EXHIBIT 99.2
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STOCK PURCHASE AGREEMENT
By and among
HEXCEL CORPORATION,
BERKSHIRE INVESTORS LLC,
BERKSHIRE FUND V, LIMITED PARTNERSHIP
BERKSHIRE FUND VI, LIMITED PARTNERSHIP
GREENBRIAR EQUITY FUND, L.P.
and
GREENBRIAR CO-INVESTMENT PARTNERS, L.P.
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Dated as of December 18, 2002
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TABLE OF CONTENTS
ARTICLE I
AUTHORIZATION AND SALE OF SHARES
Section 1.1 Authorization ................................................ 2
Section 1.2 Issuance and Sale of Shares .................................. 2
ARTICLE II
CLOSING
Section 2.1 Closing ...................................................... 2
Section 2.2 Deliveries and Payments ...................................... 3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 Organization; Subsidiaries ................................... 3
Section 3.2 Due Authorization ............................................ 4
Section 3.3 Capitalization ............................................... 5
Section 3.4 SEC Reports .................................................. 6
Section 3.5 Financial Statements ......................................... 6
Section 3.6 Consents; No Violations ...................................... 7
Section 3.7 Compliance with Laws ......................................... 8
Section 3.8 Absence of Certain Changes ................................... 9
Section 3.9 Litigation ................................................... 9
Section 3.10 Employee Matters; ERISA ...................................... 9
Section 3.11 Section 203 of the DGCL; Takeover Statute .................... 10
Section 3.12 Real Property Holding Corporation; Investment Company;
Public Utility Holding Company ............................... 10
Section 3.13 Brokers and Finders .......................................... 11
Section 3.14 Registration and Qualification ............................... 11
Section 3.15 Opinion of Financial Advisor ................................. 11
Section 3.16 Negotiations with Third Parties .............................. 12
Section 3.17 Environmental Laws ........................................... 12
Section 3.18 Title to Assets .............................................. 12
Section 3.19 Labor Relations .............................................. 13
Section 3.20 Intellectual Property ........................................ 13
Section 3.21 Transactions with Affiliates ................................. 14
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Section 4.1 Organization of the Investors ................................ 14
Section 4.2 Due Authorization ............................................ 14
Section 4.3 Consents; No Violations ...................................... 14
Section 4.4 Ownership of Capital Stock ................................... 15
Section 4.5 Investment ................................................... 15
Section 4.6 Rule 144 ..................................................... 15
Section 4.7 Brokers and Finders; Transaction Expenses .................... 15
Section 4.8 No Arrangements with Respect to Company Securities ........... 16
Section 4.9 Sufficient Funds ............................................. 16
ARTICLE V
CONDITIONS PRECEDENT
Section 5.1 Conditions to Obligations of the Investors and the Company ... 16
Section 5.2 Conditions to the Investors' Obligations ..................... 17
Section 5.3 Conditions to the Obligations of the Company ................. 19
ARTICLE VI
COVENANTS
Section 6.1 Conduct of Business Pending the Closing ...................... 20
Section 6.2 Amendment of Certificate of Incorporation and By-Laws of
the Company .................................................. 21
Section 6.3 Certain Payments ............................................. 21
Section 6.4 Availability of Common Stock ................................. 23
Section 6.5 Proxy Statement; Stockholder Approval ........................ 23
Section 6.6 No Solicitation .............................................. 24
Section 6.7 HSR Act; Other Filings ....................................... 26
Section 6.8 Consents; Approvals .......................................... 26
Section 6.9 Debt Refinancing ............................................. 27
Section 6.10 Listing ...................................................... 27
Section 6.11 Cooperation .................................................. 27
Section 6.12 Execution and Delivery of Related Agreements ................. 27
Section 6.13 Use of Proceeds .............................................. 27
Section 6.14 Investors' Access to Premises; Notices of Developments ....... 27
Section 6.16 IRS Forms .................................................... 28
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ARTICLE VII
TERMINATION
Section 7.1 Termination .................................................. 28
Section 7.2 Effect of Termination ........................................ 30
Section 7.3 Termination Payment .......................................... 30
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Survival of Representations and Warranties ................... 31
Section 8.2 Indemnification .............................................. 31
Section 8.3 Procedure for Indemnification ................................ 33
Section 8.4 Sole Remedy .................................................. 34
ARTICLE IX
MISCELLANEOUS
Section 9.1 Governing Law ................................................ 35
Section 9.2 Jurisdiction; Forum; Service of Process; Waiver of Jury
Trial ........................................................ 35
Section 9.3 Successors and Assigns ....................................... 35
Section 9.4 Entire Agreement; Amendment .................................. 36
Section 9.5 Notices ...................................................... 36
Section 9.6 Certain Definitions .......................................... 37
Section 9.7 Withholding .................................................. 40
Section 9.8 Counterparts ................................................. 40
Section 9.9 Severability ................................................. 40
Section 9.10 Titles and Subtitles ......................................... 40
Section 9.11 No Public Announcement ....................................... 40
Section 9.12 Further Actions .............................................. 40
Section 9.13 Enforcement of Agreement ..................................... 41
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INDEX OF DEFINED TERMS
Affiliate ............................................................... 40
Agreement ............................................................... 1
Alternate Proposal ...................................................... 27
beneficial ownership .................................................... 40
beneficially owns ....................................................... 40
Berkshire Investors ..................................................... 1
Berkshire Partners ...................................................... 23
Berkshire V ............................................................. 1
Berkshire VI ............................................................ 1
Board of Directors ...................................................... 5
Certificate of Incorporation ............................................ 2
Claim ................................................................... 35
Closing ................................................................. 3
Closing Date ............................................................ 3
Code .................................................................... 10
Common Stock ............................................................ 40
Company ................................................................. 1
Company Charter Amendment ............................................... 2
Company Disclosure Schedule ............................................. 4
Company Indemnified Person .............................................. 34
Consents ................................................................ 28
Credit Agreement ........................................................ 40
DGCL .................................................................... 5
Encumbrances ............................................................ 4
Environmental Laws ...................................................... 40
ERISA ................................................................... 10
ERISA Affiliate ......................................................... 10
Exchange Act ............................................................ 40
Expenses ................................................................ 24
Expiration Date ......................................................... 30
Fairness Opinions ....................................................... 12
GAAP .................................................................... 7
Goldman Governance Agreement ............................................ 41
Goldman Investors ....................................................... 41
Goldman Purchase Agreement .............................................. 41
Goldman Registration Rights Agreement ................................... 41
Governmental Entity ..................................................... 41
Greenbriar Co-Investment ................................................ 1
Greenbriar Equity ....................................................... 1
Greenbriar Equity Group ................................................. 23
Hazardous Materials ..................................................... 00
Xxxxxxxx Xxxxx .......................................................... 12
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HSR Act ................................................................. 17
Indemnifying Party ...................................................... 35
Indemnitee .............................................................. 35
Investor Indemnified Person ............................................. 33
Investor Managers ....................................................... 23
Investors ............................................................... 1
Knowledge ............................................................... 41
Laws .................................................................... 9
Licenses ................................................................ 9
Litigation .............................................................. 9
Losses .................................................................. 41
Material Adverse Effect ................................................. 42
Notice of Superior Proposal ............................................. 27
NYSE .................................................................... 5
PCX ..................................................................... 5
Permitted Transferee .................................................... 42
Person .................................................................. 42
Plans ................................................................... 10
Proceeding .............................................................. 37
Proxy Statement ......................................................... 25
Purchase Price .......................................................... 2
Registration Rights Agreement ........................................... 1
Related Agreements ...................................................... 1
Restated Company By-Laws ................................................ 2
Restated Goldman Governance Agreement ................................... 19
Restated Goldman Registration Rights Agreement .......................... 19
SEC ..................................................................... 6
SEC Reports ............................................................. 6
Securities Act .......................................................... 6
Selected Courts ......................................................... 37
Senior Debt Refinancing ................................................. 18
Series A Certificate of Designations .................................... 1
Series A Preferred Shares ............................................... 1
Series A Preferred Stock ................................................ 1
Series B Certificate of Designations .................................... 1
Series B Preferred Shares ............................................... 1
Series B Preferred Stock ................................................ 1
Shares .................................................................. 1
Significant Subsidiaries ................................................ 42
Special Meeting ......................................................... 24
Stockholder Approval .................................................... 18
Stockholders Agreement .................................................. 1
Subsidiary .............................................................. 42
Superior Proposal ....................................................... 28
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Termination Payment ..................................................... 33
Transaction Fee ......................................................... 23
Exhibits
Exhibit A -- Form of Series A Preferred Stock Certificate of Designations
Exhibit B -- Form of Series B Preferred Stock Certificate of Designations
Exhibit C -- Form of Stockholders Agreement
Exhibit D -- Form of Registration Rights Agreement
Exhibit E -- Company Charter Amendment
Exhibit F -- Restated Company By-Laws
Exhibit G -- Terms of Senior Debt Restructuring
Exhibit H -- Form of the Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Exhibit I -- Summary Terms of Equity Incentive Plans
Exhibit J -- Form of Press Release
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement"), is entered into as
of December 18, 2002, by and among Hexcel Corporation, a Delaware corporation
(the "Company"), Greenbriar Equity Fund, L.P., a Delaware limited partnership
("Greenbriar Equity"), Greenbriar Co-Investment Partners, L.P., a Delaware
limited partnership ("Greenbriar Co-Investment"), Berkshire Fund V, Limited
Partnership, a Massachusetts limited partnership ("Berkshire V"), Berkshire Fund
VI, Limited Partnership, a Massachusetts limited partnership ("Berkshire VI"),
and Berkshire Investors LLC, a Massachusetts limited liability company
("Berkshire LLC" and, together with Greenbriar Equity, Greenbriar Co-Investment,
Berkshire V, Berkshire VI and the permitted designees of Berkshire V and
Berkshire VI under Section 1.2 of this Agreement, the "Investors").
W I T N E S S E T H :
WHEREAS, on the terms and subject to the conditions hereof, the
Company desires to sell to the Investors, and the Investors desire to purchase
from the Company, (i) an aggregate of 77,875 shares (the "Series A Preferred
Shares") of Series A Convertible Preferred Stock, without par value (the "Series
A Preferred Stock"), of the Company having the terms set forth in the
Certificate of Designations of the Series A Convertible Preferred Stock attached
hereto as Exhibit A (the "Series A Certificate of Designations") and (ii) an
aggregate of 77,875 shares (the "Series B Preferred Shares" and, together with
the Series A Preferred Shares, the "Shares") of Series B Convertible Preferred
Stock, without par value (the "Series B Preferred Stock"), of the Company having
the terms set forth in the Certificate of Designations of the Series B
Convertible Preferred Stock attached hereto as Exhibit B (the "Series B
Certificate of Designations"), for an aggregate purchase price of $77,875,000;
and
WHEREAS, in connection with the transactions contemplated by this
Agreement, at the Closing (as defined in Section 2.1 below), the Company and the
Investors will enter into (A) with Berkshire Fund V Investment Corp., Berkshire
Fund VI Investment Corp., a Stockholders Agreement in the form of Exhibit C
hereto (the "Stockholders Agreement") and (B) a Registration Rights Agreement in
the form of Exhibit D hereto (the "Registration Rights Agreement", and, together
with the Stockholders Agreement, the "Related Agreements"); and
WHEREAS, on the terms and subject to the conditions hereof, at the
Closing, (i) the Certificate of Incorporation of the Company (as amended from
time to time, the "Certificate of Incorporation") will be amended substantially
as set forth in the form of amendment attached as Exhibit E hereto (the "Company
Charter Amendment"), and (ii) the By-Laws of the Company will be amended and
restated so as to read
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substantially in the form attached hereto as Exhibit F (the "Restated Company
By-Laws").
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
AUTHORIZATION AND SALE OF SHARES
Section 1.1 Authorization. Subject to obtaining the Stockholder
Approval (as defined in Section 5.1(c) below), the Company has heretofore
authorized the issuance and sale of the Shares to the Investors at the Closing
pursuant to this Agreement.
Section 1.2 Issuance and Sale of Shares. Upon the terms and subject
to the conditions set forth herein, at the Closing, in reliance on the
representations and warranties of the Investors contained herein, the Company
shall issue and sell to each Investor and, in reliance on the representations
and warranties of the Company contained herein, each such Investor shall
purchase from the Company, the number of Shares indicated on Schedule 1.2 hereto
opposite such Investor's name, for an aggregate purchase price of $77,875,000
("Purchase Price"); provided, that each of Berkshire V and Berkshire VI shall be
entitled to assign its right to acquire the Shares to be purchased by such
Investor to its wholly-owned subsidiary by delivering written notice of such
reallocation to the Company not less than two business days prior to the Closing
so long as such assignment does not (i) change the total number of Series A
Preferred Shares and Series B Preferred Shares being acquired hereunder or the
aggregate Purchase Price or (ii) affect the accuracy of the Investors'
representations contained in Article IV hereof; provided, further, that (A) such
assignment shall not release such Investor from any of its obligations under
this Agreement and (B) that any wholly-owned subsidiary of Berkshire V or
Berkshire VI which purchases Shares pursuant to this Section 1.2 shall transfer
any Shares so purchased to any of Berkshire V or Berkshire VI within 90 days of
the Closing.
