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EXHIBIT 4.9
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PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
by and among
INTERNATIONAL WIRE HOLDING COMPANY,
INTERNATIONAL WIRE GROUP, INC.,
CHEMICAL EQUITY ASSOCIATES
and
HICKS, MUSE, XXXX & XXXXX EQUITY FUND II, L.P.
dated as of March 5, 1996
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TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is
attached but is inserted for convenience only.
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ARTICLE I
AUTHORIZATION;
PURCHASE AND SALE; CLOSING
1.01 Purchase and Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.02 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.03 Investors' Closing Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.04 Issuers' Closing Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.05 Restrictive Legend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.06 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE ISSUERS
2.01 Corporate Existence; Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.02 Corporate Power; Authorization; Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . . 5
2.03 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.04 Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.05 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.06 No Event of Non-Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.07 Federal Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.08 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.09 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.10 Delivery of Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.11 Representations and warranties Contained in Other Agreements . . . . . . . . . . . . . . . . . . . . 8
2.12 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.13 Disqualified Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.14 Offering of Purchased Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.15 Charter Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
3.01 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.02 Corporate Power; Authorization; Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . . 9
3.03 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.04 Purchase of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.05 Resale of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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ARTICLE IV
AFFIRMATIVE COVENANTS
4.01 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.02 Certificates; Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.03 Inspection of Property; Books and Records; Discussions . . . . . . . . . . . . . . . . . . . . . . . 12
4.04 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.05 Reservation and Authorization of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.06 Board observers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE V
REGISTRATION RIGHTS IN RESPECT OF EXCHANGE NOTES
5.01 Shelf Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.02 Registration Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.03 Holdback Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.04 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VI
GENERAL PROVISIONS
6.01 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.02 Survival of Representations, Warranties, Covenants and Agreements . . . . . . . . . . . . . . . . . 26
6.03 Amendment and Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.04 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.05 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.06 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.07 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.08 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.09 No Assignment; Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.11 Invalid Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.12 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.13 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.14 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SCHEDULES AND EXHIBITS
SCHEDULE I Investor Information
SCHEDULE II Capitalization of Holding and the Company
EXHIBIT A Form of Warrant
EXHIBIT B Certificate of Designation
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EXHIBIT C-1 Certificate of Incorporation of the Company
EXHIBIT C-2 Certificate of Incorporation of Holding
EXHIBIT D Form of Exchange Indenture
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PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
Preferred Stock and Warrant Purchase Agreement (this "Agreement") made
and entered into this 5th day of March, 1996, by and among International Wire
Holding Company, a corporation organized and existing under the laws of the
State of Delaware ("Holding"), International Wire Group, Inc., a corporation
organized and existing under the laws of the State of Delaware (the "Company"
and, together with Holding, the "Issuers"), Chemical Equity Associates ("CEA")
and Hicks, Muse, Xxxx & Xxxxx Equity Fund II, L.P. ("HMTF") and, together with
CEA, the "Investors"). Certain capitalized terms used in this Agreement are
defined in Section 7.01 and in the Certificate of Designation attached hereto
as Exhibit B.
RECITALS
WHEREAS, the Company proposes to acquire all of the capital stock of
Hoosier Wire, Inc., and the Company, through a wholly-owned subsidiary,
proposes to acquire all of the assets of Dekko Automotive Wire, Inc.,
Silicones, Inc. and Albion Wire, Inc., and, in order to provide a portion of
the financing for the consummation of such acquisitions, the Company and
Holding propose to enter into the transactions contemplated by this Agreement;
WHEREAS, the Investors desire to purchase an aggregate of (i) 400,000
shares of the Company's Series A Senior Cumulative Exchangeable Redeemable
Preferred Stock, par value $0.01 per share (the "Series A Preferred Stock"),
and (ii) warrants of Holding in the form attached hereto as Exhibit A entitling
the holder or holders thereof to purchase, on certain terms and conditions, an
aggregate of 7,126,316 shares of Holding's Common Stock at a purchase price of
$0.01 per share, subject to adjustment as provided therein (the "Warrants" and,
together with the Series A Preferred Stock, the "Purchased Securities"), all on
the terms and subject to the conditions set forth in this Agreement;
WHEREAS, the Series A Preferred Stock shall, on the terms and subject
to the conditions set forth in this Agreement and in the Certificate of
Designation, be exchangeable (in whole but not in part) by the Company for the
Exchange Notes to be issued pursuant to the Exchange Indenture; and
WHEREAS, the Company and Holding desire to issue and sell the
Purchased Securities to the Investors, on the terms and subject to the
conditions set forth in this Agreement.
NOW, THEREFORE, for and in consideration of the mutual
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereto agree as follows:
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ARTICLE I
AUTHORIZATION;
PURCHASE AND SALE; CLOSING
1.01 Purchase and Sale; Purchase Price. On the basis of the
representations, warranties, covenants and agreements contained in this
Agreement, (i) the Company agrees to sell to the Investors, and the Investors
severally agree to purchase from the Company, an aggregate of 400,000 shares of
the Company's Series A Preferred Stock and (ii) Holding agrees to sell to the
Investors, and the Investors severally agree to purchase from Holding, Warrants
to purchase an aggregate of 7,126,316 shares of Holding's Common Stock (subject
to adjustment). Shares of the Series A Preferred Stock and the Warrants shall
be issued and sold to the Investors in units (the "Units"), each Unit
consisting of 1,000 shares of Series A Preferred Stock and Warrants to purchase
17,815.79 shares of Holding's Common Stock. The purchase price for each Unit
shall be $250,000, for an aggregate purchase price of $10,000,000 (the
"Purchase Price"), payable in immediately available funds at the Closing in the
manner provided in Section 1.02. Each Investor will purchase the number of
Units set forth opposite the name of such Investor on Schedule I hereto.
1.02 Closing. The closing of the purchase and sale of the Units
under this Agreement (the "Closing") will take place at the offices of Xxxxxxx
Xxxxxxxx & Xxxxxxxx, 425 Lexington Avenue, New York, New York, or at such other
place as the Issuers and the Investors mutually agree, at 10:00 A.M., local
time, on March 5, 1996, or on such later Business Day on or prior to March 31,
1996 as the Issuers and the Investors mutually agree (the "Closing Date"). At
the Closing, each Investor will deliver to the Company the portion of the
Purchase Price set forth opposite such Investor's name on Schedule I hereto by
wire or interbank transfer in immediately available funds to an account
designated in writing by the Company, against delivery (i) by the Company to
such Investor of one or more (as designated by such Investor) duly executed
stock certificates evidencing the aggregate number of shares of Series A
Preferred Stock to be purchased by such Investor (as set forth on Schedule I
hereto) and (ii) by Holding to such Investor of duly executed warrant
certificates, in at least such numbers as may be required to reflect the
various exercise dates and conditions thereof specified in Section 5.01 and in
such additional numbers as may be requested by such Investor, evidencing
Warrants to purchase the aggregate number of shares of Common Stock set forth
opposite such Investors name on Schedule I hereto, each such certificate to be
dated the Closing Date and registered in the name of the Investor purchasing
the Purchased Securities evidenced thereby.
1.03 Investors' Closing Conditions. The obligations of each
Investor to purchase and pay for the Units at the Closing
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is subject to the satisfaction (as of the Closing) of the following conditions:
(a) Representations True; No Event of Non-Compliance. All
representations and warranties of the Issuers made in Article II or
otherwise under or pursuant to this Agreement shall (except as
affected by the transactions contemplated hereby) be true and correct
as though made on the Closing Date; and no Event of Non-Compliance
shall have occurred and be continuing.
