in
accordance with Section 3.4(b), and the resolution process thereby provided
shall determine the Creation Price which shall be final and binding on the
parties in calculating the Creation Multiple.
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3.2 Calculation of Pro Forma EBITDA for the Entry Relevant
Period and Creation Multiple. (a) Within 90 days of the end of each of 1997 and
1998, the Stockholders shall cause the chief financial officer of Prime
Holdings to calculate Prime Holdings' EBITDA for the calendar year then ended
and provide to the Stockholders his written certification of his calculation of
such amount. Unless the amount so calculated is disputed by any Stockholder by
written notice given to the other Stockholders within 30 days of its being so
certified, it shall be final and binding on the parties in calculating Pro
Forma EBITDA for the Entry Relevant Period. If such amount is so disputed by
written notice as aforesaid, such dispute shall be resolved in accordance with
Section 3.4(b), and the resolution process thereby provided shall determine
EBITDA for 1997 and/or 1998, as the case may be, which amount shall be final
and binding on the parties in calculating Pro Forma EBITDA for the Entry
Relevant Period.
(b) Promptly following the determination of EBITDA for
calendar 1998, the Stockholders shall cause the chief financial officer of
Prime Holdings to calculate Pro Forma EBITDA for the Entry Relevant Period and
the Creation Multiple and provide to the Stockholders his written certification
of his calculation of such amounts. Unless the amounts so calculated are
disputed by any Stockholder by written notice given to the other Stockholders
within 30 days of their being so certified, they shall be final and binding on
the parties. If such amounts are so disputed by written notice as aforesaid,
such dispute shall be resolved in accordance with Section 3.4(b), and the
resolution process thereby provided shall determine the Pro Forma EBITDA for
the Entry Relevant Period and the Creation Multiple which shall be final and
binding on the parties.
3.3 Calculation of EBITDA for the Exit Relevant Period. As
promptly as practicable following the Notification Date, the Stockholders shall
cause the chief financial officer of Prime Holdings to calculate EBITDA for the
Exit Relevant Period and provide to the Stockholders, no later than 45 days
after the Notification Date, his written certification of his calculation of
such amount. Unless the amount so calculated is disputed by any Stockholder by
written notice given to the other Stockholders within 15 days of its being so
certified, it shall be final and binding on the parties in calculating EBITDA
for the Exit Relevant Period. If such amount is so disputed by written notice
as aforesaid, such dispute shall be resolved in accordance with Section 3.4(b),
and the resolution process thereby provided shall determine EBITDA for the Exit
Relevant Period, which amount shall be final and binding on the parties in
calculating Total Enterprise Value.
3.4 Access to Information; Resolution of Disputes.
(a) Each Stockholder and its representatives shall have full
access to the books and records of Prime Holdings and its
subsidiaries in connection with any calculation made pursuant to
this Article III. The parties hereby agree to cause Prime
13
Holdings to instruct all auditors to make their work papers available for
review in this regard, and hereby waive any objection which such Stockholder
may raise with respect thereto. The fees and expenses of the Stockholders'
representatives shall be paid by Prime Holdings.
(b) In the event any Stockholder disputes any amount
calculated by the chief financial officer of Prime Holdings and gives timely
notice of such dispute as described above, the Stockholders shall negotiate in
good faith as promptly as practicable. In the event such dispute is not
resolved within 14 days of the giving of notice of such dispute, the parties
shall promptly engage as "Arbitrator" a "big six" accounting firm (which shall
not be KPMG Peat Marwick or Deloitte & Touche LLP or Prime Holdings' or LWN's
then existing auditors) to reach a final determination of the amount whose
calculation is in dispute. The fees of the Arbitrators shall be shared equally
between BCP collectively and LGII, and the Arbitrator shall render its decision
within 21 days of its engagement for such purpose.
(c) By way of illustration, the "Illustrative Scenarios"
attached to this Agreement reflect the distribution order in a call or put
scenario pursuant to the formula described herein.
ARTICLE IV
DETERMINATION OF OPTION CONSIDERATION; CERTAIN CONDITIONS
4.1 Option Consideration. (a) (i) LGII may use for payment of
the Option Price (either in whole or in part) payable to the BCP Entities under
the Call Option or the Put Option either cash or common stock, par value $.01,
of LWN ("Xxxxxx Common Stock"). If Xxxxxx Common Stock is to be issued, LWN
shall notify BCP within 15 days of the Notification Date of the percentage of
the Option Price payable to the BCP Entities to be paid in Xxxxxx Common Stock.
The number of shares of Xxxxxx Common Stock issuable to BCP on the Exercise
Date will be calculated as follows.
(ii) If BCP notifies LWN within 30 days of the Notification Date
of its desire promptly to sell the shares of Xxxxxx Common Stock received in
full or partial payment of the Option Price, then LWN will, on behalf of LGII,
issue for the account of BCP, and will undertake for the benefit of BCP to
effectuate the sale of, such number of shares of Xxxxxx Common Stock as would,
upon consummation of such sale, yield net cash proceeds to BCP equal to the
portion of the Option Price that would have otherwise been paid in cash to the
BCP Entities (such notification by BCP together with the sale of Xxxxxx Common
Stock for such purpose being referred to as the "BCP Liquidity Right").
14
(iii) LWN shall, on behalf of LGII, bear all Registration
Expenses in connection with such issuance and sale (including the entire amount
of any and all underwriters' discounts and commissions) and provide customary
and appropriate undertakings (including indemnification of BCP to the same
extent provided in Section 5.4) in connection with such issuance and sale. If
such net cash proceeds have not been paid to BCP on the Exercise Date, the
closing of the Option shall be in escrow pending receipt of such proceeds by
BCP. Any delay in remitting net cash proceeds to BCP beyond the 90th day after
the date on which BCP notifies LWN of its desire to exercise the BCP Liquidity
Right shall require a "grossing up" (through the issuance of additional shares)
of the net cash proceeds required to be received so as to reflect an implied
interest component (accruing from such 90th day to the date of actual payment
to BCP) at the rate of 10% per annum. If net cash proceeds have not been
received by BCP within 180 days after the date on which BCP notifies LWN of its
desire to exercise the BCP Liquidity Right, LGII shall be required to pay the
Option Price wholly in cash on such 180th day.
