EXHIBIT 10.2
Execution Copy
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EXCHANGE AGREEMENT
THIS IS AN EXCHANGE AGREEMENT, dated as of April 17, 2001 (the "Agreement"), by
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and among ABC-NACO INC., a Delaware corporation, having its principal office at
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxx 00000 (the "Company")
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and the individual and entities listed on Exhibit A hereto (individually
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referred to as an "Investor" and collectively as the "Investors").
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BACKGROUND
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A. The Company has (i) twenty-five million shares of common stock, par
value $0.01 per share, of which 19,872,242 were issued and outstanding on April
16, 2001, and (ii) as of the date hereof (x) authorized 1,000,000 shares of
preferred stock, par value one dollar ($1.00) per share (the "Preferred Stock"),
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of which 100,000 shares are designated as Series A Junior Participating
Preferred Stock ("Series A Preferred Stock") and (y) 300,000 shares are issued
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and outstanding and are designated as Series B Cumulative Convertible Preferred
Stock ("Series B Preferred Stock"). The Company's Common Stock is currently
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traded on the Nasdaq National Market ("NASDAQ").
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B. The Company is engaged in the business of design, engineering and
manufacture of high performance freight railcar, locomotive and passenger rail
suspension and coupler systems, wheels and mounted wheel sets, and specialty
track products, and supplying freight as well as highly engineered valve bodies
and components for industrial flow control systems worldwide.
C. Concurrently with the execution hereof, the Investors and other funds
sponsored by ING Xxxxxx Xxxx Investments have entered into a Commitment Letter
(the "Senior Notes Commitment Letter") with the Company pursuant to which,
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subject to the terms and conditions thereof, the Company shall issue to and sell
to such parties, and such parties shall purchase, $15 million in initial
principal amount of the Company's Senior Second Secured Notes (the "Senior
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Second Secured Notes").
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D. The Company desires to designate a new series of its Preferred Stock,
to be known as the Series B-1 Cumulative Convertible Participating Preferred
Stock, par value one dollar ($1.00) per share (the "Series B-1 Preferred
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Stock"). Concurrently with the closing of the sale of the Senior Second Secured
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Notes pursuant to the Commitment Letter, the Company desires to issue shares of
Series B-1 Preferred Stock in exchange for all of the outstanding shares of
Series B Preferred Stock, and the Investors desire to exchange all of their
shares of Series B Preferred Stock for shares of the Series B-1 Preferred Stock,
subject to the terms and conditions contained herein (the foregoing transactions
hereinafter referred to as the "Exchange").
TERMS
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NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:
ARTICLE I EXCHANGE OF SECURITIES
Section 1.1. Dividend; Exchange of Series B Preferred Stock.
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(a) At or before the Closing (as defined in Section 1.2)
the Company shall declare and pay in cash a dividend equal to 40% of the accrued
but unpaid dividends (calculated on a daily basis) on the outstanding shares of
Series B Preferred Stock (the "Series B Dividend").
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(b) Subject to the terms and conditions set forth herein,
at the Closing the Company shall issue and deliver to each Investor, and each
Investor shall receive from the Company, in exchange for the shares of Series B
Preferred Stock held by such Investor as set forth on Exhibit A, a number of
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shares of Series B-1 Preferred Stock equal to the sum of (i) the number of
shares of Series B Preferred Stock set forth opposite such Investors name on
Exhibit A hereto, plus (ii) the amount of accrued but unpaid dividends on such
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number of shares of Series B Preferred Stock (accrued on a daily basis) to the
date of Closing, divided by $100.
Section 1.2. Closing. (a) Subject to the terms and conditions of this
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Agreement, the closing of the Exchange (the "Closing") will take place
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concurrently with the closing of the sale of the Senior Second Secured Notes
pursuant to the Commitment Letter, but in no event later than June 1, 2001, at
the offices of Dechert, 4000 Xxxx Atlantic Tower, 0000 Xxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, or on such other date to be mutually
agreed by the parties hereto (the "Closing Date").
