SHARE PURCHASE AGREEMENT
dated as of
January 12, 2001
between
XXXXXXX & XXXXXX CORPORATION
and
HEARTLAND INDUSTRIAL PARTNERS, L.P.
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions....................................................2
ARTICLE 2
PURCHASE AND SALE; CLOSING
SECTION 2.01. Purchase and Sale of the Primary Shares.......................10
SECTION 2.02. Closing.......................................................10
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Corporate Existence and Power.................................11
SECTION 3.02. Corporate Authorization; Opinion of Financial Advisor.........11
SECTION 3.03. Governmental Authorization....................................12
SECTION 3.04. Non-contravention.............................................12
SECTION 3.05. Capitalization; Reservation of Shares.........................13
SECTION 3.06. Subsidiaries; Equity Investments..............................13
SECTION 3.07. SEC Filings...................................................14
SECTION 3.08. Financial Statements..........................................14
SECTION 3.09. No Undisclosed Material Liabilities...........................15
SECTION 3.10. Disclosure Documents..........................................15
SECTION 3.11. Absence of Certain Changes....................................15
SECTION 3.12. Compliance with Laws and Court Orders.........................17
SECTION 3.13. Litigation....................................................17
SECTION 3.14. Finders' Fees.................................................17
SECTION 3.15. Taxes.........................................................17
SECTION 3.16. Employee Benefit Plans........................................18
SECTION 3.17. Environmental Matters.........................................20
SECTION 3.18. Antitakeover Statutes.........................................21
SECTION 3.19. Private Offering..............................................21
SECTION 3.20. Existing Investor Agreements..................................21
SECTION 3.21. Disclaimer of Other Representations and Warranties............22
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Page
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE NEW INVESTOR
SECTION 4.01. Existence and Power..........................................22
SECTION 4.02. Authorization................................................22
SECTION 4.03. Governmental Authorization...................................22
SECTION 4.04. Non-contravention............................................23
SECTION 4.05. Purchase for Investment......................................23
SECTION 4.06. Restrictions on Transfer.....................................23
SECTION 4.07. Sophistication; Access to Information........................24
SECTION 4.08. Disclosure Documents.........................................24
SECTION 4.09. Finders' Fees................................................24
SECTION 4.10. Section 203..................................................24
SECTION 4.11. Financing....................................................25
SECTION 4.12. Disclaimer of Other Representations and Warranties...........25
ARTICLE 5
COVENANTS OF THE COMPANY
SECTION 5.01. Conduct of the Company........................................25
SECTION 5.02. Access to Information.........................................27
SECTION 5.03. Shareholder Meeting; Proxy Material; Debt Consents............27
SECTION 5.04. No Solicitation...............................................28
SECTION 5.05. Reports.......................................................29
SECTION 5.06. Further Assurances............................................29
SECTION 5.07. Stock Exchange Listing........................................30
ARTICLE 6
COVENANTS OF THE NEW INVESTOR AND THE COMPANY
SECTION 6.01. Commercially Reasonable Efforts...............................30
SECTION 6.02. Certain Filings...............................................31
SECTION 6.03. Public Announcements..........................................31
SECTION 6.04. Notices of Certain Events.....................................31
SECTION 6.05. Confidentiality...............................................32
SECTION 6.06. Consummation of Agreement.....................................32
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Page
ARTICLE 7
CONDITIONS TO THE TRANSACTIONS
SECTION 7.01. Conditions to the Obligations of Each Party...................33
SECTION 7.02. Conditions to the Obligations of the New Investor.............34
SECTION 7.03. Conditions to the Obligations of the Company..................35
ARTICLE 8
TERMINATION
SECTION 8.01. Termination...................................................37
SECTION 8.02. Effect of Termination.........................................38
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices.......................................................39
SECTION 9.02. Survival of Representations and Warranties....................40
SECTION 9.03. Amendments; No Waivers........................................40
SECTION 9.04. Expenses......................................................41
SECTION 9.05. Successors and Assigns........................................41
SECTION 9.06. Governing Law.................................................41
SECTION 9.07. Jurisdiction..................................................41
SECTION 9.08. Waiver of Jury Trial..........................................42
SECTION 9.09. Counterparts; Effectiveness; Third Parties....................42
SECTION 9.10. Entire Agreement..............................................42
SECTION 9.11. Captions......................................................42
SECTION 9.12. Severability..................................................42
SECTION 9.13. Specific Performance..........................................42
ANNEXES
Annex A - Terms of Non-Voting Convertible Preferred Stock
Annex B - Form of Profit Participation Agreement
Annex C - Form of New Charter
Annex D - Form of New Registration Rights Agreement
Annex E - Form of New Master Shareholder Agreement
Annex F - Form of Secondary Share Purchase Agreement
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SHARE PURCHASE AGREEMENT
SHARE PURCHASE AGREEMENT (this "Agreement") dated as of January 12, 2001
between Xxxxxxx & Xxxxxx Corporation, a Delaware corporation (the "Company") and
Heartland Industrial Partners, L.P., a Delaware limited partnership ("Heartland"
or the "New Investor").
W I T N E S S E T H :
WHEREAS, the New Investor seeks to acquire from the Company (x) 8,600,000
shares (the "Treasury Shares") of Common Stock, par value $0.01 per share (the
"Common Stock"), of the Company and (y) 1,000,000 shares of Non-Voting
Convertible Preferred Stock, par value $0.01 per share (the "Convertible
Preferred Shares"), of the Company, having the terms set forth in Annex A,
convertible into an aggregate of 16,400,000 shares of Common Stock (the
"Converted Shares") upon the occurrence of the Charter Amendment Effective Date
(as defined below);
WHEREAS, the board of directors of the Company (the "Board of Directors")
(i) has approved the sale of the Treasury Shares and the Convertible Preferred
Shares (together, the "Primary Shares") to the New Investor, (ii) has determined
that the sale of the Primary Shares to the New Investor is advisable and in the
best interests of the holders of the Company's capital stock (the "Company
Shareholders"), and (iii) has approved and recommended the approval of this
Agreement; and
WHEREAS, simultaneously with the execution of this Agreement, the New
Investor will enter into an agreement dated as of the date hereof (the
"Secondary Share Purchase Agreement") to purchase 27,000,000 shares of Common
Stock from each of Blackstone Capital Company II, L.L.C., Blackstone Capital
Partners L.P., Blackstone Advisory Directors Partnership, L.P., Blackstone
Family Investment Partnership I L.P. (collectively "Blackstone") and
Xxxxxxxxxxx/C&A Holdings, L.L.C. ("Xxxxxxxxxxx" and together with Blackstone,
the "Sellers").
NOW, THEREFORE, in consideration of the foregoing and the
mutual promises herein made, and in consideration of the representations,
warranties and covenants herein contained, the parties hereto hereby agree as
follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used herein, have
the following meanings:
"Acquisition Proposal" means any offer or proposal for, or any indication
of interest in, (i) any acquisition or purchase of 10% or more of the
consolidated assets of the Company and its Subsidiaries, (ii) any acquisition or
purchase of an equity interest in the Company representing in excess of 10% of
the power to vote for the election of a majority of the directors of the
Company, or any tender offer or exchange offer for equity securities of the
Company as a result of which the offeror would hold such an equity interest in
the Company or (iii) any merger, consolidation, business combination, sale of
substantially all assets, recapitalization, liquidation, dissolution or similar
transaction involving the Company, or any of its Subsidiaries whose assets,
individually or in the aggregate, constitute more than 30% of the consolidated
assets of the Company and its Subsidiaries, in each case other than the
transactions contemplated by this Agreement.
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
"Antitrust Laws" means the Xxxxxxx Act, as amended, the Xxxxxxx Act, as
amended, the HSR Act, the Federal Trade Commission Act, as amended, and all
other federal, state and foreign statutes, rules, regulations, orders, decrees,
administrative and judicial doctrines and other laws that are designed or
intended to prohibit, restrict or regulate actions having the purpose or effect
of monopolization or restraint of trade or lessening of competition through
merger or acquisition.
"Bank Amendments" means (1) the waiver of any event of default caused by or
resulting from the transactions contemplated hereby and by the Secondary Share
Purchase Agreement, including, without limitation, any event of default arising
from a change of control, (2) the amendment of the definitions of "Change in
Control" and "Designated Person" in the Credit Agreement, the Receivables
Agreement and the Master Lease Agreement to provide for the control and
beneficial ownership of capital stock by the New Investor and its Affiliates
contemplated to occur as a result of the transaction contemplated hereby and by
the Secondary Share Purchase Agreement without any breach or default thereunder,
and (3) such other changes as may be requested by the New Investor that are
reasonably acceptable to the Credit Agreement Parties (other than the Company
and its affiliates).
"Benefit Plan" means any Plan, other than a Multiemployer Plan or a Foreign
Plan, existing at the Closing Date established or to which contributions have at
any time been
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made by the Company or any Subsidiary thereof, or any predecessor of the Company
or any Subsidiary thereof, or with respect to which the Company or any
Subsidiary is a party, under which any employee, former employee or director of
the Company or any Subsidiary thereof, or any beneficiary thereof, is covered,
is eligible for coverage or has benefit rights in respect of service to the
Company or any Subsidiary thereof and any other Plan with respect to which the
Company or any Subsidiary has liability.
"Business Day" means a day other than Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close.
"Charter Amendment Effective Date" means the earliest date on which each of
the following events has occurred:
(a) approval by the Company Shareholders of the Shareholder Matters;
(b) filing and effectiveness of the New Charter with the Secretary of
State of the State of Delaware;
(c) increase in the size of the Board of Directors to 11 and
appointment of designees of Heartland to the two added seats and, if the
Board of Directors appoints a third director meeting the independence
requirements of the New York Stock Exchange, increase in the size of the
Board of Directors to 13 and appointment of a designee of Heartland to a
third additional seat.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company Balance Sheet" means the unaudited consolidated balance sheet of
the Company as of September 30, 2000 and the notes thereto set forth in the
Company's quarterly report on Form 10-Q for the period ending on that date.
"Company Balance Sheet Date" means September 30, 2000.
"Company 10-K" means the Company's annual report on Form 10-K for the
fiscal year ended December 25, 1999.
"Consent Costs" means the direct and indirect financial cost (whether
through the payment of consent, waiver or other fees, the reimbursement of
out-of-pocket costs and expenses of any person or any change in financial terms
of the Indenture or the Credit Agreement, as applicable) to the New Investor or
its Affiliates or the Company or any of its subsidiaries incurred or payable in
connection with obtaining requisite approval of the Indenture Amendments and the
Bank Amendments, as applicable; provided that Consent Costs shall not include
(1) the reasonable fees and expenses of any dealer manager/solicitation agent
for the consent solicitation in respect of the Indenture Amendments, (2)
reimbursement of the reason-
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able out-of-pocket expenses of the Credit Agreement Parties (other than the
Company and its affiliates) payable pursuant to the terms of the Credit
Agreement, as in effect on the date hereof, (3) the reimbursement of the
reasonable out-of-pocket expenses of the Trustee incurred in connection with the
Indenture Amendments, (4) the payment of reasonable fees and expenses of the New
Investor in connection with the transactions contemplated hereby or by the
Secondary Share Purchase Agreement and (5) the payment of reasonable fees and
expenses for counsel to the Company, the Special Committee of the Company,
Blackstone and Xxxxxxxxxxx in connection with the transactions contemplated
hereby or by the Secondary Share Purchase Agreement.