(b) If BCP does not invoke the BCP Liquidity Right as
described in paragraph (a) above with respect to the entire portion of the
Option Price payable to BCP in Xxxxxx Common Stock, the number of shares
issuable to BCP in respect of the non-cash portion of the Option Price will be
based on the Market Value of the Xxxxxx Common Stock. In this regard, LWN
agrees (i) to make an appropriate public announcement no later than the
commencement of such 20 trading day period with regard to the pending issuance
of Xxxxxx Common Stock to BCP on the Exercise Date, and (ii) during the period
commencing at the beginning of such 20 trading day period and through the
Exercise Date, not to take any corporate action (other than the declaration or
payment of a regular dividend) in respect of combining the outstanding shares
of Xxxxxx Common Stock, including combining its outstanding shares into a
smaller number of shares or issuing rights or warrants to stockholders of
record on a date prior to the Exercise Date.
(c) Regardless of the issuance of Xxxxxx Common Stock in
connection with the Call Option or the Put Option, the amount payable pursuant
to Section 2.1 or 2.2 by LGII for each share of PSIM Common Stock in connection
with the exercise of the Call Option or the Put Option shall be paid by LGII in
cash to PSIM on the Exercise Date.
4.2 Conditions to Issuance of Xxxxxx Common Stock. The
ability of LGII and LWN to issue Xxxxxx Common Stock in lieu of LGII paying the
Option Price to BCP in cash is subject to the satisfaction, on or before the
Exercise Date, of each of the following conditions:
(a) The representations and warranties of LWN and LGII
set forth in Sections 6.1 and 6.2 hereof shall be true and
15
correct in all material respects when made and shall be true and correct in all
material respect at and as of the Exercise Date.
(b) LWN and LGII shall have performed and complied in all
material respects with all agreements, covenants and conditions contained
herein which are required to be performed or complied with by it on or before
the Exercise Date.
(c) BCP shall have received a certificate, dated the Exercise
Date and signed by a principal executive officer of LWN, certifying that the
conditions set forth in Sections 4.2(a) and 4.2(b) are satisfied on and as of
such date.
(d) LWN shall have provided BCP with a legal opinion from
counsel reasonably satisfactory to BCP with respect to matters customarily
covered in connection with the issuance of shares to a private investor, and
such option shall be reasonably satisfactory in form and substance to BCP and
its counsel.
(e) The receipt of the Option Shares by BCP shall not have
been enjoined (temporarily or permanently) as of the Exercise Date or be
prohibited by any applicable law or governmental regulation.
(f) All proceedings taken in connection with the issuance and
delivery of the Option Shares and all documents and papers relating thereto
shall be reasonably satisfactory to BCP. BCP shall have received copies of such
documents and papers as it may reasonably request in connection therewith, all
in form and substance reasonably satisfactory to it.
(g) Since the Notification Date, there has not been any
material adverse change in the general affairs, management, financial position,
shareholders' equity or results of operations of LWN and its subsidiaries taken
as a whole.
(h) No "Default" as described in Section 8.6 or 8.7 of the
credit agreement dated as of May 15, 1996 among LWN, LGII and the lenders named
therein (in the form thereof on August 26, 1996) shall have occurred since the
date of this Agreement.
ARTICLE V
REGISTRATION RIGHTS
5.1 Incidental Registration. (a) Right to Include
Registrable Securities. Following the issuance of Xxxxxx Common
Stock to BCP pursuant to Section 4.1(b), each time LWN proposes
to register Xxxxxx Common Stock under the Securities Act (other
than a registration on Form S-4 or S-8, or any successor or other
forms promulgated for similar purposes), whether or not for sale
for its own account, pursuant to a registration statement on
which it is permissible to register Registrable Securities for
16
sale to the public under the Securities Act, it will give prompt written notice
to all Holders of its intention to do so and of the Holders' rights under this
Section 5.1(a). Upon the written request of any Holder made within 30 days
after the receipt of any such notice (which request shall specify the
Registrable Securities intended to be disposed of by such Holder), LWN will use
its best efforts to effect the registration under the Securities Act of all
Registrable Securities which LWN has been so requested to register by the
Holders thereof; provided that (i) if, at any time after giving written notice
of its intention to register any securities and prior to the effective date of
the registration statement filed in connection with such registration, LWN
shall determine for any reason not to proceed with the proposed registration,
LWN may, at its election, give written notice of such determination to each
Holder and thereupon shall be relieved of its obligation to register any
Registrable Securities in connection with such registration (but not from its
obligation to pay the Registration Expenses in connection therewith), and (ii)
if such registration involves an underwritten offering by LWN (underwritten, at
least in part, by Persons who are not Affiliates of LWN), all Holders
requesting to have Registrable Securities included in LWN's registration must
sell their Registrable Securities to such underwriters who shall have been
selected by LWN on the same terms and conditions as apply to LWN, with such
differences, including any with respect to indemnification and contribution, as
may be customary or appropriate in combined primary and secondary offerings. If
a proposed registration pursuant to this Section 5.1(a) involves such an
underwritten public offering, any Holder making a request under this Section
5.1(a) in connection with such registration may elect in writing, prior to the
effective date of the registration statement filed in connection with such
registration, to withdraw such request and not to have such securities
registered in connection with such registration.
(b) Expenses. LWN will pay all Registration Expenses in
connection with each registration of Registrable Securities requested pursuant
to this Section 5.1(a), regardless of whether such registration statement
becomes effective, and each Holder shall pay the Holders' Portion, if any, of
all underwriting discounts and commissions relating to the sale or disposition
of such Holder's Registrable Securities pursuant to a registration statement
effected pursuant to this Section 5.1(a).
