Exhibit 10.64
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INVESTMENT AGREEMENT
dated as of December 28, 2000
between
LIH HOLDINGS IV, LLC
and
XXXX INTERNATIONAL HOLDINGS, INC.
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THIS INVESTMENT AGREEMENT is made and entered into as of
December 28, 2000 by and between LIH HOLDINGS IV, LLC, a Delaware limited
liability company (the "Purchaser") and XXXX INTERNATIONAL HOLDINGS, INC., a
Delaware corporation (the "Company").
WHEREAS, the Company is a party to that certain Credit
Agreement, dated February 27, 1998, (as such agreement has been amended,
supplemented or otherwise modified, including, without limitation, by that
certain Waiver and Fourth Amendment to Credit Agreement, dated November 13, 2000
and as it may hereafter be further amended, restated, supplemented, modified,
refinanced or replaced (the "Credit Agreement")) with Xxxx Industries,
Incorporated, Deflecta-Shield Corporation, Belmor Autotron Corp., DFM Corp, Auto
Ventshade Company and Smittybilt, Inc. (the foregoing entities are collectively
referred to herein as the "Borrowers"), --------- Xxxx Acquisition Corp., BAC
Acquisition Co, Trailmaster Products, Inc., Delta III, Inc., Ventshade Holdings,
Inc. and Xxxxxx Financial, Inc., individually as a lender and in its capacity as
agent ("Agent") for a number of lenders who executed the Credit Agreement (the
"Lenders").
WHEREAS, Agent on behalf of the Lenders, the Company,
Harvest Partners III, L.P. ("Harvest"), and the Borrowers have entered into that
certain Capital Call Agreement, dated November 13, 2000 and as it may hereafter
be amended, supplemented or otherwise modified (the "Capital Call Agreement")
pursuant to which Harvest has agreed to invest, or to cause its designee to
invest, up to an additional $10,000,000 in equity of the Company on the terms
and conditions set forth in the Capital Call Agreement.
WHEREAS, as required by the Capital Call Agreement, the
Company desires to sell to the Purchaser and the Purchaser desires to purchase
from the Company, up to 10,000 shares of Series C Preferred Stock, par value
$0.01 per share (the "Series C Preferred Stock"), of the Company.
NOW, THEREFORE, in consideration of the mutual covenants
and agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following
defined terms shall have the meanings indicated below:
"Actions or Proceedings" means any action, suit,
proceeding, arbitration or Governmental or Regulatory Authority investigation or
audit.
"Affiliate" means, as applied to any Person, (i) any other
Person directly or indirectly controlling, controlled by or under common control
with that Person, (ii) any other
Person that owns or controls 5% or more of any class of equity securities
(including any equity securities issuable upon the exercise of any Option) of
that Person or any of its Affiliates, or (iii) any member, director, partner,
officer, agent, employee or relative of such Person. For the purposes of this
definition, "control" (including with correlative meanings, the terms
"controlling", "controlled by", and "under common control with") as applied to
any Person, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of that Person, whether
through ownership of voting securities or by contract or otherwise. For the
purpose of this Agreement, (i) neither the Purchaser nor any of its Affiliates
shall be deemed to be "Affiliates" of the Company or any Subsidiary and (ii)
neither the Company, any Subsidiary, nor any of their respective Affiliates
shall be deemed to be "Affiliates" of the Purchaser.
"Agent" has the meaning ascribed to it in the introductory
paragraphs of this Agreement.
"Agreement" means this Investment Agreement and the
schedules hereto and the certificates delivered in connection herewith, as the
same may be amended, modified or restated from time to time in accordance with
the terms hereof.
"Assets and Properties" of any Person means all assets and
properties of every kind, nature, character and description (whether real,
personal or mixed, whether tangible or intangible, whether absolute, accrued,
contingent, fixed or otherwise and wherever situated), including the goodwill
related thereto, operated, owned or leased by such Person, including without
limitation cash, cash equivalents, accounts and notes receivable, chattel paper,
documents, instruments, general intangibles, real estate, equipment, inventory,
goods and intellectual property.
"Borrowers" has the meaning ascribed to it in the
introductory paragraphs of this Agreement.
"Business Day" means a day other than Saturday, Sunday or
any day on which banks located in the State of New
York or the State of Minnesota are authorized or obligated to close.
"Business or Condition of the Company" means the business,
condition (financial or otherwise), results of operations, and Assets and
Properties of the Company and the Subsidiaries taken as a whole.
"Capital Call Agreement" has the meaning ascribed to it in
the introductory paragraphs of this Agreement.
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"Charter" means the Certificate of Incorporation of the
Company, as amended, after giving effect to the filing of the Series C
Certificate of Designation with the Secretary of State of the State of Delaware.
"Closing" means the closing of the transactions
contemplated by Section 2.2 or Section 2.3, as applicable.
"Closing Date" means the date on which the Initial Closing
or the Second Closing, as applicable, actually occurs.
"Common Stock" means shares of common stock, $.10 par
value, of the Company.
"Company" has the meaning ascribed to it in the
introductory paragraphs of this Agreement.
"Contract" means any agreement, lease, debenture, note,
evidence of Indebtedness, mortgage, indenture, security agreement or other
contract or other commitment (whether written or oral).
"Credit Agreement" has the meaning ascribed to it in the
introductory paragraphs of this Agreement.
"Dividends" means the shares of Series C Preferred Stock
issued as dividends on the Series C Preferred Stock in
accordance with the Series C Certificate of Designation.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"Financial Statement Date" means October 1, 2000.
"GAAP" means United States generally accepted accounting
principles, consistently applied throughout the specified period and in all
prior comparable periods.
"Governmental or Regulatory Authority" means any court,
tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States, any foreign country or any domestic or
foreign state, county, city or other political subdivision, any arbitrator,
tribunal or panel of arbitrators and, shall include any stock exchange,
quotation service and the National Association of Securities Dealers.
"Harvest" has the meaning ascribed to it in the
introductory paragraphs of this Agreement.
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"Indebtedness" of any Person means all obligations of such
Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures or
similar instruments, (iii) for the deferred purchase price of goods or services
(other than trade payables or accruals incurred in the ordinary course of
business), (iv) under capital leases and (v) in the nature of guarantees of the
obligations described in clauses (i) through (iv) above of any other Person.
"Initial Capital Call" has the meaning ascribed to it in
Section 2.1
"Initial Closing" means the closing of the transactions
contemplated by Section 2.2.
"Initial Closing Date" means the date on which the Initial
Closing actually occurs.
"Initial Purchase Price" has the meaning ascribed to it in
Section 2.1.
"Laws" means all laws, statutes, rules, regulations,
ordinances and other pronouncements having the effect of law of the United
States, any foreign country or any domestic or foreign state, county, city or
other political subdivision or of any Governmental or Regulatory Authority.
"Lenders" has the meaning ascribed to it in the
introductory paragraphs of this Agreement.
"Liens" means any mortgage, pledge, assessment, security
interest, lease, lien, adverse claim, levy, charge or
other encumbrance of any kind, or any conditional sale Contract, title retention
Contract or Contract committing to grant any of the foregoing.