"Credit Agreement" means the Credit Agreement dated as of May 28, 1998
among the Credit Agreement Parties, as amended and modified by the waivers,
amendments and supplement thereto dated as of October 27, 1998, December 22,
1998, March 8, 1999 and May 12, 1999.
"Credit Agreement Parties" means collectively (1) Xxxxxxx & Xxxxxx Products
Co., Xxxxxxx & Xxxxxx Canada Inc. and Xxxxxxx & Xxxxxx Plastics, Ltd., as
Borrowers, (2) the Company, as Guarantor, (3) Bank of America National Trust and
Savings Association, as Documentation Agent, (4) The Chase Manhattan Bank, as
Administrative Agent, and The Chase Manhattan Bank, as Canadian Administrative
Agent, and (5) the Lenders (as defined under the Credit Agreement) necessary for
the Bank Amendments to be approved and effective under the terms of the Credit
Agreement.
"Environmental Claim" means any notice, claim, demand or other
communication alleging liability for cost, cleanup, response, corrective action
or other costs, or damages to natural resources or other property, personal
injuries, fines or penalties arising out of or resulting from (i) the presence,
Release or threatened Release in or into the environment of Hazardous Material
at any location or (ii) any violation of Environmental Law, and includes,
without limitation, any claim seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from the presence of
Hazardous Material or arising from alleged injury or threat of injury to health,
safety or the environment.
"Environmental Laws" means any law, statute, ordinance, regulation, rule,
decree, order, judgment, consent order, consent decree or other binding
requirement and the common law relating to protection of public health or the
environment, the Release or threatened Release of Hazardous Material, natural
resources damages, or occupational safety and health.
"Environmental Permits" means any permit, license, approval, consent or
other authorization required by a federal, state, local or foreign government or
regulatory entity pursuant to Environmental Law.
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"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" of any entity means any other Person that, together with
such Person, would be treated as a single employer under Section 414 of the
Code.
"Existing Investor Agreements" means each of the following: (a) the Amended
and Restated Stockholders Agreement dated as of June 29, 1994, among Blackstone
Capital Partners L.P., Xxxxxxxxxxx Xxxxxxx Partners, L.P., the Company and
Xxxxxxx & Xxxxxx Group, Inc.; (b) the Voting Agreement dated as of June 29,
1994, among Blackstone Capital Partners L.P. and Xxxxxxxxxxx Xxxxxxx Partners,
L.P.; and (c) any agreements providing for the payment of monitoring fees by the
Company to Blackstone, Xxxxxxxxxxx or any of their affiliates.
"Governmental Authority" means any federal, state or local government or
any court, administrative agency or commission or other governmental or
regulatory agency, authority or official, whether domestic, foreign or
supranational.
"Hazardous Material" means any material, substance, waste, constituent,
compound, pollutant or contaminant including, without limitation, petroleum
(including, without limitation, crude oil or any fraction thereof or any
petroleum product) subject to regulation or which can give rise to liability
under Environmental Law.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.
"Indebtedness" means, of any Person at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of property or
services (other than trade liabilities incurred in the ordinary course of
business and payable in accordance with customary practices), (b) any other
indebtedness of such Person which is evidenced by a note, bond, debenture or
similar instrument, (c) all leases the obligations of such Person in respect of
which are required in accordance with GAAP to be capitalized, (d) all
obligations of such Person in respect of acceptances issued or created for the
account of such Person, and (e) all indebtedness or obligations of the types
referred to in the preceding clauses (a) through (d) secured by any Lien on any
property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof.
"Indenture" means the Indenture dated as of June 1, 1996, as amended by the
first supplemental indenture thereto dated as of June 1, 1996 (the "First
Supplemental Indenture"), among the Indenture Parties.
"Indenture Amendments" means an amendment to the definition of "Permitted
Holder" in Section 5.14 of the First Supplemental Indenture to add the New
Investor and its affiliates and such related changes so that the transactions
contemplated hereby
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and by the Secondary Share Purchase Agreement do not cause a "change in control"
under such First Supplemental Indenture.
"Indenture Parties" means collectively Xxxxxxx & Xxxxxx Products Co. as
issuer, the Company as Guarantor, and First Union National Bank of North
Carolina as Trustee.
"knowledge" of the Company or the "Company's knowledge" or "known by the
Company" means the actual knowledge of the executive officers of the Company.
"Lien" means, with respect to any property or asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
property or asset.
"Master Lease Agreement" means the Master Equipment Lease Agreement dated
as of September 30, 1994, between NationsBanc Leasing Corporation of North
Carolina and Xxxxxxx & Xxxxxx Products Co.
"Material Adverse Effect" means an event, circumstance or condition which
is reasonably likely to result in either (a) a material adverse effect on the
condition (financial or otherwise), business or results of operations of the
Company and its Subsidiaries, taken as a whole, or (b) an effect which is
materially adverse to the ability of the Company to consummate the Transactions;
provided that with respect to subclause (a) of this definition, any such effect
resulting or arising from (i) the triggering of change of control provisions of
the agreements governing the Indebtedness of the Company and its Subsidiaries
resulting from the transactions contemplated by this Agreement, (ii) changes in
circumstances or conditions affecting the industry in which the Company and its
Subsidiaries operate, (iii) changes in general economic, regulatory or political
conditions or in financial markets in the United States or Europe or (iv)
changes in GAAP shall not be considered a Material Adverse Effect, and with
respect to subclause (b) of this definition, any such effect resulting from
subclause (ii), (iii) or (iv) above shall not be considered a Material Adverse
Effect.
"Multiemployer Plan" means a multiemployer plan within the meaning of
Section 4001(a)(3) of ERISA with respect to which the Company has an obligation
to contribute or has or could have withdrawal liability under Section 4201 of
ERISA other than a Foreign Plan.
"New Charter" means the amended and restated Certificate of Incorporation
of the Company in the form attached hereto as Annex C.
"New Master Shareholder Agreement" means the shareholder agreement to be
entered into on or prior to the Closing Date by and among the Company, the New
Investor and the Sellers pursuant hereto and to the Secondary Share Purchase
Agreement in the form
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attached hereto as Annex E with such changes as are necessary to accommodate the
co-investors of Heartland that are reasonably acceptable to the Company.
"New Registration Rights Agreement" means the registration rights agreement
to be entered into on or prior to the Closing Date by and among the Company, the
New Investor and the Sellers pursuant hereto and to the Secondary Share Purchase
Agreement in the form attached hereto as Annex D with such changes as are
necessary to accommodate the co-investors of Heartland that are reasonably
acceptable to the Company.
"1934 Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
"1933 Act" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
"Option Plans" means, collectively, the 1993 Employee Stock Option Plan, as
amended and restated; the 1994 Employee Stock Option Plan, as amended to date;
the 1994 Directors Stock Option Plan, as amended and restated; and the 2000
Employee Stock Option Plan.
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Section 4002 of ERISA, or any successor thereto.
"Person" means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
Governmental Authority.
"Plan" means any bonus, incentive compensation, deferred compensation,
pension, profit sharing, retirement, stock purchase, stock option, stock
ownership, stock appreciation rights, phantom stock, leave of absence, layoff,
vacation, day or dependent care, legal services, cafeteria, life, health,
accident, disability, workmen's compensation or other insurance, severance,
separation, other employee benefit, employment, consulting or change of control
agreement, plan, practice, policy or arrangement of any kind, whether written or
oral, or whether for the benefit of a single individual or more than one
individual, including, without limitation, any "employee benefit plan" within
the meaning of Section 3(3) of ERISA (whether or not subject thereto).
"Profit Participation Agreement" means the profit participation agreement
to be entered into on or prior to the Closing Date by and among the Company, the
New Investor and the Sellers pursuant hereto and to the Secondary Share Purchase
Agreement substantially in the form attached hereto as Annex B.
"Receivables Agreement" means the Receivables Transfer Agreement dated as
of December 27, 1999, among Carcorp, Inc. as Transferor, Xxxxxxx & Xxxxxx
Products Co.
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as Guarantor and as Collection Agent, Park Avenue Receivables Corporation and
Redwood Receivables Corporation as Initial Purchasers, the several financial
institutions party thereto from time to time as Liquidity Banks, the several
agent banks party thereto from time to time as Funding Agents and The Chase
Manhattan Bank, as Administrative Agent.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing or
migrating.
"SEC" means the Securities and Exchange Commission.
"Shareholder Matters" means the following matters requiring the approval of
holders of the Common Stock:
(a) the issuance by the Company of the Converted Shares to the New
Investor; and
(b) the amendment and restatement of the Certificate of Incorporation of
the Company effecting the changes set forth in Annex C.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association, limited liability company or other organization,
whether incorporated or unincorporated, of which the securities or other
ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions with respect to
such corporation, partnership, association, limited liability company or other
organization are at any time directly or indirectly owned or controlled by such
Person or by any one or more of its Subsidiaries, or by such Person and one or
more of its Subsidiaries.
"Third Party" means any Person as defined in Section 13(d) of the 1934 Act,
other than the New Investor or any of its Affiliates.
"Transaction Documents" means this Agreement, the Secondary Share Purchase
Agreement, the New Charter, the New Monitoring Agreement, the New Registration
Rights Agreement, the New Master Shareholder Agreement and the Profit
Participation Agreement.
Any reference in this Agreement to a statute shall be to such statute as
amended from time to time and to the rules and regulations promulgated
thereunder.