(c) Priority in Incidental Registrations. If a registration
pursuant to this Section 5.1 involves an underwritten offering by LWN (as
described in Section 5.1(a)(ii)) and the managing underwriter with respect to
such offering advises LWN in writing that, in its opinion, the number of
securities (including all Registrable Securities) which LWN, the Holders and
any other persons intend to include in such registration exceeds the largest
number of securities which can be sold in such offering without having an
adverse effect on the offering of securities as contemplated by LWN (including
the
17
price at which LWN proposes to sell such securities), then LWN will include in
such registration (i) first, all the securities LWN proposes to sell for its
own account, (ii) second, the number of Registrable Securities which the
Holders have requested to be included in such registration and which, in the
opinion of such managing underwriter, can be sold without having the adverse
effect referred to above, such reduced number of Registrable Securities to be
allocated pro rata among all requesting Holders on the basis of the relative
number of shares of Registrable Securities then held by each such Holder
(provided that any shares thereby allocated to any such Holder that exceed such
Holder's request will be reallocated among the remaining requesting Holders in
like manner).
(d) Custody Agreement and Power of Attorney. Upon LWN's
request, any Holder will execute and deliver a custody agreement and power of
attorney in form and substance reasonably satisfactory to LWN with respect to
the shares of Xxxxxx Common Stock to be registered pursuant to this Section 5.1
(a "Custody Agreement and Power of Attorney"). The Custody Agreement and Power
of Attorney will provide, among other things, that the Holder will deliver to
and deposit in custody with the custodian and attorney-in-fact named therein a
certificate or certificates representing such shares of Xxxxxx Common Stock
(duly endorsed in blank by the registered owner or owners thereof or
accompanied by duly executed stock powers in blank) and irrevocably appoint
said custodian and attorney-in-fact as the Holder's agent and attorney-in-fact
with full power and authority to act under the Custody Agreement and Power of
Attorney on the Holder's behalf with respect to the matters specified therein.
(e) Other Agreements. Each Holder agrees that it will
execute such other agreements as LWN may reasonably request to
further accomplish the purposes of this Section 5.1.
5.2 Registration on Request. (a) Request by Holders. Upon the
written request of any Holder or Holders owning at least 20% of the Registrable
Securities that are subject to this Agreement, requesting that LWN effect the
registration under the Securities Act of all or part of such Holder's or
Holders' Registrable Securities (which Registrable Securities requested to be
registered have an aggregate Market Value as of the date of such request of not
less than $50 million), and specifying the intended method of disposition
thereof, LWN will promptly give written notice of such requested registration
to all other Holders, and thereupon will, as expeditiously as possible, use its
best efforts to effect the registration under the Securities Act of:
(i) the Registrable Securities which LWN has been so
requested to register by such Holder or Holders; and
(ii) all other Registrable Securities which LWN has
been requested to register by any other Holder thereof by
18
written request given to LWN within 30 days after the giving of such
written notice by LWN (which request shall specify the intended method
of disposition of such Registrable Securities),
so as to permit the disposition (in accordance with the Holders' intended
method thereof) of the Registrable Securities so to be registered; provided,
that LWN shall not be obligated to file a registration statement relating to
any registration request under this Section 5.2(a)(i) within a period of one
year after the effective date of any other registration statement relating to
(A) any registration request under this Section 5.2(a) or (B) any registration
effected under Section 5.1, or (ii) if three registration statements relating
to registration requests under this Section 5.2(a) have previously been filed
and declared effective by the SEC.
(b) Expenses. LWN will pay all Registration Expenses in
connection with the first three registrations of Registrable Securities
pursuant to this Section 5.2 upon the written request of any of the Holders,
and each Holder shall pay the Holders' Portion, if any, of the underwriting
discounts and commissions relating to the sale or disposition of such Holder's
Registrable Securities pursuant to a registration statement effected pursuant
to this Section 5.2. All expenses for any subsequent registrations of
Registrable Securities pursuant to this Section 5.2 shall be paid pro rata by
all Persons (including the Holders and LWN) participating in such registration
on the basis of the relative number of shares of Xxxxxx Common Stock of each
such Person included in such registration.
(c) Effective Registration Statement. A registration
requested pursuant to this Section 5.2 will not be deemed to have been effected
unless it has become effective; provided, that if, within the period ending on
the earlier to occur of (i) 180 days after the applicable registration
statement has become effective, or (ii) the date on which the distribution of
the Registrable Securities covered thereby has been completed, the offering of
Registrable Securities pursuant to such registration is interfered with by any
stop order, injunction or other order or requirement of the SEC or other
governmental agency or court, such registration will be deemed not to have been
effected.
(d) Selection of Underwriters. If a requested registration
pursuant to this Section 5.2 involves an underwritten offering, the Holders of
a majority of the Registrable Securities which have requested inclusion in such
registration shall have the right to select the investment banker or bankers
and managers to administer the offering; provided, however, that such
investment banker or bankers and managers shall be reasonably satisfactory to
LWN; provided further, that if LWN is including shares of Xxxxxx Common Stock
in such registration statement, LWN shall have the right to select such bankers
or managers.
19
(e) Priority in Requested Registrations. If a requested
registration pursuant to this Section 5.2 involves an underwritten offering and
the managing underwriter advises LWN in writing that, in its opinion, the
number of securities requested to be included in such registration (including
securities of LWN which are not Registrable Securities) exceeds the largest
number of securities which can be sold in such offering, LWN will include in
such registration only the Registrable Securities requested to be included in
such registration. In the event that the number of Registrable Securities
requested to be included in such registration exceeds the number which, in the
opinion of such managing underwriter, can be sold, the number of such
Registrable Securities to be included in such registration shall be allocated
pro rata among all requesting Holders on the basis of the relative number of
shares of Registrable Securities then held by each such Holder (provided that
any shares thereby allocated to any such Holder that exceed such Holder's
request shall be reallocated among the remaining requesting Holders in like
manner). In the event that the number of Registrable Securities requested to be
included in such registration is less than the number which, in the opinion of
the managing underwriter, can be sold, LWN may include in such registration the
securities LWN proposes to sell up to the number of securities that, in the
opinion of the managing underwriter, can be sold.