(b) Consummation of Related Transactions.
(i) The Other Agreements shall have been duly
executed and delivered by the parties thereto and shall be in
full force and effect, and no material term or condition
thereof shall have been amended, modified, supplemented or
waived without the prior written consent of such Investor. The
Company shall have delivered to such Investor true and correct
copies of each of the Other Agreements as in effect on the
Closing Date (certified by the Company to be such).
(ii) Such Investor shall have received (x) a true
and complete copy of each certificate, opinion, agreement or
other writing delivered to any party to the Other Agreements
(including any solvency letters or analyses) and (y) the
opinions of counsel required to be delivered pursuant to the
Other Agreements, addressed to the Investors (or accompanied
by an appropriate reliance letter addressed to the Investors).
(iii) Concurrently with or prior to the Investors'
purchase of the Units, the transactions contemplated by the
Other Agreements shall have been consummated.
(c) Compliance Certificate. Each Issuer shall have
delivered to such Investor a certificate of a Responsible Officer of
such Issuer, dated the Closing Date, certifying to the effect set
forth in Sections 1.03(a) and (b)(iii).
(d) Instruments and Proceedings to be Satisfactory. All
corporate and other proceedings taken or to be taken in connection
with the transactions contemplated by this Agreement and all documents
incident thereto shall be satisfactory in form and substance to such
Investor and CEA's special counsel, and such Investor and CEA's
special counsel shall have received all such counterpart originals or
certified or other copies of such documents as they may reasonably
request.
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(e) Certificate of Designation. The Issuer shall have
adopted the Certificate of Designation and filed the Certificate of
Designation with the Secretary of State of the State of Delaware in
accordance with the applicable provisions of the Delaware General
Corporation Law (the "DGCL").
(f) Opinion of the Issuers' Counsel. Such Investor shall
have received from Weil, Gotshal & Xxxxxx, counsel for the Issuers, an
opinion, in connection with the transactions contemplated by this
Agreement, dated the Closing Date, in form satisfactory to such
Investor and CEA's special counsel, and as to such matters as such
Investor may reasonably request.
(g) Legality of Investment. There shall not be in effect
any Requirement of Law restraining, enjoining or otherwise prohibiting
or making illegal to consummation of the transactions contemplated by
this Agreement.
(h) Other Investor. The other Investor shall purchase and
pay for the Units to be purchased by such Investor hereunder.
(i) Administrative Fee. The Company shall have paid to
each of the Investors on the Closing Date an administrative fee of
$75,000, such fee to be paid in immediately available funds to an
account designated by each Investor.
1.04 Issuers' Closing Conditions. The obligations of each Issuer to
sell the Purchased Securities to be sold by such Issuer at the Closing is
subject to the satisfaction (as of the Closing) of the following conditions:
(a) Consummation of Other Transactions. Concurrently with
or prior to the Investors' purchase of the Units, the transactions
contemplated by the Other Agreements shall have been consummated.
(b) Legality of Investment. There shall not be in effect
any Requirement of Law restraining, enjoining or otherwise prohibiting
or making illegal to consummation of the transactions contemplated by
this Agreement.
1.05 Restrictive Legend. In addition to any legend required by the
DGCL, each certificate evidencing the Series A Preferred Stock and the warrants
issued at the Closing will bear, and each certificate representing a Restricted
Security will bear, a legend in the following terms:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933,
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AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND ACCORDINGLY, SUCH
SECURITIES MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
EXCEPT IN COMPLIANCE WITH THE REGISTRATION OR QUALIFICATION PROVISIONS
OF APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR APPLICABLE
EXEMPTIONS THEREFROM."
The holder of certificates representing Restricted Securities bearing the
above-referenced legend shall be entitled to receive certificates not bearing
such legend in connection with a sale pursuant to a registration statement that
has been declared effective by the SEC under the Securities Act or, in
connection with a sale exempt from the registration requirements of the
Securities Act and applicable state securities laws or otherwise, upon
furnishing the applicable Issuer with a reasonably satisfactory opinion of
counsel to the effect that such legend may be removed under the Securities Act
and applicable state securities laws.
1.06 Further Assurances. Following the Closing, each party hereto
will execute such further documents and instruments and take such further
actions as may reasonably be requested by one or more of the others to
consummate the purchase of the Units and to effect the other purposes of this
Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE ISSUERS
To induce the Investors to enter into this Agreement and to purchase
the Units, the Issuers hereby represent and warrant to each Investor that:
2.01 Corporate Existence; Compliance with Law. Holding and each of
its Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the corporate
power and authority, and the legal right, to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which
it is currently engaged, (c) is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, except to the extent that the failure to so qualify could not,
in the aggregate, reasonably be expected to have a Material Adverse Effect and
(d) is in compliance with all Requirements of Law except to the extent that the
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Affect.
2.02 Corporate Power; Authorization; Enforceable Obligations. Each
Issuer has the corporate power and authority, and the legal right, to make,
deliver and perform each Investment
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Document to which it is a party and the Loan Documents and Acquisition
Documents to which it is a party and has taken all necessary corporate action
to authorize the execution, delivery and performance of each Investment
Document to which it is a party and the Loan Documents and Acquisition
Documents to which it is a party. No material consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the execution,
delivery, performance, validity or enforceability of the Investment Documents,
the Loan Documents or the Acquisition Documents to which either Issuer is a
party, except for (a) those set forth on Schedule 5.4 to the Senior Credit
Agreement, each of which has been made or taken and is in full force and effect
and (b) the filing of the Certificate of Designation as specified in Section
1.03(e) (which filing will have been made on or prior to the Closing Date).
This Agreement, each Warrant, the Certificate of Designation and each of the
Loan Documents and the Acquisition Documents has been duly executed and
delivered on behalf of the Issuer party thereto. This Agreement, each Warrant,
the Certificate of Designation and each of the Loan Documents and each of the
Acquisition Documents constitutes a legal, valid and binding obligation of the
Issuer party thereto enforceable against such Issuer in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors', rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
2.03 Capitalization. (a) on the date hereof, the total number of
shares of capital stock which the Company has authority to issue is 2,000,000
shares, consisting of (i) 1,000,000 shares of preferred stock, par value $.01
per share, of which 400,000 shares have been designated Series A Preferred
Stock, par value $0.01 per share; and (ii) 1,000,000 shares of common stock,
par value $.01 per share, of which 1,000 have been issued and are outstanding.
Part A of Schedule II hereto correctly sets forth the Company's capital stock
and equity securities owned of record and the names of the owners of record on
the date hereof. Upon the Closing, the Company shall not have outstanding any
subscriptions, options, warrants, rights (including "phantom" stock rights),
preemptive rights or other contracts, commitments, understandings or
arrangements, including any right of conversion or exchange under any
outstanding security, instrument or agreement (together, "Options"), obligating
the Company or any of its Subsidiaries to issue or sell any shares of capital
stock of the Company or to grant, extend or enter into any Option with respect
thereto.