(a) Each of the following terms is defined in the Section set forth
opposite such term:
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Term Section
Agreement.................................................. Recitals
Blackstone................................................. Recitals
Board of Directors......................................... Recitals
Closing.................................................... 2.02
Closing Date............................................... 2.02
Common Stock............................................... Recitals
Company.................................................... Recitals
Company Proxy Statement.................................... 3.10
Company Representatives.................................... 5.02
Company SEC Documents...................................... 3.07(a)
Company Securities......................................... 3.05(b)
Company Shareholder Meeting................................ 5.03(a)
Company Shareholders....................................... Recitals
Company Subsidiary Securities.............................. 3.06(b)
Confidentiality Agreement.................................. 5.02
Contingent Payment......................................... 2.01
Converted Shares........................................... Recitals
Convertible Preferred Shares............................... Recitals
Disclosure Schedule........................................ Article 3
DOJ........................................................ 6.01(b)
End Date................................................... 8.01(b)
Foreign Plan............................................... 3.16(c)
FTC........................................................ 6.01(b)
GAAP....................................................... 3.08
Heartland.................................................. Recitals
Initial Purchase Price..................................... 2.01
IRS........................................................ 3.15
New Investor Representatives............................... 5.02
New Investor............................................... Recitals
New Monitoring Agreement................................... 7.01(f)
Preferred Stock............................................ 3.05(a)
Primary Shares............................................. Recitals
Purchase Price............................................. 2.01
Secondary Share Purchase Agreement......................... Recitals
Sellers.................................................... Recitals
Tax Return................................................. 3.15
Taxes...................................................... 3.15
Taxing Authority........................................... 3.15
Transactions............................................... 3.02(a)
Transaction Fee............................................ 7.02(h)
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Term Section
Treasury Shares............................................ Recitals
Xxxxxxxxxxx................................................ Recitals
ARTICLE 2
PURCHASE AND SALE; CLOSING
SECTION 2.01. Purchase and Sale of the Primary Shares. On the terms and
subject to the conditions of this Agreement, the Company shall sell, transfer
and deliver to the New Investor, and the New Investor shall purchase from the
Company, the Primary Shares for a purchase price of (a) (i) $5.00 per Treasury
Share, plus (ii) $82.00 per Convertible Preferred Share, for an aggregate
initial purchase price of $125.0 million (the "Initial Purchase Price"), payable
in cash and (b) a participating interest in profits realized on the Primary
Shares by the New Investor on the terms and conditions set forth in Annex B (the
"Contingent Payment" and, together with the Initial Purchase Price, the
"Purchase Price").
SECTION 2.02. Closing. The closing (the "Closing") of the sale of the
Primary Shares shall be held at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx within
three Business Days of satisfaction of the conditions set forth in Article 7
(other than such conditions that by their nature may only be satisfied at the
Closing) or at a date and time to be mutually agreed upon by the parties (the
"Closing Date"). At the Closing, (i) the New Investor shall deliver to the
Company, by wire transfer to a bank account designated in writing by the
Company, immediately available funds in the amount of the Initial Purchase
Price, and (ii) the Company shall deliver to the New Investor certificates
representing the Primary Shares registered in its name.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the New Investor that, except as set
forth in the corresponding section or subsection of the disclosure schedule (the
"Disclosure Schedule") delivered by the Company to the New Investor immediately
prior to the execution of this Agreement:
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SECTION 3.01. Corporate Existence and Power. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware and has all corporate powers and all governmental licenses,
authorizations, permits, consents and approvals required to carry on its
business as now conducted, except for those licenses, authorizations, permits,
consents and approvals the absence of which would not be reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect. The Company
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where such qualification is necessary, except for
those jurisdictions where failure to be so qualified would not have,
individually or in the aggregate, a Material Adverse Effect. The Company has
heretofore delivered to the New Investor true and complete copies of the
certificate of incorporation and by-laws of the Company as currently in effect.
SECTION 3.02. Corporate Authorization; Opinion of Financial Advisor. (a)
The execution, delivery and performance by the Company of this Agreement and the
consummation by the Company of the sale of the Primary Shares and the other
transactions contemplated hereby and (unless the context otherwise requires) by
the Secondary Share Purchase Agreement (the "Transactions") to be performed by
the Company are within the Company's corporate powers and, except for the
required approval of the Company Shareholders in connection with the
consummation of the sale of the Primary Shares and the other Shareholder
Matters, have been duly authorized by all necessary corporate action on the part
of the Company. The affirmative votes of the holders of a majority of the shares
of Common Stock voting (provided that a majority of the outstanding shares vote)
with respect to the matters referred to in clause (a) of the definition of
Shareholder Matters and of the holders of two-thirds of the Company's
outstanding Common Stock with respect to the matters referred to in clause (b)
of such definition are the only votes of the holders of the Company's capital
stock necessary in connection with the consummation of the Transactions. This
Agreement constitutes a valid and binding agreement of the Company.
(b) At a meeting duly called and held, the Special Committee of the Board
of Directors unanimously approved the Transactions and this Agreement and the
other Transaction Documents, determined that it is advisable and in the best
interests of Company Shareholders to consummate the sale of the Primary Shares
and the other Transactions, including, without limitation, approval of the New
Charter and the Transaction Fee, and resolved to recommend approval of the
Shareholder Matters by Company Shareholders, and determined that it is advisable
and in the best interests of Company Shareholders to consummate the
Transactions.
(c) At a meeting duly called and held, the Board of Directors unanimously
(with one director absent) approved the Transactions and this Agreement and the
other Trans-
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action Documents, determined that it is advisable and in the best interests of
Company Shareholders to consummate the sale of the Primary Shares and the other
Transactions, including without limitation approval of the New Charter, the New
Monitoring Agreement and the Transaction Fee, and resolved to recommend approval
of the Shareholder Matters by the Company Shareholders, and determined that it
is advisable and in the best interests of the Company Shareholders to consummate
the Transactions.
SECTION 3.03. Governmental Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the Company
of the Transactions require no action by or in respect of, or filing with, or
notification or reporting to, any Governmental Authority, other than (i)
compliance with any applicable requirements of the HSR Act and of the Antitrust
Laws of the foreign jurisdictions set forth on Section 3.03 of the Disclosure
Schedule, (ii) compliance with any applicable requirements of the 1933 Act, the
1934 Act and any other applicable securities laws, whether state or foreign,
(iii) the filing with the Delaware Secretary of State of the Certificate of
Designation governing the Convertible Preferred Shares and a certificate of
amendment to the Company's certificate of incorporation and (iv) any actions or
filings the absence of which would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
SECTION 3.04. Non-contravention. The execution, delivery and performance by
the Company of this Agreement and the consummation of the Transactions do not
and will not (i) contravene, conflict with or result in any violation or breach
of any provision of the certificate of incorporation or by-laws of the Company,
(ii) assuming compliance with the matters referred to in Section 3.03,
contravene, conflict with or result in a violation or breach of any provision of
any applicable law, statute, ordinance, rule, regulation, judgment, injunction,
order or decree, (iii) assuming compliance with the matters referred to in
Section 5.03, require any consent or other action by any Person under,
constitute a default under, or cause or permit the termination, cancellation,
acceleration or other change of any right or obligation or the loss of any
benefit to which the Company or any of its Subsidiaries is entitled under any
provision of any agreement or other instrument binding upon the Company or any
of its Subsidiaries or any license, franchise, permit, certificate, approval or
other similar authorization affecting, or relating in any way to, the assets or
business of the Company and its Subsidiaries or (iv) result in the creation or
imposition of any Lien on any asset of the Company or any of its Subsidiaries,
except for such contraventions, conflicts and violations referred to in clause
(ii) and for such failures to obtain any such consent or other action, defaults,
terminations, cancellations, accelerations, changes, losses or Liens referred to
in clauses (iii) and (iv) that would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. The Company has not
adopted and will not adopt an interpretation of the effect of the consumma-
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tion of the Transactions on the Option Plans or on the change of control
agreements to which the Company is a party as in effect on the date hereof.
SECTION 3.05. Capitalization; Reservation of Shares. (a) The authorized
capital stock of the Company consists of 150,000,000 shares of Common Stock and
16,000,000 shares, par value $0.01 per share, of preferred stock (the "Preferred
Stock"). As of the close of business on December 31, 2000, (i) 61,879,272 shares
of Common Stock were issued and outstanding, (ii) no shares of Preferred Stock
were issued and outstanding and (iii) 8,783,079 shares of Common Stock were held
by the Company in its treasury. All outstanding shares of Common Stock have been
duly authorized and validly issued and are fully paid and nonassessable. The
shares of Common Stock issuable upon conversion of the Convertible Preferred
Shares have been duly authorized and validly reserved for issuance and, when
issued and delivered in accordance with the provisions of the Certificate of
Designation governing the terms of the Convertible Preferred Shares, will be
fully paid and nonassessable.
(b) Other than vested and unvested options of directors, officers and
employees for 4,344,432 shares of Common Stock, there are no outstanding (i)
shares of capital stock or voting securities of the Company, (ii) securities of
the Company convertible into or exchangeable for shares of capital stock or
voting securities of the Company, (iii) options or other rights to acquire from
the Company, or other obligation of the Company to issue, any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of the Company or (iv) stock appreciation, phantom
stock or similar rights with respect to the Company (the items in clauses (i),
(ii), (iii) and (iv) being referred to collectively as the "Company
Securities"). There are no outstanding obligations of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any of the Company
Securities.
SECTION 3.06. Subsidiaries; Equity Investments. (a) Each Subsidiary of the
Company is a corporation duly incorporated (or other organization duly formed),
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization and has all corporate or organizational powers and
all governmental licenses, authorizations, permits, consents and approvals
required to carry on its business as now conducted, except for those licenses,
authorizations, permits, consents and approvals the absence of which would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. Each such Subsidiary is duly qualified to do business as a
foreign corporation or other organization and is in good standing in each
jurisdiction where such qualification is necessary, except for those
jurisdictions where the failure to be so qualified would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
-13-
(b) All of the outstanding capital stock of, or other voting securities or
ownership interests in, each Subsidiary of the Company (other than director
qualifying shares) is owned by the Company, directly or indirectly, free and
clear of any Lien and free of any other limitation or restriction (including any
restriction on the right to vote, sell or otherwise dispose of such capital
stock or other voting securities or ownership interests). All of the outstanding
shares of capital stock of each Subsidiary of the Company have been validly
issued and are fully paid and nonassessable. There are no outstanding (i)
securities of the Company or any of its Subsidiaries convertible into or
exchangeable for shares of capital stock or other voting securities or ownership
interests in any such Subsidiary or the Company or (ii) options or other rights
to acquire from the Company or any of its Subsidiaries, or other obligation of
the Company or any of its Subsidiaries to issue, any capital stock or other
voting securities or ownership interests in, or any securities convertible into
or exchangeable for any capital stock or other voting securities or ownership
interests in, any Subsidiary of the Company (the items in clauses (i) and (ii)
being referred to collectively as the "Company Subsidiary Securities"). There
are no outstanding obligations of the Company or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any of the Company Subsidiary
Securities.
SECTION 3.07. SEC Filings. (a) The Company has delivered or made available
to the New Investor (i) the Company's annual reports on Form 10-K for its fiscal
years ended December 25, 1999, (ii) its quarterly report on Form 10-Q for its
fiscal quarter ended September 30, 2000, (iii) its proxy statements relating to
meetings of the Company Shareholders held since December 25, 1999, and (iv) all
of its other reports, statements, schedules and registration statements filed
with the SEC since December 25, 1999 (the documents referred to in this Section
3.07(a), collectively, the "Company SEC Documents").
(b) As of its filing date, each Company SEC Document complied as to form in
all material respects with the applicable requirements of the 1934 Act.
(c) As of its filing date, each Company SEC Document did not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
SECTION 3.08. Financial Statements. The audited consolidated financial
statements and unaudited consolidated interim financial statements of the
Company included in the Company SEC Documents fairly present, in conformity with
United States generally accepted accounting principles ("GAAP") applied on a
consistent basis (except as may be indicated in the notes thereto), the
consolidated financial position of the Company and its consolidated Subsidiaries
as of the dates thereof and their consolidated results of operations and cash
flows for the periods then
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ended (subject to normal year-end adjustments and the absence of notes in the
case of any unaudited interim financial statements).