"Option" with respect to any Person means any security,
right, subscription, warrant, option, "phantom" stock
right or other Contract that gives the right to (i) purchase or otherwise
receive or be issued any shares of capital stock or other equity interests of
such Person or any security of any kind convertible into or exchangeable or
exercisable for any shares of capital stock or other equity interest of such
Person or (ii) receive any benefits or rights similar to any rights enjoyed by
or accruing to the holder of shares of capital stock or other equity interests
of such Person, including without limitation any rights to participate in the
equity, income or election of directors, management committee members or
officers of such Person.
"Order" means any writ, judgment, decree, injunction or
similar order of any Governmental or Regulatory Authority (in each such case
whether preliminary or final).
"Person" or "person" means any individual, corporation,
joint stock corporation, limited liability company or partnership, general
partnership, limited partnership, proprietorship,
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joint venture, other business organization, trust, union, association,
Governmental or Regulatory Authority or other entity of any kind.
"Preferred Stock" has the meaning ascribed to it in Section
3.3.
"Purchase Price" has the meaning ascribed to it in Section
2.1.
"Purchaser" has the meaning ascribed to it in the
introductory paragraphs of this Agreement.
"Second Capital Call" has the meaning ascribed to it in
Section 2.1.
"Second Closing" means the closing of the transactions
contemplated by Section 2.3.
"Second Closing Date" means the date on which the Second
Closing actually occurs, if at all.
"Second Purchase Price" has the meaning ascribed to it in
Section 2.1.
"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Series C Certificate of Designation" means the Certificate
of Designation with respect to the Series C Preferred Stock in the form attached
as Exhibit A, to be filed with the Secretary of State of the State of Delaware
prior to the Closing.
"Series C Preferred Stock" has the meaning ascribed to it
in the introductory paragraphs of this Agreement.
"Shares" has the meaning ascribed to it in Section 2.1.
"Subsidiary" means any Person in which the Company,
directly or indirectly through Subsidiaries or otherwise, beneficially owns more
than fifty percent (50%) of either the equity interests in, or the voting
control of, such Person.
1.2 Certain Conventions. Unless the context of this
Agreement otherwise requires, (i) words of any gender include each other gender,
(ii) words using the singular or plural number also include the plural or
singular number, respectively, (iii) the terms "hereof," "herein," "hereby" and
derivative or similar words refer to this entire Agreement, (iv) the terms
"Article" or "Section" refer to the specified Article or Section of this
Agreement, and (v) the phrases "ordinary course of business" and "ordinary
course of business consistent with past
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practice" refer to the business and practice of the Company or a Subsidiary. All
accounting terms used herein and not expressly defined herein shall have the
meanings given to them under GAAP.
ARTICLE II
SALE OF SHARES; CLOSING
2.1 Purchase and Sale. At the Closing, the Company shall
initially issue and sell to the Purchaser, and the Purchaser shall purchase from
the Company, 5,000 shares of Series C Preferred Stock (the "Initial Capital
Call"), free and clear of all Liens, for an aggregate purchase price (payable in
cash in the manner provided in Section 2.2) equal to $5,000,000 (the "Initial
Purchase Price"). If required under the Capital Call Agreement, the Company
shall subsequently issue and sell to the Purchaser, and the Purchaser shall
subsequently purchase from the Company, 5,000 additional shares of Series C
Preferred Stock (the "Second Capital Call"), free and clear of all Liens, for an
aggregate purchase price (payable in cash in the manner provided in Section 2.2)
equal to $5,000,000 (the "Second Purchase Price"). The shares of Series C
Preferred Stock to be issued in the Initial Capital Call and in the Second
Capital Call are collectively referred to herein as the "Shares" and the Initial
Purchase Price and Second Purchase Price are collectively referred to herein as
the "Purchase Price."
2.2 Initial Closing. The Initial Closing shall take place
at such location as the parties mutually agree on the date on which each of the
conditions precedent set forth in Article VI and Article VII shall have been
satisfied or waived as provided therein. At the Initial Closing, the Purchaser
shall pay the Initial Purchase Price by wire transfer of immediately available
funds to the account specified by the Company by written notice delivered to the
Purchaser at least two (2) Business Days before the Initial Closing Date.
Simultaneously, the Company shall deliver to the Purchaser certificates,
registered in the name of the Purchaser, representing the shares of Series C
Preferred Stock issued in the Initial Capital Call. At the Initial Closing,
there shall also be delivered to the Company and the Purchaser the opinions,
certificates and other Contracts, documents and instruments to be delivered
under Articles VI and VII.
2.3 Second Closing. The Second Closing, if required under
the Capital Call Agreement, shall take place at such location as the parties
mutually agree on the date on which each of the conditions precedent set forth
in Article VI and Article VII shall have been satisfied or waived as provided
therein. At the Second Closing, the Purchaser shall pay the Second Purchase
Price by wire transfer of immediately available funds to the account specified
by the Company by written notice delivered to the
Purchaser at least two (2) Business Days before the Second Closing Date.
Simultaneously, the Company shall deliver to the Purchaser certificates,
registered in the name of the Purchaser, representing the shares of Series C
Preferred Stock issued in the Second Capital Call. At the Second Closing, there
shall also be delivered to the
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Company and the Purchaser the opinions, certificates and other Contracts,
documents and instruments to be delivered under Articles VI and VII.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser that
the statements contained in this Article III are true
and correct as of the date of this Agreement and will be true and correct as of
the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Article III).
3.1 Organization of the Company. The Company is a
corporation duly organized, validly existing and in good standing under the Laws
of the State of Delaware, is duly qualified, licensed or admitted to do business
and is in good standing in those jurisdictions in which the ownership, use or
leasing of its Assets and Properties or the conduct or nature of its business,
makes such qualification, licensing or admission necessary, except where the
failure to be so qualified, licensed, admitted or in good standing will not,
individually or in the aggregate, have a material adverse effect on the Business
or Condition of the Company.
3.2 Power and Authority. The Company has the requisite
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder, to consummate the transactions contemplated hereby. The
execution and delivery by the Company of this Agreement, the performance by the
Company of its obligations hereunder, the consummation of the transactions
contemplated hereby, have been duly and validly authorized by all necessary
action on the part of the Board of Directors of the Company, which action of the
Board of Directors is the only corporate action necessary therefore. This
Agreement has been duly and validly executed and delivered by the Company and
constitutes a legal, valid and binding obligation of the Company, in each case
enforceable against the Company in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws relating to the
enforcement of creditors' rights generally and by general principles of equity.
3.3 Capital. As of the date hereof and prior to the
transactions contemplated by this Agreement, the authorized capital stock of the
Company consists of 25,000,000 shares of Common Stock, 3,000,000 shares of Class
B Common Stock, par value $0.01 (the "Class B Common Stock"), and 506,602 shares
of Preferred Stock, par value $0.01 (the "Preferred Stock") of which 394,315
shares are designated as Series B Preferred Stock (the "Series B Preferred
Stock"), of which (i) approximately 9,368,000 shares of Common Stock are
outstanding, all of which are validly issued, fully paid and non-assessable, and
have been issued in compliance with all applicable federal and state securities
laws, (ii) no shares of Class B Common Stock are outstanding and (iii) 167,000
shares of Series B Preferred Stock are
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outstanding. Immediately after giving effect to the Closing and the other
transactions contemplated by this Agreement to occur on the Closing Date, (i)
the authorized capital stock of the Company will consist of 25,000,000 shares of
Common Stock, 3,000,000 shares of Class B Common Stock and 506,602 shares of
Preferred Stock, of which 363,000 shares are designated as Series B Preferred
Stock and of which 30,000 shares shall be designated Series C Preferred Stock,
in each case having the terms and conditions specified in the Charter, (ii) the
outstanding capital stock of the Company will consist of 9,368,000 shares of
Common Stock, 167,000 shares of Series B Preferred Stock and 5,000 shares of
Series C Preferred Stock (upon the Initial Closing) and 10,000 shares of Series
C Preferred Stock (upon the Second Closing). Except for the Series C Preferred
Stock and except as set forth on Schedule 3.3, there are no, and immediately
after giving effect to the Closing and the other transactions contemplated by
this Agreement to occur on the Closing Date, there will not be any outstanding
Options with respect to the Company, no agreements, arrangements or
understandings to issue Options with respect to the Company and no preemptive
rights or agreements, arrangements or understandings to issue preemptive rights
with respect to the issuance or sale of the Company's capital stock. Upon
issuance at the Closing, the certificate or certificates representing the Shares
purchased hereunder to the Purchaser will grant the Purchaser good and valid
title to the Shares free and clear of all Liens, and all the Shares will have
been duly authorized, validly issued and fully paid and will be nonassessable.