(b) on the date hereof, the total number of shares of capital
stock which Holding has authority to issue is 205,000,000 shares, consisting of
(i) 10,000,000 shares of preferred stock, par value $.01 per share; (ii)
175,000,000 shares of common
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stock, par value $.01 per share (the "Common Stock"); and (iii) 20,000,000
shares of class A common stock, par value $.01 per share (the "Class A Common
Stock"). Part B of Schedule II hereto correctly sets forth Holding's capital
stock and equity securities owned of record and the names of the owners of
record securities date hereof. Upon the issuance of the Warrants pursuant to
this agreement, Holding shall not have outstanding any options obligating
Holding or any of its Subsidiaries to issue or sell any shares of capital stock
of Holding or to grant, extend or enter into any option with respect thereto,
other than the Warrants to be issued pursuant to this Agreement, the Warrants
to purchase 2,000,000 shares of Common Stock to be issued pursuant to the
Acquisition Agreements, the Class A Common Stock, options to purchase up to
3,400,000 shares of Common Stock issued to management of the Company and
4,187,629 options to purchase Common Stock to be issued to Xxxxx & Partners,
Inc. or its employees upon Hicks, Muse, Xxxx & Xxxxx Equity Fund, L.P.
achieving a 35% internal rate of return on its invested capital.
2.04 Securities. (a) Upon consummation of the Closing, all shares
of Series A Preferred Stock to be issued and sold pursuant to this Agreement
will have been duly and validly issued and will be fully paid and nonassessable
and free and clear of any lien, charge or other encumbrance or claim, and the
issuance thereof will not be subject to any preemptive or similar rights.
(b) Upon consummation of the Closing, 7,126,316 shares of Common
Stock issuable upon the exercise of the Warrants will have been duly authorized
and reserved for issuance upon exercise of the Warrants and, when issued upon
such exercise and payment of the exercise price thereof in accordance with the
terms of the Warrants, will have been duly and validly issued and will be fully
paid and nonassessable and free and clear of any lien, charge or other
encumbrance or claim, and the issuance of such (Common Stock will not be
subject to any preemptive or similar rights.
(c) The Exchange Notes, when issued in accordance with this
Agreement and the Certificate of Designation, will be legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms except as such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors', rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
2.05 No Legal Bar. The execution, delivery and performance of the
Investment Documents, the Loan Documents and the Acquisition Documents, and the
use of the proceeds from the Purchase of the Units hereunder, will not violate
any Requirement of Law or Contractual Obligation of either Issuer or of any of
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their Subsidiaries which could reasonably be expected to have a Material
Adverse Effect.
2.06 No Event of Non-Compliance. Neither of the Issuers nor any of
their respective Subsidiaries is in default under or with respect to any of its
Contractual Obligations in any respect which could reasonably be expected to
have a Material Adverse Effect. No Event of Non-Compliance has occurred and is
continuing.
2.07 Federal Regulations. No part of the proceeds of the purchase
of the Units hereunder will be used for "purchasing" or "carrying" any "margin
stock" within the respective meanings of each of the quoted terms under
Regulation U of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect or for any purpose which violates the
provisions of the Regulations of such Board of Governors.
2.08 Use of Proceeds. The proceeds of the purchase of the Units
hereunder shall be used to finance a portion of the Acquisition and the
transaction costs associated therewith.
2.09 Financial Statements. Each Investor has received a complete
copy of each financial statement specified in Section 5.1 of the Senior Credit
Agreement.
2.10 Delivery of Other Agreements. Each Investor has received a
complete copy of each of the Acquisition Documents and each of the Loan
Documents (including all exhibits, schedules and disclosure letters referred to
therein or delivered pursuant thereto, if any) and all amendments thereto,
waivers relating thereto and other side letters or agreements affecting the
terms thereof.
2.11 Representations and Warranties Contained in Other Agreements.
Each of the Acquisition Documents and each of the Loan Documents has been duly
executed and delivered by the Issuers and, to the best knowledge of the
Issuers, all other parties thereto and is in full force and effect. As of the
date hereof, the representations and warranties of Holding and the Company and,
to the best knowledge of the Company, each of other parties thereto,
respectively, in the Loan Documents and in the Acquisition Documents are true
and correct in all material respects.
2.12 Disclosure. No information, financial statement, report,
certificate or other document prepared or furnished by or on behalf of either
Issuer to any Investor in connection with this Agreement, any other Investment
Document, any of the Loan Documents or any of the Acquisition Documents (but
excluding all projections and pro forma financial statements which shall have
been prepared in good faith and based upon reasonable assumptions) contains any
untrue statement of a material fact or
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omits to state any material fact necessary to make the statements herein or
therein not misleading. As of the Closing Date, there is no fact known to
either Issuer (other than general economic conditions, which conditions are
commonly known and affect businesses generally) which has, or which could
reasonably be expected to have, in the reasonable judgment of such Issuer, a
Material Adverse Effect.
2.13 Disqualified Equity. The Series A Preferred Stock does not
constitute "Disqualified Equity" for purposes of the Senior Subordinated Notes.
2.14 Offering of Purchased Securities. Neither the Issuers,
directly or indirectly, nor any agent on their behalf has Offered the Purchased
Securities or any similar securities or has solicited an offer to acquire the
Purchased Securities or any similar securities from any Person so as to require
registration of the issuance and sale of the Purchased Securities sold to the
Investors under the circumstances contemplated by this Agreement under the
provisions of Section 5 of the Securities Act. Assuming the representations and
warranties of the Investors in Article III are true and correct, the sale of
the Purchased Securities under this Agreement is exempt from the registration
and prospectus delivery requirements of the Securities Act. No form of general
solicitation or general advertising was used by the issuers or their
representatives in connection with the offer or sale of the Purchased
Securities.
2.15 Charter Documents. Annexed hereto as Exhibits C-1 and C-2,
respectively, are true and complete copies of the certificates of incorporation
and By-laws of the Company and Holding as amended and in effect on the date
hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each of the Investors severally, but not jointly, hereby represents
and warrants to the Issuers as follows:
3.01 Organization. Such Investor is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization.
3.02 Corporate Power; Authorization; Enforceable Obligations. Such
Investor has the corporate power and authority, and the legal right, to make,
deliver and perform this Agreement and has taken all necessary corporate action
to authorize the execution, delivery and performance of this Agreement. This
Agreement has been duly executed and delivered on behalf of such Investor, and
constitutes a legal, valid and binding obligation of such Investor enforceable
against such
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Investor in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors, rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
3.03 No Legal Bar. The execution, delivery and performance of the
this Agreement will not violate any Requirement of Law or Contractual
Obligation of such Investor.
3.04 Purchase of Securities. Such Investor is an "accredited
investor" within the meaning of Rule 501 under the Securities Act and is
purchasing the Purchased Securities for its own account and not with a view to
the distribution thereof, provided that the disposition of such Investor's
property shall at all times be within its control.
3.05 Resale of Securities. Such Investor understands that the
Purchased Securities have not been registered under the Securities Act and may
be resold only if registered pursuant to the provisions of the Securities Act
or if an exemption from registration is available and that, except as expressly
provided in this Agreement, the Warrants or the Certificate of Designation,
neither Issuer is required to register the Purchased Securities.