SECTION 3.09. No Undisclosed Material Liabilities. There are no liabilities
or obligations of the Company or any of its Subsidiaries of any kind whatsoever,
whether accrued, contingent, absolute, determined, determinable or otherwise,
other than:
(a) liabilities or obligations disclosed or provided for in the
Company Balance Sheet and the footnotes to the audited consolidated
financial statements included in the Company 10-K;
(b) liabilities or obligations that would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect; or
(c) liabilities or obligations under or contemplated by this
Agreement.
SECTION 3.10. Disclosure Documents. The proxy statement of the Company to
be filed with the SEC in connection with the Shareholder Matters (the "Company
Proxy Statement") and any amendments or supplements thereto will, when filed,
comply as to form in all material respects with the applicable requirements of
the 1934 Act. At the time the Company Proxy Statement or any amendment or
supplement thereto is first mailed to Company Shareholders, and at the time the
Company Shareholders vote on the Shareholder Matters, the Company Proxy
Statement, as supplemented or amended, if applicable, will not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. The representations and warranties
contained in this Section 3.10 will not apply to statements or omissions
included in the Company Proxy Statement based upon information furnished to the
Company by or on behalf of the New Investor for use therein.
SECTION 3.11. Absence of Certain Changes. From the Company Balance Sheet
Date to the date of this Agreement, the business of the Company and its
Subsidiaries has been conducted in the ordinary course consistent with past
practices and there has not been:
(a) any event, occurrence or development that has had or would not
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect;
-15-
(b) any declaration, setting aside or payment of any dividend or other
distribution with respect to any shares of capital stock of the Company, or
any repurchase, redemption or other acquisition by the Company or any of
its Subsidiaries of any outstanding shares of capital stock or other
securities of, or other ownership interests in, the Company or any of its
Subsidiaries (other than ordinary course open market purchases);
(c) any amendment of any material term of any outstanding security of
the Company or any of its Subsidiaries;
(d) any incurrence, assumption or guarantee by the Company or any of
its Subsidiaries of any indebtedness in excess of $5.0 million,
individually or in the aggregate, other than (i) under the Credit Agreement
in the ordinary course of business consistent with past practices to fund
general corporate purposes, (ii) between the Company and its Subsidiaries
or between two or more of the Company's Subsidiaries or (iii) trade
payables in the ordinary course of business;
(e) any creation or other incurrence by the Company or any of its
Subsidiaries of any Lien on any asset that is material to the Company and
its Subsidiaries, taken as a whole, other than in the ordinary course of
business consistent with past practices;
(f) any making of any material loan, advance or capital contribution
to or investment in any Person other than loans, advances or capital
contributions to or investments in its wholly-owned Subsidiaries or by its
wholly-owned Subsidiaries to or in the Company or other Subsidiaries of the
Company;
(g) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of the Company or
any of its Subsidiaries that has had or would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect;
(h) any change in any method of accounting, method of tax accounting
or accounting principles or practice by the Company or any of its
Subsidiaries, except for any such change required by reason of a concurrent
change in GAAP, Regulation S-X under the 1934 Act or other applicable law
or regulation; or
(i) any adoption or amendment in any respect of any bonus, profit
sharing, compensation, severance, termination, stock option, stock
appreciation right, pension, retirement, employment or other employee
benefit agreement, trust, plan or other arrangement for the benefit or
welfare of any director or executive officer of the Company or increase in
any manner of the compensation or fringe benefits of any director or
executive officer of the Company (other than in the ordinary course of
business
-16-
consistent with past practices or as required by agreements as in effect on
the date hereof) or payment of any benefit not required by any existing
agreement or placement of any assets in any trust for the benefit of any
director or executive officer of the Company not required by any existing
agreement.
SECTION 3.12. Compliance with Laws and Court Orders. The Company and each
of its Subsidiaries are, and, since January 1, 2000, have been, in compliance
with any applicable law, statute, ordinance, rule, regulation, judgment,
injunction, order or decree, except for failures to comply or violations that
have not had and would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
SECTION 3.13. Litigation. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened, against the
Company or any of its Subsidiaries or any of their respective properties before
any court or arbitrator, or before or by any Governmental Authority, except for
those that would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
SECTION 3.14. Finders' Fees. There is no investment banker, broker, finder
or other intermediary that has been retained by or is authorized to act on
behalf of the Company or any of its Subsidiaries who might be entitled to any
fee or commission from the Company or any of its Affiliates in connection with
the Transactions.
SECTION 3.15. Taxes. (a) Each of the Company and its Subsidiaries has
timely filed (or has had timely filed on its behalf), taking into account any
extension of time within which to file, all material Tax Returns required to be
filed by it and all such Tax Returns are true and complete in all material
respects.
(b) Each of the Company and its Subsidiaries has paid (or has had paid on
its behalf), or, where payment is not yet due, has established in accordance
with GAAP an adequate accrual for the payment of, all Taxes imposed on it or on
its assets or activities (whether or not shown on such Tax Returns).
(c) There are no material Liens or encumbrances for Taxes on any of the
assets of the Company or any of its Subsidiaries except for Taxes not yet due
and payable or with respect to matters contested in good faith for which
adequate reserves have been established.
-17-
(d) No material federal, state, local or foreign audits or administrative
proceedings are pending or, to the Company's knowledge, threatened, with regard
to any Taxes or any Tax Return of the Company or any of its Subsidiaries.
(e) No amount that could be received (whether in cash or property or the
vesting of property) as a result of any of the Transactions by any employee,
officer or director of the Company or any of its Affiliates who is a
"disqualified individual" (as such term is defined in proposed Treasury
Regulation Section 1.280G-1) under any employment, severance or termination
agreement, other compensation arrangement or Benefit Plan currently in effect
could be characterized as an "excess parachute payment" (as such term is defined
in Section 280G(b)(1) of the Code).
"Taxes" shall mean any and all taxes, charges, fees, levies or other
assessments, including income, gross receipts, excise, real or personal
property, sales, withholding, social security, retirement, unemployment,
occupation, use, goods and services, service use, license, value added, capital,
net worth, payroll, profits, withholding, franchise, transfer and recording
taxes, fees and charges, and any other taxes, assessments or similar charges
imposed by the Internal Revenue Service (the "IRS") or any taxing authority
(whether domestic or foreign including any state, county, local or foreign
government or any subdivision or taxing agency thereof (including a United
States possession)) (a "Taxing Authority"), whether computed on a separate,
consolidated, unitary, combined or any other basis; and such term shall include
any interest whether paid or received, fines, penalties or additional amounts
attributable to, or imposed upon, or with respect to, any such taxes, charges,
fees, levies or other assessments. "Tax Return" shall mean any report, return,
document, declaration or other information or filing required to be supplied to
any taxing authority or jurisdiction (foreign or domestic) with respect to
Taxes, including information returns, any documents with respect to or
accompanying payments of estimated Taxes, or with respect to or accompanying
requests for the extension of time in which to file any such report, return,
document, declaration or other information.
SECTION 3.16. Employee Benefit Plans. (a) Section 3.16 of the Disclosure
Schedule lists (i) all material Benefit Plans currently maintained or
contributed to by the Company or a Subsidiary thereof, and (ii) all material
Multiemployer Plans. Copies of all material written Benefit Plans, and all
summary plan descriptions, trust agreements, actuarial valuation reports and the
most recent annual return and IRS determination letters related to Benefit Plans
have been made available to each New Investor.
(b) Except as would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect:
-18-
(i) each Benefit Plan has at all times been maintained and
administered in all respects in accordance with its terms and with the
requirements of all applicable law, including ERISA and the Code. Each
Benefit Plan intended to qualify under Section 401(a) of the Code has been
determined by the IRS to be qualified under Section 401(a) of the Code, and
the Company knows of no fact or circumstance giving rise to a material
likelihood that the IRS would revoke such determination;
(ii) all required contributions to any Benefit Plans and Multiemployer
Plans that are "defined benefit pension plans" required to be made by the
Company or any Subsidiary in accordance Section 302 of ERISA or Section 412
of the Code within the last six years, have been timely made; within the
last six years there has been no application for or waiver of the minimum
funding standards imposed by Section 412 of the Code with respect to any
Benefit Plan; and within the last six years no Benefit Plan has incurred
any "accumulated funding deficiency" within the meaning of Section 302 of
ERISA or Section 412 of the Code;
(iii) no "reportable event" which is subject to Section 4043 of ERISA
and for which the requirement of notice has not been waived by regulation
by the PBGC has occurred with respect to any Benefit Plan or any single
employer plan (within the meaning of Section 4001(a)(15) of ERISA)
maintained by an ERISA Affiliate within the last six years;
(iv) no liability has been incurred or is expected to be incurred by
the Company or any Subsidiary thereof under Title IV of ERISA (other than
PBGC premiums) with respect to any Benefit Plan or Multiemployer Plan, or,
to the Company's knowledge, with respect to any other Plan presently or
heretofore maintained or contributed to during the 5 year period prior to
the Closing Date by any ERISA Affiliate;
(v) with respect to each Multiemployer Plan, (i) no withdrawal
liability (within the meaning of Section 4201(b) of ERISA) has been
incurred by the Company or any ERISA Affiliate, and the Company has no
reason to believe that any such withdrawal liability will be incurred, (ii)
no such Multiemployer Plan is in "reorganization" (within the meaning of
Section 4241 of ERISA), (iii) no notice has been received that increased
contributions may be required to avoid a reduction in plan benefits or the
imposition of an excise tax, or that such Multiemployer Plan is or may
become "insolvent" (within the meaning of Section 4241 of ERISA), (iv) to
the knowledge of the Company, no proceedings have been instituted by the
PBGC against such Multiemployer Plan, (v) neither the Company nor any
Subsidiary thereof has sold assets in a transaction intended to satisfy the
requirements of Section 4204 of ERISA, and (vi) if the Company or any ERISA
Affiliate were to have a complete or partial withdrawal under Section 4203
of ERISA as of the Closing Date, no withdrawal liability would exist on the
part of the Company or any ERISA Affiliate;
-19-
(vi) neither the Company nor, to the Company's knowledge, any ERISA
Affiliate has incurred any liability for any tax imposed under Sections
4971 through 4980E of the Code or civil liability under Section 502(i) or
(l) of ERISA;
(vii) no Tax has been incurred under Section 511 of the Code with
respect to any Benefit Plan (or trust or other funding vehicle pursuant
thereto); and
(viii) no action (excluding claims for benefits incurred in the
ordinary course of Plan activities) has been brought or, to the knowledge
of the Company, threatened against or with respect to any Benefit Plan and
there are no facts or circumstances known to the Company or any Subsidiary
thereof that could reasonably be expected to give rise to any such action.