5.3 Registration Procedures. If and whenever, LWN is required
to use its best efforts to effect or cause the registration of any Registrable
Securities under the Securities Act as provided in this Agreement, LWN will, as
expeditiously as possible:
(a) prepare and, if the registration is pursuant to notice
given under Section 5.2(a), in any event within 45 days after the
giving of notice pursuant to Section 5.2(a), file with the SEC a
registration statement with respect to such Registrable Securities on
any form for which LWN then qualifies or which counsel for LWN shall
deem appropriate, and which form shall be available for the sale of
the Registrable Securities in accordance with the intended methods of
distribution thereof, and use its best efforts to cause such
registration statement to become and remain effective; provided,
however, that LWN may discontinue any registration of its securities
which is being effected pursuant to Section 5.2 at any time prior to
the effective date of the registration statement relating thereto;
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for a period of 180 days or such lesser period of
time as LWN or any Holder may be required under the Securities Act to
deliver a prospectus in connection with any sale of Registrable
20
Securities, and to comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the
intended methods of disposition by the Holder or Holders thereof set
forth in such registration statement; provided, that before filing a
registration statement or prospectus, or any amendments or supplements
thereto, LWN will furnish to the Holders and their counsel copies of
all documents proposed to be filed, which documents will be subject to
the review of such counsel and will not be filed if such counsel
reasonably objects;
(c) furnish to each Holder of such Registrable Securities
such number of copies of such registration statement and of each
amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus included in such
registration statement (including each preliminary prospectus and
summary prospectus and prospectus supplement, as applicable), in
conformity with the requirements of the Securities Act, and such other
documents as such Holder may reasonably request in order to facilitate
the disposition of the Registrable Securities by such Holder;
(d) use its best efforts to register or qualify such
Registrable Securities covered by such registration statement under
such other securities or blue sky laws of such jurisdictions as each
Holder shall reasonably request, and do any and all other acts and
things which may be reasonably necessary or advisable to enable such
Holder to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such Holder, except that LWN shall not
for any such purpose be required to qualify generally to do business
as a foreign corporation in any jurisdiction where, but for the
requirements of this Section 5.3(d), it would not be obligated to be
so qualified, to subject itself to taxation in any such jurisdiction,
or to consent to general service of process in any such jurisdiction;
(e) use its best efforts to cause such Registrable Securities
covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the Holder or Holders thereof to consummate the
disposition of such Registrable Securities;
(f) notify each Holder of any such Registrable Securities
covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act
within the appropriate period mentioned in Section 5.3(b), of LWN's
becoming aware that the prospectus included in such registration
statement,
21
as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light
of the circumstances then existing, and at the request of any such
Holder, prepare and furnish to such Holder a reasonable number of
copies of an amended or supplemental prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such Registrable
Securities, such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(g) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable (but not more than
eighteen months) after the effective date of the registration
statement, an earnings statement which shall satisfy the provisions of
Section 11(a) of the Securities Act and the rules and regulations
promulgated thereunder;
(h) use its best efforts to cause all such Registrable
Securities to be listed on any securities exchange on which the Xxxxxx
Common Stock is then listed, if such Registrable Securities are not
already so listed and if such listing is then permitted under the
rules of such exchange, and to provide a transfer agent and registrar
for such Registrable Securities covered by such registration statement
no later than the effective date of such registration statement;
(i) enter into such customary agreements (including an
underwriting agreement in customary form) and take such other actions
as sellers of a majority of shares of such Registrable Securities or
the underwriters, if any, reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities, including
making appropriate members of senior management of LWN available for
customary participation in a "road show" presentation to potential
investors;
(j) obtain a "cold comfort" letter or letters from LWN's
independent public accountants in customary form and covering matters
of the type customarily covered by "cold comfort" letters as the
Holder or Holders of a majority of the shares of such Registrable
Securities shall reasonably request (provided that Registrable
Securities constitute at least 25% of the securities covered by such
registration statement); and
(k) make available for inspection by representatives
of the Holders of the Registrable Securities covered by such
registration statement, by any underwriter participating in
22
any disposition to be effected pursuant to such registration statement
and by any attorney, accountant or other agent retained by such
Holders or any such underwriter, all pertinent financial and other
records, pertinent corporate documents and properties of LWN, and
cause all of LWN's officers, directors and employees to supply all
information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration
statement.
LWN may require each Holder of Registrable Securities as to
which any registration is being effected to furnish LWN with such information
regarding such Holder and pertinent to the disclosure requirements relating to
the registration and the distribution of such securities as LWN may from time
to time reasonably request in writing.
Each Holder of Registrable Securities agrees that, upon
receipt of any notice from LWN of the happening of any event of the kind
described in Section 4(f), such Holder will forthwith discontinue disposition
of Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 4(f), and, if so
directed by LWN, such Holder will deliver to LWN (at LWN's expense) all copies,
other than permanent file copies then in such Holder's possession, of the
prospectus covering such Registrable Securities current at the time of receipt
of such notice. In the event LWN shall give any such notice, the period
mentioned in Section 5.3(b) shall be extended by the number of days during the
period from the date of the giving of such notice pursuant to Section 5.3(f)
and through the date when each seller of Registrable Securities covered by such
registration statement shall have received the copies of the supplemented or
amended prospectus contemplated by Section 5.3(f).