The Company has taken all necessary corporate action to reserve the full number
of shares of Common Stock issuable upon conversion of the Shares and the
dividends of shares of Series C Preferred Stock thereon (the "Dividends"). The
Common Stock issuable upon conversion of the Shares and the Dividends, when
issued upon such conversion, will be duly authorized, validly issued, fully paid
and nonassessable. Neither the execution, delivery or performance by the Company
of this Agreement, the issuance of the Shares as contemplated hereby, the
issuance of shares of Common Stock upon conversion of the Shares or the
Dividends, nor the consummation of the transactions contemplated by this
Agreement will give rise to or result in (with or without notice, lapse of time
or both) any antidilution adjustment, acceleration of vesting or other change
under or to any Option, except as set forth on Schedule 3.3 hereto. In the event
that the Second Capital Call is not required and thus, the 5,000 shares of
Series C Preferred Stock that could have been issued pursuant to the Second
Capital Call plus the shares of Series C Preferred Stock that would have been
issued or accrued as dividends thereon are not issued to the Purchaser, such
shares of Series C Preferred Stock shall be retired and shall revert to the
status of authorized, undesignated and unissued preferred stock.
3.4 Subsidiaries. Each Subsidiary is a corporation duly
organized, validly existing and in good standing under the Laws of its
jurisdiction of incorporation and has full corporate power and authority to
conduct its business as and to the extent now conducted and to own, use and
lease its Assets and Properties. Each Subsidiary is duly qualified, licensed or
admitted to do business and is in good standing in those jurisdictions in which
the ownership, use or leasing of such Subsidiary's Assets and Properties, or the
conduct or nature of its business, makes such qualification, licensing or
admission necessary, except where the failure to be so qualified, licensed,
admitted or in good standing will not, individually or in the aggregate, have a
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material adverse effect on the Business or Condition of the Company. All of the
outstanding shares of capital stock of each Subsidiary have been duly authorized
and validly issued, are fully paid and nonassessable, and are owned,
beneficially and of record, by the Company or Subsidiaries wholly owned by the
Company, free and clear of all Liens other than Liens in favor of Agent, for its
benefit and the benefit of the Lenders under the Credit Agreement. There are no
outstanding Options with respect to any Subsidiary. Except for the Subsidiaries,
the Company holds no equity, partnership, joint venture or other interest in any
Person, except for such equity, partnership, joint venture or other interest in
any Person that is de minimis.
3.5 No Conflicts. The execution and delivery by the Company
of this Agreement, the performance by the Company of its respective obligations
hereunder, the consummation of the transactions contemplated hereby (including,
without limitation, the filing of the Series C Certificate of Designation, the
issuance of the Shares and the issuance of the Common Stock issuable upon
conversion of the Shares) does not and will not: (a) conflict with or result in
a violation or breach of any of the terms, conditions or provisions of the
Company's certificate of incorporation or by-laws; (b) conflict with or result
in a violation or breach of any term or provision of any Law or Order applicable
to the Company or any Subsidiary or any of their respective Assets and
Properties; and (c) does not and will not, (i) conflict with or result in a
violation or breach of, (ii) constitute (with or without notice or lapse of time
or both) a default under, (iii) require the Company or any Subsidiary to obtain
any consent, approval or action of, make any filing with or give any notice to
any Person (other than the consent of Agent under the Credit Agreement) as a
result or under the terms of, (iv) result in any termination, cancellation,
acceleration or modification of, or give to any Person any right of termination,
cancellation, acceleration or modification in or with respect to, (v) give to
any Person any additional rights or entitlement to increased, additional,
accelerated or guaranteed payments under, (vi) other than liabilities under this
Agreement and the transactions contemplated by this Agreement, result in the
creation of any new, additional or increased liability of the Company or any
Subsidiary under or (vii) result in the creation or imposition of any Lien upon
the Company or any Subsidiary or any of their respective Assets and Properties
under, any Contract to which the Company or any Subsidiary is a party or by
which any of their respective Assets and Properties are bound.
3.6 Governmental Approvals and Filings. No consent,
approval or action of, filing with or notice to any Governmental or Regulatory
Authority on the part of the Company (other than the filing of the Series C
Certificate of Designation with the Secretary of State of the State of Delaware)
is required in connection with the execution, delivery and performance of this
Agreement, the consummation of the transactions contemplated hereby.
3.7 SEC Documents; Financial Statements. Each report,
schedule, form, statement and other document required to be filed by the Company
with the SEC (each an "SEC Document", and collectively, the "SEC Documents") has
been filed. As of its filing date, each SEC Document complied in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act and none of the SEC Documents, except to the extent that
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information contained in any SEC Document has been revised or superseded by a
later-filed or later declared effective, as the case may be, SEC Document,
contained any untrue statement of a material fact or omitted to state a material
fact (x) necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or (y) required to be
stated therein or necessary to make the statements therein not misleading. The
financial statements of the Company included in the SEC Documents comply in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with GAAP (except as may be indicated in the notes thereto) and
fairly present the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments which will
not have or reflect a material adverse effect on the Business or Condition of
the Company).
3.8 Absence of Changes. Since the Financial Statement Date
hereto or as disclosed in the SEC Documents filed prior to the execution and
delivery hereof, there has not been any event or development which, individually
or together with other such events, did have or could reasonably be expected to
have a material adverse effect on the Business or Condition of the Company. None
of the other representations or warranties in this Agreement shall be deemed to
limit the foregoing.
3.9 Legal Proceedings. There are no Actions or Proceedings
pending or, to the knowledge of the Company, overtly threatened against,
relating to or affecting the Company or any Subsidiary or any of their
respective Assets and Properties, which (i) could reasonably be expected to
result in the issuance of an Order restraining, enjoining or otherwise
prohibiting or making illegal the consummation of any of the transactions
contemplated by this Agreement, or (ii) if determined adversely to the Company
or such Subsidiary, could reasonably be expected to, individually or in the
aggregate, have a material adverse effect on the Business or Condition of the
Company.