ARTICLE II
CLOSING
Section 2.1 Closing. The closing (the "Closing") of the purchase and
sale of the Shares contemplated hereby shall take place on such date and at such
time as shall be mutually agreed to by the Company and the Investors, but in no
event later than two business days following the date of the Stockholder
Approval, subject to satisfaction or waiver of all of the conditions set forth
in Article V (the date of the Closing is hereinafter referred to as the "Closing
Date"). The Closing shall be held at the
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offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, Four Times Square, New
York, New York, or at such other place as agreed to by the Company and the
Investors.
Section 2.2 Deliveries and Payments.
(a) Subject to the satisfaction or waiver of each of the conditions
hereof, at the Closing, the Company shall deliver to each Investor against
payment of the Purchase Price: (i) one certificate representing the appropriate
number of Series A Preferred Shares registered in the name of such Investor as
set forth on Schedule 1.2; (ii) one certificate representing the appropriate
number of Series B Preferred Shares registered in the name of such Investor as
set forth on Schedule 1.2; (iii) each of the certificates, instruments and
agreements required to be delivered by the Company pursuant to Article V hereof;
(iv) filed copies of the Company Charter Amendment, the Series A Certificate of
Designations and the Series B Certificate of Designations certified by the
Delaware Secretary of State; (v) such other documents as the Investors may
reasonably request in connection with the Closing; and (vi) payment of fees and
expenses due each Investor at the Closing pursuant to Section 6.3 hereof by wire
transfer of immediately available funds to an account or accounts designated by
the Investors prior to the Closing.
(b) Subject to the satisfaction or waiver of each of the conditions
hereof, at the Closing, each of the Investors shall deliver to the Company: (i)
payment of the Purchase Price, by wire transfer of immediately available funds
to an account or accounts designated by the Company prior to the Closing, for
the Shares to be purchased by such Investor; (ii) each of the certificates,
instruments and agreements required to be delivered by each of the Investors
pursuant to Article V hereof; and (iii) such other documents as the Company may
reasonably request in connection with the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Investors, as of
the date hereof and as of the Closing, as follows:
Section 3.1 Organization; Subsidiaries.
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has the
requisite corporate power and authority to carry on its business as it is now
being conducted. The Company is duly qualified and licensed as a foreign
corporation to do business, and is in good standing (and has paid all relevant
franchise or analogous taxes), in each jurisdiction where the character of its
assets owned or held under lease or the nature of its business
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makes such qualification necessary, except where the failure to so qualify or be
licensed, individually or in the aggregate, has not had and would not reasonably
be expected to have a Material Adverse Effect.
(b) Each Significant Subsidiary is a corporation, limited liability
company, limited partnership or other business entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of organization
and has the power and authority to carry on its business as it is now being
conducted except where the failure to be in good standing or to have such power
and authority, individually or in the aggregate, has not had and would not
reasonably be expected to have a Material Adverse Effect. Except as set forth in
Section 3.1(b) of the disclosure schedule delivered by the Company to the
Investors on the date hereof (the "Company Disclosure Schedule"), (i) the
Company owns, either directly or indirectly through one or more Subsidiaries,
all of the capital stock or other equity interests of the Significant
Subsidiaries free and clear of all liens, charges, claims, security interests,
restrictions, options, proxies, voting trusts or other encumbrances
("Encumbrances") and (ii) there are no outstanding subscription rights, options,
warrants, convertible or exchangeable securities or other rights of any
character whatsoever relating to issued or unissued capital stock or other
equity interests of any Significant Subsidiary, or any contract, agreement or
other commitment of any character whatsoever relating to issued or unissued
capital stock or other equity interests of any Significant Subsidiary or
pursuant to which any Significant Subsidiary is or may become bound to issue or
grant additional shares of its capital stock or other equity interests or
related subscription rights, options, warrants, convertible or exchangeable
securities or other rights, or to grant preemptive rights. Except for the
Subsidiaries and except as set forth on Section 3.1(b) of the Company Disclosure
Schedule, the Company does not own, directly or indirectly, any interest in any
corporation, limited liability company, partnership, business association or
other Person.
Section 3.2 Due Authorization.
(a) The Company has all right, corporate power and authority to
enter into this Agreement and the Related Agreements, and, subject to obtaining
the Stockholder Approval, to consummate the transactions contemplated hereby and
thereby. The execution and delivery by the Company of this Agreement, the
Related Agreements, and the compliance by the Company with each of the
provisions of this Agreement and the Related Agreements (i) are within the
corporate power and authority of the Company, and (ii) subject to obtaining the
Stockholder Approval, have been duly authorized by all necessary corporate
action of the Company. This Agreement has been, and each of the Related
Agreements, when executed and delivered by the Company, will be, duly and
validly executed and delivered by the Company. This Agreement constitutes, and
each of the Related Agreements, when executed and delivered by the Company will
constitute, a valid and binding agreement of the Company enforceable against the
Company in accordance with its terms except as such enforcement is limited by
bankruptcy, insolvency and other similar laws affecting the enforcement of
creditors' rights generally
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and for limitations imposed by general principles of equity. The Restated
Company By-Laws have been duly adopted by the Board of Directors of the Company
(the "Board of Directors") and will be effective upon the Closing.
(b) The Shares have been duly authorized by the Company and, when
issued, sold and delivered in accordance with this Agreement, the Shares will be
validly issued, fully paid and nonassessable. At the Closing, no further
approval or authority of the stockholders or the Board of Directors under the
Delaware General Corporation Law (the "DGCL"), the rules of the New York Stock
Exchange (the "NYSE") or the consent of any other party will be required for the
issuance of the Shares. The shares of Common Stock issuable upon conversion of
the Shares have been duly authorized by the Company and, when issued upon
conversion of the Shares in accordance with the Series A Certificate of
Designations or the Series B Certificate of Designations, as appropriate, will
be validly issued, fully paid and nonassessable. At the Closing, the shares of
Common Stock issuable upon conversion of the Shares at the initial conversion
price will be reserved for issuance, and no further approval or authority of the
stockholders or the Board of Directors under the DGCL, the rules of the NYSE or
the consent of any other party, other than the approval of the NYSE and the
Pacific Exchange, Inc. (the "PCX") of the listing of such shares of Common Stock
on the NYSE and PCX, will be required for such issuance of Common Stock. No
preemptive rights or other rights to subscribe for or purchase securities exist
with respect to the issuance and sale of the Shares or the issuance of shares of
Common Stock issuable upon conversion of the Shares other than such rights held
pursuant to the Goldman Governance Agreement, the Restated Goldman Governance
Agreement and the Stockholders Agreement.
Section 3.3 Capitalization. As of the date hereof, the authorized
capital stock of the Company consists of (i) 100,000,000 shares of Common Stock,
of which as of December 13, 2002, 38,419,559 shares were issued and outstanding
excluding 1,204,358 shares of Common Stock held in the Company's treasury as of
such date, (ii) 20,000,000 shares of Preferred Stock, without par value, of
which no shares are issued and outstanding. All of the issued and outstanding
shares of Common Stock have been duly authorized and are validly issued, fully
paid and nonassessable and not subject to the preemptive or other similar rights
of the stockholders of the Company, other than such rights held pursuant to the
Goldman Governance Agreement, the Restated Goldman Governance Agreement and the
Stockholders Agreement. As of the date hereof, there is outstanding (i)
$46,935,000 in aggregate principal amount of the Company's 7.0% Convertible
Subordinated Notes due 2003, which notes are convertible into 2,968,690 shares
of Common Stock and (ii) $22,750,000 in aggregate principal amount of the
Company's 7.0% Convertible Subordinated Debentures, due 2011, which notes are
convertible into 740,559 shares of Common Stock. Except as described in the SEC
Reports (as defined below) filed prior to the date hereof and other than
pursuant to stock incentive plans approved by the Board of Directors, the
Stockholders Agreement, the Goldman Governance Agreement and the Restated
Goldman Governance Agreement, there are no outstanding subscription rights,
options, warrants, convertible or exchangeable securities or other rights of any
character whatsoever relating to issued or unissued capital stock of the
Company, or any contract or agreement of any character whatsoever relating to
issued or unissued capital stock of the Company or pursuant to which the Company
is or may become bound to issue or grant additional shares of its capital stock
or related subscription rights, options, warrants, convertible or
5
exchangeable securities or other rights, or to grant preemptive rights. Other
than as set forth on Section 3.3 of the Company Disclosure Schedule, (i) the
Company has no currently existing agreement to register any securities under the
Securities Act of 1933, as amended (the "Securities Act"), or under any state
securities law and has not granted registration rights to any Person or entity
which have not expired and (ii) there are no voting trusts, stockholders
agreements, proxies or other contracts or agreements or understandings in effect
to which the Company is a party or of which it has Knowledge with respect to the
voting or transfer of any of the outstanding shares of Common Stock.
Section 3.4 SEC Reports. The Company has timely filed all proxy
statements, reports and other documents required to be filed by it with the
Securities and Exchange Commission (the "SEC") under the Exchange Act or
otherwise since January 1, 1999, and made available to the Investors complete
copies of all annual reports, proxy statements and other reports filed by the
Company with the SEC, each as filed with the SEC (collectively, the "SEC
Reports"). Each SEC Report was, on the date of its filing, in compliance in all
material respects with the requirements of its respective report form and the
applicable Law and did not, on the date of its filing, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Section 3.5 Financial Statements. The consolidated financial
statements of the Company (including any related schedules and/or notes)
included in the SEC Reports have been prepared in accordance with United States
generally accepted accounting principles ("GAAP") consistently followed
throughout the periods involved (except as may be indicated in the notes
thereto) and fairly present in accordance with GAAP the consolidated financial
condition, results of operations, stockholders' equity, comprehensive income and
cash flows of the Company and the Subsidiaries as of the respective dates
thereof and for the respective periods then ended (except as may be indicated in
the notes thereto and except, in the case of interim statements, for the absence
of footnotes and as permitted by Form 10-Q and subject to changes resulting from
year-end adjustments, none of which are material in amount or effect). Except as
disclosed in the SEC Reports filed prior to the date hereof, neither the Company
nor any Subsidiary has any liability or obligation (whether accrued, absolute,
contingent, unliquidated or otherwise, whether known or unknown, whether due or
to become due and regardless of when asserted), except for (i) liabilities and
obligations reflected or disclosed in the audited consolidated balance sheet of
the Company and its Subsidiaries as of December 31, 2001, or the unaudited
consolidated balance sheet of the Company and its Subsidiaries as of September
30, 2002, or the footnotes thereto, (ii) liabilities and
6
obligations incurred in the ordinary course of business since September 30,
2002, or (iii) liabilities and obligations which, individually or in the
aggregate, have not had and would not reasonably be expected to have or result
in a Material Adverse Effect.
Section 3.6 Consents; No Violations. (a) Except as set forth in
Section 3.6(a) of the Company Disclosure Schedule, the execution, delivery or
performance by the Company of this Agreement and the Related Agreements, and the
consummation of the transactions contemplated hereby and thereby, do not and
will not (i) assuming the effectiveness of the Company Charter Amendment, the
Series A Certificate of Designations, the Series B Certificate of Designations
and the Restated Company By-Laws, conflict with, or result in a breach or a
violation of, any provision of the certificate of incorporation or by-laws or
other organizational documents of the Company or any of its Subsidiaries, (ii)
constitute, with or without notice or the passage of time or both, a breach,
violation or default, create an Encumbrance, or give rise to any right of
termination, modification, cancellation, prepayment, suspension, limitation,
revocation or acceleration, under (A) any Law or (B) any provision of any
agreement or other instrument to which the Company or any of the Subsidiaries is
a party or pursuant to which any of them or any of their assets or properties is
subject, except where such breach, violation or default, creation of an
Encumbrance, or right of termination, modification, cancellation, prepayment,
suspension, limitation, revocation or acceleration, individually or in the
aggregate, has not had and would not reasonably be expected to have a Material
Adverse Effect or (iii) except for (A) the filing of the Company Charter
Amendment, the Series A Certificate of Designations and the Series B Certificate
of Designations with the Secretary of State of the State of Delaware, (B) the
approval of the NYSE and the PCX of the listing of the shares of Common Stock
issuable upon conversion of the Shares on the NYSE and PCX, (C) the Stockholder
Approval and the filing with the SEC of the Proxy Statement (as defined below)
relating thereto, (D) any required filing under the HSR Act and any foreign
governmental and regulatory filings, notices and approvals required to be made
or obtained as contemplated by Section 5.1(e), and (E) any filings, consents,
approvals or authorizations of, notifications to, or exemptions or waivers by
any Governmental Entity or any other Person which are not, individually or in
the aggregate, material to the consummation of the transactions contemplated
hereby or thereby, require any consent, approval or authorization of,
notification to, filing with, or exemption or waiver by, any Governmental Entity
or any other Person on the part of the Company or any of its Subsidiaries.
(b) At the date hereof and at the Closing Date, the acquisition of
shares of Common Stock by any Investor in accordance with Section 3.01(e) of the
Stockholders Agreement (i) will not conflict with, or result in a breach or a
violation of, any provision of the certificate of incorporation or bylaws or
other organizational documents of the Company or any of its Subsidiaries or (ii)
will not constitute, with or without notice or the passage of time or both, a
breach, violation or default, or create an Encumbrance, or give rise to any
right of termination, modification, cancellation, prepayment, suspension,
limitation, revocation or acceleration under any Law or any
7
provision of any agreement or other instrument to which the Company or any of
its Subsidiaries is a party or pursuant to which any of them or any of their
assets or properties is subject, or (iii) is not prohibited by any agreement or
instrument referenced in clause (ii).