(c) Except as would not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect, (i) all contributions required to be
made by the Company or any Subsidiary with respect to a Foreign Plan have been
timely made, (ii) each Foreign Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws and has been maintained, where required, in good standing with the
applicable Governmental Authority, and (iii) neither the Company nor any
Subsidiary has incurred any obligation in connection with the termination or
withdrawal from any Foreign Plan. Section 3.16 of the Disclosure Schedule lists
all material Foreign Plans that are defined benefit pension plans. Copies of the
actuarial valuation reports or FAS 87 reports for such plans have been made
available to the New Investor. For purposes hereof, the term "Foreign Plan"
shall mean any plan, program, policy, arrangement or agreement maintained or
contributed to by, or entered into with, the Company or any Subsidiary with
respect to employees (or former employees) employed outside the United States.
SECTION 3.17. Environmental Matters. (a) The Company and its business,
operations and real properties are in compliance in all material respects with,
and the Company has no material liability under, Environmental Law. The Company
has obtained all material Environmental Permits currently required for the
conduct of its business and operations, and the ownership, operation and use of
its assets under Environmental Law. All such Environmental Permits are valid and
in good standing.
(b) (i) There is no material Environmental Claim pending or, to the
knowledge of the Company, threatened, against the Company or relating to the
real property or operations of the Company, and (ii) no Lien has been recorded
under Environmental Law against any properties, assets or facilities owned,
leased or operated by the Company.
(c) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not affect the
validity or require
-20-
the transfer of any Environmental Permit held by the
Company, and will not require any notification, disclosure, registration,
reporting, filing, investigation or remediation under Environmental Law.
(d) (i) No property or facility presently owned, leased or operated by the
Company and (ii) to the knowledge of the Company, no property or facility
formerly owned, leased or operated by the Company is currently listed or
proposed for listing on the National Priorities List or the Comprehensive
Environmental Response, Compensation, and Liability Information System, both
promulgated under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.
(e) The Company is not obligated to perform any action or otherwise incur
any expense under Environmental Law pursuant to any order, decree, judgment or
agreement by which it is bound or has assumed by contract or agreement, in each
case, which could reasonably be expected to result in material liability under
Environmental Law or affect the operations of the Company in any material
respect.
SECTION 3.18. Antitakeover Statutes. Assuming the accuracy of the New
Investor's representation contained in Section 4.10, the Company has taken all
action necessary to exempt the sale of the Primary Shares to the New Investor,
this Agreement and the Transactions from the restrictions on "business
combinations" contained in Section 203 of the Delaware General Corporation Law,
and, accordingly, neither the restrictions of such Section nor any other
antitakeover or similar statute or regulation applies or purports to apply to
any such Transactions.
SECTION 3.19. Private Offering. Neither the Company nor anyone acting on
behalf of the Company has offered the Primary Shares for sale to, or solicited
offers to buy from, or otherwise approached or negotiated with, any individual
or entity in connection with the sale of such securities other than a limited
number of investors, including the New Investor. Assuming the accuracy of the
New Investor's representations contained in Article 4 of this Agreement, the
offer, issuance and delivery of the Primary Shares are, and the offer, issuance
and delivery of the Converted Shares will be, exempt from registration under the
1933 Act, and all action required to be taken prior to the offer or sale of the
Primary Shares has been taken under applicable state securities laws.
SECTION 3.20. Existing Investor Agreements. The Existing Investor
Agreements and the Transaction Documents to which the Company is a party are the
only agreements between the Company or any of its Subsidiaries, on the one hand,
and either Seller or its Affiliates, on the other hand.
-21-
SECTION 3.21. Disclaimer of Other Representations and Warranties. The
Company does not make, and has not made, any representations or warranties in
connection with the Transactions other than those expressly set forth herein. It
is understood that any data, any financial information or any memoranda or
offering materials or presentations (including but not limited to the
Information Memorandum dated September 2000, as the same may have been amended
or supplemented) are not and shall not be deemed to be or to include
representations or warranties of the Company. Except as expressly set forth
herein, no Person has been authorized by the Company to make any representation
or warranty relating to the Company or any Subsidiary thereof or their
respective businesses, or otherwise in connection with the Transactions and, if
made, such representation or warranty may not be relied upon as having been
authorized by the Company.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE NEW INVESTOR
The New Investor represents and warrants to the Company that:
SECTION 4.01. Existence and Power. The New Investor is a limited
partnership duly formed, validly existing and in good standing under the laws of
its jurisdiction of organization and has all limited partnership powers and all
governmental licenses, authorizations, permits, consents and approvals required
to carry on its business as now conducted.
SECTION 4.02. Authorization. The execution, delivery and performance by the
New Investor of this Agreement and the Secondary Share Purchase Agreement and
the consummation by the New Investor of the Transactions are within the powers
of the New Investor and have been duly authorized by all necessary limited
partnership action. Each of this Agreement and the Secondary Share Purchase
Agreement constitutes a valid and binding agreement of the New Investor.
SECTION 4.03. Governmental Authorization. The execution, delivery and
performance by the New Investor of this Agreement and the Secondary Share
Purchase Agreement and the consummation by the New Investor of the Transactions
require no action by or in respect of, or filing with, or notification or
reporting to, any Governmental Authority, other than compliance with any
applicable requirements of the HSR Act and of the Antitrust Laws of the foreign
jurisdictions set forth on Section 3.03 of the Disclosure Schedule.
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SECTION 4.04. Non-contravention. The execution, delivery and performance by
the New Investor of this Agreement and the Secondary Share Purchase Agreement
and the consummation of the Transactions do not and will not (i) contravene,
conflict with or result in any violation or breach of any provision of the
limited partnership agreement or similar organizational documents, (ii) assuming
compliance with the matters referred to in Section 4.03, contravene, conflict
with or result in a violation or breach of any provision of any applicable law,
statute, ordinance, rule, regulation, judgment, injunction, order or decree,
(iii) require any consent or other action by any Person under, constitute a
default under, or cause or permit the termination, cancellation, acceleration or
other change of any right or obligation or the loss of any benefit to which the
New Investor is entitled under any provision of any agreement or other
instrument binding upon the New Investor or any license, franchise, permit,
certificate, approval or other similar authorization affecting, or relating in
any way to, the assets or business of the New Investor or (iv) result in the
creation or imposition of any Lien on any asset of the New Investor, except for
such contraventions, conflicts and violations referred to in clause (ii) and for
such failures to obtain any such consent or other action, defaults,
terminations, cancellations, accelerations, changes, losses or Liens referred to
in clauses (iii) and (iv) that would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect on the New Investor.
SECTION 4.05. Purchase for Investment. The Primary Shares are being
acquired by the New Investor for its own account, not as a nominee or agent, for
investment and not with a view to resale or distribution within the meaning of
the 1933 Act, and the New Investor will not distribute the shares in violation
or contravention of the 1933 Act. The New Investor is not aware of any facts or
circumstances that contradict the representation of the Company in the first
sentence of Section 3.19.
SECTION 4.06. Restrictions on Transfer. The New Investor acknowledges that
(a) the Primary Shares will not be registered under the 1933 Act as of the
Closing Date, (b) the Primary Shares will not be transferable unless so
registered or unless an exception for such registration is applicable and (c)
certificates representing the Primary Shares will bear a legend substantially in
the following form:
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS
AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
DISPOSED OF, AND NO TRANSFER OF THE SECURITIES MAY BE MADE BY THE
COMPANY OR ITS TRANSFER AGENT, IN THE ABSENCE OF SUCH REGISTRATION OR
AN EXEMPTION THEREFROM."
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SECTION 4.07. Sophistication; Access to Information. (a) The New Investor
and each member of the New Investor (i) is an "accredited investor" as defined
in the 1933 Act and is financially able to purchase the Primary Shares, (ii) is
fully capable of understanding the type of investment being made pursuant to
this Agreement, and the risks involved in connection therewith, (iii) believes
that the nature of the Primary Shares is consistent with its overall investment
programs and financial position, (iv) recognizes that there are substantial
risks involved in their purchase of the Primary Shares, (v) is capable of
bearing the economic risk of its investment for an indefinite period of time and
can afford a complete loss of its investment, (vi) has adequate means of
providing for its current liquidity needs, (vii) has no need for liquidity of
its investment, (viii) is not expecting any short term income from its
investment and (ix) has no reason to anticipate any change in circumstances,
financial or otherwise, which may cause or require any sale of the Primary
Shares.
(b) The New Investor has had the opportunity to ask questions of and
receive answers from the Company's officers and directors concerning the terms
and conditions of the (i) purchase and delivery of the Primary Shares and (ii)
business and financial condition of the Company; and the New Investor has
received to its satisfaction such additional information about the business and
financial condition of the Company and the terms and conditions of the purchase
and delivery of the Primary Shares as it has requested.
SECTION 4.08. Disclosure Documents. None of the information provided by the
New Investor for inclusion in the Company Proxy Statement or any amendment or
supplement thereto, at the time the Company Proxy Statement or any amendment or
supplement thereto is first mailed to the Company Shareholders and at the time
the Company Shareholders vote on the Shareholder Matters, will contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
SECTION 4.09. Finders' Fees. There is no investment banker, broker, finder
or other intermediary that has been retained by or is authorized to act on
behalf of the New Investor who might be entitled to any fee or commission from
the Company or any of its Affiliates in connection with the Transactions.
SECTION 4.10. Section 203. Neither the New Investor nor any of its
"affiliates" or "associates" is or has been within the last three years an
"interested stockholder" of the Company without the approval of the Board of
Directors within the meaning of Section 203 of the Delaware General Corporation
Law.
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SECTION 4.11. Financing. The New Investor has the funds available to
consummate the purchase by it of the Primary Shares.
SECTION 4.12. Disclaimer of Other Representations and Warranties. The New
Investor does not make, nor has it made, any representations or warranties in
connection with the Transactions other than those expressly set forth herein.
Except as expressly set forth herein, no Person has been authorized by the New
Investor to make any representation or warranty relating to itself or its
business, or otherwise in connection with the Transactions and, if made, such
representation or warranty may not be relied upon as having been authorized by
the New Investor.