3.10 Other Negotiations; Brokers. Neither the Company, any
Subsidiary, nor any of their respective Affiliates (nor any investment banker,
financial advisor, attorney, accountant or other Person retained by or acting
for or on behalf of the Company, any Subsidiary or any such Affiliate) (i) has
entered into any agreement that conflicts with any of the transactions
contemplated by this Agreement, or (ii) has entered into any agreement or had
any discussions with any third party regarding any transaction involving the
Company or any Subsidiary which could result in the Purchaser, their respective
members, or the general or limited partners, members, officers, directors,
employees, agents or Affiliates of any of them being subject to any claim for
liability to said third party in connection with this Agreement or the
consummation of any of the transactions contemplated hereby. No agent, broker,
finder, investment banker, financial advisor or other similar Person will be
entitled to any fee, commission or other compensation in connection with any of
the transactions contemplated by
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this Agreement on the basis of any act or statement made or alleged to have been
made by the Company, any Subsidiary, any of their respective Affiliates, or any
investment banker, financial advisor, attorney, accountant or other Person
retained by or acting for or on behalf of the Company, any Subsidiary or any
such Affiliate.
3.11 Exemption from Registration; Restrictions on Offer and
Sale of Same or Similar Securities. Assuming the representations and warranties
of the Purchaser set forth in Section 4.3 are true and correct in all material
respects, the offer and sale of the Shares made pursuant to this Agreement is
exempt from the registration requirements of the Securities Act. Neither the
Company nor any Person (other than the Purchaser and its Affiliates as to which
no representation is made) authorized to act on its behalf has, in connection
with the offering of the Shares, engaged in (i) any form of general solicitation
or general advertising (as those terms are used within the meaning of Rule
502(c) under the Securities Act), (ii) any action involving a public offering
within the meaning of Section 4(2) of the Securities Act, or (iii) any action
that would require the registration under the Securities Act of the offering and
sale of the Shares pursuant to this Agreement or that would violate applicable
state securities or "blue sky" laws. Neither the Company nor any Person (other
than the Purchaser and its Affiliates as to which no representation is made)
authorized to act on its behalf has made, directly or indirectly, any offer or
sale of the Shares or of securities of the same or a similar class as the Shares
that could cause the offer and sale of the Shares contemplated hereby to fail to
be entitled to exemption from the registration requirements of the Securities
Act. As used herein, the terms "offer" and "sale" have the meanings specified in
Section 2(3) of the Securities Act.
3.12 Disclosure. No representation or warranty contained in
this Agreement, and no statement contained in any Schedule or in any
certificate, list or other writing furnished to the Purchaser pursuant to any
provision of this Agreement, including, without limitation, pursuant to Article
VI, contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements herein, in the light of
the circumstances under which they were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company
that the statements contained in this Article IV are true and correct as of the
date of this Agreement, and will be true and correct as of the Closing Date (as
though made then and as though the Closing Date was substituted for the date of
this Agreement throughout this Article IV).
4.1 Organization; Power and Authority. The Purchaser is a
limited liability company duly organized, validly existing and in good standing
under the Laws of the State of Delaware. The Purchaser has the requisite power
and authority to execute and deliver this
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Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery by the Purchaser of
this Agreement, the performance by the Purchaser of its obligations hereunder
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by the Purchaser. This Agreement has been duly and validly
executed and delivered by the Purchaser and constitutes the legal, valid and
binding obligation of the Purchaser enforceable against the Purchaser in
accordance with its terms, except as the enforceability hereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws relating to the enforcement of creditors' rights generally
and by general principles of equity.
4.2 No Conflicts. The execution, delivery and performance
of this Agreement and the consummation by the Purchaser of the transactions
contemplated hereby will not conflict with, or constitute a default under, any
agreement, indenture or instrument to which the Purchaser is a party, or result
in a violation of the Purchaser's operating agreement or any order, judgment or
decree of any court or Governmental or Regulatory Authority having jurisdiction
over the Purchaser or any of its properties, and, except for such filings as may
be required by the Exchange Act, no consent, authorization or order of, or
filing or registration with, any court or Governmental or Regulatory Authority
is required by the Purchaser for the execution, delivery and performance of this
Agreement.
4.3 Purchase for Investment. The Shares will be acquired by
the Purchaser for its own account for the purpose of investment and not with a
view to the resale or distribution of all or any part of the Shares in violation
of the Securities Act, it being understood that the right to dispose of the
Shares shall be entirely within the discretion of the Purchaser. The Purchaser
is an "accredited investor" (as such term is defined in Rule 501(a) of
Regulation D under the Securities Act). Purchaser has such knowledge and
experience in financial and business matters as to be able to evaluate the
merits and risks of an investment in the Shares and is able to bear the economic
risk of its investment in the Shares (including a complete loss of its
investment). Purchaser understands that the Shares have not been registered
under the Securities Act or any state securities laws by reason of an exemption
from the registration requirements of the Securities Act and such state
securities laws, which depend upon, among other things, the accuracy of the
representations set forth herein.
4.4 Brokers. No agent, broker, finder, investment banker,
financial advisor or other similar Person will be entitled to any fee,
commission or other compensation in connection with any of the transactions
contemplated by this Agreement on the basis of any act or statement made by the
Purchaser.
13
ARTICLE V
COVENANTS OF THE COMPANY
5.1 Regulatory and Other Approvals. The Company shall and
shall cause each Subsidiary to (a) take all necessary or desirable steps and
proceed diligently and in good faith and use its best efforts, as promptly as
practicable, to obtain all consents, approvals or actions of, to make all
filings with and to give all notices to, Governmental or Regulatory Authorities
or any other Person required of the Company or any Subsidiary to consummate the
transactions contemplated by this Agreement, (b) provide such other information
and communications to such Governmental or Regulatory Authorities or other
Persons as the Purchaser or such Governmental or Regulatory Authorities or other
Persons may reasonably request and (c) cooperate with the Purchaser as promptly
as practicable in obtaining all consents, approvals or actions of, making all
filings with and giving all notices to, Governmental or Regulatory Authorities
or other Persons required of the Purchaser to consummate the transactions
contemplated by this Agreement. The Company will provide prompt notification to
the Purchaser when any such consent, approval, action, filing or notice referred
to in clause (a) above is obtained, taken, made or given, as applicable, and
will advise the Purchaser of any communications (and, unless precluded by Law,
provide the Purchaser with copies of any such communications that are in
writing) with any Governmental or Regulatory Authority or other Person regarding
any of the transactions contemplated by this Agreement.
5.2 Reservation of Shares. The Company will, at all times
that the Shares are outstanding, keep reserved the full number of shares of
Common Stock issuable upon conversion of the Shares and Dividends. The Company
will reserve 20,000 shares of Series C Preferred to be issued only as Dividends.
5.3 Use of Proceeds. The Company shall use the proceeds
from the purchase and sale of the Shares hereunder as required by the Credit
Agreement and the Capital Call Agreement.
5.4 Notice and Cure. The Company shall notify the Purchaser
promptly in writing of, and contemporaneously shall provide the Purchaser with
true and complete copies of any and all information or documents relating to,
and the Company shall use its best efforts to cure before the Closing, any
event, transaction or circumstance that causes or shall cause any covenant or
agreement of the Company under this Agreement to be materially breached (if not
qualified by materiality or material adverse effect) or breached (if qualified
by materiality or material adverse effect) or that renders or shall render
materially untrue (if not qualified by materiality or material adverse effect)
or untrue (if qualified by materiality or material adverse effect) any
representation or warranty of the Company contained in this Agreement as if the
same were made on or as of the date of such event, transaction or circumstance.