(c) Except as set forth in the Stockholders Agreement and the Debt
Instruments (as such term is defined in the Stockholders Agreement), at the date
hereof, any acquisition of debt securities of the Company by an Investor (i)
will not conflict with, or result in a breach or a violation of, any provision
of the certificate of incorporation or bylaws or other organizational documents
of the Company or any of its Subsidiaries, as in effect on the date hereof or
(ii) will not constitute, with or without notice or the passage of time or both,
a breach, violation or default, or create an Encumbrance, or give rise to any
right of termination, modification, cancellation, prepayment, suspension,
limitation, revocation or acceleration under any Law or any provision of any
material agreement or other instrument to which the Company or any of its
Subsidiaries is a party or pursuant to which any of them or any of their assets
or properties is subject, in each case as in effect on the date hereof, or (iii)
is not prohibited by any agreement or instrument referenced in clause (ii).
Section 3.7 Compliance with Laws. Except as disclosed in the SEC
Reports filed prior to the date hereof, the Company and its Subsidiaries are,
and since January 1, 2000, have been, in compliance in all material respects
with all foreign, federal, state, and local laws, statutes, ordinances, rules,
regulations, orders, injunctions, judgments, decrees and bodies of law
(collectively, "Laws"), and the Company and its Subsidiaries possess all
material licenses, franchise permits, consents, registrations, certificates, and
other governmental or regulatory permits, authorizations or approvals required
for the operation of the business as presently conducted and for the ownership,
lease or operation of the Company's and its Subsidiaries' properties
(collectively, "Licenses"), except where such noncompliance or failure to
possess, individually or in the aggregate, has not had and would not reasonably
be expected to have a Material Adverse Effect. All of such Licenses are valid
and in full force and effect, and the Company and its Subsidiaries have duly
performed and are in compliance in all material respects with all of their
obligations under such Licenses except where such suspension or cancellation of
such Licenses or the noncompliance with such Licenses, individually or in the
aggregate, has not had and would not reasonably be expected to have a Material
Adverse Effect. In the conduct of its business, neither the Company nor any of
its Subsidiaries nor, to the Company's Knowledge, any director, officer, agent,
employee or other Person acting on behalf of the Company or any of its
Subsidiaries, has, in any material respect, (i) used any corporate or other
funds for unlawful contributions, payments, gifts or entertainment, or made any
unlawful expenditures relating to political activity to government officials or
others or established or maintained any unlawful or unrecorded funds in
violation of Section 30A of the Exchange Act or (ii) accepted or received any
unlawful contributions, payments, gifts or expenditures.
8
Section 3.8 Absence of Certain Changes. Since June 30, 2002, neither
the Company nor any of the Subsidiaries has suffered any change, event or
development or series of changes, events or developments which, individually or
in the aggregate, has had or would reasonably be expected to have a Material
Adverse Effect.
Section 3.9 Litigation.
(a) Except as set forth in Section 3.9(a) of the Company Disclosure
Schedule or as disclosed in the SEC Reports filed prior to the date hereof,
there is no claim, action, suit, investigation or proceeding ("Litigation")
pending or, to the Knowledge of the Company, threatened against the Company or
any of its Subsidiaries or involving any of their respective properties or
assets by or before any court, arbitrator or other Governmental Entity which (i)
in any manner challenges or seeks to prevent, enjoin, alter or materially delay
the transactions contemplated by this Agreement or (ii) if resolved adversely to
the Company or a Subsidiary, individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect. The statements contained on
Schedule 3.9(a) hereto are true and correct as of the date hereof.
(b) Except as disclosed in the SEC Reports filed prior to the date
hereof, neither the Company nor any of its Subsidiaries is in default under or
in breach of any order, judgment or decree of any court, arbitrator or other
Governmental Entity, except for defaults or breaches, which, individually or in
the aggregate, have not had and would not reasonably be expected to have a
Material Adverse Effect.
Section 3.10 Employee Matters; ERISA.
(a) All (i) "employee benefit plans," as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), other
than any "multiemployer plan," as defined in Section 3(37)(A) of ERISA,
maintained or contributed to by the Company or any of its Subsidiaries and (ii)
other plans, agreements or arrangements relating to compensation or employee
benefits pursuant to which the Company or any of its Subsidiaries may have any
material liability (collectively, the "Plans"), are in compliance with all
applicable provisions of ERISA and the Internal Revenue Code of 1986, as amended
(the "Code"), and the Company and its Subsidiaries do not have any liabilities
or obligations (other than liabilities and obligations for benefits payable in
the ordinary course) with respect to any Plan, whether or not accrued,
contingent or otherwise, except (a) as described in any of the SEC Reports filed
prior to the date hereof or previously disclosed in writing to the Investors and
(b) for instances of noncompliance or liabilities or obligations that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect. Except such of the following as,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect, (x) neither the Company nor any
trade or business, whether or not incorporated (an "ERISA Affiliate"), which
together with the Company would be deemed a "single employer" within the meaning
of Section 414 of the Code or Section 4001(b) of ERISA, has incurred any
unsatisfied liability under
9
Title IV of ERISA and no conditions exist that could reasonably be expected to
present a risk to the Company or any ERISA Affiliate of incurring any such
liability (other than liability for premiums to the Pension Benefit Guaranty
Corporation arising in the ordinary course), and (y) no "employee benefit plan"
maintained or contributed to by the Company or any ERISA Affiliate, other than a
"multiemployer plan" as defined in Section 3(37)(A) of ERISA, has incurred an
"accumulated funding deficiency" (within the meaning of Section 302 of ERISA or
Section 412 of the Code) whether or not waived. As to any "multiemployer plan"
maintained or contributed to by the Company or any of its Subsidiaries or ERISA
Affiliate of the Company, neither the Company nor any ERISA Affiliate has any
Knowledge (a) that such plan is not in substantial compliance with the
applicable provisions of ERISA and the Code; or (b) that such plan has incurred
an "accumulated funding deficiency" (within the meaning of Section 302 of ERISA
or Section 412 of the Code) whether or not waived.
(b) Each Plan which is intended to be qualified under Section 401(a)
of the Code is the subject of a favorable determination letter from the IRS,
and, to the Company's Knowledge, nothing has occurred which may reasonably be
expected to result in the revocation of such determination.
(c) Except as set forth on Section 3.10(c) of the Company Disclosure
Schedule, the execution and delivery of, and performance of the transactions
contemplated in, this Agreement will not (either alone or upon the occurrence of
any additional or subsequent events) (i) constitute an event under any Plan (or
related trust), trust or loan that will or may result in any material payment
(whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to fund
benefits with respect to any current or former employee or director of the
Company or any subsidiary of the Company, or (ii) result in the triggering or
imposition of any material restrictions or limitations on the right of the
Company or any of its Subsidiaries to amend or terminate any Plan.
Section 3.11 Section 203 of the DGCL; Takeover Statute. The Board of
Directors has taken all actions necessary or advisable so that the restrictions
contained in Section 203 of the DGCL applicable to a "business combination" (as
defined in such Section) will not apply to the execution by the Investors of
this Agreement or the consummation of any of the transactions contemplated by
this Agreement. The execution, delivery and performance of this Agreement will
not cause to be applicable to the Company any "fair price," "moratorium,"
"control share acquisition" or other similar antitakeover statute or regulation
enacted under state or federal laws.
Section 3.12 Real Property Holding Corporation; Investment Company;
Public Utility Holding Company. The Company is not, and has not been at any time
during the past five years, a "United States real property holding corporation"
within the meaning of Section 897(c)(2) of the Code. Neither the Company nor any
of its Subsidiaries is an "investment company" or a "company controlled by an
investment
10
company" or an "affiliated person" or "promoter" or "principal underwriter" for,
an "investment company," within the meaning of the Investment Company Act of
1940, as amended, or a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
Section 3.13 Brokers and Finders. Except as set forth in Section
3.13 of the Company Disclosure Schedule, no agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any broker's
or finder's fee or any other commission or similar fee in connection with any of
the transactions contemplated by this Agreement based on any agreement,
arrangement or understanding with the Company or any of its Subsidiaries.
Section 3.14 Registration and Qualification.
(a) Assuming the accuracy of the representations and warranties made
by the Investors set forth in Article IV hereof, it is not necessary in
connection with the offer, sale and delivery of the Shares to the Investors in
the manner contemplated by this Agreement to register the Shares, or the shares
of Common Stock issuable upon conversion of the Shares, under the Securities Act
or the securities laws of any state thereof.
(b) The Company has not, directly or indirectly, offered, sold or
solicited any offer to buy and will not, directly or indirectly, offer, sell or
solicit any offer to buy, any security of a type or in a manner which would be
integrated with the sale of the Shares and require any of the Shares to be
registered under the Securities Act. None of the Company, its Subsidiaries or
any person acting on its or any of their behalf has engaged or will engage in
any form of general solicitation or general advertising (within the meaning of
Rule 502(c) under the Securities Act) in connection with the offering of the
Shares.
Section 3.15 Opinion of Financial Advisor. The Board of Directors
has received the opinions of Xxxxxxxx Xxxxx Xxxxxx & Xxxxx Financial Advisors,
Inc. ("Xxxxxxxx Xxxxx"), financial advisor to the Board of Directors, to the
effect that, as of the date of each such opinion, (i) the transactions
contemplated by this Agreement and the Goldman Purchase Agreement are fair, from
a financial point of view to the Company and its public stockholders, other than
the Investors and the Goldman Investors and (ii) the transactions contemplated
by this Agreement and the Goldman Purchase Agreement are fair, from a financial
standpoint to the Company and its Restricted Subsidiaries (as such term is
defined in the Indenture, dated January 21, 1999, between the Company and The
Bank of New York, as trustee, relating to the issuance of the Company's 9-3/4%
Senior Subordinated Notes due 2009) (together, the "Fairness Opinions").
11
Section 3.16 Negotiations with Third Parties. Except in connection
with the transactions contemplated by this Agreement and the Goldman Purchase
Agreement and subject to Section 6.6, the Company is not as of the date hereof,
and since November 8, 2002, has not been, directly or indirectly, negotiating,
seeking to negotiate or otherwise engaging in discussions with any Person (other
than with respect to the restructuring transactions set forth in Section 6.1 of
the Company's Disclosure Schedule) relating to (a) an acquisition of greater
than 20% of the Common Stock, (b) a tender or exchange offer for the Common
Stock, (c) a merger, consolidation or other business combination involving the
Company or any of its material Subsidiaries, or (d) an offer to acquire in any
manner a greater than 20% equity interest in the Company, or more than 20% of
the assets of the Company and its Subsidiaries, taken as a whole.
Section 3.17 Environmental Laws. Except as set forth in Section 3.17
of the Company Disclosure Schedule and except as disclosed in the SEC Reports
filed prior to the date hereof, each of the Company and its Subsidiaries is in
compliance with all Environmental Laws applicable to such entity or its business
except for such non-compliances as, individually or in the aggregate, has not
had and would not reasonably be expected to have a Material Adverse Effect.
Except as set forth in Section 3.17 of the Company Disclosure Schedule, neither
the Company nor any of its Subsidiaries has received written notice of, or is
aware of, any violation or alleged violation, or any liability or asserted
liability, under any Environmental Law, with respect to such entity or its
business or its premises which, individually or in the aggregate, has had or
would reasonably be expected to have a Material Adverse Effect. Except as set
forth in Section 3.17 of the Company Disclosure Schedule, neither the Company
nor any of its Subsidiaries has any liability for environmental clean-up,
removal, remediation, or damages, except for such environmental clean-up,
removal, remediation, or damages, as, individually or in the aggregate, has not
had and would not reasonably be expected to have a Material Adverse Effect.
Section 3.18 Title to Assets. Except for such encumbrances which,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect, each of the Company and its
Subsidiaries has good and marketable title, subject only to the encumbrances not
prohibited by the Credit Agreement, to all personal property purported to be
owned by it and to all property reflected in the most recent balance sheet
referred to in Section 3.5 (except as sold or otherwise disposed of in the
ordinary course of business as no longer used or useful in the conduct of the
business). Except as had not had and would not reasonably be expected to have a
Material Adverse Effect, each material lease of real and personal property to
which the Company or any of its Subsidiaries is a party is in full force and
effect and, except for such defaults as, individually or in the aggregate, have
not had and would not reasonably be expected to have a Material Adverse Effect,
is not subject to termination because of default or otherwise.