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(b) At Closing, (i) the Company will deliver to each
Investor a stock certificate representing the number of shares of Series B-1
Preferred Stock to which such Investor is entitled, registered in the name of
such Investor, or an affiliate or associate of such Investor, as such Investor
may designate in writing to the Company and (ii) each Investor shall deliver to
the Company such Investor's shares of Series B Preferred Stock, by surrender of
the number of shares of Series B Preferred Stock set forth opposite such
investor's name on Exhibit A hereto, accompanied by stock powers or other
documents of transfer duly endorsed in blank.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
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The Company hereby represents and warrants to the Investors as
follows:
Section 2.1. Approval of the Board of Directors. The Board of Directors
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of the Company has taken all actions necessary or appropriate to authorize and
to ratify the execution, delivery and performance of this Agreement and each
other Document, other agreement or
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instrument contemplated herein and the transactions contemplated hereby,
including authorization of the issuance, sale and delivery of the shares of
Series B-1 Preferred Stock.
Section 2.2. Issuance of Series B-1 Preferred Stock and Reservation of
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Common Shares. The issuance, sale and delivery of the shares of Series B-1
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Preferred Stock have been duly authorized by all requisite corporate action of
the Company and the shares of Series B-1 Preferred Stock to be issued to the
Investors in accordance with the terms of this Agreement and the Certificate of
Designation (as defined in Section 4.4), when issued and delivered in accordance
with the terms of this Agreement will be validly issued, fully paid and non-
assessable, free and clear of any liens, claims and encumbrances of any kind or
nature ("Liens") and not subject to preemptive or other similar rights of the
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stockholders of the Company. The Company has authorized the reservation of and
the issuance of the shares of Common Stock reserved for issuance upon conversion
of the Series B-1 Preferred Stock and as otherwise set forth in the Certificate
of Designation, in accordance with the Certificate of Designation, and when
issued and delivered in accordance with the terms of this Agreement will be
validly issued, fully paid and non-assessable, free and clear of any Liens) and
not subject to preemptive or other similar rights of the stockholders of the
Company.
Section 2.3. Organization and Qualification. The Company is a corporation
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duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the requisite corporate power to carry on its business
as it is now being conducted.
(a) Capitalization.
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(i) As of April 16, 2001, the authorized capital stock
of the Company consists of 25,000,000 shares of Common Stock, 19,872,242 of
which are issued and outstanding, and 1,000,000 shares of Preferred Stock, of
which (i) 100,000 are designated as Series A Preferred Stock, none of which are
issued or outstanding and (ii) 300,000 are designated as Series B Preferred
Stock, all of which are issued and outstanding.
Section 2.4. Authorization and Enforceability. The Company has all
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requisite corporate power and authority to execute and deliver this Agreement
and each other Document, agreement or instrument contemplated hereby, to perform
its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement by
the Company and each other Document, agreement or instrument executed or to be
executed by the Company in connection herewith and the consummation by the
Company of the transactions contemplated hereby and thereby, have been duly and
validly authorized by the Board of Directors of the Company. This Agreement and
each other Document, agreement or instrument contemplated hereby, has been or
will be duly and validly executed and delivered by the Company and, assuming
this Agreement and each other Document, agreement or instrument executed, or to
be executed, by the Company in connection herewith, constitutes a valid and
binding obligation of the Investors, this Agreement and each other Document,
agreement or instrument contemplated hereby, constitutes or will constitute a
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms.