ARTICLE 5
COVENANTS OF THE COMPANY
The Company agrees that, except as set forth in the corresponding section
or subsection of the Disclosure Schedule:
SECTION 5.01. Conduct of the Company. Except as contemplated by this
Agreement or as expressly agreed to in writing by the New Investor (which
agreement shall not be unreasonably withheld), during the period from the date
of this Agreement to the earlier of the Charter Amendment Effective Date and the
End Date, the Company shall, and shall cause each of its Subsidiaries to,
conduct its operations according to its ordinary and usual course of business
and consistent with past practice and use commercially reasonable efforts to
preserve intact their current business organizations, keep available the
services of their current officers and employees and preserve their
relationships with customers, suppliers, licensors, licensees, advertisers,
distributors and others having business dealings with them and to preserve
goodwill. Without limiting the generality of the foregoing and except as (x)
otherwise expressly provided in this Agreement or the other Transaction
Documents or (y) required by law, prior to the earlier of the Charter Effective
Amendment Date and the End Date, the Company shall not, and shall cause its
Subsidiaries not to:
(a) expend funds for capital expenditures that in the aggregate would
cause total capital expenditures for the period from the Company Balance
Sheet Date to the Closing Date to exceed $80.0 million;
(b) sell, lease, license or otherwise dispose of any Subsidiary or any
material amount of assets, securities or property of the Company and its
Subsidiaries, taken
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as a whole, except pursuant to existing contracts or commitments or
otherwise in the ordinary course consistent with past practice;
(c) amend its certificate of incorporation, by-laws or equivalent
organizational documents or alter through merger, liquidation,
reorganization, restructuring or in any other fashion the corporate
structure or ownership of any Subsidiary of the Company; or split, combine
or reclassify any of its capital stock or issue or authorize the issuance
of any other securities in respect of, in lieu of or in substitution for
shares of its capital stock;
(d) except for issuances upon exercise of presently outstanding
options and awards under any Plan, authorize for issuance, issue, deliver,
sell or agree or commit to issue, sell or deliver (whether through the
issuance or granting of options, warrants, commitments, subscriptions,
rights to purchase or otherwise), pledge or otherwise encumber any shares
of its capital stock or the capital stock of any of its Subsidiaries, any
other voting securities or any securities convertible into, or any rights,
warrants or options to acquire, any such shares, voting securities or
convertible securities or any other securities or equity equivalents
(including, without limitation, stock appreciation rights);
(e) make or agree to make any acquisition of equity interest (whether
through a purchase of stock, establishment of a joint venture or otherwise)
or assets which is material to the Company and its Subsidiaries, taken as a
whole, except for (i) purchases of inventory and supplies in the ordinary
course of business, or (ii) pursuant to purchase orders entered into in the
ordinary course of business;
(f) settle or compromise any material litigation (whether or not
commenced prior to the date of this Agreement) or settle, pay or compromise
any claims not required to be paid, other than, in each case, in
consultation and cooperation with the New Investor and, with respect to any
such settlement, with the prior written consent of the New Investor (which
consent shall not be unreasonably withheld);
(g) (i) take any action that would make any representation and
warranty of the Company hereunder inaccurate in any material respect at, or
as of any time prior to, the Closing Date or (ii) omit to take any action
necessary and reasonably available to the Company to prevent any such
representation or warranty from being materially inaccurate in any respect
at any such time;
(h) incur, assume or guarantee any additional indebtedness other than
(i) under the Credit Agreement in the ordinary course of business
consistent with past practices to fund general corporate purposes, (ii)
between the Company and its Sub-
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sidiaries or between two or more of the Company's Subsidiaries or (iii)
trade payables in the ordinary course of business;
(i) enter into any agreement or take any action in violation of the
terms of this Agreement or any other Transaction Document; or
(j) authorize, or commit or agree to take, any of the foregoing
actions.
SECTION 5.02. Access to Information. From the date of this Agreement until
the Closing Date, the Company shall, and shall cause its Subsidiaries, and each
of their respective officers, directors, employees, counsel, advisors and
representatives (collectively, the "Company Representatives") to, give the New
Investor and its members, managers, employees, counsel, advisors,
representatives (collectively, the "New Investor Representatives") and
representatives of co-investors identified by the New Investor reasonable
access, upon reasonable notice and during normal business hours, to the offices
and other facilities and to the books and records of the Company and its
Subsidiaries and will cause the Company Representatives and the Company's
Subsidiaries to furnish the New Investor and the New Investor Representatives
and representatives of co-investors identified by the New Investor with such
financial and operating data and such other information with respect to the
business and operations of the Company and its Subsidiaries as the New Investor
and representatives of co-investors identified by the New Investor may from time
to time reasonably request. The New Investor for itself, and on behalf of the
co-investors, agrees that any information furnished pursuant to this Section
5.02 shall be subject to the provisions of the letter agreement dated August 11,
2000 between Heartland and the Company (the "Confidentiality Agreement").
SECTION 5.03. Shareholder Meeting; Proxy Material; Debt Consents. (a) The
Company shall use its commercially reasonable efforts to cause the Charter
Amendment Effective Date to occur as soon as reasonably practicable. In
furtherance of the foregoing, the Company shall cause a meeting of the Company
Shareholders (the "Company Shareholder Meeting") to be duly called and held as
soon as reasonably practicable for the purpose of voting on the Shareholder
Matters. Subject to Section 5.04, the Board of Directors shall recommend
approval of the Transactions and adoption of this Agreement and the other
Transaction Documents by the Company Shareholders. In connection with such
meeting, the Company will (i) promptly prepare and file with the SEC, use
commercially reasonable efforts to have cleared by the SEC and thereafter mail
to the Company Shareholders as promptly as practicable the Company Proxy
Statement and all other proxy materials for such meeting, (ii) promptly prepare
and file with the SEC and thereafter mail to the Company Shareholders as
promptly as practicable the information required to be provided on Schedule
14f-1 and related materials, (iii) subject to Section 5.04, use commercially
reasonable efforts to obtain the
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necessary approvals by the Company Shareholders of the Shareholder Matters and
(iv) otherwise comply with all legal requirements applicable to such proxy
material and such meeting.
(b) The Company shall cooperate in seeking such modifications to the Credit
Agreement and the Indenture as the New Investor shall request. The dealer
manager/solicitation agent or dealer managers/solicitation agent for the consent
solicitation in respect of the Indenture Amendments shall be selected by the New
Investor and shall be reasonably acceptable to the Company and Sellers and
engaged pursuant to documentation that is reasonably acceptable to the New
Investor, the Company and the Sellers. The New Investor shall have the right to
direct the strategy and manner in which the consent solicitation in respect of
the Indenture is conducted and in which the Bank Amendments are sought, but only
after consultation with the Company and Sellers. All costs and expenses incurred
in connection with such consent solicitation and in seeking and securing such
Bank Amendments shall be borne by the Xxxxxxx & Xxxxxx Products Co.
SECTION 5.04. No Solicitation. (a) From the date of this Agreement until
the Closing Date, the Company agrees that it will not, directly or indirectly
through any officer, Subsidiary, Affiliate, director, employee, stockholder,
representative, agent or other person, (i) seek, initiate, solicit or encourage
any Person to make an Acquisition Proposal, (ii) engage in negotiations or
discussions concerning an Acquisition Proposal with any person or group, (iii)
disclose any non-public information relating to the Company or give access to
the properties, employees, books or records of the Company or any of its
subsidiaries to any person or group in connection with any Acquisition Proposal
or (iv) approve or recommend or agree to approve or recommend any Acquisition
Proposal; provided that nothing herein shall prevent the Board of Directors or a
committee thereof from (A) furnishing information to any person that has made an
Acquisition Proposal not solicited in violation of this paragraph or (B) subject
to the other provisions of this paragraph, entering into or participating in
discussions or negotiations concerning an Acquisition Proposal not solicited in
violation of this paragraph so long as, in any case, (x) the Board of Directors
or such committee shall have concluded in good faith (after receiving and
considering the advice of its outside legal counsel) that failing to participate
in such discussions or negotiations or furnishing such information would cause
the Board of Directors or such committee to be in breach of its fiduciary duties
to the Company Shareholders under applicable law, and (y) prior to participating
in such discussions or negotiations or furnishing any such information, the
Company and the party making such offer agrees to a confidentiality agreement on
terms that are, in the aggregate, no less favorable to the Company than those of
the Confidentiality Agreement (other than the standstill provisions thereof) and
the New Investor is given concurrent or advance written notice thereof unless
the Board of Directors or such committee shall have concluded in good faith,
after receiving and considering the advice of its outside counsel, that doing so
would cause it to be in breach of its fiduciary responsibilities to the Company
Shareholders under applicable law. The Board of Directors or such committee may
(x) fail to make, withdraw or modify in a manner adverse to the New Investor
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its recommendation to its stockholders referred to in Section 5.03, (y) take and
disclose to the Company Shareholders a position contemplated by Rule 14e-2 under
the 1934 Act or otherwise complying with its disclosure obligations and/or (z)
take any non-appealable, final action ordered to be taken by the Company by any
court of competent jurisdiction, but in the case of clause (x) or (y) only if
the Board of Directors or such committee determines, in good faith after
consultation with outside legal counsel to the Company, that such action is
consistent with the exercise of its fiduciary duties under applicable law.
(b) The Company shall notify the New Investor in writing no later than the
end of the next business day after receipt thereof of the receipt of any
Acquisition Proposal (including a copy thereof if in writing), the terms and
conditions of such Acquisition Proposal and the identity of the person making
it. The Company also shall promptly notify the New Investor no later than the
end of the next Business Day of any change to or modification of such
Acquisition Proposal.
(c) The Company shall, and shall cause its Subsidiaries and the advisors,
employees and other agents of the Company and any of its Subsidiaries to, cease
immediately and cause to be terminated any and all existing activities,
discussions or negotiations, if any, with any Third Party conducted prior to the
date hereof with respect to any Acquisition Proposal and shall use commercially
reasonable efforts to cause any such Party (or its agents or advisors) in
possession of confidential information about the Company that was furnished by
or on behalf of the Company to return or destroy all such information.
SECTION 5.05. Reports. During the period from the date of this Agreement to
the Closing Date, the Company shall provide the New Investor with monthly
financial statements in the existing reporting format (balance sheet, cash flow
statement, income statement and, if available, notes thereto), broken out by
operating unit, no later than the twentieth Business Day following the end of
each calendar month following the date of this Agreement; provided that for
calendar months that are also the end of a calendar quarter, the Company may
provide such financial information to the New Investor on the same date such
information is publicly released in accordance with the past practice of the
Company.
SECTION 5.06. Further Assurances. Following the Closing Date, the Company
shall, and shall cause each of the Subsidiaries to, from time to time, execute
and deliver such additional instruments, documents, conveyances or assurances
and take such other actions as shall be necessary, or otherwise reasonably be
requested by the New Investor, to confirm and assure the rights and obligations
provided for in this Agreement and the other Transaction Documents and render
effective the consummation of the transactions contemplated hereby and thereby.
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SECTION 5.07. Stock Exchange Listing. The Company shall use commercially
reasonable efforts to cause the New Investor to receive assurance from the New
York Stock Exchange in a form reasonably satisfactory to the New Investor that:
(a) in accordance with the rules of the New York Stock Exchange, all Treasury
Shares and, when issued, all Converted Shares will be eligible for listing on
the New York Stock Exchange; and (b) consummation of the Transactions will not
cause any securities of the Company already listed on the New York Stock
Exchange to lose their listing privileges.