12
Section 3.19 Labor Relations. As of the date hereof, the Company
represents that, to its Knowledge, except as set forth in Section 3.19 of the
Company Disclosure Schedule, (a) except for such strikes as, individually or in
the aggregate, have not had and would not reasonably be expected to have a
Material Adverse Effect, no strikes against either the Company or its
Subsidiaries are pending or, to the Company's Knowledge, threatened, and no
other labor disputes that, individually or in the aggregate, have not had and
would reasonably be expected to have a Material Adverse Effect are pending or,
to the Company's Knowledge, threatened; (b) except as have not had and would not
reasonably be expected to have a Material Adverse Effect, hours worked by and
payment made to employees of the Company or any of its Subsidiaries comply with
the Fair Labor Standards Act and each other federal, state, local or foreign law
applicable to such matter; (c) except as have not had and would not reasonably
be expected to have a Material Adverse Effect, all payments due from either the
Company or its Subsidiaries for employee health and welfare insurance have been
paid or accrued as a liability on the books of such entity; (d) neither the
Company nor any of its Subsidiaries is a party to or bound by any collective
bargaining agreement, management agreement, consulting agreement or any
employment agreement, except for any collective bargaining agreement, management
agreement, consulting agreement or any employment agreement as, individually or
in the aggregate, have not had and would not reasonably be expected to have a
Material Adverse Effect; (e) except as has not had and would not reasonably be
expected to have a Material Adverse Effect, there is no organizing activity
involving either the Company or its Subsidiaries pending or, to either the
Company or its Subsidiaries' Knowledge, threatened by any labor union or group
of employees; (f) except as have not had and would not reasonably be expected to
have a Material Adverse Effect, there are no representation proceedings pending
or, to the Company's Knowledge, threatened with the National Labor Relations
Board, and no labor organization or group of employees of either the Company or
its Subsidiaries has made a pending demand for recognition; and (g) there are no
complaints or charges against either the Company or its Subsidiaries pending or,
to the Knowledge of the Company, threatened to be filed with any Governmental
Authority or arbitrator based on, arising out of, in connection with, or
otherwise relating to the employment or termination of employment by either the
Company or its Subsidiaries of any individual which, individually or in the
aggregate, if adversely determined, would reasonably be expected to have a
Material Adverse Effect.
Section 3.20 Intellectual Property. Each of the Company and its
Subsidiaries owns or is licensed or otherwise possesses sufficient rights to use
and transfer such rights in all the patents, trademarks, service marks, trade
names, copyrights, know-how, franchises, software and software licenses used in
or necessary for the operation of its business as currently conducted, except
where such failure to own, license or possess the right to use and transfer,
individually or in the aggregate, has not had and would not reasonably be
expected to have a Material Adverse Effect.
13
Section 3.21 Transactions with Affiliates. Except as set forth in
Section 3.21 of the Company Disclosure Schedule or the SEC Reports filed prior
to the date hereof and except for events (or series of related matters) as to
which the amounts involved are not material to the Company, since the Company's
proxy statement dated April 2, 2002, no event has occurred that would be
required to be reported as a "Certain Relationship or Related Transaction"
pursuant to Item 404 of Regulation S-K promulgated by the SEC.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each Investor hereby represents and warrants to the Company, solely
as to itself, separately and not jointly, as of the date hereof and as of the
Closing, as follows:
Section 4.1 Organization of the Investors. Such Investor is duly
organized and validly existing under the laws of the jurisdiction of its
organization and has the requisite power and authority to carry on its business
as it is now being conducted.
Section 4.2 Due Authorization. Such Investor has all right, power
and authority to enter into this Agreement and the Related Agreements and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery by such Investor of this Agreement and each of the Related Agreements,
and the compliance by such Investor with each of the provisions of this
Agreement and the Related Agreements (a) are within the power and authority of
such Investor and (b) have been duly authorized by all necessary action on the
part of such Investor. This Agreement has been, and each of the Related
Agreements when executed and delivered by such Investor at the Closing in
accordance with the terms of this Agreement will be, duly and validly executed
and delivered by such Investor, and this Agreement constitutes, and each of the
Related Agreements when executed and delivered by such Investor will constitute,
a valid and binding agreement of such Investor enforceable against such Investor
in accordance with its respective terms except as such enforcement is limited by
bankruptcy, insolvency and other similar laws affecting the enforcement of
creditors' rights generally and for limitations imposed by general principles of
equity.
Section 4.3 Consents; No Violations. Neither the execution, delivery
or performance by such Investor of this Agreement and the Related Agreements nor
the consummation of the transactions contemplated hereby or thereby will (a)
conflict with, or result in a breach or a violation of, any provision of the
organizational documents of such Investor, (b) constitute, with or without
notice or the passage of time or both, a breach, violation or default, create an
Encumbrance, or give rise to any right of termination, modification,
cancellation, prepayment, suspension, limitation, revocation or acceleration,
under (i) any Law or (ii) any provision of any agreement or other instrument
14
to which such Investor is a party or pursuant to which such Investor or its
assets or properties is subject, or (c) except for any required filing under the
HSR Act and any foreign governmental and regulatory filings, notices and
approvals required to be made or obtained as contemplated by Section 5.1(e)
hereof, and filings, consents, approvals or authorizations of, notifications to,
or exemptions or waivers by any Governmental Entity or any other Persons which
are not, individually or in the aggregate, material to the consummation of the
transactions contemplated hereby or thereby, require any consent, approval or
authorization of, notification to, filing with, or exemption or waiver by, any
Governmental Entity or any other Person on the part of such Investor.
Section 4.4 Ownership of Capital Stock. Neither such Investor nor
any of its respective subsidiaries, directors, officers or members beneficially
owns, directly or indirectly, any capital stock of the Company or is party to
any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any capital stock of the Company or any security
convertible into capital stock of the Company, other than this Agreement and the
Related Agreements.
Section 4.5 Investment.
(a) Such Investor is acquiring Shares for investment for its own
account, and not with a view to any distribution thereof in violation of the
securities laws. Such Investor understands that the Shares have not been
registered under the Securities Act by reason of specific exemptions therefrom
which depend upon, among other things, the bona fide nature of the investment
intent and the accuracy of the Investor's representations as expressed herein.
(b) Such Investor's financial condition and investments are such
that it is in a position to bear the economic risks of the investment and
withstand the complete loss of the investment. Such Investor has extensive
knowledge and experience in financial and business matters and has the
capability to evaluate the merits and risks of an investment in such Shares.
(c) Such Investor qualifies as an "accredited investor" as such term
is defined in Section 2(15) of the Securities Act and Regulation D promulgated
thereunder.
Section 4.6 Rule 144. Such Investor acknowledges that the Shares to
be purchased by such Investor must be held indefinitely unless subsequently
registered under the Securities Act or any applicable state securities laws or
unless exemptions from such registrations are available. Such Investor is aware
of the provisions of Rule 144 promulgated under the Securities Act that permit
limited resale of securities purchased in a private placement subject to the
satisfaction of certain conditions.
Section 4.7 Brokers and Finders; Transaction Expenses. No agent,
broker, investment banker, financial advisor or other firm or Person is or will
be entitled to any broker's or finder's fee or any other commission or similar
fee in connection with
15
any of the transactions contemplated by this Agreement based on any agreement,
arrangement or understanding with such Investor.
Section 4.8 No Arrangements with Respect to Company Securities.
Except for arrangements, agreements or understandings between and among the
Investors and their Affiliates, none of the Investors or any of their respective
Affiliates has any arrangement, agreement or understanding with any other Person
(other than arrangements, agreements or understandings (A) with the Company and
(B) among each other) for the purpose of acquiring, holding, voting or disposing
of beneficial ownership of securities of the Company.
Section 4.9 Sufficient Funds. Such Investor has available, or has
obtained commitments for, sufficient funds to acquire its portion of the Shares
to be purchased pursuant to this Agreement.
ARTICLE V
CONDITIONS PRECEDENT
Section 5.1 Conditions to Obligations of the Investors and the
Company. The respective obligations of each of the Investors and the Company to
consummate the transactions contemplated hereby shall be subject to the
satisfaction or waiver at or prior to the Closing of each of the following
conditions:
(a) HSR Approval. The applicable waiting period (and any extension
thereof) under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), if any, relating to the transactions contemplated by
this Agreement shall have been terminated or shall have expired.
(b) Laws. No Laws shall be in effect which prohibit the consummation
of the transactions contemplated hereby.
(c) Stockholder Approval. The approval of holders of the requisite
number of the shares of Common Stock outstanding on the record date for the
Special Meeting (as defined below) in accordance with the requirements of the
DGCL and the rules of the NYSE and PCX, as applicable, shall have been received
for (i) the issuance of the Shares and the shares of Common Stock issuable upon
conversion of the Shares, (ii) the issuance and sale of 47,125 shares of Series
A Preferred Stock and 47,125 shares of Series B Preferred Stock to the Goldman
Investors pursuant to the Goldman Purchase Agreement and (iii) the Company
Charter Amendment (the "Stockholder Approval").
(d) Senior Debt Restructuring. The Company shall have consummated a
refinancing or restructuring of its Credit Agreement (the "Senior Debt
16
Refinancing") on terms and conditions no less favorable to the Company than
those set forth in Exhibit G hereto.
(e) Foreign Governmental and Regulatory Filings. The Company and/or
the Investors shall have made any material foreign governmental and regulatory
filings, given all material notices and obtained any material approvals that the
Company and the Investors reasonably agree are required in connection with the
consummation of the transactions contemplated by this Agreement and the Related
Agreements.
(f) NYSE and PCX Listing. The shares of Common Stock issuable upon
conversion of the Shares shall have been approved for listing on the NYSE and
PCX, subject to official notice of issuance.
(g) Receipt of Proceeds. The Company shall have received or shall
receive simultaneously with the Closing gross proceeds (before giving effect to
the payment of fees and expenses) of not less than $47,125,000 from simultaneous
issuances of its Series A Preferred Stock and Series B Preferred Stock to
parties other than the Investors on the terms provided to the Investors on the
date hereof.
Section 5.2 Conditions to the Investors' Obligations. The obligation
of each of the Investors to consummate the transactions contemplated hereby
shall be subject to the satisfaction at or prior to the Closing of each of the
following conditions:
(a) Representations and Warranties. All of the representations and
warranties of the Company set forth in this Agreement shall be true and correct,
in each case as of the date of this Agreement and as of the Closing Date, as if
made at and as of such time, except (i) to the extent expressly made as of an
earlier date, in which case as of such date, (ii) in the case of any of the
representations and warranties (other than those set forth in the second
sentence of Section 3.1(b), Sections 3.2-3.6, Sections 3.11-3.16 and Section
3.21) where the failure to be true and correct (without giving effect to any
limitation as to "materiality" or "Material Adverse Effect" set forth therein)
would not have a Material Adverse Effect, (iii) in the case of the
representations and warranties set forth in the second sentence of Section
3.1(b), Sections 3.2-3.6, Sections 3.11-3.16 and Section 3.21, which shall be
true and correct in all material respects on each such date (except to the
extent statements in such representations and warranties are qualified by
"materiality" or "Material Adverse Effect", which statements shall be true and
correct in all respects on each such date), and (iv) for changes specifically
permitted by this Agreement.
(b) Performance of Obligations. The Company shall have performed,
satisfied and complied with, in all material respects, all covenants and
agreements set forth in this Agreement required to be performed by it under this
Agreement at or prior to the Closing.
17
(c) Director Resignation. A director of the Company shall have
resigned from the Board of Directors effective as of the Closing.
(d) Officer's Certificates. The Company shall have delivered to the
Investors a certificate signed by its chief executive officer, dated the Closing
Date, in form and substance reasonably satisfactory to the Investors, to the
effect that the conditions set forth in Sections 5.2(a), 5.2(b) and 5.2(c) have
been satisfied.
(e) Material Adverse Effect. Since June 30, 2002, there shall not
have occurred any change, event or development or series of changes, events or
developments which, individually or in the aggregate, has had or would
reasonably be expected to have a Material Adverse Effect.
(f) Related Agreements. At or prior to the Closing, the Company
shall have delivered to each of the Investors originals of each of (i) the
Related Agreements, (ii) the Amended and Restated Governance Agreement, dated as
of the Closing Date, among the Company, the Goldman Investors and the other
parties signatory thereto (the "Restated Goldman Governance Agreement") and
(iii) the Amended and Restated Registration Rights Agreement, dated as of the
Closing Date, among the Company, the Goldman Investors and the other parties
signatory thereto (the "Restated Goldman Registration Rights Agreement"), in
each case, duly executed by the Company and each of the other parties thereto.
(g) Other Deliveries. The Company shall have made the deliveries set
forth in Section 2.2(a) hereof. Items delivered pursuant to Section 2.2(a)(v)
shall include, without limitation, (i) a resolution of the Board of Directors
affirmatively determining that no relationship has been created between the
Company and either of Xxxx X. Xxxxxxx or Xxxxxx X. Small solely by virtue of
this Agreement and the Related Agreements which would preclude the Board of
Directors from determining that either of Xxxx X. Xxxxxxx or Xxxxxx X. Small is
an independent director under the NYSE's proposed corporate governance rules (in
the form filed with the SEC on August 16, 2002 and without giving effect to any
subsequent amendment of such proposal or rules), and (ii) a certificate of the
Company's Chief Executive Officer and Chief Financial Officer certifying that
the transactions contemplated by this Agreement do not violate the terms of the
Senior Debt Refinancing, and as to such officers' good faith belief, based on
projections prepared by the Company using assumptions believed to be reasonable
in good faith, that the Company will be able to satisfy the financial covenants
contained in the Senior Debt Financing, or such similar certifications as are
reasonably acceptable to the Investors.
(h) Certificates of Designations. Each of the Series A Certificate
of Designations and the Series B Certificate of Designations shall have been
duly filed with the Secretary of State of the State of Delaware, shall have
become effective and shall be in full force and effect.
18
(i) Legal Opinion. The Investors shall have received an opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, special counsel to the Company, dated
the Closing Date and addressed to each Investor, in the form attached hereto as
Exhibit H.