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Section 2.5. No Violation; Consents and Approvals. (a) Neither the
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execution and delivery of this Agreement or any Document, agreement or
instrument contemplated hereby by the Company nor the consummation of the
transactions contemplated hereby or thereby will conflict with, or result in any
violation or breach of, or constitute a default (or give rise to any right of
termination, modification (including, in the case of leases, any change in the
amount of rent), cancellation or acceleration or result in the creation or
imposition of (with or without notice or lapse of time, or both), of any Liens
upon any of the properties or assets or the Company or its Subsidiaries) under,
(i) the Restated Certificate of Incorporation or Bylaws of the Company or
similar organizational and governance documents of any of its Subsidiaries, each
as amended, (ii) the terms, conditions or provisions of any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise or license applicable to the Company
or any of its Subsidiaries or to their properties or assets, or (iii) any
permit, license, approval, franchise, or other governmental or regulatory
authorization held or used by or binding upon the Company or any of its
Subsidiaries or their properties or assets, other than, in the case of clauses
(ii) or (iii), any such conflicts, violations, breaches, defaults, rights or
Liens that, individually or in the aggregate, reasonably could not be expected
to have a Material Adverse Effect.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with, (w) the stockholders of the Company,
(x) any Federal, state, local or foreign governmental or regulatory entity (or
any department, agency, authority or political subdivision thereof) or court or
arbitrator, domestic or foreign (an "Authority"), (y) the Nasdaq National Market
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("NASDAQ"), or (z) any third party, is required by the Company or any of its
Subsidiaries in connection with the execution and delivery of this Agreement or
each other Document, agreement or instrument contemplated hereby by the Company
or the consummation by the Company of the transactions contemplated by this
Agreement, except for (i) the filing with the Securities and Exchange Commission
("SEC") of a notice on Form D or such reports under Section 13(a) of the
Exchange Act as may be required in connection with this Agreement or any other
Document or instrument contemplated hereby and the transactions contemplated
hereby or thereby, (ii) the filing of the Certificate of Designation with the
Secretary of State of the State of Delaware pursuant to the Delaware General
Corporation Law (the "DGCL"), (iii) applicable state "blue sky" filings, if any,
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and (iv) such other consents, approvals, orders, authorizations, registrations,
declarations and filings, which have been obtained or made or the failure of
which to be obtained or made, individually or in the aggregate, reasonably could
not be expected to have a Material Adverse Effect.
Section 2.6. Offering of Shares of Series B-1 Preferred Stock. Neither
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the Company nor any person acting on its behalf has taken or will take any
action (including, without limitation, any offering of any securities of the
Company under circumstances that would require, under the Securities Act, the
integration of such offering with the offering and sale of the shares of Series
B-1 Preferred Stock), which might subject the offering, issuance and sale of the
shares of Series B-1 Preferred Stock to the registration requirements of Section
5 of the Securities Act.
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Section 2.7. Disclosure. To the Company's knowledge, no representation or
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warranty made by the Company, nor any of the documents or written information
furnished or to be furnished by or on behalf of the Company to the Investors in
connection with the transactions contemplated hereby contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements or facts contained therein not
misleading.
Section 2.8. Broker's Fees. The Company has not employed any broker or
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finder or incurred any liability for any broker's fees, commissions or finder's
fees in connection with any of the transactions contemplated hereby.
Section 2.9. Rights Agreement. The Investors, and any of their permitted
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assignees, shall not be deemed an Acquiring Person pursuant to the Rights
Agreement, dated as of September 29, 1995, as amended, up to the date hereof
(the "Rights Agreement"), between the Company and La Salle National Trust, N.A.
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The execution, delivery or performance of this Agreement or the transactions
contemplated hereby shall not constitute an event triggering the rights afforded
under the Rights Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF EACH INVESTOR
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Each Investor hereby represents and warrants to the Company,
severally and not jointly, as follows:
Section 3.1. Organization. Each Investor, who is not an individual, is
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duly organized or formed, validly existing and in good standing under the laws
of the State of Delaware and have the requisite corporate or other power to
carry on its business as it is now being conducted.
Section 3.2. Authority Relative to this Agreement; No Conflict. Each
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Investor has the requisite corporate or other power, capacity and authority to
execute and deliver this Agreement, to perform such Investor's obligations
hereunder and to consummate the transactions contemplated hereby without the
consent of any other person (except for such consents as have heretofore been
obtained). This Agreement has been duly and validly executed and delivered by
each Investor and, assuming this Agreement constitutes a valid and binding
obligation of the Company, this Agreement constitutes a valid and binding
agreement of each Investor enforceable against such Investor in accordance with
its terms, and will not conflict with any other agreement to which such Investor
is a party.
Section 3.3. Investment Intent. The shares of Series B-1 Preferred Stock
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being acquired hereunder are being purchased by each Investor for investment for
such Investor's own account, and not with a view to any resale, distribution or
other transfer thereof that would violate the Securities Act, or the applicable
state securities laws of any state. None of the
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Investors will distribute the shares of Series B-1 Preferred Stock in violation
of the Securities Act or the applicable securities laws of any state.