5.4 Indemnification. (a) Indemnification by LWN. In
the event of any registration of any securities of LWN under the Securities Act
pursuant to Section 5.1 or 5.2, LWN hereby indemnifies and agrees to hold
harmless, to the extent permitted by law, each Holder of Registrable Securities
covered by such registration statement, each affiliate of such Holder and their
respective directors and officers or general and limited partners (and the
directors, officers, affiliates and controlling Persons thereof), each other
Person who participates as an underwriter in the offering or sale of such
securities and each other Person, if any, who controls such Holder or any such
underwriter within the meaning of the Securities Act (collectively, the
"Indemnified Parties"), against any and all losses, claims, damages or
liabilities, joint or several, and expenses to which such Indemnified Party may
become subject under the Securities Act, common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof, whether or not such Indemnified Party is a party thereto) arise
23
out of or are based upon (a) any untrue statement or alleged untrue statement
of any material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary, final or
summary prospectus contained therein, or any amendment or supplement thereto,
or (b) any omission or alleged omission to state therein a material fact
necessary to make the statements made, in the light of the circumstances under
which they were made, not misleading, and LWN will reimburse such Indemnified
Party for any legal or other expenses reasonably incurred by it in connection
with investigating or defending any such loss, claim, liability, action or
proceeding; provided, that LWN shall not be liable to any Indemnified Party in
any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, in any such preliminary, final or
summary prospectus, or any amendment or supplement thereto in reliance upon and
in conformity with written information with respect to such Indemnified Party
furnished to LWN by such Indemnified Party for use in the preparation thereof;
and provided, further, that LWN will not be liable to any Person who
participates as an underwriter in the offering or sale of Registrable
Securities or any other Person, if any, who controls such underwriter within
the meaning of the Securities Act, under the indemnity agreement in this
Section 5.4(a) with respect to any preliminary prospectus or the final
prospectus or the final prospectus as amended or supplemented, as the case may
be, to the extent that any such loss, claim, damage or liability of such
underwriter or controlling Person results from the fact that such underwriter
sold Registrable Securities to a person to whom there was not sent or given, at
or prior to the written confirmation of such sale, a copy of the final
prospectus (including any documents incorporated by reference therein) or of
the final prospectus as then amended or supplemented (including any documents
incorporated by reference therein), whichever is most recent, if LWN has
previously furnished copies thereof to such underwriter. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of such Holder or any Indemnified Party and shall survive the transfer
of such securities by such Holder.
(b) Indemnification by the Holders and Underwriters. LWN may
require, as a condition to including any Registrable Securities in any
registration statement filed in accordance with Section 5.1 or 5.2 herein, that
LWN shall have received an undertaking reasonably satisfactory to it from the
prospective Holder of such Registrable Securities or any underwriter to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 5.4(a)) LWN, all other prospective Holders or any underwriter,
as the case may be, and any of their respective affiliates, directors, officers
and controlling Persons, with respect to any statement or alleged statement in
or
24
omission or alleged omission from such registration statement, any preliminary,
final or summary prospectus contained therein, or any amendment or supplement,
if such statement or alleged statement or omission or alleged omission was made
in reliance upon and in conformity with written information with respect to
such Holder or underwriter furnished to LWN by such Holder or underwriter
expressly for use in the preparation of such registration statement,
preliminary, final or summary prospectus or amendment or supplement, or a
document incorporated by reference into any of the foregoing. Such indemnity
shall remain in full force and effect regardless of any investigation made by
or on behalf of LWN or any of the Holders, or any of their respective
affiliates, directors, officers or controlling Persons and shall survive the
transfer of such securities by such Holder.
(c) Notices of Claims, Etc. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any action
or proceeding with respect to which a claim for indemnification may be made
pursuant to this Section 5.4, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party, give written
notice to the latter of the commencement of such action; provided, that the
failure of the indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under Sections 5.4(a) or
5.4(b), except to the extent that the indemnifying party is actually prejudiced
by such failure to give notice. In case any such action is brought against an
indemnified party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may
exist in respect of such claim, the indemnifying party will be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation. If, the indemnified party has been advised by counsel that
having common counsel would result in a conflict of interest between the
interests of such indemnified and indemnifying parties, then such indemnified
party may employ separate counsel reasonably acceptable to the indemnifying
party to represent or defend such indemnified party in such action, it being
understood, however, that the indemnifying party shall not be liable for the
reasonable fees and expenses of more than one separate firm of attorneys at any
time for all such indemnified parties (and not more than one separate firm of
local counsel at any time for all such indemnified parties) in such action. No
indemnifying party will consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such
25
indemnified party of a release from all liability in respect of such claim or
litigation.
(d) Other Indemnification. Indemnification similar to that
specified in this Section 5.4 (with appropriate modifications) shall be given
by LWN and each Holder of Registrable Securities with respect to any required
registration or other qualification of securities under any federal or state
law or regulation or governmental authority other than the Securities Act.
(e) Contribution. If recovery is not available under the
foregoing indemnification provisions of this Section 5 for any reason other
than as expressly specified therein, the parties entitled to indemnification by
the terms thereof shall be entitled to contribution to liabilities and expenses
except to the extent that contribution is not permitted under Section 11(f) of
the Securities Act. In determining the amount of contribution to which the
respective parties are entitled, there shall be considered the relative
benefits received by each party from the offering of the Registrable Securities
(taking into account the portion of the proceeds realized by each), the
parties' relative knowledge and access to information concerning the matter
with respect to which the claim was asserted, the opportunity to correct and
prevent any misstatement or omission and any other equitable considerations
appropriate under the circumstances.
(f) Non-Exclusivity. The obligations of the parties
under this Section 5 shall be in addition to any liability which
any party may otherwise have to any other party.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties of All Parties. LWN, LGII
and each Stockholder represents and warrants, on a joint and several basis in
the case of LWN and LGII and on a several and not joint basis in the case of
the Stockholders, as follows:
(a) This Agreement has been duly executed and delivered by such Person
and constitutes the legal, valid and binding obligation of such Person,
enforceable against such Person in accordance with the terms hereof except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights generally and by
general principles of equity; and
(b) The execution and delivery of this Agreement by such Person does
not, and the performance by it of its obligations under this Agreement will
not, violate, conflict with or constitute a breach of, or a default under, any
material
26
agreement, indenture or instrument to which such Person is a party or which is
binding on such Person, and will not result in the creation of any lien on, or
security interest in, any of the assets of such Person.