(j) Financing Document Amendments. The Company shall have not
amended, modified, waived, terminated or otherwise altered in any material
respect the provisions, terms or conditions of any other agreements between the
Company and any other Person with respect to an investment in shares of Series A
Preferred Stock and Series B Preferred Stock and the rights and obligations
incident thereto without the Investors' consent.
Section 5.3 Conditions to the Obligations of the Company. The
obligation of the Company to consummate the transactions contemplated hereby
shall be subject to the satisfaction at or prior to the Closing of each of the
following conditions:
(a) Representations and Warranties. All of the representations and
warranties of the Investors set forth in this Agreement shall be true and
correct in all material respects, in each case as of the date of this Agreement
and as of the Closing Date, as if made at and as of such time, except (i) to the
extent expressly made as of an earlier date, in which case as of such date and
(ii) in the case of the representations and warranties set forth in Sections
4.1, 4.2 and 4.8, which shall be true and correct in all respects on each such
date.
(b) Performance of Obligations. The Investors shall have performed,
satisfied and complied with, in all material respects, all covenants and
agreements set forth in this Agreement required to be performed by any of them
under this Agreement at or prior to the Closing.
(c) Officers' Certificates. Each of the Investors shall have
delivered to the Company a certificate signed by an authorized signatory
thereof, dated the Closing Date, in form and substance reasonably satisfactory
to the Company, to the effect that the conditions set forth in Section 5.3(a)
and 5.3(b) have been satisfied.
(d) Related Agreements. At or prior to Closing, the Investors shall
have delivered to the Company originals of the Related Agreements duly executed
by each of the Investors.
(e) Other Deliveries. The Investors shall have made the deliveries
set forth in Section 2.2(b) hereof.
(f) Legal Opinion. The Company shall have received an opinion of
Ropes & Xxxx, special counsel to the Investors, dated the Closing Date and
addressed to the Company, in a form reasonably acceptable to the Company.
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ARTICLE VI
COVENANTS
Section 6.1 Conduct of Business Pending the Closing. The Company
covenants and agrees that, during the period from the date of this Agreement and
continuing until the earlier of the termination of this Agreement or the Closing
(A) unless the Investors otherwise agree in writing, (B) except as set forth in
Section 6.1 of the Company Disclosure Schedule or (C) except for those actions
specifically set forth in Sections 2.06(i), (ii) or (iii) of the Stockholders
Agreement, in the form attached hereto as Exhibit C, which are permitted to be
taken by the Company or its Significant Subsidiaries without the approval of a
majority of the directors to be appointed by the Investors to the Board of
Directors, the Company shall, and shall cause each of its Significant
Subsidiaries to, (i) conduct its business only in the ordinary course and
consistent with past practice; (ii) use reasonable best efforts to preserve and
maintain its assets and properties and its relationships with its customers,
suppliers, advertisers, distributors, agents, officers and employees and other
persons with which it has significant business relationships; (iii) use its
reasonable best efforts to maintain all of the material assets it owns or uses
in the ordinary course of business consistent with past practice; (iv) use its
reasonable best efforts to preserve the goodwill and ongoing operations of its
business; (v) maintain its books and records in the usual, regular and ordinary
manner, on a basis consistent with past practice; and (vi) comply in all
material respects with applicable Laws. Notwithstanding the foregoing and except
as expressly contemplated by this Agreement or as set forth on Section 6.1 of
the Company Disclosure Schedule, between the date of this Agreement and the
Closing, the Company shall not, and shall cause each of its Significant
Subsidiaries not to, do any of the following without the prior written consent
of the Investors, which consent shall not be unreasonably withheld or delayed:
(a) amend the Certificate of Incorporation or bylaws or other
organizational documents except as contemplated by this Agreement;
(b) become liable in respect of any guarantee or incur, assume or
otherwise become liable in respect of any debt, except for guarantees or
borrowings in the ordinary course of business as permitted under the Credit
Agreement;
(c) make any declaration, setting aside or payment of any dividend
or other distribution with respect to, or any repurchase, redemption, early
repayment or other acquisition of, any of its capital stock, securities directly
or indirectly convertible into capital stock, or debt instruments, except as
required by the terms thereof;
(d) take any action that is reasonably likely to result in (i) any
of the representations and warranties set forth in Article III (as modified by
any section of the Company Disclosure Schedule relating thereto) becoming false
or inaccurate in any material respect as of, or at any time prior to, the
Closing Date or (ii) any of the
20
conditions to the obligations of the Investors set forth in Section 5.2(a) or
(b) not being satisfied;
(e) amend, modify, waive, terminate or otherwise alter in any
material respect the provisions, terms or conditions of any other agreements
between the Company and any other Person that has committed to purchase shares
of Series A Preferred Stock and Series B Preferred Stock or any agreements to be
entered into in connection therewith; or
(f) agree to take any of the actions restricted by this Section 6.1.
Notwithstanding the foregoing, nothing in this Section 6.1 shall in
any way be deemed to restrict or prohibit the Company's or its Subsidiaries'
ability to (i) pay fees to the lenders under the Credit Agreement, (ii) enter
into waivers with respect to the Credit Agreement, (iii) amend the Credit
Agreement (consistent with Section 5.1(d)), or (iv) take any other action with
respect to the Credit Agreement in accordance with past practice or in the
ordinary course of business.
Section 6.2 Amendment of Certificate of Incorporation and By-Laws of
the Company. At or prior to the Closing and subject to the Stockholder Approval,
the Company shall cause the Company Charter Amendment, the Series A Certificate
of Designations and the Series B Certificate of Designations to be filed with
the Secretary of State of Delaware and shall cause the Restated Company By-laws
to become effective. The Company shall use its reasonable best efforts to ensure
that the Restated Company By-Laws will not be inconsistent, at any time, with
any of the terms and provisions contained in the Stockholders Agreement for so
long as such agreement is in effect.
Section 6.3 Certain Payments.
(a) The Company shall, on the date set forth below, pay to each of
Berkshire Partners LLC, a Massachusetts limited liability company ("Berkshire
Partners") and Greenbriar Equity Group LLC, a Delaware limited liability company
("Greenbriar Equity Group" and together with Berkshire Partners, the "Investor
Managers"), such portion of a transaction fee equal to $1,500,000 in the
aggregate, subject to reduction pursuant to Section 6.3(a)(ii) below (the
"Transaction Fee"), as is set forth opposite the names of the Investors
affiliated with such Investor Managers as set forth on Schedule 6.3(a) hereto:
(i) at the Closing, against receipt from each Investor of the
Purchase Price payable by such Investor pursuant to Section 2.2(b) hereof; or
(ii) immediately upon termination of this Agreement; provided
that if this Agreement is terminated by (A) any of the Investors as a result of
the failure to satisfy the condition set forth in Section 5.2(e) of this
Agreement or due to any
21
inaccuracy of a representation or warranty which inaccuracy is due to an event
occurring after the date hereof which is a Material Adverse Effect, no
Transaction Fee shall be payable, (B) the Company pursuant to Section 7.1(c)(ii)
as a result of a breach or failure to perform by any of the Investors, no
Transaction Fee shall be payable, (C) either the Company or the Investors
pursuant to Section 7.1(b)(iii), the Transaction Fee payable by the Company to
the Investor Managers shall be equal to $750,000, or (D) either the Company or
the Investors as a result of the failure to satisfy any of the conditions set
forth in Sections 5.1(a), (b), (d), (e) or (f) (provided, the Investors' failure
to fulfill any obligation under this Agreement was not the cause of, or did not
result in the failure of such condition), the Transaction Fee payable by the
Company to the Investor Managers shall be equal to $750,000. Any payment
pursuant to this Section 6.3(a)(ii) shall be paid in immediately available funds
within two (2) business days of a termination of this Agreement.
(b) Upon the execution of this Agreement, the Company shall pay to
the Investor Managers an aggregate amount equal to (A) $550,000 (which amount is
intended to approximate the Investors' expenses incurred solely in connection
with the transactions contemplated by this Agreement through September 11, 2002)
plus (B) 50% of all reasonable, documented out-of-pocket legal, travel and
accounting expenses incurred by the Investors after September 11, 2002 and on or
prior to the date hereof solely in connection with the transactions contemplated
by this Agreement. Upon the earlier to occur of (x) the Closing, or (y) two (2)
business days following termination of this Agreement, the Company shall pay to
the Investor Managers an aggregate amount equal to (A) 50% of all reasonable,
documented out-of-pocket legal, travel and accounting expenses incurred by the
Investors after September 11, 2002 and on or prior to the date hereof solely in
connection with the transactions contemplated by this Agreement plus (B) all
reasonable, documented out-of-pocket legal, travel and accounting expenses
(including, without limitation, filing fees incurred with respect to any filing
made under the HSR Act by the Investors) incurred by the Investors solely in
connection with the transactions contemplated by this Agreement after the date
hereof and on or prior to the earlier to occur of (1) the Closing Date or (2)
the date of the termination of this Agreement (collectively, the amounts
referred to in the first two sentences of this Section 6.3(b) are referred to as
the "Expenses"); provided, however, that in the event that the Company
terminates this Agreement pursuant to Section 7.1(c)(ii) as a result of a breach
or a failure to perform by any of the Investors of this Agreement, the term
"Expenses" shall not include any expenses incurred by the Investors after the
date of this Agreement. The amounts payable by the Company to the Investor
Managers pursuant to this Section 6.3(b) shall be allocable among the Investor
Managers in proportion to the amounts set forth opposite the names of the
Investors affiliated with such Investor Managers as set forth on Schedule 6.3(a)
hereto.
(c) The provisions of this Section 6.3 supercede and replace the
provisions of the expense reimbursement letter, dated October 22, 2002, between
the Company and Greenbriar Equity Group LLC.
22
Section 6.4 Availability of Common Stock. From and after the
Closing, the Company shall at all times authorize, reserve and keep available
out of its authorized but unissued Common Stock, for the purpose of enabling the
conversion of the Shares, the full number of shares of Common Stock then
issuable upon the conversion of the Shares. The Company will, from time to time,
in accordance with the laws of the State of Delaware, use its reasonable efforts
to increase the authorized amount of Common Stock if at any time the number of
shares of Common Stock remaining unissued and available for issuance shall be
insufficient to permit conversion of the Shares.
Section 6.5 Proxy Statement; Stockholder Approval.
(a) The Company shall, in accordance with applicable law and its
Certificate of Incorporation and By-Laws:
(i) duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Special Meeting") as soon as practicable
following the mailing of the Proxy Statement (as defined below) for the purpose
of obtaining the Stockholder Approval;
(ii) prepare a form of proxy statement to be mailed to the
stockholders of the Company in connection with the Special Meeting (the "Proxy
Statement") as soon as practicable after the date hereof (provided that the
Investors and their counsel shall be given reasonable opportunity to review and
comment on the preliminary proxy statement, any amendments thereto and related
communications with stockholders prior to filing with the SEC and provided
further that the Investors shall have the right to consent to any descriptions
of or references to (i) the Investors or any of their Affiliates, and (ii) the
Series A Certificate of Designations, the Series B Certificate of Designations
and the Related Agreements and the transactions contemplated thereby in the
Proxy Statement or such communications, which consent shall not be unreasonably
withheld or delayed) and use its reasonable best efforts (x) (1) to respond as
promptly as practicable to any comments made by the SEC with respect to the
Proxy Statement and (2) to promptly supply the Investors with copies of all
correspondence between the Company or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement, and (y) to cause the definitive Proxy Statement to be mailed to its
stockholders at the earliest practicable date following the clearance of the
Proxy Statement by the SEC and, if necessary, after the Proxy Statement shall
have been so mailed, promptly circulate amended, supplemental or supplemented
proxy material, and, if required in connection therewith, resolicit proxies;
(iii) except to the extent the Board of Directors determines
in good faith, after consultation with outside counsel, that contrary action is
required by such Board of Directors' fiduciary duties under applicable
23
law, recommend, without qualification, that the stockholders of the Company vote
to adopt and approve (x) the issuance of the Shares and the shares of Common
Stock issuable upon conversion of the Shares, (y) the Company Charter Amendment
and (z) the adoption of the Hexcel Corporation 2003 Incentive Stock Plan and
amendments to certain of the Company's existing equity incentive plans,
substantially on terms set forth in Exhibit I hereto, and include in the Proxy
Statement such unqualified recommendations and take all lawful action to solicit
such approvals and acceptances.
(b) The Company will advise the Investors, promptly after it
receives notice thereof, of the time when any supplement or amendment has been
filed or of any request by the SEC for an amendment of or supplement to the
Proxy Statement or comments thereon and responses thereto or requests by the SEC
for additional information. If at any time the Company or the Investors,
respectively, discover any information relating to the Company or the Investors,
or any of their respective affiliates, officers or directors, that should be set
forth in an amendment or supplement to the Proxy Statement so that the document
will not include any misstatement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, then the party that
discovers any misleading information shall promptly notify the other parties
hereto and an appropriate amendment or supplement describing the information
shall be promptly filed with the SEC and, to the extent required by law or
regulation, disseminated to the Company's stockholders.
(c) The Company shall use reasonable efforts to ensure that the
Proxy Statement (including without limitation any SEC Reports incorporated by
reference therein) shall comply in all material respects with all applicable
federal or other securities laws, except that the Company shall have no
obligation as to information provided by any of the Investors.
Section 6.6 No Solicitation.