Section 3.4. Economic Risk. Each Investor is well versed in financial
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matters, has had extensive dealings over the years in securities and is fully
familiar with the operating history and financial results of the Company and is
fully capable of understanding the type of investment being made pursuant to
this Agreement and the risks involved in connection therewith. Each Investor is
financially able to hold the Series B-1 Preferred Stock for long-term
investment, believes that the nature and amount of the Series B-1 Preferred
Stock being acquired by the Investor are consistent with the Investor's overall
investment program and financial position, and recognizes that there are
substantial risks involved in the acquisition of the Series B-1 Preferred Stock.
Section 3.5. Litigation. There is no action, suit, investigation or
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proceeding pending against, or to the knowledge of the Investor, threatened
against or affecting, such Investor before any Authority that in any manner
challenges or seeks to prevent, enjoin, alter or materiality delay the
transactions contemplated this Agreement.
Section 3.6. Additional Representations. Each Investor: (a) is an
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accredited investor within the meaning of Rule 501(a) under the Securities Act;
(b) is aware of the limits on resale imposed by virtue of the nature of the
transactions contemplated by this Agreement and is aware that the certificates
representing the Investor's respective ownership of Series B-1 Preferred Stock
will bear related restrictive legends; (c) is acquiring the shares of the
Company hereunder without registration under the Securities Act in reliance on
the exemption from registration contained in Section 4(2) of the Securities Act;
(d) has been given the opportunity to ask questions of, and receive answers
from, the officers of the Company regarding the Company, its current and
proposed business operations and the Series B-1 Preferred Stock, and the
officers of the Company have made available to each Investor all documents and
information that the Investor has requested relating to an investment in the
Company; (e) has access to all of the Company's public filings with the SEC; (f)
acknowledges that the Company is entering into this Agreement in reliance upon
the Investor's representations and warranties and other covenants and agreements
contained herein; and (g) acknowledges that each Investor is entering into this
Agreement in reliance upon the Company's representations and warranties and
other covenants and agreements contained herein.
Section 3.7. Rule 144. Each Investor acknowledges that the Series B-1
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Preferred Stock must be held indefinitely unless registered under the Securities
Act or unless an exemption for such registration is available. Each Investor is
aware of the provisions of Rule 144 promulgated under the Securities Act which
permit limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, which may include, among other things, the
existence of a public market for the shares, the availability of certain current
public information about the Company, the resale occurring not less than one
year after a party has purchased and paid for the security to be sold, the sale
being effected through a "broker's transaction" or in transactions directly with
a "market maker" and the number of shares being sold during any
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three-month period not exceeding specified limitations. Each Investor agrees
that prior to any proposed transfer of the Series B-1 Preferred Stock, such
Investor shall give notice to the Company describing the manner and
circumstances of the proposed transfer and, if reasonably requested by the
Company, such Investor shall deliver an opinion of legal counsel, addressed to
the Company, to the effect that the proposed transfer may be effected without
registration under the Securities Act.
Section 3.8. Broker's Fees. None of the Investors has employed any broker
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or finder or incurred any liability for any broker's fees, commissions or
finder's fees in connection with any of the transactions contemplated hereby.
ARTICLE IV
COVENANTS
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Section 4.1. Conduct of Business of the Company. During the period from
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the date of execution of this Agreement up to and including the Closing Date,
the Company and each of its Subsidiaries will each conduct its business and
operations according to its ordinary and usual course of business and consistent
with past practice.
Section 4.2. Access to Information.
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(a) Between the date of execution of this Agreement and the
Closing Date, the Company will upon reasonable notice (i) give the Investors and
their authorized representatives access during regular business hours to all of
the Company's and its Subsidiaries' offices and to all books and records of it,
(ii) permit the Investors to make such inspections as it may require (and the
Company shall cooperate with Investor in any inspections), and (iii) cause its
officers and those of its Subsidiaries to furnish the Investors with such
financial and operating data and other information with respect to the business
and properties of the Company and its Subsidiaries as the Investors may from
time to time request. The Investors shall maintain the confidentiality of any
confidential and proprietary information so obtained by it which is not
otherwise available from other sources that are free from similar restrictions;
provided, however, that the foregoing shall in no way limit or otherwise
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restrict the ability of the Investors or such authorized representatives to
disclose any such information concerning the Company or its Subsidiaries which
it may be required to disclose (x) to its partners, board members or
stockholders, to the extent required to satisfy its fiduciary obligations to
such persons, or (y) otherwise pursuant to or as required by law; provided that,
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to the extent legally permitted, the Investors will notify the Company of such
disclosure and afford the Company an opportunity to oppose promptly such
disclosure.