The Company also shall notify the Purchaser promptly in writing of, and the
Company shall use its best efforts to cure, before the Closing, any material
violation or material breach (in each case, if not
14
qualified by materiality or material adverse effect) or any violation or breach
(in each case, if qualified by materiality or material adverse effect) of any
representation, warranty, covenant or agreement made by the Company in this
Agreement, whether occurring or arising before, on or after the date of this
Agreement. No notice given pursuant to this Section shall have any effect on the
representations, warranties, covenants or agreements contained in this Agreement
for purposes of determining satisfaction of any condition contained herein.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF THE PURCHASER
The obligations of the Purchaser hereunder are subject to
the fulfillment, at or before such Closing, of each of the following conditions
(all or any of which may be waived in whole or in part by the Purchaser in its
sole discretion):
6.1 Orders and Laws. There shall not be in effect on the
Closing Date any Order or Law restraining, enjoining or otherwise prohibiting or
making illegal the consummation of any of the transactions contemplated by this
Agreement.
6.2 Certificates of Designation. The Purchaser shall have
received evidence satisfactory to it that the Class C Certificate of
Designation, substantially in the form of Exhibit A hereto, has been duly filed
with the Office of the Secretary of State of the State of Delaware and has
become effective in accordance with its terms.
6.3 Delivery of Certificates. Duly executed certificates
representing the Shares shall have been delivered to the Purchaser.
6.4 Capital Call Agreement. The Capital Call Agreement
shall be in effect and shall require the investment contemplated, including in
the amount set forth in Section 2 hereof, by this Agreement.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE COMPANY
The obligations of the Company hereunder are subject to the
fulfillment, at or before the Closing, of each of the following conditions (all
or any of which may be waived in whole or in part by the Company in its sole
discretion):
7.1 Payment of Purchase Price. The Purchaser shall have
paid the applicable Purchase Price for the Shares.
15
7.2 Orders and Laws. There shall not be in effect on the
Closing Date any Orders or Laws that became effective after the execution and
delivery of this Agreement restraining, enjoining or otherwise prohibiting or
making illegal the consummation of any of the transactions contemplated by this
Agreement.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS
Notwithstanding any right of the Purchaser (whether or not
exercised) to investigate the affairs of the Company or any right of any party
(whether or not exercised) to investigate the accuracy of the representations
and warranties of another party contained in this Agreement or the waiver of any
condition to Closing, the Company, on the one hand, and the Purchaser, on the
other hand, have the right to rely fully upon the representations, warranties,
covenants and agreements of the other contained in this Agreement. The
representations, warranties, covenants and agreements of the Company and the
Purchaser contained in this Agreement will survive the Closing (a) indefinitely
with respect to the covenants and agreements herein and the representations and
warranties contained in Sections 3.1, 3.2, 3.3, 3.4 and 3.10 and 4.1 and 4.4 and
(b) until the third anniversary of the Closing Date with respect to all other
representations and warranties.
ARTICLE IIX
TERMINATION
9.1 Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned upon termination of Capital
Call Agreement or any amendment thereto that eliminates the obligation of
Harvest to fund any call obligation.
9.2 Effect of Termination. If this Agreement is validly
terminated pursuant to Section 9.1, this Agreement will forthwith become null
and void, and there will be no liability or obligation on the part of the
Company or the Purchaser, except that the provisions with respect to expenses in
Section 10.3 will continue to apply following any such termination.
ARTICLE X
MISCELLANEOUS
10.1 Notices. All notices, requests and other
communications hereunder must be in writing and will be deemed to have been duly
given only if delivered personally against written receipt or by facsimile
transmission or mailed by prepaid first class certified mail, return receipt
requested, or mailed by overnight courier prepaid, to the parties at the
following addresses or facsimile numbers:
16
(a) If to the Purchaser, to:
LIH Holdings IV, LLC
c/o Harvest Partners, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No: (000) 000-0000
Attn: Xxx Xxxxxxxx
with a copy (which shall not constitute notice) to:
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx
1251 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile No: (000) 000-0000
Attn: Xxxxxxx Xxxxx, Esquire
(b) If to the Company, to:
Xxxx International Holdings, Inc.
0000 Xxxxxxxxx Xxxxxxx XX
Xxxxx 0000
Xxxxxx, Xxxxxxx 00000
Facsimile No: (000) 000-0000
Attn: Chief Executive Officer
with a copy (which shall not constitute notice) to:
Xxxxxxx, Street and Deinard
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Facsimile No: (000) 000-0000
Attn: Xxxx Xxxxx, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given
upon delivery, (ii) if delivered by facsimile transmission to the facsimile
number as provided in this Section, be deemed given upon receipt, (iii) if
delivered by mail in the manner described above to the address as provided in
this Section, be deemed given on the earlier of the third Business Day following
mailing or upon receipt and (iv) if delivered by overnight courier to the
address as provided in this Section, be deemed given
17
on the earlier of the first Business Day following the date sent by such
overnight courier or upon receipt (in each case regardless of whether such
notice, request or other communication is received by any other Person to whom a
copy of such notice is to be delivered pursuant to this Section). Any party from
time to time may change its address, facsimile number or other information for
the purpose of notices to that party by giving notice specifying such change to
the other party hereto.
10.2 Entire Agreement. This Agreement supersedes all prior
discussions and agreements between the parties with respect to the subject
matter hereof and contains the sole and entire agreement between the parties
hereto with respect to the subject matter hereof.
10.3 Fees and Expenses. In the event that (i) the
transactions contemplated by this Agreement are consummated or (ii) this
Agreement is terminated, the Company shall reimburse the Purchaser for all the
reasonable fees and expenses (including the fees and expenses of counsel,
consultants and accountants), incurred by the Purchaser prior to the Closing in
connection with this Agreement and the transactions contemplated hereby.
10.4 Further Assurances; Future HSR Filing. At any time and
from time to time after the Closing, the Company shall execute and deliver to
the Purchaser such other documents and instruments, provide such materials and
information and take such other actions as the Purchaser may reasonably request
more effectively to vest title to the Shares in the Purchaser and to otherwise
cause the Company to fulfill its other obligations under this Agreement. The
parties hereto agree that, prior to the conversion of the Series C Preferred
Stock into Common Stock, they may be required to file a Notification and Report
Form and related material with the Federal Trade Commission and the Antitrust
Division of the United States Department of Justice under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended. Each party agrees that it will
use its best efforts to obtain an early termination of the applicable waiting
period, and will make any further filings pursuant thereto that may be
necessary, proper, or advisable in connection therewith.
10.5 Waiver. Any term or condition of this Agreement may be
waived at any time by the party that is entitled to the benefit thereof, but no
such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No waiver
by any party of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any
other term or condition of this Agreement on any future occasion. All remedies,
either under this Agreement or by Law or otherwise afforded, will be cumulative
and not alternative.
10.6 Amendment. This Agreement may be amended, supplemented
or modified only by a written instrument duly executed by or on behalf of each
party hereto.
10.7 Third Party Beneficiaries. The terms and provisions of
this Agreement are intended solely for the benefit of each party hereto and
their respective successors and permitted
18
assigns, and it is not the intention of the parties to confer third-party
beneficiary rights, and this Agreement does not confer any such rights, upon any
other Person.