ARTICLE IV
AFFIRMATIVE COVENANTS
Each Issuer agrees that, for so long as the Purchased Securities
issued by such Issuer are outstanding, for the benefit of the Investors and any
other Applicable Securityholder, such Issuer shall, and shall cause its
Subsidiaries to:
4.01 Financial Statements. Furnish to each Applicable
Securityholder:
(a) as soon as available, but in any event within 110
days after the end of each fiscal year of such Issuer, a copy of the
consolidated balance sheet of such Issuer and its consolidated
Subsidiaries as at the end of such year and the consolidated
statements of income and retained earnings and consolidated statement
of cash flows for such year, setting forth in each case in comparative
form the figures for the previous year except in the case of the
financial statements for the year ending December 31, 1995, reported
on without a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit, by independent
certified public accountants of nationally recognized standing;
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(b) as soon as available, but in any event not later than
45 days after the end of each of the first three quarterly periods of
each fiscal year of such Issuer, the unaudited consolidating and
consolidated balance sheet of such Issuer and its consolidated
Subsidiaries as at the end of such quarter and the related unaudited
consolidating and consolidated statements of income and retained
earnings and consolidated statement of cash flows of such Issuer and
its consolidated Subsidiaries for such quarter and the portion of the
fiscal year through the end of such quarter, setting forth in each
case in comparative form (i) the figures for the previous year
commencing with the quarter ending September 30, 1996 and (ii) in the
case of the Company, commencing with the quarter ending September 30,
1995, the figures set forth in the relevant budgets required to be
delivered in accordance with Section 4.02(b), certified by a
Responsible Officer as being fairly stated in all material respects
when considered in relation to the consolidated financial statements
of such Issuer and its consolidated Subsidiaries (subject to normal
year-end audit adjustments); and
(c) in the case of the Company, as soon as available, but
in any event not later than 45 days after the end of each month (other
than a month the last day of which coincides with the last day of any
fiscal quarter) of each fiscal year of the Company, the consolidated
balance sheet of the Company and its consolidated Subsidiaries as at
the end of such month and the related unaudited consolidated
statements of income and retained earnings and consolidated statement
of cash flows of the Company and its consolidated Subsidiaries for
such month and the portion of the fiscal year through the end of such
month, setting forth in each case in comparative form (i) the figures
for the previous year commencing with the 1996 fiscal year and (ii)
commencing with the month ending July 31, 1995, the figures set forth
in the relevant budgets required to be delivered in accordance with
Section 4.02(b);
all such financial statements shall fairly present in all.material respects the
consolidated financial position or the consolidating financial position, as the
case may be, of the applicable Issuer and its Subsidiaries as of such date and
shall be prepared in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein and with prior periods
(except as approved by such accountants or officer, as the case may be, and
disclosed therein).
4.02 Certificates; Other Information. Furnish to each Applicable
Securityholder:
(a) concurrently with the delivery of the financial
statements referred to in Sections 4.01(a) and (b), a
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certificate of a Responsible Officer of such Issuer (i) stating that,
to the best of such Responsible Officer's knowledge, such Issuer
during such period has observed or performed all of its covenants and
other agreements, and satisfied every condition, contained in this
Agreement and in the other Investment Documents to which it is a party
to be observed, performed or satisfied by it, in all material
respects, and that such Officer has obtained no knowledge of any Event
of Non-Compliance except as specified in such certificate and (ii)
stating that all such financial statements fairly present in all
material respects (subject, in the case of interim statements, to
normal year-end audit adjustments) the consolidated financial position
or the consolidating financial position, as the case may be, of the
applicable Issuer and its Subsidiaries as of such date and have been
prepared in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein (except as
disclosed therein);
(b) in the case of the Company, as soon as available but
not later than 45 days subsequent to the end of each fiscal year of
the Company (or, in the case of the 1996 fiscal year, as soon as
available but in no event later than 90 days from the Closing Date), a
copy of the projections by the Company of the operating budget and
cash flow budget of the Company and its Subsidiaries for the
succeeding fiscal year (showing the operating budget and cash flow
budget for each month within such fiscal year), such projections to be
accompanied by a certificate of a Responsible Officer of the Company
to the effect that such projections have been prepared in good faith
and based upon reasonable assumptions;
(c) within five days after the same are filed, copies of
all financial statements and reports which such Issuer or any of its
Subsidiaries may make to, or file with, the SEC or any successor or
analogous Governmental Authority; and
(d) promptly, such additional financial and other
information as any Applicable Securityholder may from time to time
reasonably request.
4.03 Inspection of Property; Books and Records; Discussions. Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of any Applicable Securityholder to visit and inspect any of
its properties and examine and make abstracts from any of its books and records
upon reasonable advance notice at any reasonable time on any Business Day and
as often as may reasonably be desired and to discuss the business, operations,
properties and financial and other condition of such Issuer and
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its Subsidiaries with officers and employees of such Issuer and its
Subsidiaries and with its independent certified public accountants; provided
that such Applicable Securityholder shall notify such Issuer prior to any
contact with such accountants and give such Issuer the opportunity to
participate in such discussions.
4.04 Notices. Promptly give to each Applicable securityholder:
(a) notice of the occurrence of any Event of
NonCompliance; and
(b) copies of any notices provided by either Issuer to
the Lenders under the Senior Credit Agreement.
Each notice pursuant to this subsection shall be accompanied by a statement of
a Responsible Officer of the applicable Issuer setting forth details of the
occurrence referred to therein and stating what action Holdings or the Company
proposes to take with respect thereto.
4.05 Reservation and Authorization of Common Stock. (a) Holding
shall at all times reserve and keep available for issue upon the exercise or
conversion of Warrants such number of its authorized but unissued shares of
Common Stock as will be sufficient to permit the exercise in full of all
outstanding Warrants.
(b) Before taking any action which would result in an adjustment
in the number of shares of Common Stock comprising a stock unit (as defined in
the Warrants) or which would cause an adjustment reducing the Current Warrant
Price (as defined in the Warrants) per share of Common Stock below the then par
value, if any, of the shares of Common Stock issuable upon exercise of the
Warrants, Holding shall take any corporate action which is necessary in order
that Holding may validly and legally issue fully paid and nonassessable shares
of Common Stock free and clear of any liens upon the exercise of all the
Warrants immediately after the taking of such action.
(c) Before taking any action which would result in an adjustment
in the number of shares of Common Stock comprising a Stock Unit or in the
Current Warrant Price per share of Common Stock, the Issuer shall obtain all
such authorizations or exemptions thereof, or consents thereto, as may be
necessary from any public regulatory body or bodies having jurisdiction
thereof.
(d) Holding will list on each national securities exchange on
which any Common Stock may at any time be listed, subject to official notice of
issuance upon exercise of the Warrants, and will maintain such listing of, all
shares of Common
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Stock from time to time issuable upon the exercise of the Warrants.
4.06 Board Observers. For so long as CEA holds any shares of Series
A Preferred Stock, the Company shall afford CEA the opportunity to have one (1)
representative (an "Observer") attend (at CEA's sole cost and expense) as an
observer at (but not participate in or vote at) each meeting of the Board of
Directors. In addition, upon the occurrence of an Event of NonCompliance, CEA
shall be afforded the opportunity to appoint a second Observer to attend, at
its sole cost and expense (but not participate in or vote at) each meeting of
the Board of Directors. The Company shall give each Observer notice of all such
meetings at the same time and in the same manner as notice is given to members
of the Board of Directors. Each Observer shall be entitled to receive all
written materials and other information given to the directors of the Company
in connection with such meetings at the same time and in the same manner and
form such materials and information are given to the directors, and copies of
all minutes and all resolutions adopted by the Board of Directors (whether at
meetings, by written consent or otherwise) promptly after such adoption and (if
applicable) approval thereof (it being understood that such copies shall be
certified by the Secretary or Assistant Secretary of the Company).
ARTICLE V
REGISTRATION RIGHTS IN RESPECT OF EXCHANGE NOTES
5.01 Shelf Registration.
(a) Effective Registration. The Company shall, not later than
ninety (90) days following the Exchange Date, prepare and file with the SEC a
"shelf" registration statement with respect to the Registrable Securities on
any appropriate form pursuant to Rule 415 under the Securities Act and/or any
similar rule that may be adopted by the SEC (a "Shelf Registration"), and shall
use its best efforts to have such Shelf Registration declared effective within
one hundred eighty (180) days following the Exchange Date; provided, that the
Company shall not be required to effect a Shelf Registration of the Registrable
Securities if the Registrable Securities have been called for redemption
pursuant to the Indenture under which such Registrable Securities are issued.