(b) The Company will provide Investors with copies of the
Form 10-K for the year ended December 31, 2000 as filed with the SEC,
immediately upon the Company's completion of such Form 10-K.
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Section 4.3. Reasonable Best Efforts. Subject to the terms and conditions
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herein, each of the parties hereto agrees to use its reasonable best efforts to
take, or cause to be taken, all appropriate action, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement. In case at any time after the Closing Date any further action is
necessary or desirable to carry out the purposes of this Agreement, the proper
officers and directors of each party to this Agreement shall take all such
necessary action. Such reasonable best efforts shall include, without
limitation, (a) the obtaining of all necessary consents, approvals or waivers
from third parties and governmental authorities necessary to the consummation of
the transactions contemplated by this Agreement, and (b) opposing vigorously, to
the extent commercially reasonable, any litigation or administrative proceeding
relating to this Agreement or the transactions contemplated hereby, including,
without limitation, to the extent commercially reasonable, promptly appealing
any adverse court or agency order. Notwithstanding the foregoing or any other
provisions contained in this Agreement to the contrary, neither the Investors
nor any of their affiliates shall be under any obligation of any kind to enter
into any negotiations or to otherwise agree with any Authority, including but
not limited to any governmental or regulatory authority with jurisdiction over
the enforcement of any applicable federal, state, local and foreign antitrust,
competition or other similar laws, or any other party to sell or otherwise
dispose of, hold separate (through the establishment of a trust or otherwise)
particular assets or categories of assets or businesses of any of the Company,
the Investors or any of the Investors' affiliates.
Section 4.4. Certificate of Designation; Investors Rights Agreement. On
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or before the Closing, the Company shall file a Certificate of Designation,
Preferences and Rights of Series B-1 Cumulative Convertible Participating
Preferred Stock in the form of Exhibit B hereto (the "Certificate of
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Designation" ) with the Secretary of State of the State of Delaware. On or
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before the Closing Date, the Company and the Investors shall amend the Investors
Rights Agreement dated as of March 8, 2000 to provide that it shall be
applicable to the Series B-1 Preferred Stock in the same fashion that it applied
to the Series B Preferred Stock.
ARTICLE V
CONDITIONS TO CLOSING
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Section 5.1. Conditions to Investors' Obligations for Closing. The
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obligation of each Investor to effect the exchange of Series B Preferred Stock
for shares of Series B-1 Preferred Stock contemplated hereby is subject to the
satisfaction or written waiver of the following conditions in the Investor's
sole discretion:
(a) the representations and warranties of the Company
contained in this Agreement that are not qualified by materiality shall be true
and correct in all material respects as of the date hereof and on and as of the
Closing Date with the same effect as if made on and as of the Closing Date, and
the representations and warranties of the Company that are qualified by
materiality shall be true and correct on and as of the Closing Date with the
same
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effect as if made on and as of the Closing Date (except, in either case, to
the extent any such representation and warranty specifically refers to a
particular date, in which case such representation and warranty shall be true
and correct as of such date), and the Company shall have performed, in all
material respects, all of its obligations under this Agreement required to be
performed by the Company prior to the Closing Date;
(b) there shall not have occurred any Material Adverse
Effect or any violation of Law by the Company or its Subsidiaries that
reasonably could be expected to have a Material Adverse Effect;
(c) there shall not have occurred any event which has
resulted in or may result in the Company seeking protection from its creditors
under any chapter or provision of the United States Bankruptcy Code;
(d) each Investor shall have received a certificate of the
President, Chief Executive Officer or Chief Financial Officer of the Company, on
behalf of the Company, certifying as to the fulfillment of the conditions set
forth in clauses (a) through (c) above;
(e) no statute, rule, regulation, judgment, order or
injunction shall be enacted, entered, promulgated or enforced (i) challenging
the transactions contemplated hereby, seeking to restrain or prohibit the
transactions contemplated hereby or seeking any damages material in relation to
the Company or any Investor, (ii) seeking to impose limitations on the ability
of each Investor to acquire or hold, or exercise full rights of ownership of any
shares of Series B-1 Preferred Stock, including the right to vote such shares or
(iii) that otherwise reasonably could be expected to have a Material Adverse
Effect;
(f) each Investor shall have been provided with evidence