10.8 No Assignment; Binding Effect. Neither this Agreement
nor any right, interest or obligation hereunder may be assigned (by operation of
Law or otherwise) by the Company without the prior written consent of the
Purchaser and any attempt to do so will be void ab initio. Neither this
Agreement nor any right, interest or obligation hereunder may be assigned by the
Purchaser without the prior written consent of the Company and any attempt to do
so will be void ab initio. Subject to the preceding sentence, this Agreement
shall bind and inure to the benefit of and be enforceable by the parties hereto
and their respective successors and assigns, including, without limitation, any
holder of the Shares.
10.9 Headings; Construction. The headings used in this
Agreement have been inserted for convenience of reference only and do not define
or limit the provisions hereof. The parties hereto agree that this Agreement is
the product of negotiation between sophisticated parties and individuals, all of
whom were represented by counsel, and each of whom had an opportunity to
participate in and did participate in, the drafting of each provision hereof.
Accordingly, ambiguities in this Agreement, if any, shall not be construed
strictly or in favor of or against any party hereto but rather shall be given a
fair and reasonable construction without regard to the rule of contra
proferentum. The words "include," "includes" and "including" shall be deemed to
be followed by the phrase "without limitation."
10.10 Invalid Provisions. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under any present or
future Law, and if the rights or obligations of any party hereto under this
Agreement will not be materially and adversely affected thereby, (i) such
provision will be fully severable, (ii) this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof, (iii) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the illegal, invalid
or unenforceable provision or by its severance here from and (iv) in lieu of
such illegal, invalid or unenforceable provision, there will be added
automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible.
10.11 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of New York.
10.12 Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
19
10.13 Limited Recourse. Notwithstanding anything in this
Agreement, or any other document, agreement or instrument contemplated hereby to
the contrary, the obligations of the Purchaser hereunder shall be without
recourse to any Affiliate of the Purchaser or any stockholder, partner, member,
officer, director, manager, employee or agent of Purchaser or such Affiliates,
and shall be limited to the assets of the Purchaser; provided, however, nothing
herein shall affect the obligations of Harvest pursuant to the Capital Call
Agreement.
10.14 Consent to Jurisdiction and Service of Process. EACH
OF THE COMPANY AND THE PURCHASER CONSENTS TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW YORK, STATE OF NEW YORK AND
IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS RELATING TO THIS AGREEMENT
MAY BE LITIGATED IN SUCH COURTS. EACH OF THE COMPANY AND THE PURCHASER ACCEPTS
FOR ITSELF AND IN CONNECTION WITH ITS RESPECTIVE PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND
BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. EACH OF THE
COMPANY AND THE PURCHASER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE PARTY AT THE ADDRESS SPECIFIED IN THIS AGREEMENT, SUCH SERVICE TO BECOME
EFFECTIVE FIFTEEN (15) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL IN ANY WAY
BE DEEMED TO LIMIT THE ABILITY OF ANY PARTY HERETO TO SERVE ANY SUCH LEGAL
PROCESS, SUMMONS, NOTICES AND DOCUMENTS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER OR TO BRING ACTIONS, SUITS OR
PROCEEDINGS AGAINST ANY OF THE OTHER PARTIES HERETO IN SUCH OTHER JURISDICTIONS,
AND IN SUCH MANNER, AS MAY BE PERMITTED BY ANY APPLICABLE LAW.
[Signature Page to Follow]
20
IN WITNESS WHEREOF, this Agreement has been duly executed
and delivered by the duly authorized officer of each
party hereto as of the date first above written.
LIH HOLDINGS IV, LLC
By: /s/ Xxx X. Xxxxxxxx
______________________________________________
Name:__________________________
Title:___________________________
XXXX INTERNATIONAL HOLDINGS, INC.
By: /s/ Xxxxxx X. Vollmershausen
______________________________________________
Name: Xxxxxx X. Vollmershausen
Title: President and Chief Executive Officer
[SIGNATURE PAGE TO INVESTMENT AGREEMENT]
21
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES C PREFERRED STOCK
XXXX INTERNATIONAL HOLDINGS, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
The undersigned, Xxxxxx X. Vollmershausen, hereby certifies that:
A. He is the duly elected and acting President and Chief Executive
Officer of XXXX INTERNATIONAL HOLDINGS, INC., a Delaware corporation (the
"Corporation").
B. Pursuant to authority given by the Corporation's Certificate of
Incorporation, as amended through the date hereof (the "Certificate of
Incorporation"), the Board of Directors of the Corporation duly adopted the
following resolutions as of December 20, 2000 creating a new series of 30,000
shares of Preferred Stock designated as "Series C Preferred Stock."
C. The resolutions contained herein have not been modified, altered
or amended and are presently in full force and effect.
RESOLVED, that pursuant to the authority expressly vested in the
Board of Directors of the Corporation by Article Fourth of the Certificate of
Incorporation, the Board of Directors hereby fixes and determines the powers,
preferences, rights and limitations of a series of Preferred Stock, which shall
consist of 30,000 shares and shall be designated as Series C Preferred Stock
(the "Series C Preferred Stock"), as follows:
4B. Series C Preferred Stock.
(i) Designation; Stated Value. There shall be a series of Preferred
Stock designated as "Series C Preferred Stock." The number of shares initially
constituting such series shall be 30,000. In the event that additional shares of
Series C Preferred Stock are required for the payment of dividends as described
below, the Corporation shall amend this Certificate to increase the number of
shares of Series C Preferred Stock; provided, however, that the Corporation
shall only be required to amend such number up to the number of shares of
preferred stock that is authorized, unissued and undesignated at such time. The
Series C Preferred Stock shall have a stated value of $1,000.00 per share (the
"Series C Stated Value"). Shares of Series C Preferred Stock may be issued from
time to time upon payment therefore pursuant to that certain Investment
Agreement, dated as of December 28, 2000, by and between the Corporation and LIH
Holdings IV, LLC (the "Investment Agreement"). Each issuance pursuant to the
22
Investment Agreement is hereinafter referred to as a "Tranche" and the shares
issued in each Tranche are hereinafter referred to as "Tranche Shares."
(ii) Rank. The Series C Preferred Stock shall, with respect to
dividend and other distribution rights, and rights on liquidation, dissolution
and winding up, rank (i) pari passu with any class of capital stock or series of
Preferred Stock hereafter created which expressly provides that it ranks pari
passu with the Series C Preferred Stock as to dividends, other distributions,
liquidation preference and/or otherwise (collectively, the "Parity Securities"),
(ii) junior to the Series B Preferred Stock, and (iii) senior to (x) the Common
Stock, the Class B Common Stock and all other securities of any class or classes
(however designated) of the Corporation (other than the Series B Preferred
Stock) the holders of which have the right, without limitation as to amount,
after payment on any securities entitled to a preference on dividends or other
distributions upon any dissolution, liquidation or winding up, either to all or
to a share of the balance of payments upon such dissolution, liquidation or
winding up (collectively, the "Common Stock Instruments") and (y) any other
class of capital stock or series of Preferred Stock hereafter created which does
not expressly provide that it ranks pari passu with, or senior to, the Series C
Preferred Stock as to dividends, other distributions, liquidation preference
and/or otherwise (collectively, the "Junior Securities"). The terms "Parity
Securities" and "Junior Securities" as used herein with respect to any class or
series of capital stock shall only be deemed to refer to such class or series to
the extent it ranks (i) pari passu with or (ii) not pari passu with, as
applicable, the Series C Preferred Stock with respect to dividends, other
distributions, liquidation preference or otherwise. The Corporation shall not
issue any securities ranking senior to or pari passu with the Parity Securities
with respect to dividends, distributions, liquidation preference or otherwise
unless a majority in interest of the Series C Preferred Stock, voting as a
class, shall have approved such a proposed issuance.