(a) Except as consented to by the Investors and except to satisfy
the condition set forth in Section 5.1(g) of this Agreement, the Company shall
not, and shall cause its Subsidiaries not to, and shall use its reasonable best
efforts to cause its officers, directors, employees, financial advisors,
consultants, attorneys, accountants, and other agents not to, directly or
indirectly, solicit, initiate, encourage or facilitate or take any action to
solicit, initiate, encourage or facilitate the submission or making of any
Alternate Proposal or any inquiry with respect thereto or engage in discussions
or negotiations with any Person with respect thereto, or, in connection with any
Alternate Proposal or potential Alternate Proposal, disclose any nonpublic
information relating to it or its Subsidiaries or afford access to the
properties, books or records of it or its Subsidiaries to any Person that has
made, or, to such party's knowledge, is considering making, any Alternate
Proposal; provided, however, in the event that the Company shall
24
receive an Alternate Proposal that could reasonably be expected to result in a
Superior Proposal that was not solicited by it after the date hereof and which
did not otherwise result from a breach of this Section 6.6, then (i) the Company
or its representatives may make such inquiries or conduct such discussions with
respect to such Alternate Proposal as the Board of Directors, after consultation
with outside legal counsel, may deem necessary to inform itself for the purpose
of exercising its fiduciary duties and (ii) if the Board of Directors of the
Company by a majority vote determines in good faith (after receiving advice of a
financial adviser of nationally recognized reputation) that such Alternate
Proposal is reasonably likely to result in a Superior Proposal, the Company and
its representatives may conduct such additional discussions or provide such
information as the Board of Directors may determine, but only if, (i) prior to
such additional discussions or such provision of information the Board of
Directors by a majority vote shall have determined in good faith, after
consultation with outside legal counsel, that the failure to take such action
would reasonably be expected to constitute a breach by it of its fiduciary
duties to its stockholders under applicable law and (ii) prior to providing any
such information, the Company shall have received from such Person an executed
agreement protecting the confidentiality of the information to be provided.
(b) Nothing contained in this Agreement shall prevent the Board of
Directors from complying with Rule 14e-2 under the Exchange Act with regard to
an Alternate Proposal.
(c) Upon receiving any unsolicited Alternate Proposal (or any
amendment, supplement or change to any previously submitted Alternate Proposal)
or any inquiry that could reasonably be expected to lead to an Alternate
Proposal, the Company shall promptly (and in no event later than two business
days after receipt of any Alternate Proposal or amendment, supplement or change
thereto) notify the Investors of the receipt of such Alternate Proposal or
amendment, supplement or change to any previously received Alternate Proposal or
any inquiry that could reasonably be expected to lead to an Alternate Proposal
and the identity of the Person making such proposal or submitting such
amendment, supplement or change and the material terms and conditions of such
Alternate Proposal or any inquiry that could reasonably be expected to lead to
an Alternate Proposal.
(d) Except as set forth in this Section 6.6(d), the Board of
Directors shall not withdraw its recommendation of the transactions contemplated
by this Agreement or approve or recommend, or cause the Company to enter into
any agreement with respect to, any Alternate Proposal. Notwithstanding the
foregoing, if the Board of Directors by a majority vote determines in good
faith, after consultation with outside legal counsel, that such withdrawal of
recommendation or approval or recommendation of a Superior Proposal or entering
into an agreement with respect to a Superior Proposal may reasonably be expected
to be required to satisfy its fiduciary duties, the Board of Directors may
withdraw its recommendation of the transactions contemplated hereby or approve
or recommend a Superior Proposal, or cause the Company to enter into an
25
agreement with respect to a Superior Proposal, but in each case only (i) after
providing written notice to the Investors (a "Notice of Superior Proposal")
advising the Investors that the Board of Directors has received a Superior
Proposal, specifying the material terms and conditions of such Superior Proposal
and identifying such Person making such Superior Proposal and (ii) if the
Investors do not, within five business days of the Investors' receipt of the
Notice of Superior Proposal, make an offer which the Board of Directors by a
majority vote determines in good faith (based on the advice of a financial
advisor of nationally recognized reputation) to be as favorable to the Company's
stockholders as such Superior Proposal; provided, however, the Company shall not
be entitled to withdraw its recommendation of the transactions contemplated
hereby or enter into any agreement with respect to a Superior Proposal unless
this Agreement has been or concurrently is terminated by its terms pursuant to
Section 7.1 and the Company has paid any amounts due to the Investors pursuant
to Section 7.3.
(e) For purposes of this Agreement, "Alternate Proposal" means any
offer or proposal for, or any indication of interest in, any (i) direct or
indirect acquisition or purchase of a business or assets that constitute 20% or
more of the net revenues, net income or the assets of the Company and its
Subsidiaries, taken as a whole, (ii) direct or indirect acquisition or purchase
of 20% or more of any class of equity securities of the Company, (iii) tender
offer or exchange offer that if consummated would result in any person
beneficially owning 20% or more of any class of equity securities of the
Company, or (iv) merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving the Company, other
than the transactions contemplated by this Agreement and the Xxxxxxx Purchase
Agreement.
(f) For purposes of this Agreement, "Superior Proposal" means any
bona fide Alternate Proposal, which does not contain any due diligence
condition, on terms that the Board of Directors of the Company determines in its
good faith judgment (after consultation with a financial advisor of nationally
recognized reputation and outside counsel) to be more favorable from a financial
point of view to the Company's stockholders than the transactions contemplated
by this Agreement, taking into account any changes to the transactions
contemplated by this Agreement that have been proposed by the Investors in
response to such proposal.
Section 6.7 HSR Act; Other Filings. Each of the Investors and the
Company shall cooperate in making required filings under the HSR Act and any
foreign governmental and regulatory filings, notices and approvals required to
be made or obtained as contemplated by Section 5.1(e) hereof.
Section 6.8 Consents; Approvals. The Company shall use its
commercially reasonable efforts to obtain, as promptly as practicable, all
consents, waivers, exemptions, approvals, authorizations or orders
(collectively, "Consents") (including, without limitation (i) all Consents
required to avoid any breach, violation, default, encumbrance or right of
termination, modification, cancellation, prepayment,
26
suspension, limitation, revocation or acceleration of any material agreement or
instrument to which the Company is a party or its properties or assets are
bound, and (ii) all United States and foreign governmental and regulatory
approvals), required in connection with the consummation of the transactions
contemplated by this Agreement and the Related Agreements, in each case as
promptly as practicable, except where the failure to obtain such Consents,
individually or in the aggregate, has not had and would not be reasonably
expected to have a Material Adverse Effect.
Section 6.9 Debt Refinancing.(a) The Company shall use its
reasonable best efforts to consummate the Senior Debt Refinancing on
substantially the terms set forth in Exhibit G hereto.
(b) Prior to Closing, the Company shall (i) use its commercially
reasonable efforts to cause the terms of the agreements to be entered into
pursuant to the Senior Debt Refinancing, including any senior ranked revolving
credit facility, to not prohibit the acquisition of debt securities, other than
debt securities issued pursuant to the Senior Debt Refinancing, of the Company
by the Investors and (ii) not enter into any agreement, other than the
agreements referred to in clause (i), which would prohibit the acquisition of
debt securities by the Investors.
Section 6.10 Listing. The Company shall use its reasonable best
efforts to continue to have its Common Stock listed on the NYSE and PCX or
another national securities exchange for so long as the Investors own any
Shares.
Section 6.11 Cooperation. Each of the Investors, on the one hand,
and the Company, on the other, agrees to use commercially reasonable efforts to
cause, or not to impede, to the extent that such party has control or influence
over such matters, satisfaction of the conditions to the other party's
obligation to consummate the transactions contemplated by this Agreement set
forth in Section 5.2 or 5.3, as applicable.
Section 6.12 Execution and Delivery of Related Agreements. Prior to
or simultaneously with the Closing, (i) the Company shall execute and deliver to
the Investors the Related Agreements (in each case upon satisfaction or waiver
of the other conditions set forth in Sections 5.1 and 5.3 hereto), and (ii) each
of the Investors shall execute and deliver to the Company the Related Agreements
(in each case upon satisfaction or waiver of the other conditions set forth in
Sections 5.1 and 5.2 hereto).
Section 6.13 Use of Proceeds. The Company shall use the proceeds
from the sale of the Shares to repay indebtedness of the Company and for general
corporate purposes.
Section 6.14 Investors' Access to Premises; Notices of Developments.
27
(a) From the date of this Agreement until the Closing Date, the
Company will permit the Investors and their respective representatives to have
full access (at reasonable times and upon reasonable notice) to all officers of
the Company and its Subsidiaries and to all premises, properties, books, records
(including tax records), contracts, financial and operating data and information
and documents pertaining to the Company and its Subsidiaries and make copies of
such books, records, contracts, data, information and documents as any Investor
or their respective representatives may reasonably request.
(b) From the date of the Agreement until the Closing Date, the
Company will give the Investors prompt written notice upon becoming aware of any
development materially adversely affecting the assets, liabilities, business,
financial condition or operations of the Company or its Subsidiaries, or any
event or circumstance that could reasonably be expected to result in a breach
of, or inaccuracy in, any of the Company's representations and warranties in
this Agreement; provided, however, that no such disclosure will be deemed to
prevent or cure any such breach of, or inaccuracy in, amend or supplement any
Company Disclosure Schedule to, or otherwise disclose any exception to, any of
the representations and warranties set forth in this Agreement.
Section 6.15 IRS Forms. Prior to or simultaneously with the payment
of the amounts due the Investor Managers pursuant to Section 6.3(b) hereof, each
of the Investors and the Investor Managers shall provide the Company, in the
manner prescribed by applicable law, validly completed and executed Internal
Revenue Service Forms W-9 or W-8BEN or other applicable W-8.
ARTICLE VII
TERMINATION
Section 7.1 Termination. Notwithstanding anything contained herein
to the contrary, this Agreement may be terminated at any time prior to the
Closing Date:
(a) by the mutual written consent of each of the Investors and the
Company;
(b) by the Investors or the Company:
(i) if the Closing has not occurred on or before May 30, 2003
(the "Expiration Date") and this Agreement has not previously been terminated;
provided, that the right to terminate the Agreement pursuant to this Section
7.1(b)(i) shall not be available to any party whose failure to fulfill any
obligation under this Agreement was the cause of, or resulted in, the failure of
the Closing to occur on or before such date; or
28
(ii) if any Governmental Entity shall have issued an order,
judgment, decree or ruling or taken any other action, in each case permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated
hereby and such order, judgment, decree, ruling or other action shall have
become final and non-appealable; provided, that the right to terminate this
Agreement pursuant to this Section 7.1(b)(ii) shall not be available to any
party whose failure to fulfill any obligation under this Agreement was the cause
of, or resulted in the issuance of such order, judgment, decree or ruling; or
(iii) if, at the Special Meeting, the Stockholder Approval is
not obtained, provided, that the right to terminate the Agreement pursuant to
this Section 7.1(b)(iii) shall not be available to any party whose failure to
fulfill any obligation under this Agreement was the cause of, or resulted in,
the failure to obtain Stockholder Approval;
(c) by the Company:
(i) if the Company receives a Superior Proposal and the Board
of Directors has complied with the provisions of Section 6.6(a), (c) and (d),
including the notice provisions therein, and with the applicable requirements of
Section 7.3, including the payments required thereunder; or
(ii) if (A) the representations and warranties of any of the
Investors set forth in this Agreement (other than those set forth in Sections
4.1, 4.2 and 4.8) shall not be true and correct in all material respects on and
as of the date of this Agreement and on and as of the Closing Date as if made on
such date (except to the extent expressly made as of an earlier date, in which
case as of such date), (B) the representations and warranties set forth in
Sections 4.1, 4.2, and 4.8 shall not be true and correct in all respects on each
such date (except to the extent expressly made as of an earlier date, in which
case as of such date), or (C) any of the Investors shall have breached or failed
in any material respect to perform or comply with any material obligation,
agreement or covenant required by this Agreement to be performed or complied
with by it, which inaccuracy or breach is incapable of being cured prior to the
Expiration Date, except, in the case of the inaccuracy of any representation or
warranty, for changes specifically permitted by this Agreement.
(d) by the Investors:
(i) if the Board of Directors or any committee thereof shall
have withdrawn or modified, in a manner adverse to the Investors, its approval
or recommendation of any of the transactions contemplated by this Agreement; or
29
(ii) if (A) the representations and warranties of the Company
set forth in this Agreement shall not be true and correct on and as of the date
of this Agreement and on and as of the date of such determination as if made on
such date (except to the extent expressly made as of an earlier date, in which
case as of such earlier date), except, (i) in the case of any such
representations and warranties (other than those set forth in the second
sentence of Section 3.1(b), Sections 3.2-3.6, Sections 3.11-3.16 and Section
3.21) where the failure to be true and correct (without giving effect to any
limitation as to "materiality" or "Material Adverse Effect" set forth therein)
would not have a Material Adverse Effect and (ii) in the case of the
representations and warranties set forth in the second sentence of Section
3.1(b), Sections 3.2-3.6, Sections 3.11-3.16 and Section 3.21 hereof, the
representations and warranties shall not be true and correct in all material
respects on each such date (except to the extent such statements in
representations and warranties are qualified by "materiality" or "Material
Adverse Effect", which shall statements be true and correct in all respects on
each such date), or (B) the Company shall have breached or failed in any
material respect to perform or comply with any material obligation, agreement or
covenant required by the Agreement to be performed or complied with by it, which
inaccuracy or breach cannot be cured or has not been cured prior to the
Expiration Date, except, in the case of the failure of any representation or
warranty, for changes specifically permitted by this Agreement; or
(iii) if any change, event or development or series of
changes, events or developments which individually or in the aggregate has had a
Material Adverse Effect subsequent to the date of this Agreement and which
Material Adverse Effect is incapable of being cured prior to the Expiration
Date, provided, that a party may not terminate the Agreement pursuant to this
Section 7.1(d)(iii) shall not be available to any party whose failure to fulfill
any obligation under this Agreement has been the cause of, or resulted in the
change, event or development.