satisfactory to the Investor in such Investor's reasonable discretion that the
Board of Directors of the Company has approved the transactions contemplated by
this Agreement for purposes of Section 203 of the DGCL;
(g) each Investor shall have received a certificate, dated
the Closing Date, duly executed by the Secretary of the Company certifying as to
(i) the attached copy of resolutions of the Board of Directors of the Company
authorizing and approving or ratifying the execution, delivery and performance
of this Agreement and the other documents and instruments contemplated hereby
and the consummation of the transactions contemplated hereby and stating that
such resolutions have not been modified, amended, revoked or rescinded, and (ii)
the incumbency, authority and specimen signature of each officer of the Company
executing this Agreement and any other document or instrument contemplated
hereby;
(h) each Investor shall have received a copy of a
certificate of the Secretary of State of the State of Delaware certifying as to
the Company's due organization, valid existence and good standing as a domestic
corporation in the State of Delaware as of a date not more than two (2) business
days prior to the Closing Date;
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(i) each Investor shall have received an opinion of Xxxxxx
Xxxxxx & Xxxxx, outside counsel to the Company, dated as of the Closing Date, as
to the matters set forth in Sections 2.1, 2.2, 2.4, 2.5(a) (clause (i)), 2.5 (b)
and 2.5(c), and such opinion shall be in form and substance reasonably
acceptable to the Investors.
(j) the Company shall have received (and furnished to each
Investor evidence thereof reasonably satisfactory to each Investor) any
necessary or required approvals or consents from all Authorities and other third
parties necessary or required to complete the transactions contemplated hereby,
and such approvals and consents shall not have been withdrawn or expired as of
the Closing Date and the Certificate of Designation shall have been duly filed
with the Secretary of State of the State of Delaware;
(k) the Company shall have executed and delivered to each
Investor the Amended and Restated Investors Rights Agreement; and
(l) each Investor shall have been provided with evidence
satisfactory to the Investor that the Company has paid, in full, the Series B
Dividend to the holders of the Series B Preferred Stock.
Section 5.2. Conditions to the Company's Obligations for the Closing. The
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obligations of the Company to issue the shares of Series B-1 Preferred Stock in
exchange for the Series B Preferred Stock contemplated hereby is subject to the
satisfaction or written waiver of the following conditions:
(a) the representations and warranties of each Investor
contained in this Agreement that are not qualified by materiality shall be true
and correct in all material respects as of the date hereof and on and as of the
Closing Date with the same effect as if made on and as of the Closing Date, and
the representations and warranties of each Investor that are qualified by
materiality shall be true and correct on and as of the Closing Date with the
same effect as if made on and as of the Closing Date (except, in either case, to
the extent any such representation and warranty specifically refers to a
particular date, in which case such representation and warranty shall be true
and correct as of such date), and each Investor shall have performed, in all
material respects, all of its obligations under this Agreement required to be
performed by each Investor prior to the Closing Date;
(b) the Company shall have received certificates from the
authorized officer of each Investor, certifying as to the fulfillment of the
condition set forth in clause (a) above;
(c) each Investor shall have executed and delivered to the
Company the Amended and Restated Investors Rights Agreement.
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ARTICLE VI
MISCELLANEOUS
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Section 6.1. Termination; Effect of Termination; Expenses; Fees.
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(a) This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing Date:
(i) by mutual written consent of the Company and the
Investors; or
(ii) by either party, if the Closing does not occur by June
1, 2001; provided, however, that the right to terminate this Agreement pursuant
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to this Section 6.1(a) shall not be available to any party whose failure to
fulfill any of its obligations under this Agreement results in the failure of
any such condition; or
(iii) by either party if any court of competent jurisdiction
or any other governmental body shall have issued an order, decree or ruling or
taken any other action permanently enjoining, restraining or otherwise
prohibiting the transactions contemplated hereby and such order, decree, ruling
or other action shall have become final and nonappealable; or
(b) In the event of termination and abandonment of this
Agreement pursuant to Section 6.1(a), this Agreement, except for the provisions
of Section 4.2 (only with respect to confidentiality), shall forthwith become
void and have no effect, without any liability on the part of any party or its
respective members, partners, shareholders, directors, officers or shareholders;
provided, that nothing in this Section 6.1(b) shall relieve any party to this
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Agreement of liability for breach of this Agreement.