The Company agrees to use its best efforts to keep such Shelf Registration
continuously effective for a period of three (3) years following the date on
which the Shelf Registration is declared effective or, if earlier, until all
Registrable Securities included therein have been sold or are no longer
outstanding. As used herein, "Registrable Securities" means the Exchange Notes,
provided that as to any particular Exchange Note, once issued such securities
shall cease to be
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Registrable Securities, and shall no longer be deemed outstanding for purposes
of the first sentence of this Section 5.01(a), when (i) a registration statement
with respect to the sale of such securities shall have become effective under
the Securities Act such securities shall have been disposed of in accordance
with such registration statement, (ii) they shall have been distributed to the
public pursuant to Rule 144 or have become eligible for sale pursuant to
paragraph (k) of Rule 144 or (iii) they shall have ceased to be outstanding.
(b) Supplements and Amendments. The Company shall supplement and
amend the Shelf Registration if (i) required by the rules, regulations or
instructions applicable to the registration form used for such Shelf
Registration, (ii) otherwise required by the SEC, (iii) requested by the
holders of, or any underwriter for, a majority of the Registrable Securities to
which such Shelf Registration relates or (iv) requested to do so by any holder
to the extent necessary to list such holder as a "Selling Securityholder" in
such registration statement, and the Company agrees to furnish to the holders
of the Registrable Securities copies of any such supplement or amendment prior
to its being used and/or filed with the SEC.
(c) Registration Expenses. The Company will pay all expenses
incident to the Company's performance of or compliance with its obligations
under this Article V to effect the registration of Registrable Securities,
including, without limitation, all registration, filing, securities exchange
listing and fees of any applicable stock exchange, all registration, filing,
qualification and other fees and expenses of complying with securities or blue
sky laws, all word processing, duplicating and printing expenses, messenger and
delivery expenses, and the fees and disbursements of counsel for the Company
and of its independent public accountants, including the expenses of any
special audits or "cold comfort" letters required by or incident to such
performance and compliance, but excluding underwriting discounts and
commissions, the fees and disbursements of counsel retained by the holders of
the Registrable Securities being registered and transfer taxes, if any, in
respect of Registrable Securities, which shall be borne by the sellers of the
Registrable Securities and which each such holder agrees, by acquisition of
such Registrable Securities, to bear.
(d) Selection of Underwriters and Counsel. The holders of a
majority of the principal amount of Registrable Securities to be sold in an
underwritten Public Offering (as defined below) shall have the right to select
the Managing Underwriter (as defined below); provided, however, that such
Managing Underwriter and its counsel must be reasonably satisfactory to the
Company. As used herein, "Managing underwriter" means, with respect to any
underwritten public
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offering of Exchange Notes (a "Public Offering"), the underwriter or
underwriters managing such Public Offering.
5.02 Registration Procedures. In connection with the Shelf
Registration, the Company shall use its best efforts to effect such
registration to permit the sale of such Registrable Securities in accordance
with the intended methods of distribution thereof, and pursuant thereto the
Company shall, as expeditiously as possible:
(a) furnish to the holders of Registrable Securities listed in the
Shelf Registration as Selling Security holders (the "Selling Securityholders")
copies of reasonably complete drafts of all such documents proposed to be filed
(including exhibits) with the SEC and consider in good faith comments with
respect to any such drafts made by the Selling Securityholders or their legal
counsel, and, without limiting the foregoing, each Selling Securityholder shall
have the opportunity to object to any information pertaining solely to such
Selling Securityholder that is contained therein and the Company will make the
corrections reasonably requested by such Selling Securityholder with respect to
such information prior to filing any such registration statement or amendment
(including, without limitation, the deletion of such Selling Securityholder as
a "Selling Securityholder" in such registration statement, without prejudice to
such Selling Securityholder's right to become a "Selling Securityholder" again
pursuant to Section 5.01(b));
(b) promptly notify each Selling Securityholder and the Managing
Underwriter, if any:
(i) when the Shelf Registration or any prospectus used in
connection therewith, or any amendment or supplement thereto, has been
filed and, with respect to such Shelf Registration or any
post-effective amendment thereto, when the same has become effective;
(ii) of any written comments from the SEC with respect to
any filing and of any written request by the SEC for amendments or
supplements to such registration statement or prospectus;
(iii) of the notification to the Company by the SEC of its
initiation of any proceeding with respect to the issuance by the SEC
of, or of the issuance by the SEC of, any stop order suspending the
effectiveness of such registration statement; and
(iv) of the receipt by the Company of any notification
with respect to the suspension of the qualification of any Registrable
Securities for sale under the applicable securities or blue sky laws
of any jurisdiction;
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(c) furnish to each Selling Securityholder such number of
conformed copies of such registration statement and of each amendment and
supplement thereto (in each case including all exhibits and documents
incorporated by reference), such number of copies of the prospectus contained
in such registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424 promulgated
under the Securities Act relating to such Investor's Registrable Securities,
any other Registrable Securities and such other documents, as such Investor may
reasonably request to facilitate the disposition of its Registrable Securities;
(d) use its best efforts to register or qualify all Registrable
Securities under such other securities or blue sky laws of such jurisdictions
as each holder thereof shall reasonably request, to keep such registration or
qualification in effect for so long as such registration statement remains in
effect, and take any other action which may be reasonably necessary or
advisable to enable such holder to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such holder, except that
the Company shall not for any such purpose be required (i) to qualify generally
to do business as a foreign corporation in any Jurisdiction wherein it would
not but for the requirements of this Section 5.02(d) be obligated to be so
qualified, (ii) to subject itself to taxation in any such jurisdiction solely
by reason of such registration or qualification or (iii) to consent to general
service of process in any jurisdiction;
(e) in connection with any underwritten Public Offering, furnish
to each Selling Securityholder a signed counterpart, addressed to such holder
(and the underwriters, if any), of
(i) an opinion of counsel for the Company, dated the date
of any closing under the underwriting agreement, and
(ii) a "comfort" letter, dated the date of any closing
under the relevant underwriting agreement, signed by the independent
public accountants who have certified the Company's financial
statements included in such registration statement,
in each case covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in the case
of the accountants' letter, with respect to events subsequent to the date of
such financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' letters delivered to the underwriters in
underwritten Public Offerings of securities;
(f) notify each Selling Securityholder, at any time when a
prospectus relating thereto is required to be delivered
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under the Securities Act, of the happening of any event as a result of which
any prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and at the request of any such holder promptly prepare and furnish to such
holder a reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(g) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC, and make available to its securityholders, as
soon as reasonably practicable, an earnings statement covering the period of at
least twelve (12) months, but not more than eighteen (18) months, beginning
with the first full calendar month after the effective date of such
registration statement, which earnings statement shall satisfy the provisions
of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder (or
any successor provision); and
(h) use its best efforts to cause all Registrable Securities to be
listed, upon official notice of issuance, on any securities exchange on which
any of the securities of the same class as the Registrable Securities are then
listed.
The Company may require each holder of Registrable Securities to, and
each such holder, as a condition to including Registrable Securities in such
registration, shall, furnish the Company with such information and affidavits
regarding such holder and the distribution of such securities as the Company
may from time to time reasonably request in writing in connection with such
registration.
Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5.02(f), such holder
will forthwith discontinue such holder's disposition of Registrable Securities
pursuant to the registration statement relating to such Registrable Securities
until such holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 5.02(f) and, if so directed by the Company,
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such holder's possession of any prospectus
relating to such Registrable Securities at the time of receipt of such notice.
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5.03 Holdback Agreements.
(a) By the Holders of Registrable Securities. If and to the extent
requested by the Managing Underwriter in connection with an underwritten Public
Offering of Registrable Securities, each holder of Registrable Securities, by
acquisition of such Registrable Securities, agrees, to the extent permitted by
Law, not to effect any public sale or distribution (including a sale under Rule
144) of such securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the seven (7) days prior to and the
ninety (90) days after the closing of such underwritten Public Offering (or for
such shorter period of time as is sufficient and appropriate, in the opinion of
the Managing Underwriter, in order to complete the sale and distribution of the
securities included in such underwritten public offering), except as part of
such underwritten Public Offering, whether or not such holder participates in
such underwritten Public Offering.
(b) By the Company. If and to the extent requested by the Managing
Underwriter in connection with an underwritten Public Offering of Registrable
Securities, the Company agrees not to effect any public sale or distribution of
any securities similar to those being registered hereunder, or any securities
convertible into or exchangeable or exercisable for such securities, during the
seven (7) days prior to and the ninety (90) days after the closing of such
underwritten Public Offering (or for such shorter period of time as is
sufficient and appropriate, in the opinion of the Managing Underwriter, in
order to complete the sale and distribution of the securities included in such
underwritten Public Offering), except pursuant to registrations on Form S-4 or
Form S-8 promulgated by the SEC (or any successor or similar forms thereto).
5.04 Indemnification.
(a) Indemnification by the Company. The Company shall, to the full
extent permitted by applicable law, indemnify and hold harmless each seller of
Registrable Securities in connection with the Shelf Registration, its general
or limited partners, directors, officers, employees, agents and each other
Person, if any, who controls any such seller within the meaning of the
Securities Act, against any Losses, to which such seller or any such other
Person may become subject under the Securities Act or otherwise, insofar as
such Losses (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in such registration statement,
any preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case
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of a prospectus, in the light of the circumstances under which they were made)
not misleading, and the Company will reimburse such seller and each such other
Person for any legal or any other expenses reasonably incurred by them in
connection with investigating or defending any such Loss (or action or
proceeding in respect thereof); provided that the Company shall not be liable
in any such case to the extent that any such Loss (or action or proceeding in
respect thereof) arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such seller specifically for use in the
preparation thereof; provided further, however that with respect to any untrue
statement or omission or alleged untrue statement or omission made in any
preliminary prospectus, the indemnity agreement contained in this paragraph
shall not apply to the extent that any such Loss results from the fact that a
current copy of the prospectus was not sent or given to the person asserting
any such Loss at or prior to the written confirmation of the sale of the
securities concerned to such person if the Company had prior thereto given such
seller the notice referred to in Section 5.02(f) hereof and provided to such
seller a supplemented or amended prospectus as contemplated by Section 5.02(f),
and such current copy of the prospectus would have cured the defect giving rise
to such Loss. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of such seller or any such other
Person, and shall survive the transfer of such securities by such seller. The
Company shall also indemnify each other Person who participates (including as
an underwriter) in the offering or sale of Registrable Securities, their
partners, officers, directors, employees, agents and each other Person, if any,
who controls any such participating Person within the meaning of the Securities
Act to the same extent as provided above with respect to sellers of Registrable
Securities.
(b) Indemnification by the Sellers. Each holder of Registrable
Securities which are included in the Shelf Registration, as a condition to
including Registrable Securities in such registration statement, shall, to the
full extent permitted by Law, indemnify and hold harmless the Company, its
directors, officers, employees, agents and each other Person, if any, who
controls the Company within the meaning of the Securities Act, against any
Losses to which the Company or any such other Person may become subject under
the Securities Act or otherwise, insofar as such Losses (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or
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supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein (in the case of a prospectus, in the light of the circumstances under
which they were made) not misleading, if such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by such seller
specifically for use in the preparation thereof; provided, however, that the
obligation to provide indemnification pursuant to this Section 5.04(b) shall be
several, and not joint and several, among such sellers on the basis of the
number of Registrable Securities included by each in such registration
statement and the aggregate amount which may be recovered from any holder of
Registrable Securities pursuant to the indemnification provided for in this
Section 5.04(b) in connection with any sale of Registrable Securities shall be
limited to the total proceeds received by such holder from the sale of such
Registrable Securities. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company or any such
other Person and shall survive the transfer of such securities by such seller.
Such holders shall also indemnify each other Person who participates (including
as an underwriter) in the offering or sale of Registrable Securities, their
partners, officers, directors, employees, agents and each other Person, if any,
who controls any such participating Person within the meaning of the Securities
Act to the same extent as provided above with respect to the Company.
(c) Notices of Claims, etc. Promptly after receipt by a party
entitled to indemnity under this Section 5.04 of notice of the commencement of
any action or proceeding involving a claim referred to in Section 5.04(a) or
(b), such indemnified party will, if a claim in respect thereof is to be made
against a person obligated to provide indemnity under this Section 5.04
pursuant to such provisions, give written notice to the latter in the manner
provided in Section 6.04 and such Proceeding shall be subject to the other
provisions contained in Section 6.08(c) as if such Section were applicable to
such Proceeding.
(d) Contribution. If the indemnification provided for in any
paragraph of this Section 5.04 is unenforceable although available to an
indemnified party in respect of any Losses referred to therein or is
insufficient to hold an indemnified party harmless for any Losses in respect of
which the provisions of Section 5.04(a) and/or (b) would otherwise apply by
their terms, then the indemnifying party shall contribute to the aggregate
amount paid or payable by the indemnified party as a result of such Losses in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and the indemnified party on the other hand
in connection with statements or omissions which resulted in such Losses, as
well as any other relevant equitable considerations. The
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relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the indemnifying party or the indemnified party and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The amount paid by an Indemnified Party as a
result of the Losses referred to above shall be deemed to include any legal and
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any Loss which is the subject of this paragraph.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5.04(d) were to be determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
(e) Other Indemnification. Indemnification similar to that
specified in this Section 5.04 (with appropriate modifications) shall be given
by the Company and each seller of Registrable Securities with respect to any
required registration or other qualification of securities under any Federal or
state law or regulation of any Governmental or Regulatory Authority other than
the Securities Act. The provisions of this Section 5.04 shall be in addition to
any other rights to which any indemnified party hereunder may otherwise have.
ARTICLE VI
GENERAL PROVISIONS
6.01 Certain Definitions. Except as otherwise specified or as the
context may otherwise require, the following terms shall have the respective
meanings set forth below whenever used in this Agreement:
"Acquisition Documents" has the meaning specified the Senior Credit
Agreement.
"Applicable Securityholder" means, with respect to either Issuer, a
Securityholder holding any Purchased Securities issued by such Issuer.
"Certificate of Designation" means the certificate designation in
respect of the Series A Preferred Stock, in substantially the form attached
hereto as Exhibit B.
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"Closing" has the meaning specified in Section 1.02.
"Closing Date" has the meaning specified in Section 1.02.
"Common Stock" has the meaning specified in Section 2.03(b).
"Company" means International Wire Group, Inc., a corporation
organized and existing under the laws of the State of Delaware.