(iii) Dividends.
(a) The holders of shares of Series C Preferred Stock shall
be entitled to receive, when, as and if declared by the Board of
Directors, to the extent such dividends are legally available
therefore in accordance with the Delaware General Corporation Law, a
dividend on shares of Series C Preferred Stock held (whether such
shares are Tranche Shares or issued as a dividend on Tranche Shares
as provided below ("Tranche Dividend Shares")), payable by the
issuance of additional shares of Series C Preferred Stock, as
provided below, quarterly on the last day of each March, June,
September and December, commencing on the first of such dates
following the date of an issuance of Series C Preferred Stock
(whether Tranche Shares or Tranche Dividend Shares), (each such date
hereinafter referred to as a "Series C Dividend Payment Date"),
except that if such date is not a Business Day, then such dividend
shall be payable on the next succeeding Business Day, to the holders
of record as they appear on the register of the Corporation for the
Series C Preferred Stock of the Corporation five Business Days prior
to such Dividend Payment Date (the "Series C Dividend Record Date").
Dividends on the Series C Preferred Stock shall accrue and
be paid at a rate per annum by distributing that number of shares of
Series C Preferred Stock with a Stated
23
Value equal to 12% of the Stated Value of each share of Series C
Preferred Stock outstanding on a Series C Dividend Record Date with
respect to such Series C Dividend Payment Date. No fractional shares
shall be issued; provided, however, that fractional shares, if any,
shall accrue and shall be issued when a whole number is accumulated.
(b) Dividends on the Series C Preferred Stock shall be
cumulative and shall accrue from the date of issuance whether or not
such dividends have been declared or paid.
(c) For so long as any shares of Series C Preferred Stock
shall be outstanding, no dividend or distribution, whether in cash,
stock or other property, shall be paid, declared and set apart for
payment or made on any date on or in respect to any Junior Securities
and no payment on account of the redemption, purchase or other
acquisition or retirement for value by the Corporation shall be made
on any date of shares of Junior Securities unless, in each case, the
full amount of unpaid dividends accrued on all outstanding shares of
Series C Preferred Stock shall have been paid or contemporaneously
are declared and paid; provided, however, that the foregoing
provisions of this sentence shall not prohibit (i) a dividend payable
solely in shares of Common Stock Instruments or any other Junior
Securities, or (ii) the acquisition of any shares of any Common Stock
Instruments or any other Junior Securities upon conversion or
exchange thereof into or for any shares of any other class of Common
Stock Instruments or other Junior Securities.
(iv) Redemption and Retirement of Series C Preferred Stock.
(a) Redemption by Corporation. The Series C Preferred
Stock shall be redeemed by the Corporation only upon satisfaction of
each of the conditions for redemption set forth in that certain
Capital Call Agreement, dated as of November 13, 2000, by and among
the Corporation, Harvest Partners III, L.P. and Agent (as the same
may be amended, restated, supplemented or otherwise modified from
time to time, the "Capital Call Agreement"). Notwithstanding the
foregoing, the Series C Preferred Stock shall be redeemable upon
demand by the Corporation in the event that certain Credit Agreement,
dated February 27, 1998 (as such agreement has from time to time been
amended, supplemented or otherwise modified, including without
limitation that certain Waiver and Fourth Amendment to Credit
Agreement dated as of November 13, 2000 and as it may hereafter be
further amended, restated, supplemented, modified, refinanced or
replaced (the "Credit Agreement")), by and among the Corporation,
Xxxx Industries, Incorporated, Deflecta-Shield Corporation, Belmor
Autotron Corp., DFM Corp., Auto Ventshade Company, Smittybilt, Inc.,
Xxxx Acquisition Corp., BAC Acquisition Co., Trailmaster Products,
Inc., Delta III, Inc., Ventshade Holdings, Inc., Xxxxxx Financial,
Inc., individually as a Lender and in its capacity as Agent, and the
other Lenders which are signatories thereto, is terminated and all
obligations thereunder are indefeasibly repaid in full in cash.
24
(b) Payment of Series C Redemption Price. On the Series C
Redemption Date (as hereinafter defined), if permitted by law, the
Corporation shall pay to the holder of each share of Series C
Preferred Stock being redeemed, upon surrender by such holder at the
Corporation's principal executive office of the certificate
representing such share, duly endorsed in blank or accompanied by an
appropriate form of assignment, the Series C Redemption Price. As
used herein, the "Series C Redemption Price" means the sum of (x) the
Series C Stated Value, plus (y) an amount equal to all accrued and
unpaid dividends thereon to the Series C Redemption Date.
(c) Redeemed or Otherwise Acquired Shares Not to be
Reissued; Shares Not Acquired. All shares of Series C Preferred Stock
redeemed pursuant to this Part (iv) of Section 4B or otherwise
acquired by the Corporation shall be retired and shall not thereafter
be reissued as Series C Preferred Stock, but shall revert to the
status of authorized, undesignated and unissued preferred stock. In
the event that the Second Capital Call, as defined in the Investment
Agreement, does not occur, 5,000 shares of Series C Preferred Stock
plus any shares of Series C Preferred Stock that were reserved for
dividends thereon, shall be retired and shall not thereafter be
reissued as Series C Preferred Stock, but shall revert to the status
of authorized, undesignated and unissued preferred stock.
(d) Determination of Number of Each Holder's Shares to be
Redeemed. If, for any reason, less than all of the outstanding shares
of Series C Preferred Stock are to be redeemed pursuant to Part
(iv)(a) of this Section 4B, the Corporation shall determine the
shares held by each holder of Series C Preferred Stock to be redeemed
as hereinafter provided. The number of shares to be redeemed from
each holder thereof shall be the number of shares determined by
multiplying the total number of shares to be redeemed times a
fraction, the numerator of which shall be the total number of shares
of Series C Preferred Stock then held by such holder and the
denominator of which shall be the total number of shares of Series C
Preferred Stock then outstanding.
(e) Notice of Redemption. Notice of any redemption of
Series C Preferred Stock pursuant to Part (iv)(a) of this Section 4B,
specifying the time and place of redemption and the Series C
Redemption Price (the "Series C Redemption Date"), shall be mailed by
certified or registered mail, return receipt requested, to each
holder of record of shares to be redeemed, at the address for such
holder shown on the Corporation's records, not less than 15 days
prior to the date on which such redemption is to be made; provided,
that neither failure to give such notice nor any defect therein shall
affect the validity of the proceeding for the redemption of any
shares of Series C Preferred Stock to be redeemed. Such notice shall
also specify the number of shares of each holder thereof and the
certificate numbers thereof which are to be redeemed. In case less
than all the shares represented by any certificate are redeemed, a
new certificate representing the unredeemed shares shall be issued to
the holder thereof without cost to such holder. Upon receipt of any
such notice, the holder of the shares being redeemed shall deliver to
the Corporation the certificate(s), duly endorsed for transfer,
representing the shares to be redeemed; provided, however, that any
failure by a holder to deliver such
25
certificate(s) shall not in any way affect the status of such shares,
upon tender by the Corporation of the Series C Redemption Price, as
redeemed and canceled.