Section 6.2. Extension; Waiver. The parties hereto, may (a) extend the
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time for the performance of any of the obligations or other acts of the other
parties hereto, (b) waive any inaccuracies in the representations and warranties
contained herein by any other applicable party or in any document, certificate
or writing delivered pursuant hereto by any other applicable party or (c) waive
compliance with any of the agreements or conditions contained herein. Any
agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
Section 6.3. Entire Agreement; Assignment. This Agreement (including the
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Schedules and Exhibits hereto) and the other documents and instruments
contemplated hereby, (a) constitute the entire agreement among the parties with
respect to the subject matter hereof, and supersedes all other prior agreements
and understandings, both written and oral, among the parties or any of them with
respect to the subject matter hereof, and (b) shall not be assigned by operation
of law or otherwise; provided, that each Investor may assign any of its rights
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and obligations hereunder to any affiliate of such Investor prior to Closing and
after Closing to any person, but no such assignment shall relieve Investor of
its obligations hereunder unless such
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assignee or transferee agrees in writing to be bound by the terms hereof as
though an original signatory hereto.
Section 6.4. Enforcement of the Agreement; Governing Law; Jurisdiction.
---------------------------------------------------------
The parties hereto agree that Investor would suffer irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached by
the Company. It is accordingly agreed that Investor shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any state court located in the
State of New York, or the United States District Court for the Southern District
of New York or any federal court in the State of New York (as to which the
Company agrees to submit to jurisdiction for the purposes of such or any other
action), this being in addition to any other remedy to which Investor is
entitled at law or in equity. This Agreement shall be governed by and construed
in accordance with the substantive laws of the State of New York regardless of
the laws that might otherwise govern under principles of conflicts of laws
applicable thereto.
Section 6.5. Validity. The invalidity or unenforceability of any provision
--------
of this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
Section 6.6. Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by cable, telegram, facsimile transmission
with confirmation of receipt, or telex, or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties as
follows:
if to Investors:
---------------
00 Xxxx 00xx Xxxxxx, 00/xx/ Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a required copy to:
-----------------------
Dechert
0000 Xxxx Xxxxxxxx Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
-12-
if to the Company:
-----------------
ABC-NACO Inc.
0000 Xxxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
VP and Corp. Treasurer
Phone: (000) 000-0000
Fax: (000) 000-0000
with required copies to:
-----------------------
ABC-NACO Inc.
0000 Xxxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esq.,
VP, General Counsel and Secretary
Phone: (000) 000-0000
Fax: (000) 000-0000
Xxxxxx Xxxxxx & Xxxxx
0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
Section 6.7. Descriptive Headings. The descriptive headings herein are
--------------------
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
Section 6.8. Parties in Interest. This Agreement shall be binding upon
-------------------
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
Section 6.9. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
-13-
Section 6.10. Amendment. This Agreement may not be amended except by an
---------
instrument in writing signed on behalf of all the parties.
Section 6.11. Survival. The representations, warranties, covenants and
--------
agreements of the Company and Investors contained in this Agreement, and all
statements contained in this Agreement or any exhibit, attachment or Schedule
hereto or any certificate, financial statement or SEC Documents delivered
pursuant to this Agreement or in connection with the transactions contemplated
hereby, shall be deemed incorporated in this Agreement and shall constitute
representations, warranties, covenants and agreements of the respective party
delivering the same. All such representations, warranties, covenants and
agreements shall survive the Closing. The Company acknowledges that its
representations and warranties in this Agreement shall not be affected or
mitigated by any investigation conducted by Investor or its representatives
prior to the Closing or any knowledge of any Investor. Each Investor shall use
reasonable efforts to notify the Company in the event it discovers information
which constitutes a breach of the Company's representations or warranties set
forth in Article 2 hereof; provided, however, that the failure of any Investor
in any way to provide such notification shall not subject the Investor to any
penalty or liability and shall not change the Company's liability with respect
to any breach of such representation or warranty.