ARTICLE 6
COVENANTS OF THE NEW INVESTOR AND THE COMPANY
The parties hereto agree that:
SECTION 6.01. Commercially Reasonable Efforts. (a) Subject to the terms and
conditions of this Agreement and to the fiduciary duties of the Board of
Directors (as determined by such directors in good faith), the Company and the
New Investor will use commercially reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate the
Transactions (including those contemplated by the Secondary Share Purchase
Agreement). In furtherance and not in limitation of the foregoing, the New
Investor and the Company agree to make, if required, an appropriate filing of a
Notification and Report Form pursuant to the HSR Act with respect to the
transactions contemplated hereby as promptly as practicable and in any event
within seven Business Days of the date hereof and to supply as promptly as
practicable any additional information and documentary material that may be
requested pursuant to the HSR Act and to take all other actions necessary to
cause the expiration or termination of the applicable waiting periods under the
HSR Act as soon as practicable. For the avoidance of doubt, notwithstanding any
provision of this Agreement to the contrary, the Company shall not be required
to make any significant change in the operations or activities of the business
(or any material assets employed therein) of the Company or any of its
Affiliates, including any divestiture of its businesses (or assets) or other
extraordinary measures, in satisfaction of the HSR Act requirements.
(b) In connection with the efforts referenced in Section 6.01(a) to obtain
all requisite approvals and authorizations for the Transactions under any other
Antitrust Law, the New Investor and the Company shall each use commercially
reasonable efforts to (i) cooperate in all respects with each other in
connection with any filing or submission and in connection with any
investigation or other inquiry, including any proceeding initiated by a
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private party, (ii) keep the other party informed in all material respects of
any material communication received by such party from, or given by such party
to, the Federal Trade Commission (the "FTC"), the Antitrust Division of the
Department of Justice (the "DOJ") or any other Governmental Authority and of any
material communication received or given in connection with any proceeding by a
private party, in each case regarding any of the Transactions and (iii) permit
the other party to review any material communication given by it to, and consult
with each other in advance of any meeting or conference with, the FTC, the DOJ
or any other Governmental Authority or, in connection with any proceeding by a
private party, with any other Person.
SECTION 6.02. Certain Filings. The Company and the New Investor shall
cooperate with one another (i) in connection with the preparation of the Company
Proxy Statement, (ii) in determining whether any action by or in respect of, or
filing with, any Governmental Authority is required, or any actions, consents,
approvals or waivers are required to be obtained from parties to any material
contracts, in connection with the consummation of the Transactions and the
achievement of the Charter Amendment Effective Date, and (iii) in taking such
actions or making any such filings, furnishing information required in
connection therewith or with the Company Proxy Statement and seeking timely to
obtain any such actions, consents, approvals or waivers.
SECTION 6.03. Public Announcements. The New Investor and the Company will
consult with each other before issuing any press release or making any public
statement with respect to this Agreement or the Transactions and, except as may
be required by applicable law or any listing agreement with any national
securities exchange, will not issue any such press release or make any such
public statement prior to such consultation.
SECTION 6.04. Notices of Certain Events. From the date of this Agreement
until the Closing Date, each of the Company and the New Investor shall promptly
notify the other of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
Transactions;
(b) any notice or other communication from any Governmental Authority
in connection with the Transactions;
(c) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against, relating to or
involving or otherwise affecting the Company or any of its Subsidiaries
that, if pending on the date of this Agreement,
-31-
would have been required to have been disclosed pursuant to Section 3.12 or
3.13, or that relate to or affect the consummation of the Transactions;
(d) the occurrence or non-occurrence of any fact or event which would
be reasonably likely:
(i) to cause any representation or warranty contained in this
Agreement to be untrue or inaccurate in any material respect at any
time from the date hereof to the Closing Date, or
(ii) to cause any covenant, condition or agreement under this
Agreement not to be complied with or satisfied; and
(e) any failure of the Company or the New Investor, as the case may
be, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that no such
notification shall affect the representations or warranties of any party or
the conditions to the obligations of any party hereunder.
SECTION 6.05. Confidentiality. Prior to the Closing Date and after any
termination of this Agreement, each of the New Investor and the Company will
hold, and will use its reasonable best efforts to cause its officers, directors,
employees, accountants, counsel, consultants, advisors and agents to hold, in
confidence, all confidential documents and information concerning the other
party furnished to it or its Affiliates in connection with the Transactions in
accordance with the terms of the Confidentiality Agreement.
SECTION 6.06. Consummation of Agreement. Subject to the provisions of
Section 8.01 of this Agreement, each party hereto shall use all commercially
reasonable efforts to fulfill and perform all conditions and obligations on its
part to be fulfilled and performed under this Agreement and the other
Transaction Documents to which it is a party, and to cause the transactions
contemplated by this Agreement and the other Transaction Documents to which it
is a party to be fully carried out. Blackstone and Xxxxxxxxxxx are intended
third party beneficiaries of this Section 6.06.
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ARTICLE 7
CONDITIONS TO THE TRANSACTIONS
SECTION 7.01. Conditions to the Obligations of Each Party. The obligations
of the Company and the New Investor to consummate the Transactions are subject
to the satisfaction of the following conditions:
(a) the sale of shares of Common Stock by the Sellers to the New
Investor in accordance with the terms of the Secondary Share Purchase
Agreement in the form attached hereto as Annex F shall be consummated
simultaneously with the Closing;
(b) any applicable waiting period under the HSR Act shall have expired
or been terminated;
(c) no court, arbitrator or Governmental Authority shall have issued
any injunction, order or decree still in effect, and there shall not be in
effect any statute, rule or regulation, restraining or prohibiting the
consummation of the Transactions or the effective operation of any material
portion of the business of the Company and its Subsidiaries after the
Closing Date;
(d) all actions by or in respect of, or filings with, any Governmental
Authority required to permit the consummation of the Transactions, shall
have been taken, made or obtained, except where the failure to take, make
or obtain such actions or filings, individually or in the aggregate with
all other such failures, would not be reasonably expected to have a
Material Adverse Effect; and
(e) all licenses, permits, qualifications, consents, waivers,
approvals, authorizations or orders required to have been obtained or made
by the Company in connection with the Transactions shall have been obtained
and made by the Company, except where the failure to receive such licenses,
permits, qualifications, consents, waivers, approvals, authorizations or
orders, individually or in the aggregate with all other such failures,
would not be reasonably expected to have a Material Adverse Effect (either
before or after giving effect to the Transactions); and
(f) the Company and Heartland shall have entered into a monitoring fee
agreement (the "New Monitoring Agreement") in form and substance
satisfactory to each of them providing for the payment to Heartland of an
annual monitoring fee of $4.0 million.
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SECTION 7.02. Conditions to the Obligations of the New Investor. The
obligations of the New Investor to consummate the Transactions are subject to
the satisfaction of the following further conditions:
(a) (i) the Company shall have performed in all material respects all
of its obligations hereunder required to be performed by it at or prior to
the Closing Date, (ii) the representations and warranties of the Company
contained in this Agreement and in any certificate or other writing
delivered by the Company pursuant hereto shall be true without regard to
any materiality qualifications, other than those failures to be true that
would not have, individually or in the aggregate, a Material Adverse
Effect, in each case at and as of the Closing Date (except as to such
representations made as of a particular date, which shall be true as of
such date) as if made at and as of such time and (iii) the New Investor
shall have received a certificate signed by a duly authorized officer of
the Company to the foregoing effect;
(b) the Company, the Sellers and the New Investor (and any of its
assigns pursuant to Section 9.05) shall have entered into the New
Registration Rights Agreement and the New Master Shareholder Agreement, and
such agreements shall be in full force and effect;
(c) the Board of Directors shall consist of nine individuals, at least
four of whom are designees of the New Investor;
(d) each of the Existing Investor Agreements shall have been canceled
pursuant to documentation in form and substance satisfactory to the New
Investor;
(e) each of the Indenture Parties shall have entered into a second
supplemental indenture to the Indenture providing for the Indenture
Amendments. By the terms of such second supplemental Indenture, the
Indenture Amendments shall become effective without any further action by
any person upon the Closing Date. The Indenture Amendments shall have been
irrevocably consented to by the requisite Holders (as defined under the
Indenture) of Notes for the second supplemental indenture containing the
Indenture Amendments to be entered into by the Indenture Parties and to
become effective in accordance with their terms under Article IX of the
Indenture. The form and substance of the second supplemental indenture,
insofar as the Indenture Amendments and any other changes requested by the
Holders are concerned, shall be in form and substance satisfactory to the
New Investor. The Consent Costs incurred in connection with obtaining the
Indenture Amendments shall be reasonably acceptable to the New Investor
based upon the estimates of the likely cost provided to the New Investor
prior to the date hereof by the financial advisors to the New Investor and
the financial advisors to the Sellers and the Company. It is a further
condition to
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the obligations of the New Investor to consummate the Transactions that the
Board of Directors shall have approved the form and substance of such
second supplemental indenture and the related Consent Costs, as arranged by
the New Investor; otherwise the New Investor may terminate this Agreement;
(f) each of the Credit Agreement Parties shall have entered into an
amendment and waiver to the Credit Agreement, in form and substance
reasonably satisfactory to the New Investor, providing for the Bank
Amendments. By the terms of such amendment and waiver, the Bank Amendments
shall become effective without any further action by any person upon the
Closing Date. The amendment and waiver shall have been irrevocably
consented to by the requisite lenders under the Credit Agreement for it to
become effective in accordance with its terms and the provisions of the
Credit Agreement. The Consent Costs incurred in connection with obtaining
the Bank Amendments shall be reasonably acceptable to the New Investor
based upon the estimates of the likely cost provided to the New Investor
prior to the date hereof by the financial advisors to the New Investor and
the financial advisors to the Sellers and the Company. In addition, the New
Investor shall be satisfied that the effect of the Bank Amendments will be
to modify the documentation relating to the Master Lease Agreement and the
Receivables Agreement and related documentation, including, without
limitation, the receivables transfer agreement, to ensure that no default
or, in the case of the receivables financing, no "Termination Event" or
"Potential Termination Event" will arise as a result of the transactions
contemplated hereby and by the Secondary Share Purchase Agreement. It is a
further condition to the obligations of the New Investor to consummate the
Transactions that the Board of Directors shall have approved the form and
substance of the proposed Bank Amendments and the related Consent Costs, as
arranged by the New Investor; otherwise the New Investor may terminate this
Agreement;
(g) the Certificate of Designations governing the Convertible
Preferred Stock shall have been filed and become effective with the
Secretary of State of the State of Delaware;
(h) the Company shall have paid to Heartland a transaction fee in cash
equal to $12.0 million (the "Transaction Fee"); and
(i) there shall not have occurred and be continuing any Material
Adverse Effect.