(f) Dividends After Redemption Date. Unless the Series C
Redemption Price in respect of a share of Series C Preferred Stock is
not made available in full to the holder thereof, from and after the
Series C Redemption Date, such share of Series C Preferred Stock
shall not be entitled to any dividends accruing after such date, all
rights of the holder of such share, as a stockholder of the
Corporation by reason of the ownership of such share, shall cease,
except the right to receive the Series C Redemption Price of such
share upon the presentation and surrender of the certificate
representing such share, and such share shall not after such date be
deemed to be outstanding for any purpose.
(v) Liquidation Rights.
(a) Upon the dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, the holders of
outstanding shares of Series C Preferred Stock shall be entitled to
receive for each such share, out of the assets of the Corporation
available for distribution to stockholders, before any payment or
distribution to stockholders and before any payment or distribution
shall be made to the holders of Common Stock or any other Junior
Securities upon liquidation, an amount in cash equal to the sum (the
"Series C Liquidation Value") of (x) the Series C Stated Value, plus
(y) an amount equal to all accrued and unpaid dividends in respect of
such share to the date of final distribution.
(b) After the payment to the holders of the Series C
Preferred Stock of the full preferential amounts provided for in this
Part (v) of Section 4B, the holders of the Series C Preferred Stock
as such shall have no right or claim to any of the remaining assets
of the Corporation.
(c) If, upon any such liquidation, dissolution or other
winding up of the affairs of the Corporation, the assets of the
Corporation are insufficient to permit the payment in full of the
Series C Liquidation Value for each share of Series C Preferred Stock
then outstanding and the full liquidating payment on all Parity
Securities, then the assets of the Corporation remaining shall be
ratably distributed among the holders of Series C Preferred Stock and
of any Parity Securities in proportion to the full amounts to which
they would otherwise be respectively entitled if all amounts thereon
were paid in full.
(d) Neither the voluntary sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all the property or assets of
the Corporation nor the consolidation, merger or other business
combination of the Corporation with or into one or more corporations
shall be deemed to be a liquidation, dissolution or winding-up
voluntary or involuntary, of the Corporation.
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(vi) Conversion.
(a) Each share of Series C Preferred Stock shall be
convertible, at the option of the holder at any time, into that
number of shares of Common Stock equal to the Series C Liquidation
Value divided by the Fair Market Value, as described below, per share
of Common Stock on the date of notice of conversion (the "Series C
Conversion Ratio"). For purposes of this Section 4B (vi)(a), Fair
Market Value means the average of the closing sale price for the
Common Stock for the twenty (20) business days prior to the date of
conversion as reported on the largest securities exchange on which
such shares are listed; and if not so listed, as reported on Nasdaq
National or Small Cap market and if such shares are not listed on
either a national securities exchange or on the Nasdaq National or
Small Cap markets, then on the Nasdaq Bulletin Board, and if the
Common Stock is not, for the twenty (20) business days prior to the
date of conversion, quoted on the bulletin board, any national
exchange or automated quotation system, means the value determined by
the independent members of the Board of Directors of the Corporation.
Independent members shall mean those directors who are not affiliates
of Harvest Partners III, L.P. or the Chief Executive Officer of the
Corporation.
(b) Each conversion of shares of Series C Preferred Stock
into shares of Common Stock will be effected by the surrender of the
certificate or certificates representing the shares to be converted
at the principal office of the Corporation (or such other office or
agency of the Corporation as the Corporation may designate in writing
to the holders of the Series C Preferred Stock) at any time during
normal business hours. Each conversion will be deemed to have been
effected as of the close of business on the date on which such
certificate or certificates were surrendered. At such time, the
rights of the holder of the converted Series C Preferred Stock (in
its capacity as such) will cease and the person or persons or entity
or entities in whose name or names the certificate or certificates
for shares of Common Stock are to be issued upon such conversion will
be deemed to have become the holder or holders of record of the
shares of Common Stock represented thereby.
(c) Following each surrender of certificates pursuant to
paragraph (b) above, the Corporation will issue and deliver, in
accordance with the surrendering holder's instructions, (x) the
certificate or certificates for Common Stock issuable upon such
conversion, and (y) any cash payment required to be made pursuant to
Part (vi)(a) of Section 4B.
(d) The issuance of certificates representing shares of
Common Stock upon conversion of any shares of Series C Preferred
Stock will be made without charge to the holders of such converted or
newly issued shares for any issuance tax in respect thereof or other
cost incurred by the Corporation in connection with such conversion
and the related issuance of shares of Common Stock.
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(e) The Corporation will at all times reserve and keep
available out of its authorized but unissued shares of Common Stock
the number of such shares sufficient for issuance upon conversion of
the Series C Preferred Stock hereunder.
(f) The Corporation will not close its books against the
transfer of Common Stock in any manner which would interfere with the
timely conversion of Series C Preferred Stock.
(g) In the event the outstanding shares of Common Stock
shall, after the determination of the Series C Conversion Ratio be
further subdivided (split), or combined (reverse split), by
reclassification or otherwise, or in the event of any dividend or
other distribution payable on the Common Stock or Junior Securities
in shares of Common Stock, Common Stock Instruments or Junior
Securities, then, in each such case, the Series C Conversion Ratio in
effect immediately prior to such event shall be adjusted so that each
holder of shares of Series C Preferred Stock shall have the right to
convert its shares of Series C Preferred Stock into the number of
shares of the Common Stock which it would have owned after the event
had such shares of Series C Preferred Stock been converted
immediately before the happening of such event. Any adjustment under
this Part (vi)(g) of Section 4B shall become effective as of the date
and time the subdivision or combination becomes effective.
(h) In connection with any merger, consolidation,
recapitalization, reorganization or similar transactions in which
holders of Common Stock generally receive, or are given the
opportunity to receive, consideration for their shares, then, in all
such circumstances, unless otherwise approved by a majority of the
holders of the then outstanding shares of Series C Preferred Stock
voting as a separate class, all holders of Series C Preferred Stock
shall be entitled to receive the same consideration per share for
their shares (calculated as if such shares of Series C Preferred
Stock, including cumulative dividends thereon, whether declared or
paid, had been converted on a one-for-one basis into shares of Common
Stock) as is received by the holders of Common Stock, including, but
not limited to, form, amount and timing of payment.
(vii) Voting Rights. Except as expressly provided herein or as
required under the Delaware General Corporation Law, on all matters to be voted
on by the Corporation's stockholders, holders of shares of Series C Preferred
Stock will be entitled to no voting rights.
RESOLVED, that the Board of Directors hereby authorizes and directs
the officers of the Corporation, in the name of and on behalf of the
Corporation, and to the extent required under its corporate seal, to execute and
deliver any and all other instruments, certificates and other documents, and to
do any and all other acts and things, including the expenditure of corporate
funds, that said officers shall deem necessary or appropriate in order to fully
carry out the intent and accomplish the purposes of the resolutions adopted
hereby.
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IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be hereunto
affixed and this Certificate to be signed by Xxxxxx X. Vollmershausen, its
President and Chief Executive Officer, and attested by Xxxxxx X. Xxxxxxxx, its
Assistant Secretary, this 28th day of December, 2000.
XXXX INTERNATIONAL HOLDINGS, INC.
By:/s/ Xxxxxx X. Vollmershausen
-------------------------------
Name: Xxxxxx X. Vollmershausen
Title: President and Chief Executive Officer
Attest:
/s/ Xxxxxx X. Xxxxxxxx
----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Assistant Secretary
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