6.2 Representations and Warranties of LGII and LWN. LGII and
LWN jointly and severally represent and warrant to the BCP Entities as follows:
(a) The Option Shares have been or will be, prior to
issuance, duly authorized and, when such shares are issued, delivered and paid
for on the Exercise Date, will be validly issued and outstanding, fully paid
and nonassessable shares of capital stock of LWN, with no personal liability
attached to the ownership thereof; and the holders of the outstanding stock are
not entitled to preemptive or other rights to subscribe for such shares.
(b) Neither the issuance of the Option Shares nor their sale
in connection with the exercise of the BCP Liquidity Option nor the
consummation of any other of the transactions contemplated in this Agreement,
nor the fulfillment of the terms of this Agreement, will conflict with, result
in a breach of or constitute a default under the terms of the certificate of
incorporation or similar organizational document or bylaws of LWN or LGII or of
any material agreement, indenture or instrument to which LWN or LGII is a party
or is bound, or any order or regulation applicable to LWN or LGII of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over LWN or LGII.
(c) No consent, approval or authorization of, or filing,
registration or qualification with, any court, governmental, administrative or
judicial authority or regulatory body will be, as of the Exercise Date,
required on the part of LWN or LGII for the valid authorization, issuance, sale
and delivery of the Option Shares or for the execution, delivery and
performance of this Agreement other than those which have been duly obtained or
made.
(d) As of the Exercise Date, there will be no action or
proceeding or investigation pending or, to the best knowledge of LWN and LGII,
threatened against LWN or LGII or any of its subsidiaries which, if determined
adversely could adversely affect the consummation of the transactions
contemplated by this Agreement. There are no actions or proceedings challenging
or seeking to restrain, materially limit or prohibit the consummation of the
transactions contemplated hereby.
(e) On or prior to the Exercise Date, the Xxxxxx Common Stock
will have been duly registered under Section 12 of the Securities Exchange Act
of 1934, and the Option Shares will be eligible for trading on the principal
United States securities
27
exchange on which the Xxxxxx Common Stock is then traded or on the NASDAQ
National Market System, as the case may be.
6.3 Representations and Warranties of BCP and PSIM. The BCP
Entities and PSIM severally and not jointly represent and warrant to LWN and
LGII as follows:
(a) On the Exercise Date, each of the BCP Entities and PSIM
will have good and valid title to the shares of Common Stock owned by each of
them, free and clear of all liens, encumbrances, equities and claims.
(b) No consent, approval or authorization of, or filing,
registration or qualification with, any court, governmental, administrative or
judicial authority or regulatory body will be, as of the Exercise Date,
required on the part of any of the BCP Entities or PSIM for the valid sale and
delivery of the BCP Common Stock and the PSIM Common Stock to LGII as
contemplated herein.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 Calculation of EBITDA. (a) At any time that Prime
Holdings' EBITDA is calculated pursuant to this Agreement, such calculation
shall be prepared in accordance with the accounting practices of Prime Holdings
and its subsidiaries in effect on the Closing Date including the pre-need
accounting and business practices as set forth in Schedule A attached hereto,
without giving effect to any modifications to such accounting and business
practices made subsequent to the Closing Date, regardless of whether such
modifications were made pursuant to the promulgation of rules, regulations or
statutes applicable to Prime Holdings and its subsidiaries or otherwise.
(b) In the event that the Administrative Services Agreement
between Prime Succession, Inc. and LWN (the "ASA") is terminated or reduced in
scope prior to the Exercise Date, then Pro Forma EBITDA for the Entry Relevant
Period will be restated to reflect the incremental expense Prime Holdings would
have incurred in fiscal years 1997 and 1998 had the ASA not been in place
during those years or had been in place but only on a reduced scope basis.
(c) Notwithstanding paragraph (a) above, in the event
payments pursuant to the Prime Succession, Inc. long term incentive plan for
management are due on or as a result of the exercise of an Option, such
payments will be expensed on a straight line basis for purposes of computing
Pro Forma EBITDA for the Entry Relevant Period and EBITDA for the Exit Relevant
Period.
28
7.2 Further Assurances. (a) Subject to the terms and
conditions hereof, each of the parties hereto agrees to 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, reasonably promptly in light of the relevant
Notification Date and Option Date, the transactions contemplated by this
Agreement.
(b) Promptly following the Notification Date, each of the
parties hereto shall prepare and file all applications and other notices
required in connection with, and use their best efforts to obtain promptly and
comply with all conditions contained in, all necessary regulatory approvals and
any other consent, approval or other actions by, or notice to or registration
or filing with, any governmental or administrative agency or authority required
or necessary to be made, obtained or complied with, as the case may be, by any
party hereto in connection with the performance of the transactions
contemplated by this Agreement, including without limitation any premerger
notifications pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
0000 (xxx "XXX Xxx"). LWN and LGII agree (i) to enter into with the Federal
Trade Commission and/or the Department of Justice such decrees, consent orders
and/or hold separate undertakings and (ii) to effectuate any divestitures, in
each case involving assets or operations of either Prime Holdings or LGII or
its Affiliates or both, as may be necessary in order to enable LGII to
purchase, as soon as practicable following the Notification Date and in any
event no later than the Exercise Date, the BCP Common Stock and the PSIM Common
Stock.
7.3 LWN Guarantee. (a) Guarantee. LWN hereby unconditionally
and irrevocably guarantees to the BCP Entities and their respective successors,
transferees and assigns, the prompt and complete payment and performance by
LGII and its successors and assigns when due of the Obligations. LWN further
agrees to pay any and all expenses (including, without limitation, all fees and
disbursements of counsel) which may be paid or incurred by the BCP Entities in
enforcing any of their rights with respect to, or collecting, any or all of the
Obligations and/or enforcing any rights with respect to, or collecting against,
LGII or against LWN under this Guarantee.
(b) Guarantee Absolute and Unconditional. LWN waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon LGII or LWN with respect to the Obligations. This
Guarantee shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to any circumstance whatsoever (with or
without notice to or knowledge of LGII or LWN) which constitutes, or might be
construed to constitute, an equitable or legal discharge of LGII for the
Obligations, or of LWN under this Guarantee, in bankruptcy or in any other
instance. This Guarantee shall remain in full force and effect and be binding
in accordance with and to
29
the extent of its terms upon LWN and its successors and assigns, and shall
inure to the benefit of the BCP Entities and their respective successors,
transferees and assigns, until all the Obligations and the obligations of LWN
under this Guarantee shall have been satisfied by payment in full.