Section 7.2 Effect of Termination. Termination pursuant to Section
7.1 shall terminate all obligations and liabilities of the parties hereto under
this Agreement except for (i) liabilities for breach by any party under this
Agreement and (ii) obligations or liabilities arising under Sections 6.3, 7.2
and 7.3 and Articles VIII and IX.
Section 7.3 Termination Payment. In the event that (A) this
Agreement is terminated by the Investors pursuant to Section 7.1(d)(i), (B) this
Agreement is terminated by the Company pursuant to Section 7.1(c)(i), or (C) (i)
this Agreement is terminated by the Investors as a result of the failure to
satisfy the condition set forth in Section 5.1(g) of this Agreement and such
failure is due solely to a material breach (which is incapable of being cured
prior to the Expiration Date) by the Xxxxxxx Investors of their obligations
pursuant to the Xxxxxxx Purchase Agreement, and (ii) the Company consummates a
transaction that constitutes an Alternate Proposal within nine
30
months after the date this Agreement is terminated, then in any such event, the
Company shall pay to the Investor Managers an aggregate termination payment in
cash equal to $3,115,000 minus the sum of (x) any amount paid or payable to the
Investors pursuant to Section 6.3(a)(ii) of this Agreement and (y) 50% of any
amount paid or payable by the Company in respect of the Expenses pursuant to
this Agreement (the "Termination Payment"). The Termination Payment shall be
payable in addition to the Transaction Fee and payment of Expenses payable
pursuant to Section 6.3). The amounts payable by the Company to the Investor
Managers pursuant to this Section 7.3 shall be allocable among the Investor
Managers in proportion to the amounts set forth opposite the names of the
Investors affiliated with such Investor Managers as set forth on Schedule 6.3(a)
hereto.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Survival of Representations and Warranties. The
representations and warranties of the parties hereto contained in this Agreement
shall expire twelve months after the Closing Date, except that the
representations and warranties set forth in Sections 3.1(a), 3.2 and 3.3 shall
survive until 60 days after the expiration of the applicable statute of
limitations (including any extensions thereof) and the representations and
warranties set forth in Section 3.7 shall survive until eighteen months after
the Closing Date. After the expiration of such periods, any claim by a party
hereto based upon any such representation or warranty shall be of no further
force and effect, except to the extent a party has asserted a claim in
accordance with this Article VIII for breach of any such representation or
warranty prior to the expiration of such period, in which event any
representation or warranty to which such claim relates shall survive with
respect to such claim until such claim is resolved as provided in this Article
VIII. The covenants and agreements of the parties hereto contained in this
Agreement shall survive the Closing until performed in accordance with their
terms.
Section 8.2 Indemnification.
(a) The Company shall indemnify, defend and hold harmless the
Investors, their Affiliates, and their respective officers, directors, partners,
members, employees, agents, representatives, successors and assigns (each an
"Investor Indemnified Person") from and against all Losses incurred or suffered
by an Investor Indemnified Person arising from, relating to or as a result of
(i) the breach of any of the representations or warranties made by the Company
in this Agreement (which breach shall be determined without regard to any
materiality or Material Adverse Effect qualifications contained in the
representation and warranty giving rise to such claim for indemnity), (ii) the
breach of any covenant, obligation or agreement made by the Company in this
Agreement or (iii) any actual or threatened Litigation against such Investor
Indemnified Person by any Person (other than an Investor Indemnified Person)
31
in connection with (A) the transactions contemplated hereby or by the Related
Agreements, (B) the negotiation, execution, delivery and performance of this
Agreement or the Related Agreements or (C) any actions taken by any Investor
Indemnified Person pursuant hereto or thereto or in connection with the
transactions contemplated hereby or thereby (whether or not the transactions
contemplated hereby or thereby are consummated); provided, however, that the
Company shall not have any obligation to indemnify the Investor Indemnified
Persons pursuant to this Section 8.2(a)(iii) to the extent such suit, action,
claim or proceeding arises from a breach of this Agreement by any Investor
Indemnified Person or a failure of any representation or warranty set forth in
Article IV hereof to be true and correct and such breach or failure of a
representation or warranty to be true and correct results in any condition
contained in Sections 5.1 or 5.3 hereof being incapable of being satisfied prior
to May 30, 2003.
(b) Each Investor shall, solely on behalf of itself, separately and
not jointly, indemnify, defend and hold harmless the Company, its Affiliates,
and their respective officers, directors, partners, members, employees, agents,
representatives, successors and assigns (each a "Company Indemnified Person")
from and against all Losses incurred or suffered by a Company Indemnified Person
arising from, relating to, or as a result of (i) the breach of any of the
representations or warranties made by such Investor in this Agreement or (ii)
the breach of any covenant, obligation or agreement made by such Investor in
this Agreement.
(c) No claim may be made against the Company for indemnification
with respect to breaches of representations and warranties pursuant to Section
8.2(a)(i) above with respect to any Losses unless the aggregate amount of Losses
incurred by the Investor Indemnified Persons thereunder exceeds $2,000,000, and
the Company shall then only be liable for the amount of such Losses which exceed
$2,000,000. The maximum amount recoverable under Section 8.2(a)(i) by all
Investor Indemnified Persons, in the aggregate, shall be $20,000,000; provided,
however, the maximum amount recoverable under Section 8.2(a)(i) with respect to
a breach of the Company's representation and warranty contained in Section 3.4
shall be an amount equal to the Purchase Price. No claim may be made against the
Investors for indemnification with respect to breaches of representations and
warranties pursuant to Section 8.2(b)(i) above with respect to any Losses unless
the aggregate amount of Losses incurred by the Company Indemnified Persons
thereunder exceeds $2,000,000, and the Investors shall then only be liable for
the amount of such Losses which exceed $2,000,000. The maximum amount
recoverable under Section 8.2(b)(i) by all Company Indemnified Persons, in the
aggregate, shall be $20,000,000.
(d) In no case shall any payment be made in the case of an
indemnification claim under Section 8.2(a)(i) or 8.2(a)(ii) until a Loss occurs.
No Person shall have any liability to any Investor Indemnified Person under
Section 8.2(a)(i) for any breach of a representation or warranty to the extent
that a claim for indemnification is based upon facts of which any Investor
Indemnified Person had knowledge on or prior to
32
the Closing Date, unless such claim also relies upon a materially adverse
occurrence or development that occurs after the Closing Date. For purposes of
this Section 8.2(d), (i) the Investors shall only be deemed to have knowledge of
a fact if any of the Persons listed on Schedule 8.2(d) has knowledge of the
particular fact and (ii) such individual shall be deemed to have knowledge only
to the extent of his or her actual knowledge of such fact and only to the extent
of his or her awareness that such fact constitutes a breach of such
representation or warranty.
Section 8.3 Procedure for Indemnification.
(a) If an Investor Indemnified Person or a Company Indemnified
Person (such Person being referred to as the "Indemnitee") shall receive notice
or otherwise learn of the assertion by a Person who is not a party to this
Agreement of any claim or of the commencement by any such Person of any action
(a "Claim") with respect to which the other party (the "Indemnifying Party") may
be obligated to provide indemnification, such Indemnitee shall give such
Indemnifying Party written notice thereof promptly after becoming aware of such
Claim; provided, that the failure of any Indemnitee to give notice as provided
in this Section 8.3 shall not relieve the applicable Indemnifying Party of its
obligations under this Article VIII, except to the extent that such Indemnifying
Party is materially prejudiced by such failure to give notice; provided,
further, that the applicable Indemnifying Party shall have no obligations under
Section 8.2(a)(i) or Section 8.2(b)(i), as applicable, unless such written
notice is received by the Indemnifying Party within the survival periods set
forth in Section 8.1. Such notice shall describe the Claim in reasonable detail,
and shall indicate the amount (estimated if necessary) of the Loss that has been
or may be sustained by or is claimed against such Indemnitee.
(b) An Indemnifying Party may elect to compromise, settle or defend,
at such Indemnifying Party's own expense and by such Indemnifying Party's own
counsel, any Claim; provided, however, that the Indemnifying Party shall not
compromise, settle or defend a Claim without the consent of the Indemnitee
(which consent shall not be unreasonably withheld). If an Indemnifying Party
elects to compromise, settle or defend a Claim, it shall, within 30 days of the
receipt of notice from an Indemnitee pursuant to Section 8.3(a) (or sooner, if
the nature of such Claim so requires), notify the applicable Indemnitee of its
intent to do so, and such Indemnitee shall cooperate in a commercially
reasonable manner in the compromise or settlement of, or defense against, such
Claim. After notice from an Indemnifying Party to an Indemnitee of its election
to assume the defense of a Claim, the Indemnitee shall have the right to
participate in the defense thereof, at its own expense, and such Indemnifying
Party shall not be liable to such Indemnitee under this Article VIII for any
legal or other expenses subsequently incurred by such Indemnitee in connection
with the defense thereof (except expenses approved in advance by the
Indemnitee); provided, that such Indemnitee shall have the right to employ one
separate counsel reasonably satisfactory to the Indemnifying Party to represent
such Indemnitee if (i) in the reasonable judgment of
33
the Indemnitee, there are legal defenses available to such Indemnitee that are
different from or additional to those available to the Indemnifying Party, (ii)
the Indemnifying Party shall authorize in writing the Indemnitee to retain a
single, separate counsel at the Indemnifying Party's expense or (iii) the
defendants in any such Claim include both the Indemnifying Party and the
Indemnitee and, in such Indemnitee's reasonable judgment, a conflict of interest
between such Indemnitee and such Indemnifying Party exists in respect of such
Claim, and only in the events listed in clauses (i) through (iii) of this
paragraph (b) shall the reasonable fees and expenses of such separate counsel be
paid by such Indemnifying Party. If an Indemnifying Party elects not to
compromise, settle or defend against a Claim, or fails to notify an Indemnitee
of its election as provided in this Section 8.3 within 30 days of notice from
the Indemnitee pursuant to Section 8.3(a), such Indemnitee may compromise,
settle or defend such Claim at the expense of such Indemnifying Party.
(c) If an Indemnifying Party chooses to defend any claim, the
applicable Indemnitee shall make available to such Indemnifying Party any
personnel or any books, records or other documents within its control that are
reasonably necessary or appropriate for such defense.
(d) If the aggregate amount of any Loss shall, at any time
subsequent to payment pursuant to this Agreement, be reduced by recovery,
settlement or otherwise, the amount of such reduction, net of any expenses
incurred in connection therewith or additional Losses incurred, shall promptly
be repaid by the applicable Indemnitee to the applicable Indemnifying Party.
(e) In the event of payment by an Indemnifying Party to any
Indemnitee in connection with any Claim, such Indemnifying Party shall be
subrogated to and shall stand in the place of such Indemnitee as to any events
or circumstances in respect of which such Indemnitee may have any right or claim
relating to such Claim. Such Indemnitee shall cooperate with such Indemnifying
Party in a reasonable manner, and, at the cost and expense of such Indemnifying
Party, in prosecuting any subrogated right or claim.
Section 8.4 Sole Remedy. Except in the case of fraud, the rights to
indemnification provided for in this Article VIII for a breach of
representations or warranties by the Investors (in the case of indemnification
pursuant to Section 8.2(b)(i)) or the Company (in the case of indemnification
pursuant to Section 8.2(a)(i)) shall constitute the sole post-closing remedy of
the Company and the Investors, respectively, for such breach, and the Company
and the Investors shall have no other liability or damages to the other party
resulting from any such breach.
ARTICLE IX
MISCELLANEOUS
34
Section 9.1 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE (WITHOUT GIVING
EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF).
Section 9.2 Jurisdiction; Forum; Service of Process; Waiver of Jury
Trial. With respect to any suit, action or proceeding ("Proceeding") arising out
of or relating to this Agreement each of the Investors and the Company hereby
irrevocably:
(a) submits to the exclusive jurisdiction of the United States
District Court for the Southern District of New York or the Court of Chancery
located in the State of Delaware, County of Newcastle (the "Selected Courts")
and waives any objection to venue being laid in the Selected Courts whether
based on the grounds of forum non conveniens or otherwise and hereby agrees not
to commence any such Proceeding other than before one of the Selected Courts;
provided, however, that a party may commence any Proceeding in a court other
than a Selected Court solely for the purpose of enforcing an order or judgment
issued by one of the Selected Courts;
(b) consents to service of process in any Proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid, or by
recognized international express carrier or delivery service, to the Company or
the Investors at their respective addresses referred to in Section 9.5 hereof;
provided, however, that nothing herein shall affect the right of any party
hereto to serve process in any other manner permitted by law; and
(C) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE
WAIVED, WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF,
DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN
WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
CONTEMPLATED TRANSACTIONS, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AND AGREES THAT ANY OF THEM MAY
FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING,
VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE ITS
RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO
THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS WILL INSTEAD BE TRIED IN
A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
Section 9.3 Successors and Assigns. Except as otherwise provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors by operation of law and permitted assigns of the parties
hereto. The Investors
35
may make the assignments permitted by Section 1.02 and, subject to applicable
securities laws, assign any of their rights hereunder to a Permitted Transferee
to the extent such Permitted Transferee also receives and holds Shares or shares
of Common Stock issuable upon conversion of the Shares in accordance with the
Stockholders Agreement. Other than as set forth herein, no assignment of this
Agreement may be made by any party at any time, whether or not by operation of
law, without each of the other parties' prior written consent.