Section 6.12. Certain Definitions. For purposes of this Agreement, the
-------------------
following terms shall have the meanings ascribed to them below:
(a) "affiliate" of a person shall mean (i) a person that
---------
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first-mentioned person and
(ii) an "associate" as that term is defined in Rule 12b-2 promulgated under the
----------
Exchange Act as in effect on the date of execution of this Agreement.
(b) "Investors Rights Agreement" means the Investors Rights
--------------------------
Agreement dated as of March 8, 2000, as amended through the date hereof, by and
among the Company and the Investors.
(c) "control" (including the terms "controlling", "controlled
------- ----------- ----------
by" and "under common control with" or correlative terms) shall mean the
-- -------------------
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a person, whether through ownership of voting
securities, by contract, or otherwise.
(d) "Documents" means this Agreement, the Amended and Restated
--------
Investors Rights Agreement and the Certificate of Designation.
(e) "Exchange Act" means the Securities Exchange Act of 1934, as
-----------
amended and the rules and regulations promulgated thereunder all as the same
shall be as in effect at the time.
-14-
(f) "Material Adverse Effect" shall mean (i) any adverse change
----------------------
in the condition (financial or otherwise), assets (including without limitation
tangible and intangible assets), liabilities, business, or results of operations
or prospects of the Company or any of its Subsidiaries, which change,
individually or in the aggregate, is material to the Company and its
Subsidiaries taken as a whole, or (ii) any event, matter, condition or effect
which materially adversely impairs the ability of the Company to perform on a
timely basis its obligations under this Agreement or the Company to consummate
the transactions contemplated by this Agreement.
(g) "person" shall mean and include an individual, a
------
corporation, a partnership, a trust, an unincorporated organization and a
government or any department, agency or political subdivision thereof.
(h) "Securities Act" shall mean Securities Act of 1933, as
--------------
amended, and all other applicable securities laws and the rules and regulations
thereunder as in effect from time to time.
(i) "Subsidiaries" means when used with reference to a person, a
------------
corporation or limited liability company, the majority of the outstanding voting
securities or membership interests of which are owned directly or indirectly by
such person.
-15-
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its officers thereunto duly authorized, on the day
and year first above written.
ABC-NACO INC.
By:____________________________________
Name: Xxxx X. Xxxxxx
Title: Vice President, General Counsel and
Secretary
INVESTORS:
XXXXXX XXXX INVESTORS II L.P.
FS EMPLOYEE INVESTORS LLC
FS PARALLEL FUND L.P.
By: FS Private Investments III LLC, Manager
By:____________________________________
Name: Xxxxx X. Xxxxxxx
Title: Managing Member
ING XXXXXX-XXXX INVESTORS III LP
ING BARINGS U.S. LEVERAGED EQUITY PLAN LLC
ING BARINGS GLOBAL LEVERAGED EQUITY PLAN LTD.
By: FS Private Investments III LLC, Manager
By:____________________________________
Name: Xxxxx X. Xxxxxxx
Title: Managing Member
-16-
By:____________________________________
Xxxxx Xxxxxxx
-17-
EXHIBIT A
Investors and Series B Preferred Stock
-------------------------------------------------------------------------------------------------
Number of Shares of
Series B Preferred Stock to be Exchanged
Investors for Series B-1 Preferred Stock
--------- ------------------------------
-------------------------------------------------------------------------------------------------
ING Xxxxxx Xxxx Investors III LP 104,170.85
-------------------------------------------------------------------------------------------------
ING Barings U.S. Leveraged Equity Plan LLC 31,679.42
-------------------------------------------------------------------------------------------------
ING Barings U.S. Global Leveraged Equity Plan Ltd. 13,649.72
-------------------------------------------------------------------------------------------------
Xxxxxx Xxxx Investors II LP 131,792.56
-------------------------------------------------------------------------------------------------
FS Employee Investors LLC 11,295.56
-------------------------------------------------------------------------------------------------
FS Parallel Fund LP 6,411.88
-------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxx 1,000
-------------------------------------------------------------------------------------------------
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