"Contractual Obligation" means, as to any Person, any provision of
any security issued by such Person or any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Documents" has the meaning specified in Section 6.08(a).
"Exchange Indenture" means an indenture between the Company and a
trustee satisfactory to the Company and the holders of a majority of the
outstanding shares of Series A Preferred Stock, in substantially the form of
Exhibit E.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Holding" means International Wire Holding Company, a corporation
organized and existing under the laws of the State of Delaware.
"Indemnified Person" has the meaning specified in Section 6.08(a).
"Investment Documents" means this Agreement, the Certificate of
Designation, the Series A Preferred Stock and the Warrants.
"Investors" has the meaning specified in the recitals of this
Agreement.
"Issuers" means the Company and Holding.
"Loan Documents" has the meaning specified in the Senior Credit
Agreement.
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"Losses" means all losses, claims, damages, liabilities, costs
(including any costs of investigation and reasonable attorneys' fees) and
expenses.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) or prospects
of Holding, the Company and their Subsidiaries, taken as a whole, or, prior to
the consummation of the Acquisition, the Dekko Business taken as a whole, (b)
the ability of Holding, the Company and each of their Subsidiaries, taken as a
whole, to perform their respective obligations under this Agreement or any of
the other Investment Documents, the Loan Documents or the Acquisition Documents
or (c) the validity or enforceability of this Agreement or any of the other
Investment Documents, the Loan Documents or the Acquisition Documents or the
rights or remedies of the Securityholders hereunder or thereunder.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation, friable
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Managing Underwriter" has the meaning specified in Section 5.01(d).
"Options" has the meaning specified in Section 2.03(a).
"Other Agreements" means each Loan Document and each Acquisition
Document.
"Proceeding" has the meaning specified in Section 6.08(c).
"Public Offering" has the meaning specified in Section 5.01(d).
"Purchase Price" has the meaning specified in Section 1.01.
"Purchased Securities" has the meaning specified in recitals of this
Agreement.
"Registrable Securities" has the meaning specified in Section 5.01(a).
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or
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other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
"Responsible Officer" means, as to any Person, the chief executive
officer, the president, the chief financial or any vice president of such
Person.
"Restricted Securities" means (i) the Series A Preferred Stock, (ii)
the Exchange Notes, (iii) the Warrants, (iv) the Warrant Stock and (iv) any
securities issued with respect to the securities specified in the foregoing
clauses (i), (ii), (iii) or (iv) by way of a stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization. Any security referred to in the preceding sentence
shall cease to be a Restricted Security when it has (a) been disposed of
pursuant to an effective registration statement under the Securities Act, (b)
become eligible for sale pursuant to paragraph (k) of Rule 144 or (c) otherwise
been transferred and new certificates therefor not bearing the legend set forth
in Section 1.05 have been delivered by the applicable Issuer.
"Rule 144" means Rule 144 promulgated by the SEC under the Securities
Act or any successor or similar provision thereto adopted by the SEC.
"Securities Act" shall mean the Securities Act of 1933, as amended
from time to time.
"Securityholder" means any Person who acquires Series A Preferred
Stock, Warrants or Warrant Stock pursuant to the provisions of this Agreement,
including any transferees of Series A Preferred Stock, Warrants or Warrant
Stock (and including, without limitation, the Investors).
"Senior Credit Agreement" means the Amended Credit Agreement dated as
of March 5, 1996, among the Company, Holding, Chemical Bank, as Administrative
Agent, Bankers Trust Company, as Documentation Agent and the other parties
specified therein, as the same may be amended, supplemented or otherwise
modified and in effect from time to time.
"Senior Subordinated Notes" means the $150,000,000 aggregate principal
amount of 11-3/4% Senior Subordinated Notes due 2005 of the Company, as the
same may be amended, supplemented or otherwise modified and in effect from time
to time.
"Series A Preferred Stock" has the meaning specified in the recitals of
this Agreement.
"Shelf Registration" has the meaning specified in Section 6.01(a).
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"Units" has the meaning specified in Section 1.01.
"Warrants" has the meaning specified in the recitals of this
Agreement.
"Warrant Stock" means all shares of Common Stock issued or issuable
from time to time upon exercise of the Warrants.
6.02 Survival of Representations, Warranties, Covenants and
Agreements. The representations, warranties, covenants and agreements contained
in this Agreement or any other instrument delivered pursuant to this Agreement
shall survive the purchase of the Units hereunder.
6.03 Amendment and Waiver. This Agreement may be amended,
supplemented or modified only by a written instrument duly executed by or on
behalf of each party hereto. Any term or condition of this Agreement may be
waived at any time by the party that is entitled to the benefit thereof, but no
such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No waiver
by any party of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any
other term or condition of this Agreement on any future occasion. All remedies,
either under this Agreement or by law or otherwise afforded, will be cumulative
and not alternative.
6.04 Notices. All notices and other communications provided for
herein shall be given or made by telex, telecopy, telegraph, cable or in
writing and telexed, telecopied, telegraphed, cabled, mailed or delivered to:
(i) the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof, or
(ii) if to any other person who is then the registered
holder of any Purchased Securities or shares of Warrant Stock, to the
address of such holder as it appears in the stock or warrant ledger of
the Company or Holdings, as the case may be.
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telex, telecopy, telegraph or cable or personally delivered or, in the case of
a mailed notice, upon receipt, in each case given or addressed as aforesaid.
6.05 Entire Agreement. This Agreement and the Investment Documents
supersede all prior discussions and agreements among the parties hereto with
respect to the subject matter hereof and thereof and contain the sole and
entire
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agreement among the parties hereto with respect to the subject matter hereof
and thereof.
6.06 Specific Performance. Damages in the event of breach of this
Agreement by either Issuer or either Investor would be difficult, if not
impossible, to ascertain, and it is therefore agreed that each Issuer and each
Investor, in addition to and without limiting any other remedy or right it may
have, have the right to an injunction or other equitable relief in any court of
competent jurisdiction, enjoining any such breach, and enforcing specifically
the terms and provisions hereof, and each Issuer and each Investor hereby waives
any and all defenses it may have on the ground of lack of jurisdiction or
competence of the court to grant such an injunction or other equitable relief.
The existence of this right will not preclude the Issuers or the Investors from
pursuing any other rights and remedies at law or in equity which the Issuers or
the Investors may have.
6.07 Expenses. The Issuers jointly and severally agree to pay or
reimburse the Investors and each other Securityholder for all reasonable
out-of-pocket costs and expenses of the Investors and the Securityholders
(including the reasonable fees and expenses of Milbank, Tweed, Xxxxxx & XxXxxx,
special New York counsel to CEA), in connection with (i) the negotiation,
preparation, execution and delivery of this Agreement, the Certificate of
Designation and the Warrants and the issuance of the Series A Preferred Stock
and the warrants hereunder, (ii) the issuance of the Exchange Notes, and (iii)
any amendment, modification or waiver of (or consents in respect of) any of the
terms of this Agreement, the Certificate of Designation, the Series A Preferred
Stock or the Warrants.