Section 9.4 Entire Agreement; Amendment. Other than as provided in
this Section 9.4, this Agreement, the Related Agreements and the Confidentiality
Agreement, dated June 12, 2002, between the Company and Berkshire Partners LLC,
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof. Except as expressly provided herein, neither
this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the Company and by each
of the Investors. No waiver of any of the provisions of this Agreement will be
deemed or will constitute a waiver of any other provision hereof (whether or not
similar), nor will such waiver constitute a continuing waiver unless otherwise
expressly provided.
Section 9.5 Notices. All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or sent by telecopy,
nationally recognized overnight courier or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to such party at the
address set forth below or such other address as may hereafter be designated in
writing by such party to the other parties:
(a) if to the Company, to:
Hexcel Corporation
Two Stamford Plaza
000 Xxxxxxx Xxxxxxxxx
00xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxx X. Xxxxxxxx, Esq.
with a copy to each of the following (which shall not
constitute notice):
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
36
Attention: Xxxxxx X. Coco, Esq. and Xxxxxx X. Xxxxxxxxx, Esq.
(b) if to the Investors, to:
Berkshire Partners LLC
Xxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xx. Xxxxxx X. Small
and:
Greenbriar Equity Group LLC
000 Xxxxxxxx Xxxxx Xxxxxx
Xxxxx X-000
Xxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xx. Xxxx X. Xxxxxxx
with a copy to (which shall not constitute notice):
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq. and Xxxx X. Xxx Xxxxxx, Esq.
All such notices, requests, consents and other communications shall be deemed to
have been given or made if and when delivered personally or by overnight courier
to the parties at the above addresses or sent by electronic transmission, with
confirmation received, to the telecopy numbers specified above (or at such other
address or telecopy number for a party as shall be specified by like notice).
Section 9.6 Certain Definitions. As used herein, the following terms
shall have the meanings set forth below:
(a) "Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended (the "Exchange Act");
37
(b) "beneficially owns" and "beneficial ownership" shall have the
meanings as used in Rules 13d-3 and 13d-5 promulgated under the Exchange Act,
except that for the purposes of Article IV of this Agreement, such meanings
shall include the right to acquire securities, whether or not such right is
exercisable immediately);
(c) "Common Stock" shall mean the Company's common stock, par value
$0.01 per share;
(d) "Credit Agreement" shall mean the Second Amended and Restated
Credit Agreement, dated as of September 15, 1998, as amended, among the Company,
certain of its Subsidiaries, the lenders parties thereto, Citibank, N.A. and
Credit Suisse First Boston;
(e) "Environmental Laws" means any federal, state, foreign or local
statute, law, rule, regulation, ordinance, code or rule of common law now in
effect and in each case as amended, and any applicable judicial interpretation
thereof, including any legally binding judicial or administrative order, consent
decree or judgment, relating to the environment, employee, health and safety or
Hazardous Materials, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601 et seq.; the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. Section 6901 et seq.; the Federal Water Pollution Control
Act, as amended, 33 U.S.C. Section 1251 et seq.; the Toxic Substances Control
Act, 15 U.S.C. Section 2601 et seq.; the Clean Air Act, 42 U.S.C. Section 7401
et seq.; the Safe Drinking Water Act, 42 U.S.C. Sections 201 & 300f et seq.; the
Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq.; the Emergency
Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et
seq.; the Hazardous Material Transportation Act, 49 U.S.C. Section 1801 et seq.
and the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.; and
any state and local or foreign counterparts or equivalents, in each case as
amended from time to time;
(f) "Goldman Governance Agreement" shall mean the Governance
Agreement, dated December 19, 2000, among the Company, LXH, L.L.C, LXH II,
L.L.C. and the Goldman Investors and as amended on April 25, 2001;
(g) "Goldman Investors" shall mean, collectively, GS Capital
Partners 2000 L.P., a Delaware limited partnership, GS Capital Partners 2000
Offshore, L.P., a Cayman Islands exempted limited partnership, GS Capital
Partners 2000 Employee Fund, L.P., a Delaware limited partnership, GS Capital
Partners 2000 GmbH & Co. Beteiligungs KG, a German limited partnership and Stone
Street Fund 2000, L.P., a Delaware limited partnership;
(h) "Goldman Purchase Agreement" shall mean the Stock Purchase
Agreement, dated December 18, 2002, by and among the Company and the Goldman
Investors;
38
(i) "Goldman Registration Rights Agreement" shall mean the
Registration Rights Agreement, dated December 19, 2000, between the Company,
LXH, L.L.C. and LXH II, L.L.C.;
(j) "Governmental Entity" shall mean any national, foreign, federal,
state or local judicial, legislative, executive, administrative or regulatory
body or authority;
(k) "Hazardous Materials" means (i) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is friable, urea
formaldehyde foam insulation, polychlorinated biphenyls, and radon gas; and (ii)
any chemicals, materials or substances defined as or included in the definition
of "hazardous substances", "hazardous wastes", "hazardous materials", "extremely
hazardous substances", "restricted hazardous wastes", "toxic substances" or
"toxic pollutants" under any applicable Environmental Law;
(l) "Knowledge" shall mean, with respect to the Company, the
knowledge of Xxxxx X. Xxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxx X. Xxxxx, Xxxxxxx X.
Xxxxxxx, Xxxxxxx Xxxx, Xxx X. Xxxxxxxx, Xxxxxx X. Xxxxxxxx and Xxxxx X. Xxxxxxx;
(m) "Losses" shall mean each and all of the following items: claims,
losses, liabilities, obligations, payments, damages (actual or punitive),
charges, judgments, fines, penalties, amounts paid in settlement, costs and
expenses (including, without limitation, interest which may be imposed in
connection therewith, costs and expenses of investigation, actions, suits,
proceedings, demands, assessments and fees, expenses and disbursements of
counsel, consultants and other experts);
(n) "Material Adverse Effect" means any event which has had, has or
would reasonably be expected to have a material adverse effect on the financial
condition, results of operations or business of the Company and its
Subsidiaries, taken as a whole, other than (i) as a result of changes in general
economic or industry conditions or changes in applicable laws, rules or
regulations, (ii) as disclosed in Section 9.6(n)(ii) of the Company Disclosure
Schedule, or (iii) as a result of changes arising out of the announcement of the
transactions contemplated by this Agreement; provided, however, that, for all
purposes of this Agreement, any extension or amendment by the Company of the
Credit Agreement shall not be taken into account in determining whether a
"Material Adverse Effect" has occurred;
(o) "Permitted Transferee" shall have the meaning assigned to such
term in the Stockholders Agreement;
(p) "Person" shall mean any individual, firm, corporation, limited
liability company, partnership, company or other entity, and shall include any
successor (by merger or otherwise) of such entity;
39
(q) "Significant Subsidiaries" shall have the meaning ascribed
thereto in Rule 1-02 of Regulation S-X (17 CFR 210); and
(r) "Subsidiary" shall mean as to any Person, each corporation,
partnership or other entity of which shares of capital stock or other equity
interests having ordinary voting power (other than capital stock or other equity
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, directly or
indirectly, or the management of which is otherwise controlled, directly or
indirectly, or both, by such Person.
Section 9.7 Withholding. Each Investor agrees to indemnify, defend
and hold harmless the Company and its Affiliates from and against any liability
for taxes, interest and penalties imposed by any Governmental Entity arising
from or attributable to any failure of the Company to withhold any taxes with
respect to any payment made pursuant to this Agreement by the Company to the
Investor Manager of which it is an Affiliate.
Section 9.8 Counterparts. This Agreement may be executed in any
number of counterparts, each of which may be executed by only one of the parties
hereto, each of which shall be enforceable against the party actually executing
such counterpart, and all of which together shall constitute one instrument.
Section 9.9 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid, but
if any provision of this Agreement is held to be invalid or unenforceable in any
respect, such invalidity or unenforceability shall not render invalid or
unenforceable any other provision of this Agreement.
Section 9.10 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
Section 9.11 No Public Announcement. None of the Investors or the
Company shall make any press release, public announcement or filing with any
Governmental Entity concerning the transactions contemplated by this Agreement,
except as and to the extent that any such party shall be obligated to make any
such disclosure by this Agreement, by law or by the NYSE and then only after
consultation with the other parties hereto regarding the basis of such
obligation and the content of such press release, public announcement or filing
or as the parties shall mutually agree. The parties agree that the initial press
release to be issued with respect to the execution and delivery of this
Agreement shall be in the form attached hereto as Exhibit J.
Section 9.12 Further Actions. Subject to Section 6.6, at any time or
from time to time after the Closing, the Company and the Investors agree to
cooperate
40
with each other, and at the request of the other parties, to execute and deliver
any further instruments or documents and to take all such further action as the
other parties may reasonably request in order to evidence or effectuate the
consummation of the transactions contemplated hereby or by the Related
Agreements and to otherwise carry out the intent of the parties hereunder or
thereunder.
Section 9.13 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions and other equitable remedies to prevent breaches
of this Agreement and to enforce specifically the terms and provisions hereof in
any of the Selected Courts, this being in addition to any other remedy to which
they are entitled at law or in equity. Any requirements for the securing or
posting of any bond with respect to such remedy are hereby waived by each of the
parties hereto. Each party further agrees that, in the event of any action for
an injunction or other equitable remedy in respect of such breach or enforcement
of specific performance, it will not assert the defense that a remedy at law
would be adequate.
41
IN WITNESS WHEREOF, each of the undersigned has caused the foregoing
Agreement to be executed under seal by one of its duly authorized officers as of
the date first above written.
HEXCEL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President and
Chief Financial Officer
GREENBRIAR EQUITY FUND, L.P.
By: Greenbriar Equity Capital, L.P.,
its general partner
By: Greenbriar Holdings LLC,
its general partner
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx Xxxxxxx
Title: Managing Member
GREENBRIAR CO-INVESTMENT
PARTNERS, L.P.
By: Greenbriar Holdings LLC,
its general partner
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx Xxxxxxx
Title: Managing Member
42
BERKSHIRE FUND V,
LIMITED PARTNERSHIP
By: Fifth Berkshire Associates LLC
its general partner
By: /s/ Xxxxxx X. Small
-------------------------------
Name: Xxxxxx X. Small
Title: Managing Director
BERKSHIRE FUND VI,
LIMITED PARTNERSHIP
By: Sixth Berkshire Associates LLC
its general partner
By: /s/ Xxxxxx X. Small
-------------------------------
Name: Xxxxxx X. Small
Title: Managing Director
BERKSHIRE INVESTORS LLC
By: /s/ Xxxxxx X. Small
-------------------------------
Name: Xxxxxx X. Small
Title: Managing Director
43
SCHEDULE 1.2
NUMBER OF
NUMBER OF SHARES OF
SHARES OF SERIES A SERIES B PURCHASE
INVESTOR PREFERRED STOCK PREFERRED STOCK PRICE PAID
-------- ------------------ --------------- ----------
Greenbriar Equity Fund, L.P. 38,176.5 38,176.5 $38,176,757.93
Greenbriar Co-Investment
Partners, L.P. 761 761 $ 760,742.07
Berkshire Fund V,
Limited Partnership 17,699.5 17699.5 $17,698,845.94
Berkshire Fund VI,
Limited Partnership 19,230 19,230 $19,229,362.25
Berkshire Investors LLC 2,008 2,008 $ 2,009,291.81
-------- ------- --------------
Total 77,875 $77,875,000.00
44
SCHEDULE 3.9(a)
1. Counsel for the Company has had no oral or written communications with the
Antitrust Division of the United States Department of Justice (the
"Antitrust Division") since September 2001 with respect to the criminal
investigation by the Antitrust Division regarding possible alleged
price-fixing and other antitrust violations in connection with the carbon
fiber and carbon prepreg industries (the "Antitrust Investigation").
2. The Company has not been notified, and has no reason to believe, that it
is a target of the Antitrust Investigation.
3. The Company has no reason to believe that Hercules has been identified as
a target of the Antitrust Investigation.
4. To the Company's knowledge, no current or former employee of the Company
has invoked his Fifth Amendment right against self-incrimination or
intends to invoke his Fifth Amendment right against self-incrimination in
connection with any testimony (criminal or civil or otherwise) taken under
oath in connection with the Antitrust Investigation.
5. To the Company's knowledge, no current or former Hercules employee has
invoked his Fifth Amendment right against self-incrimination or intends to
invoke his Fifth Amendment right against self-incrimination in connection
with any testimony (criminal or civil or otherwise) taken under oath in
connection with the Antitrust Investigation.
45
SCHEDULE 6.3(a)
INVESTOR MANAGER PORTION OF PAYMENT
---------------- ------------------
Berkshire Partners LLC 50%
Greenbriar Equity Group LLC 50%
46
SCHEDULE 8.2(d)
Xxxxxx X. Small
Xxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Xxxx Xxxxx
47