SECTION 7.03. Conditions to the Obligations of the Company. The obligations
of the Company to consummate the Transactions are subject to the satisfaction of
the following further conditions:
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(a) (i) the New Investor shall have performed in all material respects
all of its obligations hereunder required to be performed by it at or prior
to the Closing Date, (ii) the representations and warranties of the New
Investor contained in this Agreement and in any certificate or other
writing delivered by the New Investor pursuant hereto that are qualified by
materiality or material adverse effect shall be true, and all other such
representations or warranties of the New Investor shall be true in all
material respects, in each case at and as of the Closing Date as if made at
and as of such time and (iii) the Company shall have received a certificate
signed by a duly authorized manager of the New Investor to the foregoing
effect;
(b) each of the Indenture Parties shall have entered into a second
supplemental indenture to the Indenture providing for the Indenture
Amendments. By the terms of such second supplemental Indenture, the
Indenture Amendments shall become effective without any further action by
any person upon the Closing Date. The Indenture Amendments shall have been
irrevocably consented to by the requisite Holders (as defined under the
Indenture) of Notes for the second supplemental indenture containing the
Indenture Amendments to be entered into by the Indenture Parties and to
become effective in accordance with their terms under Article IX of the
Indenture. The form and substance of such second supplemental indenture and
the related Consent Costs, as arranged by the New Investor shall be
satisfactory to the Board of Directors;
(c) each of the Credit Agreement Parties shall have entered into an
amendment and waiver to the Credit Agreement, in form and substance
reasonably satisfactory to the New Investor, providing for the Bank
Amendments. By the terms of such amendment and waiver, the Bank Amendments
shall become effective upon the Closing Date. The amendment and waiver
shall have been irrevocably consented to by the requisite lenders under the
Credit Agreement for it to become effective in accordance with its terms
and the provisions of the Credit Agreement. In addition, the Company shall
be satisfied that the effect of the Bank Amendments will be to modify the
documentation relating to the Master Lease Agreement and the Receivables
Agreement and related documentation, including, without limitation, the
receivables transfer agreement, to ensure that no default or, in the case
of the receivables financing, no "Termination Event" or "Potential
Termination Event" will arise as a result of the transactions contemplated
hereby and by the Secondary Share Purchase Agreement. The form and
substance of the proposed Bank Amendments and the related Consent Costs, as
arranged by the New Investor, shall be satisfactory to the Board of
Directors; and
(d) the Company, the Sellers and the New Investor (and any of its
assigns pursuant to Section 9.05) shall have entered into the New Master
Shareholder Agree-
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ment and the Profit Participation Agreement, and such agreements shall be
in full force and effect.
ARTICLE 8
TERMINATION
SECTION 8.01. Termination. This Agreement may be terminated and the
Transactions may be abandoned at any time prior to the Closing Date:
(a) by mutual written agreement of the Company and the New Investor;
(b) by either the Company or the New Investor, if:
(i) the Closing has not occurred on or before May 31, 2001 or if
the Closing has occurred, the Charter Amendment Effective Date has not
occurred on or before August 31, 2001 (as applicable, the "End Date"),
provided that the right to terminate this Agreement pursuant to this
Section 8.01(b)(i) shall not be available to any party whose breach of
any provision of this Agreement results in the failure of the
Transactions to be consummated by such time; or
(ii) there shall be any law or regulation that makes consummation
of the Transactions illegal or otherwise prohibited or any judgment,
injunction, order or decree of any Governmental Authority having
competent jurisdiction enjoining the Company or the New Investor from
consummating the Transactions is entered and such judgment,
injunction, order or decree shall have become final and nonappealable;
(c) by the New Investor, (i) if a breach of or failure to perform any
representation, warranty, covenant or agreement on the part of the Company
set forth in this Agreement shall have occurred that would cause any
condition set forth in clauses (a), (b) and (d) in Section 7.02 not to be
satisfied, and such condition is incapable of being satisfied by the End
Date or (ii) as provided in the last sentence of clauses (e) and (f) of
Section 7.02;
(d) by either the Company or the New Investor, if the Secondary Share
Purchase Agreement has been terminated;
(e) by the Company, if a breach of or failure to perform any
representation, warranty, covenant or agreement on the part of the New
Investor set forth in this
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Agreement shall have occurred that would cause the condition set forth in
Section 7.03(a) not to be satisfied, and such condition is incapable of
being satisfied by the End Date; or
(f) by the Company, if the Board of Directors or a committee thereof,
at any time shall have concluded in good faith (after receiving and
considering the advice of its legal and financial advisors and after taking
into account all legal, financial, regulatory and other aspects of an
Acquisition Proposal and the person making the Acquisition Proposal) that,
if consummated, the Acquisition Proposal would result in a transaction more
favorable to the stockholders of the Company than the transaction
contemplated by this Agreement.
The party desiring to terminate this Agreement pursuant to this Section
8.01 (other than pursuant to Section 8.01(a)) shall give notice of such
termination to the other party.
SECTION 8.02. Effect of Termination. (a) If this Agreement is terminated
pursuant to Section 8.01, this Agreement shall become void and of no effect with
no liability on the part of any party (or any stockholder, member, manager,
director, officer, employee, agent, consultant or representative of such party)
to the other party hereto; provided that, if such termination shall result from
the willful (i) failure of either party to fulfill a condition to the
performance of the obligations of the other party or (ii) failure of either
party to perform a covenant hereof, such party shall be fully liable for any and
all liabilities and damages incurred or suffered by the other party as a result
of such failure. The provisions of the last sentence of Section 5.02 and
Sections 6.05, 9.04, 9.06, 9.07, 9.08 and this Section 8.02 shall survive any
termination hereof pursuant to Section 8.01.
(b) If (i) either (A) this Agreement is terminated pursuant to Section
8.01(f) or (B) there has been a bona fide Acquisition Proposal and this
Agreement is terminated pursuant to Section 8.01(b)(i) and (ii) the Company
consummates or enters into a definitive agreement to consummate a transaction or
series of related or unrelated transactions (other than an underwritten public
offering) on or prior to the first anniversary of the termination (x) pursuant
to which the Company issues for cash Common Stock in amount equal to or greater
than 10% of the Common Stock outstanding immediately prior to such transaction
or transactions, or (y) described in the definition of Acquisition Proposal (but
substituting 50% for the percentages set forth therein), then the Company shall
pay to the New Investor an amount in cash equal to 2.5% of the value of the
shares sold or 2.5% of the value of the acquisition transaction, as applicable
(not to exceed $3.125 million in the case of an acquisition).
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ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile transmission) and
shall be given,
if to Heartland, to:
Heartland Industrial Partners, L.P.
00 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxx
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attn: W. Xxxxxx Xxxxx, Esq.
Xxxxxxxx X. Xxxxxxxxx, Esq.
if to the Company, to:
Xxxxxxx & Xxxxxx Corporation
0000 Xxx Xxxx Xxxxx
Xxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxx, CEO
and
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx, General Counsel
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with copies to:
Morris, Nichols, Arsht & Xxxxxxx
0000 X. Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
Xxxxxx Xxxxxxx & Xxxx LLP
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and other communications shall be deemed received on the date of
receipt by the recipient thereof if received prior to 5:00 p.m., and such day is
a Business Day. Otherwise, any such notice, request or communication shall be
deemed not to have been received until the next succeeding Business Day.
SECTION 9.02. Survival of Representations and Warranties. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Closing Date, except for the agreements set forth in the last sentence of
Section 5.02 and Sections 5.01, 5.03(a), 5.06, 5.07, 6.02, 6.05, 6.06, 9.04,
9.06, 9.07 and 9.08.
SECTION 9.03. Amendments; No Waivers. (a) Any provision of this Agreement
may be amended or waived prior to the Closing Date if, but only if, such
amendment or waiver is in writing and is signed, in the case of an amendment, by
each party to this Agreement or, in the case of a waiver, by each party against
whom the waiver is to be effective, provided that, after the adoption of this
Agreement by the Company's shareholders and without their further approval, no
such amendment or waiver shall reduce the amount or change the kind of
consideration to be received in exchange for any shares of capital stock of the
Company.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or
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privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 9.04. Expenses. The Company will reimburse the New Investor for (a)
all of its costs and expenses incurred prior to the date hereof in connection
with the Transactions up to a maximum of $500,000, and (b) all of its costs and
expenses incurred on and after the date hereof in connection with the
Transactions (other than, in the case of either clause (a) or (b), internal
costs and expenses of the New Investor), unless in any case the Transactions do
not close solely due to a termination by the Company pursuant to Section
8.01(e), which costs and expenses shall be payable upon the earlier of the
Closing and the termination of this Agreement.
SECTION 9.05. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. No party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
consent of each other party hereto, except that the New Investor may assign its
rights under this Agreement without the consent of any other party so long as
(i) the New Investor is not relieved of its obligations hereunder, (ii) any
assignee of the New Investor makes the representations and warranties to the
Company in writing set forth in Article IV mutatis mutandis, and (iii) upon the
purchase of the Primary Shares at the Closing, Heartland and its affiliates will
beneficially own a majority of the shares of Common Stock (assuming conversion
of the Convertible Preferred Shares) to be purchased hereunder and under the
Secondary Share Purchase Agreement. Any assignment in violation of this
Agreement shall be null and void.
SECTION 9.06. Governing Law. The validity, construction and effect of this
Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of New York, without giving effect to the principles of
conflicts of law of such state.
SECTION 9.07. Jurisdiction. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the Transactions shall be brought in the United States
District Court for the Southern District of New York or any New York state court
sitting in New York City, and each of the parties hereby consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. Process in any such suit, action or proceeding
may be served on any party anywhere in the world, whether within or without the
ju-
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risdiction of any such court. Without limiting the foregoing, each party agrees
that service of process on such party as provided in Section 9.01 shall be
deemed effective service of process on such party.
SECTION 9.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS.
SECTION 9.09. Counterparts; Effectiveness; Third Parties. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
Except as provided in Section 6.06, no provision of this Agreement is intended
to confer any rights, benefits, remedies, obligations or liabilities hereunder
upon any Person other than the parties hereto and their respective successors
and assigns.
SECTION 9.10. Entire Agreement. This Agreement, the other Transaction
Documents and the Confidentiality Agreement constitute the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersede agreements and understandings, both oral and written, between the
parties with respect to the subject matter of this Agreement. Exhibits referred
to herein are incorporated by reference herein and shall constitute a part of
this Agreement.
SECTION 9.11. Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
SECTION 9.12. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated. Upon
such a determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner so that the Transactions be consummated as
originally contemplated to the fullest extent possible.
SECTION 9.13. Specific Performance. The parties hereto agree that
irreparable damage would occur if
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any provision of this Agreement were not performed in accordance with the terms
hereof and that the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement or to enforce specifically the performance of
the terms and provisions hereof in the United States District Court for the
Southern District of New York or any New York state court sitting in New York
City, in addition to any other remedy to which they are entitled at law or in
equity.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
XXXXXXX & XXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman and Chief Executive
Officer
HEARTLAND INDUSTRIAL PARTNERS, L.P.
By: Heartland Industrial Associates L.L.C.,
its general partner
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Member
S-1
Annex A
Terms of Non-Voting Convertible Preferred Stock
Number of Shares: 1,000,000 shares of Non-Voting Convertible
Preferred Stock, par value $0.01 per share, (the
"Convertible Preferred Shares") of Xxxxxxx &
Xxxxxx Corporation (the "Company").
Liquidation Preference: $0.01 per share.
Voting Rights: Non-voting.
Conversion: Each Convertible Preferred Share will be
convertible into 16.4 shares of Common Stock,
par value $0.01 per share (the "Common Stock"),
of the Company upon the occurrence of the Charter
Effective Amendment Date (as defined in this
Agreement).
Redemption: None.
Dividends: Non-cumulative participating dividend.
Anti-dilution Protection: Customary.