6.08 Indemnification. (a) The Issuers jointly and severally
covenant and agree to indemnify the Investors and the Investors' officers,
directors, employees, agents and each person, if any, who controls each of them
(each, an "Indemnified Person"), against, and hold each Indemnified Person
harmless from, all Losses incurred by any Indemnified Person pursuant to any
investigation or proceeding by any third party against either Issuer or one or
more of the Indemnified Persons, arising out of or in connection with any of
this Agreement, the Series A Preferred Shares, the Warrants, the Exchange Notes
and any document relating thereto or any other document or instrument executed
herewith or pursuant hereto or thereto (collectively, the "Documents"), whether
or not the transactions contemplated by this Agreement are consummated, which
investigation or proceeding requires the participation of, or is commenced or
filed against, one or more of the Indemnified Persons because of this Agreement
Or any other Documents and the transactions contemplated hereby or thereby
(including any proceeding requiring the participation Of, or commenced or filed
against, an Indemnified Person), other than any Losses resulting from (i) any
action on the part of the
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Indemnified Person which is finally determined in such proceeding to be the
result of such Indemnified Person's bad faith, negligence or wilful misconduct
or material breach of the terms of this Agreement or (ii) the failure of any
Indemnified Person to pay any Taxes which either Issuer is not required to pay
hereunder. The Issuers jointly and severally agree to reimburse the Indemnified
Person promptly for all such Losses as they are incurred by the Indemnified
Person; provided that the Issuers may require such Indemnified Person to, and
in such case the Indemnified Person shall, reimburse all such fees and expenses
to the extent it is finally judicially determined that such Indemnified Person
is not entitled to indemnification hereunder. The obligations of the Issuers
under this Section 6.08 shall survive the Closing and the payment or prepayment
of the Series A Preferred Shares, the Warrants or the Exchange Notes, upon
redemption, exchange, exercise or otherwise, any transfer, conversion or
exchange of the Series A Preferred Stock, the Warrants or the Exchange Notes
pursuant to their terms by the Indemnified Person and the termination of this
Agreement and any other Documents.
(b) If the indemnification provided for in Section 6.08(a) is
unenforceable although available to the Indemnified Person in respect of any
Losses referred to therein (for any reason other than by reason of the
exceptions set forth in the provisions of Section 6.08(a)) or is insufficient
to hold such Indemnified Person harmless for any Losses in respect of which the
provisions of Section 6.08(a) would otherwise apply by their terms, then the
Issuers, in lieu of indemnifying such person, shall contribute to the aggregate
amount paid or payable by such person as a result of such Losses in such
proportion as is appropriate to reflect the relative fault of the Issuers on
the one hand and the Indemnified Person on the other hand in connection with
the actions which resulted in such Losses as well as any other relevant
equitable considerations. The amount paid or payable by an Indemnified Person
as a result of the Losses referred to above shall be deemed to include, subject
to the limitations set forth in Section 6.08(a), any legal or other fees or
expenses reasonably incurred by such person in connection with investigating or
defending any Loss which is the subject of this paragraph.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6.08(b) were to be determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
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(c) Promptly after receipt by an Indemnified Person of notice of
the commencement of any action or proceeding or any governmental investigation
or inquiry (a "Proceeding"), such Indemnified Person will, if a claim in
respect thereof is to be made against either Issuer hereunder, notify in
writing the Issuers of the commencement thereof; but the omission so to notify
the Issuers will not relieve the Issuers from any liability which the Issuers
may have to any Indemnified Person except to the extent that either Issuer is
materially prejudiced thereby. The Issuers shall have the right, exercisable by
giving written notice to an Indemnified Person promptly after the receipt of
written notice from such Indemnified Person of such proceeding, to assume, at
their expense, the defense of any such Proceeding with counsel reasonably
satisfactory to such Indemnified Person; Provided, however, that an Indemnified
Person shall have the right to employ separate counsel in any such Proceeding
and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (1) the
Issuers agree to pay such fees and expenses, (2) the Issuers fail to assume
promptly the defense of such Proceeding or fail to employ counsel reasonably
satisfactory to such Indemnified Person or (3) if the Indemnified Person shall
have been advised by counsel, in its reasonable judgment, that there is
reasonably likely to be a conflict between the positions of the Issuers and
such Indemnified Person in conducting the defense of such Proceeding which
makes it improper, under generally acceptable standards of professional
conduct, for the same counsel to represent both the Issuers and such
Indemnified Person; provided that the Issuers shall not, in connection with any
one such Proceeding or separate but substantially similar or related
Proceedings, be liable for the fees and expenses of more than one separate firm
of attorneys for all such Indemnified Persons. The Issuers will not be subject
to any liability for any settlement made without their consent (which will not
be unreasonably withheld); Provided that, if such Proceeding is settled with
their written consent or if there shall be a final judgment for the claimant or
plaintiff in such Proceeding, the Issuers shall indemnify and hold harmless the
Indemnified Person from and against any Losses by reason of such settlement or
judgment for which such Indemnified Person would be entitled to indemnification
hereunder. The Issuers shall not, without the consent of an Indemnified Person,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Person of a release, in form and substance
satisfactory to such Indemnified Person, from all liability in respect of such
Proceeding for which such Indemnified Person would be entitled to
indemnification hereunder.
(d) The obligations of each Issuer under this Section 6.08 shall
be in addition to any liability which such Issuer may otherwise have.
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6.09 No Assignment; Binding Effect. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of each Issuer (in the case of any assignment
by either Investor) or each Investor (in the case of any assignment by either
Issuer) and any attempt to do so will be void. Subject to the preceding
sentence, this Agreement is binding upon, inures to the benefit of and is
enforceable by the parties hereto and their respective successors and assigns
(including, but not limited to, transferees of Purchased Securities).
6.10 Headings. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
6.11 Invalid Provisions. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under any present or future law, and if
the rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (i) such provision will be fully
severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof
and (iii) the remaining provisions of this Agreement will remain in full force
and effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom.
6.12 Confidentiality. Each Investor agrees to keep information
obtained by it pursuant hereto identified as confidential in writing at the time
of delivery confidential in accordance with such Investor's customary practices
and agrees that it will only use such information in connection with the
transactions contemplated by this Agreement and not disclose any of such
information other than (a) to such Investor's employees, representatives,
directors, attorneys, auditors, agents or affiliates who are advised of the
confidential nature of such information, (b) to the extent such information
presently is or hereafter becomes available to such Investor on a
nonconfidential basis from any source or such information that is in the public
domain at the time of disclosure, (c) to the extent disclosure is required by
law (including applicable securities laws), regulation, subpoena or judicial
order or process (provided that notice of such requirement or order shall be
promptly furnished to the Issuers unless such notice is legally prohibited),
(d) to transferees or prospective transferees who agree to be bound by the
provisions of this subsection 6.12, (e) to the extent required in connection
with any litigation between any Issuer and any Investor with respect to this
Agreement and the other Investment Documents or (f) with the Issuer's prior
written consent.
6.13 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New
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York applicable to a contract executed and performed in such State, without
giving effect to the conflicts of laws principles thereof, except for matters
relating to the internal corporate affairs of either Issuer, which shall be
governed by and construed in accordance with the DGCL.
6.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
duly authorized officer of each party hereto as of the date first above
written.
INTERNATIONAL WIRE HOLDING COMPANY
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
Address for Notices:
INTERNATIONAL WIRE GROUP, INC.
By: /s/ XXXXX X. XXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
Address for Notices:
CHEMICAL EQUITY ASSOCIATES
By: /s/ XXXX M.B. X'XXXXXX
----------------------------------
Name: Xxxx M.B. X'Xxxxxx
Title: Managing Director
Address for Notices:
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HICKS, MUSE, XXXX & XXXXX EQUITY
FUND II, L.P.
By: HM2/GP Partners, L.P., a
General Partner
By: Xxxxx Muse GP Partners, L.P., its
General Partner
By: Xxxxx Muse Fund II Incorporated, its
General Partner
By: /s/ XXXX X. XXXXXX
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
Address for Notices:
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