(c) Reinstatement. This Guarantee shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by the BCP Entities upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of LGII or upon or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, LGII or any substantial part of its property, or
otherwise, all as though such payments had not been made.
7.4 Drag-Along Rights. (a) In the event of a default by LGII
or LWN of their obligations under Section 4.1 to pay the relevant Option Price
as provided for herein, and such default shall continue for 45 days, the BCP
Entities shall be entitled to solicit offers from third parties for the
purchase of all or part of the outstanding shares of Common Stock and Preferred
Stock. If, following such Event of Default and pursuant to such solicitation,
any of the BCP Entities receives a bona fide offer from a Person other than a
BCP Entity or any of its Affiliates (a "Third Party") to purchase in an
arms'-length transaction all or part of the outstanding shares of Common Stock
and Preferred Stock owned by the Stockholders and such offer is accepted by
such BCP Entities, then LGII, PSIM and their respective Permitted Transferees
each agrees that it will Transfer all or part of the shares of Common Stock and
Preferred Stock owned by it to such Third Party on the terms of the offer so
accepted by such BCP Entities, including the same per share consideration. In
any such transaction where less than all of the outstanding shares of Common
Stock are to be sold, such shares to be sold shall be sold by BCP, LGII and
PSIM pro rata in proportion to their respective holdings of Common Stock.
(b) The BCP Entities shall give notice (the "Drag-Along
Notice") to each of the other Stockholders of any proposed Transfer giving rise
to the rights of such BCP Entities set forth in Section 7.4(a) as soon as
practicable following the acceptance of the offer referred to in Section
7.4(a). The Drag-Along Notice shall set forth the number of shares of Common
Stock and Preferred Stock proposed to be so Transferred, the name of the
proposed transferee, the proposed amount and form of consideration (and if such
consideration consists in part or in whole of property other than cash, the
Transferring Stockholder shall provide such information, to the extent
reasonably available to the BCP Entities, relating to such consideration as
LGII, PSIM and their respective Permitted Transferees may reasonably request in
order to evaluate such non-cash consideration) and the other terms and
conditions of the offer.
30
The BCP Entities shall notify the Stockholders at least 20 days in advance of
entering into a definitive agreement in connection with such offer if
Stockholders will be required to sign any agreement containing representations,
warranties and indemnities and will provide in advance to one counsel acting
for Prime Holdings and the other Stockholders subject to the Drag-Along Notice
(which counsel shall be other than counsel for the BCP Entities) a copy of the
representations, warranties and indemnities proposed to be made by such
Stockholders. In any such agreement such Stockholders will be required to make
the same representations, warranties and indemnities as the BCP Entities so
long as they are made severally and not jointly. The Stockholders agree that
Prime Holdings shall pay the fees and expenses of counsel for the Stockholders
in connection with any transaction referred to in this Section 7.4. If the
Transfer referred to in the Drag-Along Notice is not consummated within 120
days from the date of the Drag-Along Notice, the Transferring Stockholder must
deliver another Drag-Along Notice in order to exercise its rights under this
Section 3.6 with respect to such Transfer or any other Transfer.
(c) Following a default as described in Section 7.4(a), any
proceeds realized from the sale pursuant to this Section 7.4 of the shares of
Common Stock or Preferred Stock held by LGII or its Permitted Transferees shall
be paid over to BCP (for its own account and the account of PSIM) to the extent
necessary to satisfy the Obligations which remain unsatisfied following the
sale of the BCP Common Stock and PSIM Common Stock, whether pursuant to Section
7.4 or otherwise, and any excess proceeds shall be paid over to LGII.
ARTICLE VIII
CLOSINGS
8.1 Payment of the Option Price in Cash or Xxxxxx Common
Stock. The closing of the purchase of BCP Common Stock and PSIM Common Stock
pursuant to the exercise of an Option as provided in Sections 2.1 and 2.2 shall
take place on the Exercise Date in the event (a) the Option Price is to be paid
wholly in cash or (b) the Option Price is to be paid in part or in whole in
Xxxxxx Common Stock and BCP does not exercise the BCP Liquidity Right.
8.2 Exercise of the BCP Liquidity Right. In the event the
Option Price is to be paid in part or in whole in shares of Xxxxxx Common Stock
and BCP exercises the BCP Liquidity Right as provided in subsection 4.1(a)(ii),
the closing of the purchase of BCP Common Stock and PSIM Common Stock shall
take place on the Exercise Date, provided, that in the event LGII or LWN does
not deliver the net cash proceeds from the issuance and sale of Xxxxxx Common
Stock on the Exercise Date to the extent required as a result of the exercise
of the BCP Liquidity Right, (a) BCP
31
and PSIM shall deliver into escrow (with an escrow agent reasonably acceptable
to both LGII and BCP) on the Exercise Date the BCP Common Stock and PSIM Common
Stock, and (b) LGII shall on the Exercise Date deliver into escrow with such
escrow agent the portion, if any, of the Option Price being paid in cash,
together with the requisite number of shares of Xxxxxx Common Stock, if any, as
to which the BCP Liquidity Right has not been exercised, and the closing of the
exercise of the Option shall take place on the earliest to occur of (i) the
date on which the requisite amount of net cash proceeds from the sale of shares
of Xxxxxx Common Stock as to which the BCP Liquidity Right has been exercised
are received and (ii) the 180th day after the date on which BCP notified LWN of
its desire to exercise the BCP Liquidity Right, at which time (subject to
Section 8.3) the BCP Common Stock and PSIM Common Stock shall be released from
escrow against payment of such portion of the Option Price payable in cash and
such requisite number of shares of Xxxxxx Common Stock, if any.
8.3 Default By LGII or LWN. In the event of a default by LGII
or LWN of their obligations to pay the Option Price on the Exercise Date (or
such later date as provided in Section 8.2), the BCP Common Stock and the PSIM
Common Stock shall be released from escrow and returned to BCP and PSIM, as
applicable, and any funds or other assets held by the escrow agent in respect
of any earlier deposit by or on behalf of LGII or LWN shall be retained by the
escrow agent as collateral security for the payment of the Obligations, and LWN
and LGII hereby grant to BCP a security interest in such funds or other amounts
as security for the Obligations.
8.4 Time and Place of Closing. The closing of the purchase of
the BCP Common Stock and the PSIM Common Stock shall be held at the principal
office of the BCP Entities at 10:00 A.M. local time on the date determined
pursuant to this Article VIII.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices. Notices hereunder shall be given only by
personal delivery, registered or certified mail, return receipt requested,
overnight courier service, or telex, telegram or other form of electronic mail
or by telecopy (and subsequently confirmed by any other permitted means
hereunder) and shall be deemed transmitted when personally delivered or
deposited in the mail or delivered to a courier service or a carrier for
electronic transmittal (as the case may be), postage or charges prepaid, and
addressed to the particular party to whom the notice is to be sent as follows:
(a) in the case of BCP or PSIM:
32
c/o The Blackstone Group
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
(c) in the case of LGII or LWN:
The Xxxxxx Group Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 358
Telecopier No.: (000) 000-0000
Attention: Senior Vice President and Chief
Financial Officer
with a copy to:
The Xxxxxx Group Inc.
c/x Xxxxxx Group International, Inc.
00 Xxxx Xxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Legal Department
or to such address as a party may instruct by notice hereunder.
Section 9.2 Severability. In the event any provision
hereof is held void or unenforceable by any court, then such provisions shall
be severable and shall not affect the remaining provisions hereof.
Section 9.3 Entire Agreement. This Agreement, together with
the other agreements referred to herein, is the entire Agreement among the
parties, and, when executed by the parties hereto, supersedes all prior
agreements and communications, either verbal or in writing, between the parties
hereto with respect to the subject matter contained herein.
Section 9.4 Amendment and Waiver. This Agreement may not be
amended, modified or supplemented unless consented to in writing by the parties
hereto. Any failure by a party hereto to comply with any obligation, agreement
or condition herein may be expressly waived in writing by each of the other
parties hereto, but such waiver or failure to insist upon strict compliance
with such obligation, agreement or condition shall not operate as a
33
waiver of, or estoppel with respect to, any such subsequent or
other failure.
Section 9.5 Assignment; Binding on Transferees. The
provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors
and permitted transferees from and after the effective date
hereof. BCPII, BOCP, BFIP, PSIM and LGII may assign any of their
respective rights and obligations hereunder to any of their
respective Affiliates. LWN may not assign any of its rights and
obligations hereunder to any Person without the written consent
of BCP. A Person may become an assignee of the rights of a party
hereto only if such assignee becomes a party to this Agreement to
the same extent as the assignor; provided, that an assignment by
either party hereto of its rights hereunder, shall not release
such party from its obligations hereunder unless all other
parties hereto consent to such release.
Section 9.6 Variations in Pronouns. All pronouns and any
variations thereof shall be deemed to refer to the masculine, feminine or
neuter, singular or plural, as the identity of the antecedent person or persons
or entity or entities may require.
Section 9.7 Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the
State of New York.
Section 9.8 Further Assurances. Each of the parties shall
execute such documents and other papers and take such further actions as may be
reasonably required or desirable to carry out the provisions hereof and the
transactions contemplated hereby.
Section 9.9 Headings. The headings in this Agreement are
intended solely for convenience of reference and shall be given no effect in
the interpretation of this Agreement.
Section 9.10 Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
34
Section 9.11 Submission to Jurisdiction; Waivers. Each of the
parties hereto hereby irrevocably submits in any legal action or proceeding
relating to or arising out of this Agreement, or for recognition and
enforcement of any judgment in respect thereof, to the jurisdiction of the
United States District Court for the Southern District of New York, and
appellate courts thereof. Each of the parties hereto further (i) consents that
any such action or proceeding may be brought in such court and waives any
objection that it may now or hereafter have to the venue of any such action or
proceeding in such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same; (ii) agrees that
service of process in any such action or proceeding may be effected by mailing
a copy thereof by registered or certified mail (or any substantially similar
form of mail), postage prepaid, to such party at its address set forth in
Section 9.2 or at such other address of which such party shall have given
notice pursuant thereto; (iii) agrees that nothing herein shall affect the
right to effect service of process in any other manner permitted by law or
shall limit the right to xxx in any other jurisdiction; and (iv) waives, to the
maximum extent not prohibited by law, any right it may have to claim or recover
in any legal action or proceeding referred to in this subsection any special,
exemplary, punitive or consequential damages.
Section 9.12 WAIVERS OF JURY TRIAL. EACH PARTY HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR
ANY COUNTERCLAIM THEREIN.
[Remainder of page intentionally left blank]
35
IN WITNESS WHEREOF, the undersigned have executed this
Agreement on the date first above written.
THE XXXXXX GROUP INC.
By:______________________________
Name:
Title:
XXXXXX GROUP INTERNATIONAL INC.
By:______________________________
Name:
Title:
BLACKSTONE CAPITAL PARTNERS II
MERCHANT BANKING FUND L.P.
By: BLACKSTONE MANAGEMENT
ASSOCIATES II L.L.C.
General Partner
By:____________________
Name:
Title:
BLACKSTONE FAMILY INVESTMENT
PARTNERSHIP II L.P.
By: BLACKSTONE MANAGEMENT
ASSOCIATES II L.L.C.
General Partner
By:____________________
Name:
Title:
36
BLACKSTONE OFFSHORE CAPITAL
PARTNERS II L.P.
By: BLACKSTONE MANAGEMENT
ASSOCIATES II L.L.C.
General Partner
By:______________________
Name:
Title:
PSI MANAGEMENT DIRECT L.P.
By: PSI P&S CORP., its
General Partner
By:___________________
Name:
Title:
