AMENDED AND RESTATED EQUITY PURCHASE AND COMMITMENT AGREEMENT
EXHIBIT 99.2
EXECUTION
COPY
AMENDED
AND RESTATED EQUITY PURCHASE AND COMMITMENT
AGREEMENT
THIS AMENDED AND RESTATED EQUITY PURCHASE AND COMMITMENT
AGREEMENT (this “Agreement”), dated as of
April 16, 2007, is made by and between Deutsche Bank
Securities Inc., a Delaware corporation (the
“Investor”), and Xxxxx Lemmerz International,
Inc., a Delaware corporation (the “Company”).
Capitalized terms used in this Agreement have the meanings
assigned thereto in the sections indicated on Schedule 1
hereto.
WHEREAS, the Company proposes to conduct a rights offering by
distributing to each holder of record (as of a certain record
date) of its shares of Common Stock, par value $0.01 per
share (the “Common Stock”), at no charge,
non-transferable rights (the “Rights”), for
each share of Common Stock held by such stockholder, to purchase
shares (“Shares”) of Common Stock that have an
aggregate value of $180.0 million (the “Aggregate
Offering Amount”), rounded to the nearest whole share
(the “Rights Offering”);
WHEREAS, each holder of a Right will be entitled to purchase up
to its pro rata portion of 55,384,615 Shares (the
“Basic Subscription Privilege”) at a price of
$3.25 per Share (as adjusted for any stock split,
combination, reorganization, recapitalization, stock dividend,
stock distribution or similar event, the “Exercise
Price”);
WHEREAS, each holder of Rights who exercises in full its Basic
Subscription Privilege will be entitled, on a pro rata
basis, to subscribe for additional Shares at the Subscription
Price (the “Over-Subscription Privilege”), to
the extent that other holders of Rights do not exercise all of
their respective Basic Subscription Privileges;
WHEREAS, in order to facilitate the Rights Offering, the
Investor and the Company entered into an Equity Purchase and
Commitment Agreement dated March 16, 2007 (the
“Original Agreement”), pursuant to which and upon the
terms and subject to the conditions set forth therein, the
Investor agreed to purchase at the Exercise Price, upon
expiration of the Rights Offering, such number of Shares that
are not purchased by stockholders pursuant to the exercise of
Rights;
WHEREAS, the Company and the Investor wish to amend and restate
the Original Agreement; and
WHEREAS, the Board of Directors of the Company (the
“Board of Directors”) has determined that the
Rights Offering, this Agreement and the transactions
contemplated hereby are advisable and in the best interests of
the Company.
NOW, THEREFORE, in consideration of the mutual promises,
agreements, representations, warranties and covenants contained
herein, each of the parties hereto hereby agrees as follows:
1. Rights Offering.
(a) On the terms and subject to the conditions set forth
herein, the Company will distribute, at no charge, 1.3970 Rights
to each holder of record of Common Stock (each, an
“Eligible Holder”) for each share of Common
Stock held by such holder (the “Rights Ratio”)
as of the close of business on April 10, 2007 (the
“Record Date”), provided that no fractional
Shares will be issued and the Exercise Price multiplied by the
aggregate number of Shares offered shall not exceed the
Aggregate Offering Amount. Each such Right shall be
non-transferable. Each Right will entitle the holder to purchase
at the Exercise Price, at the election of the holder thereof,
one Share.
(b) The Rights (including the Basic Subscription Privilege
and the Over-Subscription Privilege) may be exercised during a
period (the “Rights Exercise Period”)
commencing on the date on which Rights are issued to Eligible
Holders (the “Rights Offering Commencement
Date”) and ending at 5:00 p.m. Eastern Daylight
Time on a Business Day that shall not be less than twenty
(20) days after the Rights Offering Commencement Date,
subject to extension at the reasonable discretion of the Board
of Directors, provided, however, that the Rights
Exercise Period shall not be more than thirty (30) Business
Days without the prior written consent of the Investor (the
“Expiration Time”). “Business
Day” means each Monday, Tuesday, Wednesday, Thursday
and Friday that is not a day on which banking institutions in
New York City are generally authorized or obligated by law or
executive order to close.
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(c) Each Eligible Holder who wishes to exercise all or a
portion of its Rights shall (i) during the Rights Exercise
Period return a duly executed document to a subscription agent
(the “Subscription Agent”) electing to exercise
all or a portion of the Rights held by such Eligible Holder and
(ii) pay an amount equal to the full Exercise Price of the
number of Shares that the Eligible Holder elects to purchase
pursuant to the instructions set forth in the Rights Offering
Registration Statement by a specified date to an escrow account
established for the Rights Offering. On the Closing Date, the
Company will issue to each Eligible Holder who validly exercised
its Rights the number of Shares to which such Eligible Holder is
entitled based on such exercise.
(d) Each Eligible Holder who exercises in full its Basic
Subscription Privilege will be entitled to subscribe for
additional Shares at the Exercise Price up to an amount equal to
the number of Shares such Eligible Holder is entitled to
purchase under its Basic Subscription Privilege pursuant to the
instructions set forth in the Rights Offering Registration
Statement to the extent that other Eligible Holders elect not to
exercise all of their respective Rights in the Basic
Subscription Privilege. If the number of Shares remaining after
the exercise of all Basic Subscription Privilege is not
sufficient to satisfy all requests for Shares under the
Over-Subscription Privileges, the Eligible Holders who exercised
their Over-Subscription Privileges will be allocated such
remaining Shares in proportion to the number of Shares they have
purchased through the Basic Subscription Privilege.
(e) If the pro rata allocation exceeds the
number of Shares requested in the Over-Subscription Privilege,
then each Eligible Holder only will receive the number of Shares
requested, and the remaining Shares from such Eligible
Holder’s pro rata allocation will be divided
among other Eligible Holder exercising their Over-Subscription
Privilege. If the pro rata allocation is less than
the number of Shares requested in the Over-Subscription
Privilege, then the excess funds paid by that Eligible Holder as
the Subscription Price for the Shares not issued will be
returned to such Eligible Holder without interest or deduction.
(f) The Company will pay all of its expenses associated
with the Rights Offering Registration Statement, the Initial
Registration Statement and the Rights Offering, including,
without limitation, filing and printing fees, fees and expenses
of any subscription and information agents, its counsel and
accounting fees and expenses, costs associated with clearing the
Shares for sale under applicable state securities laws and
listing fees.
(g) The Company shall notify, or cause the Subscription
Agent to notify the Investor and the Principal Additional
Investor, on each Friday during the Rights Exercise Period and
on each Business Day during the five Business Days prior to the
Expiration Time (and any extensions thereto), or more frequently
if reasonably requested by the Investor, of the aggregate number
of Rights known by the Company or the Subscription Agent to have
been exercised pursuant to the Rights Offering as of the close
of business on the preceding Business Day or the most recent
practicable time before such request, as the case may be.
(h) The Company hereby agrees and undertakes to give the
Investor and the Principal Additional Investor by electronic
facsimile transmission the certification by an executive officer
of the Company of either (i) the number of Shares elected
to be purchased by Eligible Holders pursuant to validly
exercised Rights, the aggregate Exercise Price therefor, the
number of Unsubscribed Shares and the aggregate Exercise Price
therefor (a “Purchase Notice”) or (ii) in
the absence of any Unsubscribed Shares, the fact that there are
no Unsubscribed Shares and that the commitment set forth in
Section 1(k) is terminated (a “Satisfaction
Notice”) as soon as practicable and, in any event,
within two (2) Business Days after the expiration of the
Rights Offering (the date of transmission of confirmation of a
Purchase Notice or a Satisfaction Notice, the
“Determination Date”).
(i) No later than twelve noon EDT on the second Business
Day immediately following the Expiration Time, the Company will
provide a Purchase Notice or a Satisfaction Notice to the
Investor as provided above, setting forth a true and accurate
determination of the aggregate number of Unsubscribed Shares, if
any; provided, that on the Closing Date, on the terms and
subject to the conditions in this Agreement, the Investor will
purchase, and the Company will sell, only such number of
Unsubscribed Shares as are listed in the Purchase Notice,
without prejudice to the rights of the Investor or the Company
to seek later an upward or downward adjustment if the number of
Unsubscribed Shares in such Purchase Notice is inaccurate.
(j) The Investor will have the right, but not the
obligation, by providing written notice to the Company at any
time prior to 5:00 P.M. EDT on the second Business Day
immediately following the Expiration Time, to subscribe for and
purchase on the Closing Date, and the Company agrees to issue
and sell on the Closing Date, up to
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4,038,462 shares of Common Stock (the shares subscribed for
by the Investor, the “Direct Subscription
Shares”) at price equal to the Exercise Price per
share. The parties acknowledge and agree that the number of
Direct Subscription Shares purchased by the Investor, pursuant
to this Section 1(j), shall have no effect on the
Rights Ratio or the number of shares of Common Stock to be sold
in the Rights Offering.
(k) The Investor shall purchase on the Closing Date, and
the Company agrees to issue and sell on the Closing Date for the
Exercise Price per Share (i) that number of Shares issuable
pursuant to the aggregate number of Rights that were not
properly exercised by the Eligible Holders thereof during the
Rights Offering (such Shares in the aggregate, the
“Unsubscribed Shares”) and (ii) the
“Direct Subscription Shares” (such shares,
together with the Unsubscribed Shares, the “Investor
Shares”).
(l) The Investor shall have the right to arrange for one or
more of its Affiliates (each, a “Affiliated
Purchaser”) to purchase Investor Shares, by written
notice to the Company at least two (2) Business Days prior
to the Closing Date, which notice shall be signed by the
Investor and each Affiliated Purchaser, and shall contain a
confirmation by the Affiliated Purchaser of the accuracy with
respect to it of the representations set forth in
Section 4. In no event will any such arrangement
relieve the Investor from its obligations under this Agreement.
The term ”Affiliate” shall have the meaning
ascribed to such term in
Rule 12b-2
under the Securities Exchange Act of 1934 in effect on the date
hereof.
(m) The Investor shall have the right, with the prior
written consent of the Company, which consent may not be
unreasonably withheld or delayed, to enter into one or more
agreements (the “Additional Investor
Agreements”) with certain persons and entities
(collectively, ”Additional Investors”) pursuant
to which the Investor may arrange for one or more Additional
Investors to purchase certain of the Investor Shares;
provided, however, that each Additional Investor
Agreement shall be in a form reasonably acceptable to the
Company, and provided further that without the prior written
consent of the Company, no Additional Investor, other than the
Principal Additional Investor (as defined below), may acquire
Investor Shares that would result in such Additional Investor
owning beneficially or of record more than 15% of the issued and
outstanding Common Stock of the Company on the Closing Date. A
single Additional Investor (the ”Principal Additional
Investor”) may acquire Investor Shares pursuant to an
Additional Investor Agreement, in the form of agreement annexed
hereto as Exhibit C (the “Principal Additional
Investor Agreement”), that would result in such
Principal Additional Investor owning beneficially or of record
more than 15% but, not more than 30%, of the issued and
outstanding Common Stock of the Company on the Closing Date.
Each Additional Investor Agreement shall contain a confirmation
by such Additional Investor of (i) the accuracy with
respect to it of the representations set forth in
Section 4 and (ii) that it is not an
“affiliate” or “associate” of the Investor
or any other Additional Investor (as such terms are defined in
the Exchange Act) and that it is not acting in concert with nor
is it a member of a “group” which includes the
Investor or any Additional Investor other than by reason of the
fact that it beneficially owns securities of the Company. In no
event will any such arrangement relieve the Investor from its
obligations under this Agreement, nor will any breach of the
Principal Additional Investor Agreement by either the Investor
or the Principal Additional Investor relieve the Investor with
respect to its obligations hereunder.
(n) Notwithstanding the foregoing, the Investor’s
obligation to acquire and pay for Investor Shares is limited to
the maximum number of shares that the Investor may acquire
without acquiring beneficial ownership of more than 45% (after
giving effect to the sale of all Investor Shares that the
Investor has agreed to sell to the Principal Additional Investor
pursuant to the terms of the Principal Additional Investor
Agreement) of the issued and outstanding Common Stock of the
Company on the Closing Date.
(o) The closing of the purchase of the Shares to be
purchased in the Rights Offering and the Investor Shares to be
purchased by the Investor hereunder will occur at
10:00 a.m., New York City time, on the fourth (4th)
Business Day following the Expiration Time (the “Closing
Date”), for the Exercise Price, in the manner, and on
the terms and conditions of the Rights Offering as will be set
forth in the Rights Offering Registration Statement. Delivery of
the Investor Shares will be made by the Company to the account
of the Investor (or to such other accounts, including the
account of an Affiliated Purchaser or an Additional Investor, as
the Investor may designate in accordance with this Agreement).
The documents to be delivered on the Closing Date by or on
behalf of the parties hereto and the Investor Shares will be
delivered at the offices of White & Case LLP, 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the Closing
Date.
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(p) All Investor Shares will be delivered with any and all
issue, stamp, transfer, sales and use, or similar Taxes or
duties payable in connection with such delivery duly paid by the
Company.
2. The Commitment; Fees and Expenses.
(a) On the basis of the representations and warranties
herein contained, the Company shall pay the following fees to
the Investor, as the case may be:
(i) a stand-by commitment fee equal to $3,150,000 (the
“Stand-By Commitment Fee”) which was paid to
the Investor on March 16, 2007; and
(ii) a
take-up
commitment fee equal to $2,250,000 million (the
“Take-Up Fee” and, together with the Stand-By
Commitment Fee, the “Rights Offering Fees”) to
be paid to the Investor on the Closing Date, if any, only if the
Closing occurs.
(b) Payment of the Rights Offering Fees will be made by
wire transfer of immediately available funds in
U.S. dollars to the account specified by the Investor to
the Company at least 24 hours prior to such payment. The
Rights Offering Fees will be nonrefundable and non-avoidable
when paid. The provision for the payment of the Rights Offering
Fee is an integral part of the transactions contemplated by this
Agreement and without this provision the Investor would not have
entered into the Agreement.
(c) Unless the Investor is in breach of any of its
representations, warranties or covenants in this Agreement at
the date of termination, which breach had materially delayed or
materially or adversely impacted, or would reasonably be
expected to materially delay, or materially and adversely
impact, the Investor’s performance of its obligations under
this Agreement, the Company will promptly reimburse or pay, as
the case may be, on the Closing Date, the
out-of-pocket
costs and expenses reasonably incurred by the Investor and the
Principal Additional Investor to the extent incurred on or
before the Closing Date (and thereafter reasonable post-closing
costs and expenses relating to the closing incurred within three
months of the Closing Date), including reasonable fees,
out-of-pocket
costs and expenses of counsel to the Investor and the Principal
Additional Investor, and including, the filing fee, if any,
required to be paid in connection with any filings required to
be made by the Investor, the Principal Additional Investor or
their Affiliates under the HSR Act or any other competition laws
or regulations which shall be paid by the Company on behalf of
the Investor, the Principal Additional Investor or their
Affiliates, as the case may be, when filings under the HSR Act
or any other competition laws or regulations are made, together
with all expenses of the Investor, the Principal Additional
Investor or their Affiliates incurred to comply therewith and
the reasonable fees,
out-of-pocket
costs and expenses incurred by the Investor and the Principal
Additional Investor in connection with the Rights Offering
Registration Statement and the Initial Resale Registration
Statement (collectively, “Transaction
Expenses”); provided, that the aggregate amount
of such Transaction Expenses payable by the Company shall not
exceed $1.5 million. The provision for the payment of the
Transaction Expenses is an integral part of the transactions
contemplated by this Agreement and without this provision the
Investor would not have entered into this Agreement.
3. Representations and Warranties of the
Company. The Company represents and warrants
to, and agrees with the Investor, as set forth below. Except for
representations, warranties and agreements that are expressly
limited as to their date, each representation, warranty and
agreement is made as of the date hereof and as of the Closing
Date after giving effect to the transactions contemplated hereby:
(a) Organization and
Qualification. The Company and each of its
Significant Subsidiaries has been duly organized and is validly
existing in good standing under the laws of its respective
jurisdiction of incorporation, with the requisite power and
authority to own its properties and conduct its business as
currently conducted. Each of the Company and its Subsidiaries
has been duly qualified as a foreign corporation or organization
for the transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, except to the extent that the failure to be so
qualified or be in good standing has not had and would not
reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. For the purpose of this
Agreement, “Material Adverse Effect” means
(i) any material adverse effect on the business, condition
(financial or otherwise) or results of operations of the Company
or its Subsidiaries, taken as a whole, or (ii) any material
adverse effect on the ability of the Company, subject to the
approvals and other authorizations set forth in
Section 3(g), to consummate the transactions
contemplated by this
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Agreement. For the purposes of this Agreement, (x) a
“Subsidiary” of any person means, with respect
to such person, any corporation, partnership, joint venture or
other legal entity of which such person (either alone or through
or together with any other subsidiary), owns, directly or
indirectly, more than 50% of the stock or other equity
interests, has the power to elect a majority of the board of
directors or similar governing body, or has the power to direct
the business and policies, and (y) a “Significant
Subsidiary” is a Subsidiary that satisfies the
definition contained in Article 1,
Rule 1-02
of
Regulation S-X
promulgated pursuant to the Securities Act of 1933, as amended
(the “Securities Act”).
(b) Corporate Power and
Authority. The Company has or, to the extent
executed in the future, will have when executed the requisite
corporate power and authority to enter into, execute and deliver
this Agreement and each other agreement to which it will be a
party as contemplated by this Agreement (this Agreement and such
other agreements collectively, the “Transaction
Agreements”) and, subject to stockholder approval, to
perform its obligations hereunder and thereunder, including the
issuance of the Rights and Investor Shares. The Company has
taken or will take all necessary corporate action required for
the due authorization, execution, delivery and performance by it
of this Agreement, including the issuance of the Rights, the
Shares and Investor Shares.
(c) Execution and Delivery;
Enforceability. Each Transaction Agreement
has been, or prior to its execution and delivery will be, duly
and validly executed and delivered by the Company, and each such
document will constitute the valid and binding obligation of the
Company, enforceable against the Company in accordance with its
terms.
(d) Authorized and Issued Capital
Stock. The authorized capital stock of the
Company consists of (i) 100,000,000 shares of Common
Stock, and (ii) 1,000,000 shares of preferred stock,
par value $.01 per share. At the close of business on
April 10, 2007 (the “Capital Structure
Date”), (i) 39,645,682 shares of Common Stock
were issued and outstanding, (ii) no shares of preferred
stock were issued or outstanding, (iii) 957,447 shares
of Common Stock were reserved for issuance upon exercise of the
Company’s Series B Warrants (the
“Warrants”), (iv) 683,399 shares of Common
Stock were reserved for issuance upon exchange of the
Series A Cumulative Redeemable Exchangeable Preferred
Stock, par value $1.00 per share, of HLI Operating Company,
Inc., a Delaware corporation and indirect subsidiary of the
Company, (v) no shares of Common Stock were held by the
Company in its treasury, and, (vi) 2,967,299 shares of
Common Stock were reserved for issuance upon exercise of stock
options and other rights to purchase shares of Common Stock and
vesting of restricted stock units (each, an
“Option” and, collectively, the
“Options”) granted under any stock option or
stock-based compensation plan of the Company or otherwise (the
“Stock Plans”). Except with respect to Xxxxx
Lemmerz-Inci-Jant-Sanayi, A.S., Jantas Jant Sanayi ve Ticaret
A.S., Kalyani Lemmerz Limited, Siam Lemmerz Co., Ltd. and MGG
Group B.V., issued and outstanding shares of capital stock of
the Company and each of its Subsidiaries have been duly
authorized and validly issued and are fully paid and
nonassessable, and are not subject to any preemptive rights.
Except as set forth in this Section 3(d), at the
close of business on the Capital Structure Date, no shares of
capital stock or other equity securities or voting interest in
the Company were issued, reserved for issuance or outstanding.
Since the close of business on the Capital Structure Date, no
shares of capital stock or other equity securities or voting
interest in the Company have been issued or reserved for
issuance or become outstanding, other than shares described in
this Section 3(d) that have been issued upon the
exercise of outstanding Options granted under the Stock Plans or
Warrants and other than the shares to be issued hereunder.
Except as described in this Section 3(d) and with
respect to Xxxxx Lemmerz-Inci-Jant-Sanayi, A.S., Jantas Jant
Sanayi ve Ticaret A.S., Kalyani Lemmerz Limited, Siam Lemmerz
Co., Ltd. and MGG Group B.V., neither the Company nor any of its
Subsidiaries is party to or otherwise bound by or subject to any
outstanding option, warrant, call, subscription or other right
(including any preemptive right), agreement or commitment which
(w) obligates the Company or any of its Subsidiaries to
issue, deliver, sell or transfer, or repurchase, redeem or
otherwise acquire, or cause to be issued, delivered, sold or
transferred, or repurchased, redeemed or otherwise acquired, any
shares of the capital stock of, or other equity or voting
interests in, the Company or any security convertible or
exercisable for or exchangeable into any capital stock of, or
other equity or voting interest in, the Company,
(x) obligates the Company or any of its Subsidiaries to
issue, grant, extend or enter into any such option, warrant,
call, right, security, commitment, contract, arrangement or
undertaking, (y) restricts the transfer of any shares of
capital stock of the Company or (z) relates to the voting
of any shares of capital stock of the Company.
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(e) Issuance. The Investor Shares
to be issued and sold by the Company to the Investor or any
Affiliated Purchaser or Additional Investor hereunder, when such
Shares are issued and delivered against payment therefor by the
Investor hereunder, will be duly and validly authorized, issued
and delivered and fully paid and non-assessable, free and clear
of all Taxes, liens, preemptive rights, rights of first refusal,
subscription and similar rights.
(f) No Conflict. The distribution
of the Rights, the sale, issuance and delivery of the Shares
upon exercise of the Rights, the consummation of the Rights
Offering by the Company and the execution and delivery by the
Company of the Transaction Agreements and compliance by the
Company with all of the provisions hereof and thereof and the
consummation of the transactions contemplated herein and therein
(including compliance by the Investor with its obligations
hereunder and thereunder) (i) provided that the Company
amends or refinances the Credit Agreement (as defined below),
will not conflict with, or result in a breach or violation of,
any of the terms or provisions of, or constitute a default under
(with or without notice or lapse of time, or both), or result,
in the acceleration of, or the creation of any lien under, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound or to which any of the property or assets
of the Company or any of its Subsidiaries is subject,
(ii) will not result in any violation of the provisions of
the Certificate of Incorporation or Bylaws of the Company or any
of its Subsidiaries, and (iii) will not result in any
violation of, or any termination or impairment of any rights
under, any statute or any license, authorization, injunction,
judgment, order, decree, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company
or any of its Subsidiaries or any of their properties, except in
any such case described in subclause (i) and (iii) for
any conflict, breach, violation, default, acceleration, lien,
termination or impairment which has not had and would not
reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(g) Consents and Approvals. No
consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or
body having jurisdiction over the Company or any of its
Subsidiaries or any of their properties is required for the
distribution of the Rights, the sale, issuance and delivery of
Shares upon exercise of the Rights or the Investor Shares to
each Investor hereunder and the consummation of the Rights
Offering by the Company and the execution and delivery by the
Company of the Transaction Agreements and performance of and
compliance by the Company with all of the provisions hereof and
thereof and the consummation of the transactions contemplated
herein and therein, except (i) the registration under the
Securities Act of the issuance of the Rights and the Shares
pursuant to the exercise of Rights, (ii) filings with
respect to and the expiration or termination of the waiting
period under the
Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the “HSR
Act”), and any other comparable laws or regulations in
any foreign jurisdiction relating to the sale or issuance of
Investor Shares to the Investor, and (iii) such consents,
approvals, authorizations, registrations or qualifications
(x) as may be required under state securities or Blue Sky
laws in connection with the purchase of the Investor Shares by
the Investor or the distribution of the Rights and the sale of
Shares to Eligible Holders, (y) pursuant to the rules of
the Nasdaq Stock Market, Inc., including the approval of the
Company’s stockholders of the Rights Offering, including
the issuance of Investor Shares to the Investor, or (z) the
absence of which will not have or would not reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect.
(h) Arm’s Length. The Company
acknowledges and agrees that the Investor is acting solely in
the capacity of an arm’s length contractual counterparty to
the Company with respect to the transactions contemplated hereby
(including in connection with determining the terms of the
Rights Offering) and not as a financial advisor or a fiduciary
to, or an agent of, the Company or any other person or entity.
Additionally, the Investor is not advising the Company or any
other person or entity as to any legal, tax, investment,
accounting or regulatory matters in any jurisdiction. The
Company shall consult with its own advisors concerning such
matters and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated
hereby, and the Investor shall have no responsibility or
liability to the Company, its Affiliates, or their respective
stockholders, directors, officers, employees, advisors or other
representatives with respect thereto. Any review by the Investor
of the Company, the transactions contemplated hereby or other
matters relating to such transactions will be performed solely
for the benefit of the Investor and shall not be on behalf of
the Company, its Affiliates, or their respective shareholders,
directors, officers, employees, advisors or other
representatives and shall not affect any of the representations
or warranties contained herein or the remedies of the Investor
with respect thereto.
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(i) Company SEC Documents. Since
June 3, 2003, the Company has filed or submitted all
required reports, schedules, forms, statements and other
documents (including exhibits and all other information
incorporated therein) (“Company SEC Documents”)
with the Securities and Exchange Commission (the
“Commission”). As of their respective dates,
each of the Company SEC Documents complied in all material
respects with the requirements of the Securities Act or the
Exchange Act and the rules and regulations of the Commission
promulgated thereunder applicable to such Company SEC Documents.
The Company has filed with the Commission all “material
contracts” (as such term is defined in Item 601(b)(10)
of
Regulation S-K
under the Exchange Act) that are required to be filed as
exhibits to the Company SEC Documents. No Company SEC Document
filed after January 31, 2006, when filed, or, in the case
of any Company SEC Document amended or superseded prior to the
date of this Agreement, then on the date of such amending or
superseding filing, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
Any future Company SEC Documents filed with the Commission prior
to the Closing Date, when filed, will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which
they are made, not misleading.
(j) Financial Statements. The
financial statements and the related notes of the Company and
its consolidated Subsidiaries included or incorporated by
reference in the Company SEC Documents, and to be included or
incorporated by reference in the Rights Offering Registration
Statement and the Rights Offering Prospectus, comply or will
comply, as the case may be, in all material respects with the
applicable requirements of the Securities Act, the Securities
Exchange Act of 1934, as amended, and the rules and regulation
of the Commission thereunder (the “Exchange
Act”), as applicable, and present fairly in all
material respects the financial position, results of operations
and cash flows of the Company and its Subsidiaries as of the
dates indicated and for the periods specified, subject, in the
case of the unaudited financial statements, to absence of
disclosure normally made in footnotes and to customary year end
adjustments which shall not be material; such financial
statements have been prepared in conformity with
U.S. generally accepting accounting principles
(“GAAP”) applied on a consistent basis
throughout the periods covered thereby (except as disclosed in
the Company SEC Documents filed prior to March 16, 2007),
and the supporting schedules included or incorporated by
reference in the Company SEC Documents, and to be included or
incorporated by reference in the Rights Offering Registration
Statement and the Rights Offering Prospectus, present fairly the
information required to be stated therein; and the other
financial information included or incorporated by reference in
the Company SEC Documents, and to be included or incorporated by
reference in the Rights Offering Registration Statement and the
Rights Offering Prospectus, has been or will be derived from the
accounting records of the Company and its Subsidiaries and
presents fairly or will present fairly the information shown
thereby; and the pro forma financial information
and the related notes included or incorporated by reference in
the Company SEC Documents, and to be included or incorporated by
reference in the Rights Offering Registration Statement and the
Rights Offering Prospectus, have been or will be prepared in all
material respects in accordance with the applicable requirements
of the Securities Act and the Exchange Act, as applicable, and
the assumptions underlying such pro forma
financial information are reasonable and are set forth in the
Company SEC Documents and will be set forth in the Rights
Offering Registration Statement and the Rights Offering
Prospectus.
(k) Rights Offering Registration Statement and Rights
Offering Prospectus. The Rights Offering
Registration Statement or any post-effective amendment thereto,
as of the Securities Act Effective Date, will comply in all
material respects with the Securities Act, and will not contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading; and as of the applicable
filing date of the Rights Offering Prospectus and any amendment
or supplement thereto and as of the Closing Date, the Rights
Offering Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. On the Distribution Date and the Expiration Date,
the Investment Decision Package will not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading. Each Issuer Free Writing
Prospectus, at the time of use thereof, when considered together
with the Investment Decision Package, will not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading. Each Preliminary Rights
Offering Prospectus, at
A-7
the time of filing thereof, will comply in all material respects
with the Securities Act and will not contain any untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading. Notwithstanding the
foregoing, the Company makes no representation and warranty with
respect to any statements or omissions made in reliance on and
in conformity with information relating to the Investor or the
Additional Investors furnished to the Company in writing by the
Investor or the Additional Investors expressly for use in the
Rights Offering Registration Statement and the Rights Offering
Prospectus and any amendment or supplement thereto.
For the purposes of this Agreement, (i) the term
“Rights Offering Registration Statement” means
the Registration Statement on
Form S-3
initially filed with the Commission on March 16, 2007
relating to the Rights Offering, including all exhibits thereto,
as amended as of the Securities Act Effective Date, and any
post-effective amendment thereto that becomes effective;
(ii) the term “Rights Offering Prospectus”
means the final prospectus contained in the Rights Offering
Registration Statement at the Securities Act Effective Date
(including information, if any, omitted pursuant to
Rule 430A and subsequently provided pursuant to
Rule 424(b) under the Securities Act), and any amended form
of such prospectus provided under Rule 424(b) under the
Securities Act or contained in a post-effective amendment to the
Rights Offering Registration Statement; (iii) the term
“Investment Decision Package” means the Rights
Offering Prospectus, together with any Issuer Free Writing
Prospectus used by the Company to offer the Shares to Eligible
Holders pursuant to the Rights Offering, (iv) the term
“Issuer Free Writing Prospectus” means each
“issuer free writing prospectus” (as defined in
Rule 433 of the rules promulgated under the Securities Act)
prepared by or on behalf of the Company or used or referred to
by the Company in connection with the Rights Offering,
(v) the term “Preliminary Rights Offering
Prospectus” means each prospectus included in the
Rights Offering Registration Statement (and any amendments
thereto) before it becomes effective, any prospectus filed with
the Commission pursuant to Rule 424(a) under the Securities
Act and the prospectus included in the Rights Offering
Registration Statement, at the time of effectiveness that omits
information permitted to be excluded under Rule 430A under
the Securities Act; and (vi) “Securities Act
Effective Date” means the date and time as of which the
Rights Offering Registration Statement, or the most recent
post-effective amendment thereto, was declared effective by the
Commission.
(l) Free Writing
Prospectuses. Each Issuer Free Writing
Prospectus will conform in all material respects to the
requirements of the Securities Act as of the date of first use
or as otherwise provided for in Rule 433 under the
Securities Act, and the Company will comply with all prospectus
delivery and all filing requirements applicable to such Issuer
Free Writing Prospectus under the Securities Act. The Company
has retained in accordance with the Securities Act all Issuer
Free Writing Prospectuses that were not required to be filed
pursuant to the Securities Act.
(m) Absence of Certain
Changes. Since January 31, 2006, other
than as disclosed in the Company SEC Documents filed prior to
March 16, 2007, and except for actions to be taken pursuant
to the Transaction Agreements:
(i) there has not been any change in the capital stock from
that set forth in Section 3(d) or any material
change in long-term debt of the Company or any of its
Subsidiaries, or any dividend or distribution of any kind
declared, set aside for payment, paid or made by the Company on
any class of capital stock;
(ii) no event, fact or circumstance has occurred which has
had or would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect;
(iii) neither the Company nor any of its Subsidiaries has
paid, discharged, waived, compromised, settled or otherwise
satisfied any material Legal Proceeding, whether now pending or
hereafter brought, (A) at a cost in excess of
$20 million of the amount accrued or reserved for it in the
Company SEC Documents filed prior to March 16, 2007, or
(B) on a basis that reveals a finding or an admission of a
material violation of law by the Company or its
Subsidiaries; and
(iv) other than in the ordinary course of business, neither
the Company nor any of its Subsidiaries has (A) made,
changed or revoked any material Tax election, (B) entered
into any settlement or compromise of any material Tax liability,
(C) filed any amended Tax Return with respect to any
material Tax, or (D) entered into any closing agreement
relating to any material Tax, in each case, which has had an
adverse effect in excess of
A-8
$50 million on the amount accrued or reserved for Tax
liabilities in the Company SEC Documents filed prior to
March 16, 2007.
(n) Descriptions of the Transaction
Agreement. The statements in the Rights
Offering Registration Statement and the Rights Offering
Prospectus insofar as they purport to constitute summaries of
each of the Transaction Agreements or the terms of statutes,
rules or regulations, legal or governmental proceedings or
contracts, will constitute accurate summaries in all material
respects.
(o) No Violation or Default; Compliance with
Laws. Neither the Company nor any of its
Significant Subsidiaries is in violation of its charter or
by-laws or similar organizational documents. Neither the Company
nor any of its Subsidiaries is in default, and no event has
occurred that, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance
of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its Subsidiaries is a
party or by which the Company or any of its Subsidiaries is
bound or to which any of the property or assets of the Company
or any of its Subsidiaries is subject, except for any such
default that has not had and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse
Effect. Neither the Company nor any of its Subsidiaries is, or
has been at any time since January 31, 2006, in violation
of any law or statute or any judgment, order, rule or regulation
of any court or arbitrator or governmental or regulatory
authority, except for any such violation that has not had and
would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(p) Legal Proceedings. Except as
described in the Company SEC Documents filed prior to
March 16, 2007, there are no legal, governmental or
regulatory actions, suits, proceedings or, to the knowledge of
the Company, investigations pending to which the Company or any
of its Subsidiaries is a party or to which any property of the
Company or any of its Subsidiaries is the subject that,
individually or in the aggregate, has had or, if determined
adversely to the Company or any of its Subsidiaries, would
reasonably be expected to have a Material Adverse Effect. The
Company has not received written notice of any pending,
threatened or contemplated investigations by any governmental or
regulatory authority or by others. There are no current or
pending legal, governmental or regulatory actions, suits or
proceedings that are required under the Exchange Act to be
described in the Company SEC Documents or the Rights Offering
Registration Statement or Rights Offering Prospectus that are
not or will not be so described, and there are no contracts or
other documents that are required under the Exchange Act to be
filed as exhibits to the Company SEC Documents or the Rights
Offering Registration Statement or Rights Offering Prospectus or
described in the Company SEC Documents or the Rights Offering
Registration Statement or Rights Offering Prospectus that are
not so filed or described.
(q) Independent Accountants. KPMG
LLP, the Company’s public accountants, are independent
public accountants with respect to the Company and its
Subsidiaries as required by the Securities Act.
(r) Labor Relations. Except as set
forth in the Company SEC Documents filed prior to March 16,
2007:
(i) the Company and each of its Subsidiaries is in
compliance in all respects with all applicable laws (domestic
and foreign), agreements, contracts, and policies relating to
employment, employment practices, wages, hours, and terms and
conditions of employment, and is not engaged in any material
unfair labor practice as determined by the National Labor
Relations Board (or any foreign equivalent) except where the
failure to comply or such practice has not had or would not
reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect; and
(ii) there are no current and, the Company has not received
written notice of any threatened, organizational activities or
demands for recognition by a labor organization seeking to
represent employees of the Company or any Subsidiary and no such
activities have occurred during the past 24 months except
to the extent such activities or demands have not had or would
not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
(s) Title to Intellectual
Property. The Company and its Subsidiaries
own or possess valid and enforceable rights to use all material
patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service xxxx registrations,
copyrights, licenses and know-how (including trade secrets and
other unpatented
and/or
unpatentable proprietary or confidential information, systems or
procedures) (collectively,
A-9
“Intellectual Property”) used in the conduct of
their respective businesses other than such rights in
Intellectual Property, which the failure to own or possess, has
not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
Except as set forth in the Company SEC Documents filed prior to
March 16, 2007, the registrations with and applications to
governmental or regulatory authorities in respect of such
Intellectual Property are valid and in full force and effect,
have not, except in accordance with the ordinary course
practices of the Company and its Subsidiaries, lapsed, expired
or been abandoned (subject to the vulnerability of a
registration for trademarks to cancellation for lack of use),
except to the extent that such lapse, expiration, or abandonment
has not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. The
consummation of the transaction contemplated hereby will not
result in the loss or impairment of any rights to use such
Intellectual Property or obligate the Investor to pay any
royalties or other amounts to any third party in excess of the
amounts that would have been payable by Company and its
Subsidiaries absent the consummation of this transactions.
Except as set forth in the Company SEC Documents filed prior to
March 16, 2007, (i) the Company and its Subsidiaries
have taken reasonable security measures to protect the
confidentiality and value of its and their trade secrets (or
other Intellectual Property for which the value is dependent
upon its confidentiality), and no such information, has been
misappropriated or the subject of an unauthorized disclosure,
except to the extent that such misappropriation or unauthorized
disclosure has not had and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse
Effect, and (ii) the Company and its Subsidiaries have not
received any notice that it is or they are, in default (or with
the giving of notice or lapse of time or both, would be in
default) under any contract relating to Intellectual Property
except to the extent that such default has not had and would not
reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. Except as set forth in the
Company SEC Documents, the conduct of the businesses of the
Company and its Subsidiaries will not conflict in any respect
with any Intellectual Property rights of others, and the Company
and its Subsidiaries have not received any notice of any claim
of infringement or conflict with any such rights of others which
has had or would in any such case be reasonably expected to
have, individually or in the aggregate, a Material Adverse
Effect.
(t) Title to Real and Personal
Property. The Company and its Subsidiaries
have good and marketable title to all real property owned by the
Company and its Subsidiaries and good title to all other
tangible and intangible properties (other than Intellectual
Property covered by Section 3(s)) owned by them, in
each case, free and clear of all mortgages, pledges, liens,
security interests, claims, restrictions or encumbrances of any
kind except such as (i) are imposed or otherwise permitted
pursuant to the Credit Agreement or (ii) individually and
in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect. All of the leases
and subleases to which the Company or its Subsidiaries are a
party are in full force and effect and enforceable by the
Company or such Subsidiary in accordance with their terms, and
neither the Company nor any Subsidiary has received any notice
of any claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any Subsidiary under any
of the leases or subleases mentioned above, or affecting or
questioning the rights of the Company or such Subsidiary to the
continued possession of the leased or subleased property by
under any such lease or sublease, except where any such claim or
failure to be enforceable would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse
Effect.
(u) Investment Company Act. As of
the date hereof, the Company is not and, after giving effect to
the consummation of the transactions contemplated by this
Agreement, including the offering and sale of the Investor
Shares and Shares upon exercise of Rights, and the application
of the proceeds thereof, will not be required to register as an
“investment company” or an entity
“controlled” by an “investment company”
within the meaning of the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission
thereunder.
(v) Licenses and Permits. The
Company and its Subsidiaries possess all licenses, certificates,
permits and other authorizations issued by, and have made all
declarations and filings with, the appropriate federal, state,
local or foreign governmental or regulatory authorities that are
necessary for the ownership or lease of their respective
properties or the conduct of their respective businesses as
described in the Company SEC Documents except any such licenses,
certificates, permits or authorization the absence of which
would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. Except as described in the
Company SEC Documents filed prior to March 16, 2007, and
except as, individually and in the aggregate, has not had and
would not reasonably be expected to have a Material Adverse
Effect, neither the Company nor any of its Subsidiaries has
received notice
A-10
of any revocation or modification of any such license,
certificate, permit or authorization or has any knowledge that
any such license, certificate, permit or authorization will not
be renewed in the ordinary course.
(w) Compliance with Environmental Laws.
(i) the Company and its Subsidiaries have complied, since
June 3, 2003, and are in compliance with all applicable
federal, state, local and foreign laws, rules, regulations,
decisions and orders, including all civil and common law,
relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes,
pollutants or contaminants (collectively, “Environmental
Laws”);
(ii) the Company and its Subsidiaries have
(a) received and are in compliance with all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses,
(b) are not subject to any action to revoke, terminate,
cancel, limit, amend or appeal any such permits, licenses or
approvals, and (c) have paid all fees, assessments or
expenses due under any such permits, licenses or
approvals; and
(iii) the Company and its Subsidiaries have not received
notice of any actual or potential liability for the
investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or
contaminants, or for any violation of Environmental Laws.
except, in the case of each of the foregoing, as disclosed in
the Company SEC Documents filed prior to March 16, 2007, as
have been, as of the date of this Agreement, adequately provided
for in accordance with GAAP in the financial statements of the
Company included in the Company SEC Documents filed prior to
March 16, 2007, or as, individually and in the aggregate,
has not had and would not reasonably be expected to have a
Material Adverse Effect.
(x) Tax Matters. Except as
described in the Company SEC Documents filed with the Commission
prior to March 16, 2007, and except as would not,
individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect:
(i) the Company has timely filed or caused to be timely
filed (taking into account any applicable extension of time
within which to file) with the appropriate taxing authorities
all material tax returns, statements, forms and reports
(including elections, declarations, disclosures, schedules,
estimates and information Tax Returns) for Taxes (“Tax
Returns”) that are required to be filed by, or with
respect to, the Company and its Subsidiaries on or prior to the
Closing Date. The Tax Returns accurately reflect all material
liability for Taxes of the Company and its Subsidiaries for the
periods covered thereby;
(ii) all material Taxes and Tax liabilities due by or with
respect to the income, assets, payments or operations of the
Company and its Subsidiaries for all taxable years or other
taxable periods that end on or before the Closing Date have been
or will, prior to the Closing, be timely paid in full or accrued
and fully provided for in accordance with GAAP on the financial
statements of the Company;
(iii) neither the Company nor any of its Subsidiaries has
received any written notices from any taxing authority relating
to any material issue that has not been adequately provided for
in accordance with GAAP in the financial statements of the
Company included in the Company SEC Documents filed prior to
March 16, 2007; and
(iv) the Company has not been a “United States real
property holding corporation” within the meaning of
Section 897(c)(2) of the Code at any time during the
five-year period ending on the date hereof.
For purposes of this Agreement, “Taxes” shall
mean all taxes, assessments, charges, duties, fees, levies or
other governmental charges, including, without limitation, all
federal, state, local, foreign and other income, franchise,
profits, gross receipts, capital gains, capital stock, transfer,
property, sales, use, value-added, occupation, property, excise,
severance, windfall profits, stamp, license, payroll, social
security, withholding and other taxes, assessments, charges,
duties, fees, levies or other governmental charges of any kind
whatsoever (whether payable directly or by withholding and
whether or not requiring the filing of a Tax Return), all
estimated taxes, deficiency assessments, additions to tax,
penalties and interest and shall include
A-11
any liability for such amounts as a result either of being a
member of a combined, consolidated, unitary or affiliated group
or of a contractual obligation to indemnify any person or other
entity.
(y) Employee Benefit Plans.
(i) For purposes of this Agreement, “Company
Plan” means material domestic and foreign benefit and
compensation plans, programs, contracts, commitments, practices,
policies and arrangements, whether written or oral, that have
been established, maintained or contributed to (or with respect
to which an obligation to contribute has been undertaken) or
with respect to which any potential liability is borne by the
Company or any of its Subsidiaries, including, but not limited
to, “employee benefit plans” within the meaning of
Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended (“ERISA”), and deferred
compensation, stock option, stock purchase, restricted stock,
stock appreciation rights, stock based, incentive and bonus plan.
(ii) Except as described in the Company SEC Documents filed
prior to March 16, 2007: (A) each Company Plan, other
than any “multiemployer plans” within the meaning of
Section 3(37) of ERISA (“Multiemployer
Plans”), is in substantial compliance with ERISA, the
Internal Revenue Code of 1986, as amended (the
“Code”), and other applicable laws;
(B) each Company Plan that is intended to be a qualified
plan under Section 401(a) of the Code has received a
favorable determination letter from the IRS covering all Tax law
changes prior to the Economic Growth and Tax Relief
Reconciliation Act of 2001 or has applied to the IRS for such
favorable determination within the applicable remedial amendment
period under Section 401(b) of the Code, and the Company is
not aware of any circumstances likely to result in the loss of
the qualification of such Company Plan under Section 401(a)
of the Code; (C) no liability under Subtitle C or D of
Title IV of ERISA has been or is reasonably expected to be
incurred by the Company or any of its Subsidiaries with respect
to any ongoing, frozen or terminated “single-employer
plan,” within the meaning of Section 4001(a)(15) of
ERISA (“Single-Employer Plan”) currently
maintained or contributed to (or with respect to which an
obligation to contribute has been undertaken), or the
Single-Employer Plan of any entity which is considered one
employer with the Company under Section 4001 of ERISA or
Section 414 of the Code (a “Company ERISA
Affiliate”); (D) the Company and its Subsidiaries
have not incurred any withdrawal liability (including any
contingent or secondary withdrawal liability) with respect to a
Multiemployer Plan under Subtitle E of Title IV of ERISA
(regardless of whether based on contributions of a Company ERISA
Affiliate) that has not been satisfied in full and no condition
or circumstance has existed that presents a risk of the
occurrence of any withdrawal from any such Multiemployer Plan;
(E) no notice of a “reportable event,” within the
meaning of Section 4043 of ERISA has occurred or is
expected to occur for any Company Plan or by any Company ERISA
Affiliate; (F) all contributions required to be made under
the terms of any Company Plan have been timely made or have been
reflected in the financial statements of the Company included in
the Company SEC Reports filed prior to March 16, 2007;
(G) there has been no amendment to, announcement by the
Company or any of its Subsidiaries relating to, or change in
employee participation or coverage under, any Company Plan which
would increase the expense of maintaining such plan above the
level of the expense incurred therefor for the most recent
fiscal year; (H) neither any Company Plan nor any
Single-Employer Plan of a Company ERISA Affiliate has an
“accumulated funding deficiency” (whether or not
waived) within the meaning of Section 412 of the Code or
Section 302 of ERISA and neither the Company nor any of its
Subsidiaries nor any Company ERISA Affiliate has, during its
most recently completed fiscal year, applied for or obtained a
funding waiver; (I) required minimum contributions to any
Company Plan under Section 412 of the Code will not be
materially increased by application of Section 412(l) of
the Code; (J) neither the Company nor any of its
Subsidiaries during the immediately preceding two year period
has provided, or is required to provide, security to any Company
Plan or to any Single-Employer Plan of a Company ERISA Affiliate
pursuant to Section 401(a)(29) of the Code, and any such
security previously so provided has been released; (K) none
of the execution or delivery of this Agreement, stockholder
approval of this Agreement nor the consummation of the
transactions contemplated hereby, including, without limitation,
the Rights Offering (either alone or together with any
additional or subsequent events), constitutes an event under any
Company Plan, loan to, or individual agreement or contract with,
any current or former employee or director of the Company or its
Subsidiaries that may result in any material payment (whether of
severance pay or otherwise), restriction or limitation upon the
assets of any Company Plan, restriction or limitation on the
right of the
A-12
Company
and/or its
Subsidiaries to merge, amend or terminate any Company Plan,
acceleration of payment or vesting, increase in benefits or
compensation, or required funding, with respect to any such
employee or director, or the forgiveness of any loan or other
commitment of any such employees or directors; (L) no
Company Plan provides for post-employment or retiree welfare
benefits, except as required by Section 4980B of the Code
and part 6 of subtitle B of Title I of ERISA; and
(M) there are no actions, suits, arbitrations, inquiries,
audits, investigations or other proceedings (other than routine
claims for benefits) pending or, to the Company’s
knowledge, threatened, with respect to any Company Plan, except
for any of the foregoing that do not and would not reasonably be
expected to result, individually or in the aggregate, in a
material liability of the Company and its Subsidiaries.
(z) Internal Control Over Financial
Reporting. Except as set forth in the Company
SEC Documents filed prior to March 16, 2007, the Company
and its Subsidiaries (i) make and keep books and records
that accurately and fairly represent the Company’s
transactions, and (ii) maintain and have maintained
effective internal control over financial reporting as defined
in
Rule 13a-15
under the Exchange Act and a system of internal accounting
controls sufficient to provide reasonable assurance that:
(A) transactions are executed in accordance with
management’s general or specific authorizations;
(B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (C) access to assets is permitted only in
accordance with management’s general or specific
authorization; and (D) the recorded accountability for
assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences. The Company has disclosed, based on the most recent
evaluation of its chief executive officer and its chief
financial officer prior to the date hereof, to the
Company’s auditors and the audit committee of the
Company’s board of directors (i) any significant
deficiencies in the design or operation of its internal controls
over financial reporting that are reasonably likely to adversely
affect the Company’s ability to record, process, summarize
and report financial information and has identified for the
Company’s auditors and the audit committee of the
Company’s board of directors any material weaknesses in
internal control over financial reporting and (ii) any
fraud, whether or not material, that involves management or
other employees who have a significant role in the
Company’s internal control over financial reporting.
(aa) Disclosure Controls and
Procedures. Except as disclosed in the
Company SEC Documents filed prior to March 16, 2007, the
Company maintains disclosure controls and procedures required by
Rule 13a-15
or 15d-15
under the Exchange Act. Such disclosure controls and procedures
are effective to ensure that information required to be
disclosed by the Company is recorded and reported on a timely
basis to the individuals responsible for the preparation of the
Company’s filings with the Commission and other public
disclosure documents.
(bb) Insurance. The Company and
its Subsidiaries have insurance covering their respective
properties, operations, personnel and businesses, including
business interruption insurance, which insurance is in amounts
and insures against such losses and risks as are customary for
companies whose businesses are similar to the Company and its
Subsidiaries. Neither the Company nor any of its Subsidiaries
has received written notice from any insurer or agent of such
insurer that capital improvements or other expenditures are
required or necessary to be made to continue such insurance
except such capital improvements or expenditures as would not,
individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.
(cc) No Unlawful Payments. Neither
the Company nor any of its Subsidiaries nor, to the knowledge of
the Company, any director, officer, agent, employee or other
person associated with or acting on behalf of the Company or any
of its Subsidiaries has: (i) used any corporate funds for
any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; (ii) made any
direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds;
(iii) violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or (iv) made any
bribe, rebate, payoff, influence payment, kickback or other
unlawful payment in each case other than clause (iii) that
has been or would reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect.
(dd) Compliance with Money Laundering
Laws. The Company and its Subsidiaries are
and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of
the Bank Secrecy Act, as amended, the money laundering statutes
of all jurisdictions, the rules and regulations thereunder and
any related or similar rules, regulations or guidelines, issued,
administered or enforced by any
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governmental agency (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its Subsidiaries with
respect to Money Laundering Laws is pending. Neither the Company
nor any of its Subsidiaries has received written notice
regarding any threatened action, suit or proceeding involving
the Company or any of its Subsidiaries with respect to any Money
Laundering Laws.
(ee) Compliance with Sanctions
Laws. Neither the Company nor any of its
Subsidiaries nor, to the knowledge of the Company, any director,
officer, agent, employee or affiliate of the Company or any of
its Subsidiaries is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the
U.S. Treasury Department (“OFAC”). The
Company will not directly or indirectly use the proceeds of the
Rights Offering or the sale of the Investor Shares, or lend,
contribute or otherwise make available such proceeds to any
Subsidiary, joint venture partner or other person or entity, for
the purpose of financing the activities of any person that, to
the Company’s knowledge, is currently subject to any
U.S. sanctions administered by OFAC.
(ff) No Broker’s Fees. Except
for Lazard Frères & Co. LLC, neither the Company
nor any of its Subsidiaries is a party to any contract,
agreement or understanding with any person (other than this
Agreement) that would give rise to a valid claim against the
Investor for a brokerage commission, finder’s fee or like
payment in connection with the Rights Offering or the sale of
the Investor Shares.
(gg) No Registration
Rights. Except as provided for pursuant to
the Amended and Restated Registration Rights Agreements of even
date herewith by and between the Company and the Investor (the
“Registration Rights Agreement”), no person has
the right to require the Company or any of its Subsidiaries to
register any securities for sale under the Securities Act by
reason of the filing of the Rights Offering Registration
Statement with the Commission or in connection with Rights
Offering or the sale of the Investor Shares.
(hh) No Stabilization. The Company
has not taken and will not take, directly or indirectly, any
action designed to or that would reasonably be expected to cause
or result in any stabilization or manipulation of the price of
the Shares.
(ii) Margin Rules. Neither the
issuance, sale and delivery of the Rights or the Shares in
connection with Rights Offering or the sale of the Investor
Shares nor the application of the proceeds thereof by the
Company as to be described in the Rights Offering Registration
Statement and the Rights Offering Prospectus will violate
Regulation T, U or X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board of
Governors.
(jj) Forward-Looking
Statements. No forward-looking statement
(within the meaning of Section 27A of the Securities Act
and Section 21E of the Exchange Act) contained in the
Company SEC Documents has been made or reaffirmed, and in the
case of the Rights Offering Registration Statement and the
Rights Offering Prospectus, will be made or reaffirmed, without
a reasonable basis or has been disclosed other than in good
faith.
(kk) Takeover Statutes;
Charter. The Board of Directors of the
Company has taken all necessary action to approve, for purposes
of Section 203(a)(i) of the General Corporation Law of the
State of Delaware (“Section 203”), the
acquisition of the Investor Shares by the Investor and the
Principal Additional Investor pursuant to the terms of this
Agreement and the Principal Additional Investor Agreement,
respectively. Except for Section 203, no other “fair
price,” “moratorium,” “control share
acquisition”, “business combination” or other
similar anti-takeover statute or regulation (a “Takeover
Statute”) is applicable to the Company, the Common
Stock, the Shares, the sale and issuance of the Investor Shares
or the other transactions contemplated by this Agreement and the
Transaction Agreements.
(ll) No Solicitation. Neither the
Company nor any agent acting on its behalf has solicited or will
solicit any offers to sell or has offered to sell or will offer
to sell all or any part of the Shares to any Person or Persons
so as to bring the sale of such Shares to the Investors within
the registration provisions of the Securities Act or any state
securities laws.
(mm) Disclosure of
Information. The Company has disclosed
publicly any “Confidential Information” (as such term
is defined in the Confidentiality Agreement, dated
February 27, 2007, executed by the Investor)
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previously provided to the Investor and the Principal Additional
Investor that is material non-public information under the
federal securities laws.
4. Representations and Warranties of the
Investor. The Investor represents and
warrants and agrees with the Company as set forth below. Each
such representation, warranty and agreement is made as of the
date hereof and as of the Closing Date.
(a) Incorporation. The Investor
has been duly organized and, if applicable, is validly existing
as a corporation in good standing under the laws of the
jurisdiction of its incorporation.
(b) Corporate Power and
Authority. The Investor has the requisite
corporate power and authority to enter into, execute and deliver
this Agreement and to perform its obligations hereunder and has
taken all necessary corporate action required for the due
authorization, execution, delivery and performance by it of this
Agreement.
(c) Execution and Delivery. This
Agreement has been duly and validly executed and delivered by
the Investor and constitutes its valid and binding obligation,
enforceable against it in accordance with its terms.
(d) No Registration. The Investor
understands that the Investor Shares have not been registered
under the Securities Act by reason of a specific exemption from
the registration provisions of the Securities Act, the
availability of which depends upon, among other things, the bona
fide nature of the investment intent and the accuracy of such
Investor’s representations as expressed herein or otherwise
made pursuant hereto.
(e) Investment Intent. Except as
provided in Sections 1(l) and 1(m) hereof,
the Investor is acquiring the Investor Shares for investment for
its own account, not as a nominee or agent, and not with the
view to, or for resale in connection with, any distribution
thereof not in compliance with applicable securities laws, and
such Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same, except in
compliance with applicable securities laws.
(f) Securities Laws
Compliance. The Investor Shares will not be
offered for sale, sold or otherwise transferred by the Investor
except pursuant to a registration statement or in a transaction
exempt from, or not subject to, registration under the
Securities Act and any applicable state securities laws.
(g) Sophistication. The Investor
has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of
its investment in the Investor Shares being acquired hereunder.
The Investor is a “qualified institutional buyer”
within the meaning of Rule 144A under the Securities Act.
The Investor understands and is able to bear any economic risks
associated with such investment (including, without limitation,
the necessity of holding the Investor Shares for an indefinite
period of time). Without derogating from or limiting the
representations and warranties of the Company, the Investor
acknowledges that it has been afforded the opportunity to ask
questions and receive answers concerning the Company and to
obtain additional information that it has requested to verify
the information contained herein.
(h) Legended Securities. The
Investor understands and acknowledges that upon the original
issuance thereof, and until such time as the same is no longer
required under any applicable requirements of the
U.S. Securities Act or applicable state securities laws,
the Investor Shares shall be represented by a certificate
bearing the following legend:
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”). THE HOLDER HEREOF, BY PURCHASING
SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE CORPORATION THAT
SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
ONLY PURSUANT TO (1) AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR (2) AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT.”;
(i) No Conflict. The execution and
delivery by the Investor of each of the Transaction Agreements
to which it is a party and the compliance by the Investor with
all of the provisions hereof and thereof and the consummation of
the transactions contemplated herein and therein (i) will
not conflict with, or result in a breach or violation of, any of
the terms or provisions of, or constitute a default under (with
or without notice or lapse of time, or both), or result, in the
acceleration of, or the creation of any lien under, any
indenture, mortgage, deed of trust, loan agreement or other
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agreement or instrument to which the Investor is a party or by
which the Investor is bound or to which any of the property or
assets of the Investor or any of its Subsidiaries is subject,
(ii) will not result in any violation of the provisions of
the certificate of incorporation or bylaws or similar governance
documents of the Investor, and (iii) will not result in any
material violation of, or any termination or material impairment
of any rights under, any statute or any license, authorization,
injunction, judgment, order, decree, rule or regulation of any
court or governmental agency or body having jurisdiction over
the Investor or any of their properties, except in any such case
described in subclause (i) for any conflict, breach,
violation, default, acceleration or lien which has not and would
not reasonably be expected, individually or in the aggregate, to
prohibit, materially delay or materially and adversely impact
the Investor’s performance of its obligations under this
Agreement.
(j) Consents and Approvals. No
consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or
body having jurisdiction over the Investor or any of its
properties is required to be obtained or made by the Investor
for the purchase of the Investor Shares hereunder and the
execution and delivery by the Investor of this Agreement or the
Transaction Agreements to which it is a party and performance of
and compliance by the Investor with all of the provisions hereof
and thereof and the consummation of the transactions
contemplated herein and therein, except filings with respect to
and the expiration or termination of the waiting period under
the HSR Act or any comparable laws or regulations in any foreign
jurisdiction relating to the purchase of Investor Shares and
except for any consent, approval, authorization, order,
registration or qualification which, if not made or obtained,
has not and would not reasonably be expected, individually or in
the aggregate, to prohibit, materially delay or materially and
adversely impact the Investor’s performance of its
obligations under this Agreement.
(k) Arm’s Length. The
Investor acknowledges and agrees that the Company is acting
solely in the capacity of an arm’s length contractual
counterparty to the Investor with respect to the transactions
contemplated hereby (including in connection with determining
the terms of the Rights Offering). Additionally, without
derogating from or limiting the representations and warranties
of the Company, the Investor is not relying on the Company for
any legal, tax, investment, accounting or regulatory advice,
except as specifically set forth in this Agreement. Without
derogating from or limiting the representations and warranties
of the Company, the Investor shall consult with its own advisors
concerning such matters and shall be responsible for making its
own independent investigation and appraisal of the transactions
contemplated hereby.
(l) No Violation or Default; Compliance with
Laws. The Investor is not in default, and no
event has occurred that, with notice or lapse of time or both,
would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Investor is a party or by
which the Investor is bound or to which any of the property or
assets of the Investor is subject, individually or in the
aggregate, that would prohibit, materially delay or materially
and adversely impact the Investor’s performance of its
obligations under this Agreement. The Investor is not in
violation of any law or statute or any judgment, order, rule or
regulation of any court or arbitrator or governmental or
regulatory authority, except for any such violation that has not
and would not reasonably be expected, individually or in the
aggregate, to prohibit, materially delay or materially and
adversely impact the Investor’s performance of its
obligations under this Agreement.
(m) Legal Proceedings. There are
no actions, suits or proceedings to which the Investor is a
party or to which any property of the Investor is the subject
that, individually or in the aggregate, has or, if determined
adversely to the Investor, would reasonably be expected to
prohibit, materially delay or materially and adversely impact
the Investor’s performance of its obligations under this
Agreement and Investor has not received written notice that any
such actions, suits or proceedings are threatened by any
governmental or regulatory authority or threatened by others
that has or would reasonably be expected, individually or in the
aggregate, to prohibit, materially delay or materially and
adversely impact the Investor’s performance of its
obligations under this Agreement.
(n) No Undisclosed Written
Agreements. The Investor has not entered into
any material written agreements with an additional Investor
directly relating to Investor Shares or the performance of the
Transaction Agreements, and any such written agreement hereafter
entered into will be disclosed promptly to the Company.
(o) Share Ownership. Based on the
methodology for calculating shares beneficially owned by the
Investor which methodology is disclosed in its Schedule 13D
filing filed with the Commission with respect to the
Company’s
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Common Stock on March 27, 2007, the Investor beneficially
owned 1,577,604 shares of Common Stock as of March 23,
2007.
5. Additional Covenants of the
Company. Without derogating from the
obligations of the Company set forth elsewhere in this
Agreement, the Company agrees with the Investor as set forth
below.
(a) Registration Statements and Proxy Statement.
(i) As promptly as practicable following the date of this
Agreement, the Company shall prepare and file (x) an
amendment to the Rights Offering Registration Statement,
(y) an amendment to the registration statement on
Form S-3
that was filed on March 16, 2007, registering offers and
sales of Investor Shares by the Investor, any Affiliated
Purchasers and any Additional Investors pursuant to
Rule 415 under the Securities Act (the “Initial
Resale Registration Statement”), and (z) a
definitive proxy statement soliciting the approval of the
Company’s stockholders of this Agreement and the
transactions contemplated hereby pursuant to the rules of the
Nasdaq Stock Market, Inc. and certain other matters, which shall
include a recommendation of the Board of Directors that the
stockholders vote to approve the transactions contemplated
hereby, including the Rights Offering and the issuance of
Investors Shares to the Investor and the Principal Additional
Investor (the “Proxy Statement”).
(ii) The definitive Proxy Statement, and the amendments to
the Rights Offering Registration Statement and the Initial
Resale Registration Statement (the “SEC Transaction
Documents”) filed with the Commission shall be
substantially consistent in all material respects with the last
forms of such documents provided to the Investor and its counsel
to review prior to the filing thereof. The Company shall:
(x) provide the Investor with a reasonable opportunity to
review any SEC Transaction Document that is amended after the
date hereof prior to its filing with the SEC and shall duly
consider in good faith any comments of the Investor and its
counsel; (y) advise the Investor promptly of the time when
each of the SEC Transaction Documents has been filed or when
each of the Rights Offering Registration Statement or Initial
Resale Registration Statement has become effective or any Rights
Offering Prospectus or Rights Offering Prospectus supplement has
been filed and shall furnish the Investor with copies thereof;
and (z) advise the Investor promptly after it receives
notice of any comments or inquiries by the Commission (and
furnish the Investor with copies of any correspondence related
thereto), of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any SEC
Transaction Document, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing any SEC Transaction
Document or for additional information, and in each such case,
provide the Investor with a reasonable opportunity to review any
such comments, inquiries, request or other communication from
the Commission and to review any amendment or supplement to any
SEC Transaction Document before any filing with the Commission,
and to duly consider in good faith any comments consistent with
this Agreement and any other reasonable comments of the Investor
and its respective counsel and in the event of the issuance of
any stop order or of any order preventing or suspending the use
of an SEC Transaction Document or suspending any such
qualification, to use promptly its reasonable best efforts to
obtain its withdrawal.
(iii) The Company shall use its reasonable best efforts to
have the Proxy Statement, the Rights Offering Registration
Statement and the Initial Resale Registration Statement cleared
or declared effective, as the case may be, by the Commission as
promptly as practicable after such filing. The Company shall
take all action as may be necessary or advisable so that the
Rights Offering and the issuance and sale of the Investor Shares
and the other transactions contemplated by this Agreement will
be effected in accordance with the applicable provisions of the
Securities Act and the Exchange Act and any state or foreign
securities or Blue Sky laws.
(iv) The Company shall cause the Proxy Statement to be
mailed to the Company’s stockholders as promptly as
practicable and, in any event, within five (5) Business
Days after the date hereof. Subject to applicable law, the
Company shall take all action necessary, in accordance with and
subject to the General Corporation Law of the State of Delaware
and its certificate of incorporation and by-laws, to duly call,
give notice of and convene and hold a special meeting of its
stockholders to consider and vote upon the transactions
contemplated hereby as promptly as practicable, to the extent
required by applicable law or regulations or the rules of the
Nasdaq Stock Market, Inc. The Company shall use its reasonable
best efforts to obtain the requisite stockholder approval of
this Agreement and the transactions contemplated hereby.
A-17
(v) If at any time prior to the Expiration Time, any event
occurs as a result of which the Investment Decision Package, as
then amended or supplemented, would include an untrue statement
of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if
it shall be necessary to amend or supplement the Investment
Decision Package to comply with applicable law, the Company will
promptly notify the Investor of any such event and prepare an
amendment or supplement to the Investor Decision Package that is
reasonably acceptable in form and substance to the Investor that
will correct such statement or omission or effect such
compliance.
(b) Listing. The Company shall use
its commercially reasonable efforts to list and maintain the
listing of the Common Stock on the Nasdaq Global Market.
(c) Rule 158. The Company
will generally make available to the Company’s security
holders as soon as practicable an earnings statement of the
Company covering a twelve-month period beginning after the date
of this Agreement, which shall satisfy the provisions of
Section 11(a) of the Securities Act.
(d) HSR. The Company shall use its
reasonable best efforts to seek all approvals or consents that
are necessary or advisable under the HSR Act and any comparable
laws or regulations in any foreign jurisdiction so that any
applicable waiting period shall have expired or been terminated
thereunder with respect to the purchase of Investor Shares
hereunder, and shall not take any action that is intended or
reasonably likely to materially impede or delay the ability of
the parties to obtain any necessary approvals required for the
transactions contemplated by this Agreement.
(e) Clear Market. If the Investor
(including any Affiliated Purchaser), the Principal Additional
Investor and any other Additional Investor purchases 7,476,923
or more Shares in the aggregate (excluding the Shares purchased
by the Investor or the Principal Additional Investor pursuant to
Section 1(j)) on the Closing Date, for a period of
90 days after the Closing Date (the “Restricted
Period”), the Company will not (i) offer, pledge,
announce the intention to sell, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of, directly or indirectly, any
shares of capital stock of the Company or any securities
convertible into or exercisable or exchangeable for capital
stock of the Company or (ii) enter into any swap or other
agreement that transfers, in whole or in part, any of the
economic consequences of ownership of the capital stock of the
Company, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery
of capital stock of the Company or such other securities, in
cash or otherwise, without the prior written consent of the
Investor, except for (A) Rights and Common Stock issuable
upon exercise of Rights, and (B) shares of Common Stock
issued upon the exercise of any stock options outstanding as of
the date hereof. Notwithstanding the foregoing, if
(i) during the last 17 days of the Restricted Period,
the Company issues an earnings release or material news or a
material event relating to the Company occurs or (ii) prior
to the expiration of the Restricted Period, the Company
announces that it will release earnings results during the
16-day
period beginning on the last day of the Restricted Period, the
restrictions imposed by this Agreement shall continue to apply
until the expiration of the
18-day
period beginning on the issuance of the earnings release or the
occurrence of the material news or material event.
(f) Use of Proceeds. As promptly
as practicable following the Closing Date, the Company will
apply the net proceeds from the sale of the Rights and the
Investor Shares, together with any other funds of the Company as
may be necessary, to repurchase and cancel all of the
Company’s
101/2% Senior
Notes due 2010 using the optional redemption provision of such
notes and to pay any required fees and expenses related to the
transactions contemplated hereby, with any excess to be used for
general corporate purposes.
(g) No Stabilization. The Company
will not take, directly or indirectly, any action designed to or
that would reasonably be expected to cause or result in any
stabilization or manipulation of the price of the Shares.
(h) Actions Regarding
Conditions. During the period from the date
of this Agreement to the Closing Date, the Company shall not
take any action or omit to take any action that would reasonably
be expected to result in the conditions to the Agreement set
forth in Section 8 not being satisfied.
(i) Access to Information. At any
time (a)(i) prior to the Closing Date, or (ii) after the
Closing Date but prior to the second anniversary of the Closing
Date, provided solely with respect to clause (ii) that the
Investor or
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Principal Additional Investor, as the case may be, holds at
least 14,236,956 shares of Common Stock (excluding any
shares of Common Stock held by the Investor or the Principal
Additional Investor prior to the date hereof or purchased by the
Investor or the Principal Additional Investor pursuant to
Section 1(j) of this Agreement), and (b) provided that
the Investor or Principal Additional Investor, as the case may
be, has executed a confidentiality agreement mutually agreeable
to the Company and the Investor or Principal Additional
Investor, as the case may be, the Company shall (and shall cause
its Subsidiaries to) furnish promptly to the Investor or
Principal Additional Investor, as the case may be, such
information concerning its business, properties and personnel as
may reasonably be requested by the Investor or Principal
Additional Investor, as the case may be; provided, that
the Investor or the Principal Additional Investor, as the case
may be, may not trade in the Company’s securities while it
is in possession of material non-public information and,
provided, further, that the foregoing shall not
require the Company in its reasonable judgment (i) to
permit any inspection, or to disclose any information, that in
the reasonable judgment of the Company would cause the Company
or any of its Subsidiaries to violate any of its obligations
with respect to confidentiality to a third party, (ii) to
disclose any privileged information of the Company or any of its
Subsidiaries, (iii) to violate any laws or (iv) to
publicly disclose any such information.
(j) Amendment or Refinancing of Credit
Agreement. The Company shall use its
reasonable best efforts to either (i) amend the
Company’s Amended and Restated Credit Agreement, dated as
of April 11, 2005 by and among HLI Operating Company, Inc.,
as Borrower, Xxxxx Lemmerz International, Inc., the Lenders and
Issuers listed therein, Citicorp North America, Inc., as First
Lien Agent, Second Lien Agent and Collateral Agent, Xxxxxx
Commercial Paper, Inc., as Syndication Agent, and General
Electric Capital Corporation, as Documentation Agent (the
“Credit Agreement”) to permit the repurchase of
the Notes or (ii) refinance the Credit Agreement to permit
the repurchase of the Notes, in either case, as soon as is
reasonably practicable, but in no event later than Closing;
provided, however, that any such amendment or
refinancing of the Credit Agreement will permit incremental
third-party debt outside the United States in an amount of at
least $125 million.
(k) Reasonable Best Efforts. The
Company shall use its reasonable best efforts (and shall cause
its Subsidiaries to use their respective reasonable best
efforts) to take or cause to be taken all actions, and do or
cause to be done all things, reasonably necessary, proper or
advisable on its or their part under this Agreement and
applicable laws to cooperate with the Investor and to consummate
and make effective the transactions contemplated by this
Agreement, including:
(i) preparing and filing as promptly as practicable all
documentation to effect all necessary notices, reports and other
filings and to obtain as promptly as practicable all consents,
registrations, approvals, permits and authorizations necessary
or advisable to be obtained from any third party or governmental
entity;
(ii) defending any lawsuits or other actions or
proceedings, whether judicial or administrative, challenging
this Agreement or any other agreement contemplated by this
Agreement or the consummation of the transactions contemplated
hereby and thereby, including seeking to have any stay or
temporary restraining order entered by any court or other
governmental entity vacated or reversed; and
(iii) executing, delivering and filing, as applicable, any
additional ancillary instruments or agreements necessary to
consummate the transactions contemplated by this Agreement and
to fully carry out the purposes of this Agreement and the
transactions contemplated hereby and thereby, including, without
limitation, a Standstill Agreement (the “Standstill
Agreement”) between the Company and the Investor, in
the form attached hereto as Exhibit A.
6. Additional Covenants of the
Investor. The Investor agrees with the
Company:
(a) Information. To provide the
Company with such information as the Company reasonably requests
regarding the Investor for inclusion in the SEC Transaction
Documents.
(b) HSR Act. To use reasonable
best efforts to obtain all authorizations, approvals and
consents that are necessary or advisable under the HSR Act and
any comparable laws or regulations in any foreign jurisdiction
so that any applicable waiting period shall have expired or been
terminated thereunder and any applicable notification,
authorization, approval or consent shall have been made or
obtained with respect to the purchase of Investor Shares
hereunder, and not to take any action that is intended or
reasonably likely to materially impede or delay the ability of
the parties to obtain any necessary approvals required for the
transactions contemplated by this Agreement;
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provided, however, that notwithstanding anything
to the contrary contained herein, neither the Company, the
Investor nor the Principal Additional Investor (nor their
respective ultimate parent entities, as such term is used in the
HSR Act), shall be required to disclose to any other party to
this Agreement, any information contained in its HSR
Notification and Report Form which such party, in its sole and
reasonable discretion, deems confidential.
(c) Reasonable Best Efforts. The
Investor shall use its reasonable best efforts to take all
actions, and do all things, reasonably necessary, proper or
advisable on its part under this Agreement and applicable laws
to cooperate with the Company and to consummate and make
effective the transactions contemplated by this Agreement,
including executing, delivering and filing, as applicable, any
additional ancillary instruments or agreements necessary to
consummate the transactions contemplated by this Agreement and
to fully carry out the purposes of this Agreement and the
transactions contemplated hereby and thereby, including:
(i) preparing and filing as promptly as practicable all
documentation to effect all necessary notices, reports and other
filings and to obtain as promptly as practicable all consents,
registrations, approvals, permits and authorizations necessary
or advisable to be obtained from any third party or governmental
entity;
(ii) defending any lawsuits or other actions or proceedings
to which the Investor has been named a party, whether judicial
or administrative, challenging this Agreement or any other
agreement contemplated by this Agreement or the consummation of
the transactions contemplated hereby and thereby, including
seeking to have any stay or temporary restraining order entered
by any court or other governmental entity vacated or
reversed; and
(iii) executing, delivering and filing, as applicable, any
additional ancillary instruments or agreements necessary to
consummate the transactions contemplated by this Agreement and
to fully carry out the purposes of this Agreement and the
transactions contemplated hereby and thereby, including, without
limitation, the Standstill Agreement.
(d) No Stabilization. The Investor
will not take, directly or indirectly, any action designed to or
that would reasonably be expected to cause or result in any
stabilization or manipulation of the price of the Shares.
(e) Share Acquisition. Between the
date hereof and the Closing Date, the Investor shall not acquire
beneficial ownership of any shares of Common Stock, other than
pursuant to the transactions contemplated hereby.
7. Additional Joint Covenant of Company and the
Investor. Without limiting the generality of
the undertakings pursuant to Sections 5(d) and 6(b), the
Company and the Investor shall each use their respective
reasonable best efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things necessary
under the HSR Act and any comparable laws or regulations in any
foreign jurisdiction to consummate and make effective the
transactions contemplated by this Agreement and the other
Transaction Agreements, including furnishing all information
required by applicable law in connection with approvals of or
filings with any governmental authority, and filing, or causing
to be filed, as promptly as practicable, any required
notification and report forms under other applicable competition
laws with the applicable governmental antitrust authority. The
parties shall consult with each other as to the appropriate time
of filing such notifications and shall agree upon the timing of
such filings. Subject to appropriate confidentiality safeguards,
each party shall (i) respond promptly to any request for
additional information made by the antitrust agency;
(ii) promptly notify counsel to the other party of, and if
in writing, furnish counsel to the other party with copies of
(or, in the case of material oral communications, advise the
other party orally of) any communications from or with the
antitrust agency in connection with any of the transactions
contemplated by this Agreement; (iii) not participate in
any meeting with the antitrust agency unless it consults with
counsel to the other party in advance and, to the extent
permitted by the agency, give the other party a reasonable
opportunity to attend and participate thereat; (iv) furnish
counsel to the other party with copies of all correspondence,
filings and communications between it and the antitrust agency
with respect to any of the transactions contemplated by this
Agreement; and (v) furnish counsel to the other party with
such necessary information and reasonable assistance as may be
reasonably necessary in connection with the preparation of
necessary filings or submission of information to the antitrust
agency. The Parties shall use their reasonable best efforts to
cause the waiting periods under the applicable competitions laws
to terminate or expire at the earliest possible date after the
date of filing.
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Notwithstanding anything in this Agreement to the contrary,
nothing shall require any Investor or its Affiliates or the
Company or its Subsidiaries to dispose of any of its or its
respective Subsidiaries’ or its Affiliates’ assets or
to limit its freedom of action with respect to any of its or its
respective Subsidiaries’ businesses, or to consent to any
disposition of the Company’s or the Company
Subsidiaries’ assets or limits on the Company’s or the
Company Subsidiaries’ freedom of action with respect to any
of its or the Company Subsidiaries’ businesses, or to
commit or agree to any of the foregoing, and nothing in this
Agreement shall authorize the Company or any Company Subsidiary
to commit or agree to any of the foregoing, to obtain any
consents, approvals, permits or authorizations to remove any
impediments to the transactions contemplated hereby or by any
Transaction Agreement relating to antitrust or competition laws
or to avoid the entry of, or to effect the dissolution of, any
injunction, temporary restraining order or other order in any
action relating to antitrust or competition laws.
8. Conditions to the Obligations of the
Parties.
(a) The obligations of the Investor hereunder to consummate
the transactions contemplated hereby shall be subject to the
satisfaction prior to the Closing Date of each of the following
conditions (which may be waived in whole or in part by the
Investor in its sole discretion), provided that the failure of
the condition set forth in Section 8(a)(xiv) to be
satisfied may not be asserted by the Investor if such failure
results from the failure of the Investor to provide the
representation letter set forth in Section 7(h)(i) of the
Registration Rights Agreement:
(i) Registration Statement
Effectiveness. The Rights Offering
Registration Statement and the Initial Resale Registration
Statement shall each have been declared effective by the
Commission and shall continue to be effective and no stop order
shall have been entered by the Commission with respect thereto.
(ii) Rights Offering. The Rights
Offering shall have been conducted in all material respects in
accordance with this Agreement and the Expiration Time shall
have occurred.
(iii) Purchase or Satisfaction
Notice. The Investor shall have received a
Purchase Notice from the Company, dated as of the Determination
Date, certifying the number of Unsubscribed Shares to be
purchased or a Satisfaction Notice.
(iv) Antitrust Approvals. All
terminations or expirations of waiting periods imposed by any
governmental or regulatory authority necessary for the
consummation of the transactions contemplated by this Agreement,
including under the HSR Act and any comparable regulations in
any foreign jurisdiction, shall have occurred and all other
notifications, consents, authorizations and approvals required
to be made or obtained from any competition or antitrust
authority shall have been made or obtained for the transactions
contemplated by this Agreement.
(v) Consents. All other
governmental and third party notifications, filings, consents,
waivers and approvals required for the consummation of the
transactions contemplated by this Agreement shall have been made
or received.
(vi) Stockholder Approval. All
Company stockholder consents and approvals required for the
consummation of the transactions contemplated by this Agreement
have been received.
(vii) No Legal Impediment to
Issuance. No action shall have been taken and
no statute, rule, regulation or order shall have been enacted,
adopted or issued by any federal, state or foreign governmental
or regulatory authority, and no judgment, injunction, decree or
order of any federal, state or foreign court shall have been
issued, that prohibits the implementation of the Rights Offering
or the transactions contemplated by this Agreement.
(viii) Good Standing. The Investor
shall have received on and as of the Closing Date satisfactory
evidence of the good standing of the Company in its jurisdiction
of organization, in writing or any standard form of
telecommunication from the appropriate governmental authorities
of such jurisdiction.
(ix) Representations and
Warranties. The representations and
warranties of Company contained in the Original Agreement were
true and correct in all material respects as of March 16,
2007, and the representations and warranties of the Company
contained in this Agreement shall be true and correct
(disregarding all qualifications and exceptions contained
therein relating to materiality, Material Adverse Effect or
similar
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qualifications, other than such qualifications contained in
Sections 3(i) and 3(j)) as of the date hereof
and as of the Closing Date after giving effect to the
transactions contemplated hereby with the same effect as if made
on and as of the Closing Date (except for representations and
warranties made as of a specified date, which shall be true and
correct only as of the specified date), except where the failure
to be so true and correct, individually or in the aggregate, has
not had, and would not reasonably be expected to have, a
Material Adverse Effect, other than with respect to the
representations in Sections 3(b), 3(c),
3(e), and 3(m)(ii) and 3(kk), which shall
be true and correct in all respects.
(x) Covenants. The Company shall
have performed and complied with all of its respective covenants
and agreements contained in this Agreement and in any other
document delivered pursuant to this Agreement (including in any
Transaction Agreement) through the Closing Date.
(xi) Certificates. The Company
shall have furnished to the Investor a certificate, dated the
Closing Date, of an officer of the Company, on behalf of the
Company, confirming the matters set forth in subsections
(ix) and (x).
(xii) Standstill Agreement. The
Company shall have executed and delivered to the Investor the
Standstill Agreement.
(xiii) Opinion of Counsel. The
Company shall have furnished the Investor and any Affiliated
Purchaser or Additional Investor with a favorable opinion, dated
the Closing Date, of Skadden, Arps, Slate, Xxxxxxx &
Xxxx LLP and of the Company’s General Counsel or Assistant
General Counsel in the form attached hereto as
Exhibit B the other provisions of which shall be
customary and in form and substance reasonably satisfactory to
the Investor; provided that the
“10b-5 statement”
therein shall only be required to be furnished if the comfort
letter referred to in Section 8(a)(xiv) is delivered to the
Investor.
(xiv) Comfort Letter. The Company
shall have caused KPMG LLP, its independent registered public
accounting firm, to have furnished the Investor and any
Affiliated Purchaser or Additional Investor, with respect to the
Initial Resale Registration Statement, with a comfort letter,
dated the Closing Date covering such matters of the type
customarily covered by comfort letters as the Investor
reasonably requests.
(xv) Fees and Expenses. The
Company shall have paid all fees, costs and expenses payable to
the Investor or the Principal Additional Investor, as the case
may be, pursuant to Section 2.
(xvi) No Material Adverse
Effect. Since the date of this Agreement,
there shall not have occurred any changes or events that,
individually or in the aggregate would reasonably be expected to
result in a Material Adverse Effect.
(xvii) Material Customer. The
Company shall have not lost any Material Customer during the
twelve months ending on the last day of the fiscal quarter
ending immediately prior to the Closing Date. For purposes of
this Agreement, a “Material Customer” shall
mean a customer of the Company or any Subsidiary which accounted
for 4% or more of the Company’s revenues on a consolidated
basis during the twelve months ended on the last full fiscal
quarter immediately preceding the Closing Date.
(xviii) No Market Adverse
Event. There shall not have occurred
(i) a material adverse change in the financial markets in
the United States, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development
involving a prospective change in national or international
political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the
Investor, impracticable or inadvisable to conduct or close the
transactions contemplated hereby, or (ii) a suspension or
material limitation on trading, or minimum or maximum prices for
trading have been fixed, or maximum ranges for prices have been
required, by any securities exchange or by such system or by
order of the SEC, the NASD or any other governmental authority,
or (iii) a material disruption has occurred in commercial
banking or securities settlement or clearance services in the
United States, or (iv) if a banking moratorium has been
declared by either Federal or New York authorities.
(xix) Indebtedness. The Company
shall not have in excess of $750 million of Indebtedness.
For the purposes of this agreement,
“Indebtedness” shall mean: all indebtedness for
borrowed money or capital lease obligations that is required to
be classified as debt in Company’s financial statements in
accordance with
A-22
GAAP, and shall not include indebtedness under securitization
and other accounts receivable factoring and financing programs.
(xx) Nasdaq. The Company shall
have complied with the requirements of the Nasdaq Stock Market,
Inc., for the listing of the shares of Common Stock offered in
the Rights Offering on the Nasdaq Global Select Market.
(xxi) Financial Results and
Guidance. The Company shall have provided
guidance of Adjusted EBITDA minus capital expenditures of not
less than $95 million for the one-year period ending
January 31, 2008, and such guidance shall have been
publicly affirmed by a method compliant with Regulation FD
prior to the Closing Date. The calculation of Adjusted EBITDA
and capital expenditures shall be consistent with the
methodology previously used by the Company for the calculation
of such amounts in the Company SEC Documents filed or submitted
prior to the date of this Agreement.
(xxii) Refinancing. The Company
shall have refinanced or otherwise amended the Credit Agreement
in accordance with Section 5(j).
(b) The obligation of the Company to issue and sell the
Investor Shares are subject to the following conditions (which
may be waived in whole or in part by the Company in its sole
discretion), provided that the failure of a condition set forth
in Sections 8(b)(v) or (b)(viii) to be
satisfied may not be asserted by the Company if such failure
results from a breach by the Company of an obligation hereunder:
(i) Antitrust Approvals. All
terminations or expirations of waiting periods imposed by any
governmental or regulatory authority necessary for the
consummation of the transactions contemplated by this Agreement,
including under the HSR Act and any comparable regulations in
any foreign jurisdiction, shall have occurred and all other
notifications, consents, authorizations and approvals required
to be made or obtained from any competition or antitrust
authority shall have been made or obtained for the transactions
contemplated by this Agreement.
(ii) No Legal Impediment to
Issuance. No action shall have been taken and
no statute, rule, regulation or order shall have been enacted,
adopted or issued by any federal, state or foreign governmental
or regulatory authority, and no judgment, injunction, decree or
order of any federal, state or foreign court shall have been
issued, that prohibits the implementation of the Rights Offering
or the transactions contemplated by this Agreement.
(iii) Representations and
Warranties. The representations and
warranties of the Investor, each Affiliated Purchaser and each
Additional Investor contained in this Agreement or pursuant to
Sections 1(l) or 1(m) shall be true and
correct (disregarding all qualifications and exceptions
contained therein relating to materiality or material adverse
effect on the Investor’s performance of its obligations or
similar qualifications) as of the date hereof and as of the
Closing Date with the same effect as if made on the Closing Date
(except for the representations and warranties made as of a
specified date, which shall be true and correct only as such
specified date), except with respect to the Investor’s
representations in all Sections other than
Sections 4(b) and 4(c) where the failure to
be so true and correct, individually or in the aggregate, has
not and would not reasonably be expected, to prohibit,
materially delay or materially and adversely impact the
Investor’s performance of its obligations under this
Agreement.
(iv) Covenants. The Investor shall
have performed and complied with all of its covenants and
agreements contained in this Agreement and in any other document
delivered pursuant to this Agreement (including in any
Transaction Agreement) through the Closing Date, including,
without limitation, entering into the Standstill Agreement.
(v) Rights Offering. The Rights
Offering shall have been conducted in all material respects in
accordance with this Agreement and the Expiration Time shall
have occurred.
(vi) Registration Statement
Effectiveness. The Rights Offering
Registration Statement and the Initial Resale Registration
Statement shall each have been declared effective by the
Commission and shall continue to be effective and no stop order
shall have been entered by the Commission with respect thereto.
A-23
(vii) Stockholder Approval. All
Company stockholder consents and approvals required for the
consummation of the transactions contemplated by this Agreement
have been received.
(viii) Refinancing. The Company
shall have refinanced or otherwise amended the Credit Agreement
in accordance with Section 5(j).
9. Indemnification and Contribution.
(a) Whether or not the Rights Offering is consummated or
this Agreement is terminated or the transactions contemplated
hereby, the Company (in such capacity, the “Indemnifying
Party”) shall indemnify and hold harmless the Investor
and the Additional Investors, their respective Affiliates and
their respective officers, directors, employees, agents and
controlling persons (each, an “Indemnified
Person”) from and against any and all losses, claims,
damages, liabilities and reasonable expenses, joint or several,
arising out of circumstances existing on or prior to the Closing
Date (“Losses”) to which any such Indemnified
Person may become subject arising out of or in connection with
any claim, challenge, litigation, investigation or proceeding
(“Proceedings”) instituted by a third party
with respect to the Rights Offering, the Original Agreement,
this Agreement or the other Transaction Documents, the Rights
Offering Registration Statement, any Preliminary Rights Offering
Prospectus, the Rights Offering Prospectus, any Issuer Free
Writing Prospectus, the Investment Decision Package, any
amendment or supplement thereto or the transactions contemplated
by any of the foregoing and shall reimburse such Indemnified
Persons for any reasonable legal or other reasonable
out-of-pocket
expenses incurred in connection with investigating, responding
to or defending any of the foregoing; provided that the
foregoing indemnification will not apply to Losses to the extent
that they resulted from (a) any breach by such Indemnified
Person of this Agreement or the Original Agreement,
(b) gross negligence or willful misconduct on the part of
such Indemnified Person or (c) statements or omissions in
the Rights Offering Registration Statement, any Preliminary
Rights Offering Prospectus, the Rights Offering Prospectus, any
Issuer Free Writing Prospectus or any amendment or supplement
thereto made in reliance upon or in conformity with information
relating to such Indemnified Person furnished to the Company in
writing by or on behalf of such Indemnified Person expressly for
use in the Rights Offering Registration Statement, any Rights
Offering Preliminary Prospectus, the Rights Offering Prospectus,
any Issuer Free Writing Prospectus or any amendment or
supplement thereto. If for any reason the foregoing
indemnification is unavailable to any Indemnified Person (except
as set forth in the proviso to the immediately preceding
section) or insufficient to hold it harmless, then the
Indemnifying Party shall contribute to the amount paid or
payable by such Indemnified Person as a result of such Losses in
such proportion as is appropriate to reflect not only the
relative benefits received by the Indemnifying Party on the one
hand and such Indemnified Person on the other hand but also the
relative fault of the Indemnifying Party on the one hand and
such Indemnified Person on the other hand as well as any
relevant equitable considerations. It is hereby agreed that the
relative benefits to the Indemnifying Party on the one hand and
all Indemnified Persons on the other hand shall be deemed to be
in the same proportion as (i) the total value received or
proposed to be received by the Company pursuant to the sale of
the Shares and the Investor Shares contemplated by this
Agreement bears to (ii) the Rights Offering Fee and the
value of the Direct Investment Option, if exercised, calculated
by multiplying the maximum number of shares subject to Direct
Investment Option by the difference between the Exercise Price
and the closing price of the Common Stock as of the date of this
Agreement paid or proposed to be paid to the Investor. The
indemnity, reimbursement and contribution obligations of the
Indemnifying Party under this Section 9 shall be in
addition to any liability that the Indemnifying Party may
otherwise have to an Indemnified Person and shall bind and inure
to the benefit of any successors, assigns, heirs and personal
representatives of the Indemnifying Party and any Indemnified
Person.
(b) Promptly after receipt by an Indemnified Person of
notice of the commencement of any Proceedings with respect to
which the Indemnified Person may be entitled to indemnification
hereunder, such Indemnified Person will, if a claim is to be
made hereunder against the Indemnifying Party in respect
thereof, notify the Indemnifying Party in writing of the
commencement thereof; provided that (i) the omission
so to notify the Indemnifying Party will not relieve the
Indemnifying Party from any liability that it may have hereunder
except to the extent it has been prejudiced by such failure and
(ii) the omission so to notify the Indemnifying Party will
not relieve it from any liability that it may have to an
Indemnified Person otherwise than on account of this
Section 9. In case any such Proceedings
are brought against any Indemnified Person and it notifies the
Indemnifying Party of the commencement thereof, the Indemnifying
Party will be entitled to participate therein, and, to the
extent that it may elect by written notice delivered to such
Indemnified Person, to assume the defense thereof, with counsel
reasonably
A-24
satisfactory to such Indemnified Person; provided that if
the defendants in any such Proceedings include both such
Indemnified Person and the Indemnifying Party and such
Indemnified Person shall have concluded that there may be legal
defenses available to it that are different from or additional
to those available to the Indemnifying Party, such Indemnified
Person shall have the right to select separate counsel, which
selection shall be subject to the reasonable approval of the
Indemnifying Party, to assert such legal defenses and to
otherwise participate in the defense of such Proceedings on
behalf of such Indemnified Person. Upon receipt of notice from
the Indemnifying Party to such Indemnified Person of its
election so to assume the defense of such Proceedings and
approval by such Indemnified Person of counsel, the Indemnifying
Party shall not be liable to such Indemnified Person for
expenses incurred by such Indemnified Person in connection with
the defense thereof (other than reasonable costs of
investigation) unless (i) such Indemnified Person shall
have employed separate counsel in connection with the assertion
of legal defenses in accordance with the proviso to the
preceding sentence (it being understood, however, that the
Indemnifying Party shall not be liable for the expenses of more
than one separate counsel in any jurisdiction, approved by the
Investor (or the Principal Additional Investor if the Investor
is not an Indemnified Person), representing the Indemnified
Persons who are parties to such Proceedings), (ii) the
Indemnifying Party shall not have employed counsel reasonably
satisfactory to such Indemnified Person to represent such
Indemnified Person within a reasonable time after notice of
commencement of the Proceedings or (iii) the Indemnifying
Party shall have authorized in writing the employment of counsel
for such Indemnified Person.
(c) The Indemnifying Party shall not be liable for any
settlement of any Proceedings effected without its written
consent (which consent shall not be unreasonably withheld). If
any settlement of any Proceeding is consummated with the written
consent of the Indemnifying Party or if there is a final
judgment for the plaintiff in any such Proceedings, the
Indemnifying Party agrees to indemnify and hold harmless each
Indemnified Person from and against any and all Losses by reason
of such settlement or judgment in accordance with, and subject
to the limitations of, the provisions of this
Section 9. The Indemnifying Party shall
not, without the prior written consent of an Indemnified Person
(which consent shall not be unreasonably withheld), effect any
settlement of any pending or threatened Proceedings in respect
of which indemnity has been sought hereunder by such Indemnified
Person unless (i) such settlement includes an unconditional
release of such Indemnified Person in form and substance
satisfactory to such Indemnified Person from all liability on
the claims that are the subject matter of such Proceedings and
(ii) such settlement does not include any statement as to
or any admission of fault, culpability or a failure to act by or
on behalf of any Indemnified Person.
10. Survival of Representations and
Warranties. The representations and
warranties made in this Agreement will survive the execution and
delivery of this Agreement, notwithstanding any investigation at
any time made by or on behalf of any party hereto until the date
that is thirty (30) days after the later of the filing of
the Company’s Annual Report on
Form 10-K
for the year ending January 31, 2008 and the filing of any
amendment thereto and the covenants shall survive in accordance
with their specific terms; provided, however, the
representations and warrants contained in
Sections 3(b), (c), (e) and (g)
and Sections 4(b) and (c) shall survive
indefinitely.
11. Termination. This Agreement
may be terminated and the transactions contemplated hereby may
be abandoned at any time prior to the Closing Date:
(a) by mutual written consent of the Company, on the one
hand, and the Investor, on the other hand;
(b) by the Company, at any time, in its sole discretion;
(c) by the Investor,
(i) if there has been a breach of any covenant or a breach
of any representation or warranty of the Company, which breach
would cause the failure of any condition precedent set forth in
Section 8(a), provided, that any such breach
of a covenant or representation or warranty is not capable of
cure on or prior to June 29, 2007;
(ii) upon the occurrence of any event which results in a
failure to satisfy any of the conditions set forth in
Section 8(a), which failure is not capable of cure
on or prior to June 29, 2007;
A-25
(iii) if Rights Offering Registration Statement or the
Initial Resale Registration Statement have not been declared
effective by the Commission and the Rights Offering Commencement
Date has not occurred by May 31, 2007; or
(iv) after June 29, 2007; provided, that the
Closing Date has not occurred by such date.
(d) If this Agreement is terminated pursuant to:
(i) Section 11(c)(ii) in connection with the
conditions set forth in Sections 8(a)(xvi), the
Company shall pay to the Investor a termination fee equal to
$1.8 million (the “11(c)(ii) Termination
Fee”); or
(ii) (A) Section 11(b) (provided that
there was no breach of any representations, warranties or
covenants in this Agreement by the Investor at the date of
termination, which breach had materially delayed or materially
or adversely impacted, or would reasonably be expected to
materially delay, or materially and adversely impact, the
Investor’s performance of its obligations under this
Agreement) or (B) Section 11(c)(i) or
(c)(ii), other than in connection with the conditions set
forth in Section 8(a)(i), (a)(iv),
(a)(v), (a)(vii), (a)(xvi),
(a)(xvii) or (a)(xviii), in each case, the Company
shall pay to the Investor a termination fee equal to $5,793,750
(the “Termination Fee”).
In addition, if this Agreement is terminated, provided that
there was no breach of any representations, warranties or
covenants in this Agreement by the Investor at the date of
termination which breach had materially delayed or materially or
adversely impacted, or would reasonably be expected to
materially delay, or materially and adversely impact, the
Investor’s performance of its obligations under this
Agreement, the Company shall pay to the Investor any Transaction
Expenses and any other amounts certified by the Investor to be
due and payable hereunder that have not been paid theretofore.
Payment of the amounts due under this Section 11(d)
will be made no later than the close of business on the third
(3rd) Business Day following the date of such termination by
wire transfer of immediately available funds in
U.S. dollars to an account specified by the Investor to the
Company. The provision for the payment of the Termination Fee is
an integral part of the transactions contemplated by this
Agreement and without this provision the Investor would not have
entered into this Agreement.
(e) Upon termination under this Section 11, all
rights and obligations of the parties under this Agreement shall
terminate without any liability of any party to any other party
except that (x) nothing contained herein shall release any
party hereto from liability for any willful breach and
(y) the covenants and agreements made by the parties herein
in Section 2, and Sections 9 through
17 will survive indefinitely in accordance with their
terms. Notwithstanding the foregoing, upon termination of this
Agreement in accordance with this Section 11, the Company
shall not be liable for any amount in excess of the 11(c)(ii)
Termination Fee or the Termination Fee, as the case may be, and
the Transaction Expenses to the extent applicable.
12. Notices. All notices and other
communications in connection with this Agreement will be in
writing and will be deemed given (and will be deemed to have
been duly given upon receipt) if delivered personally, sent via
electronic facsimile (with confirmation), mailed by registered
or certified mail (return receipt requested) or delivered by an
express courier (with confirmation) to the parties at the
following addresses (or at such other address for a party as
will be specified by like notice):
(a) If to:
Xxxxx Lemmerz International, Inc.
00000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxx and Xxxxxxx Xxxxxx
00000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxx and Xxxxxxx Xxxxxx
A-26
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
Xxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
(b) If to:
Deutsche Bank Securities Inc.
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxx Xxxxx and Xxxxxxx X. Xxxxxxxx
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxx Xxxxx and Xxxxxxx X. Xxxxxxxx
with a copy to:
White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxx and Xxxxx Xxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxx and Xxxxx Xxxxxxx
13. Assignment; Third Party
Beneficiaries. Neither this Agreement nor any
of the rights, interests or obligations under this Agreement
will be assigned by any of the parties (whether by operation of
law or otherwise) without the prior written consent of the other
parties, except to an Additional Investor or to a Affiliated
Purchaser pursuant to Sections 1(l) and
1(m). Notwithstanding the previous sentence,
subject to the provisions of Sections 1(l) and
1(m): this Agreement, or the Investor’s obligations
hereunder, may be assigned, delegated or transferred, in whole
or in part, by any Investor to any Affiliate of such Investor
over which such Investor or any of its Affiliates exercise
investment authority, including, without limitation, with
respect to voting and dispositive rights; provided, that any
such assignee assumes the obligations of such Investor hereunder
and agrees in writing to be bound by the terms of this Agreement
in the same manner as such Investor. Notwithstanding the
foregoing or any other provisions herein, no such assignment
will relieve the Investor of its obligations hereunder if such
assignee fails to perform such obligations. Except as provided
in Section 1(g), Section 1(h), the first
two sentences of Section 1(m), and
Sections 2, 3(kk), 5(a), 5(d),
5(e), 5(i), 5(k), and 7 in each
case, with respect to the Principal Additional Investor, and in
Section 9 with respect to the Indemnified Persons,
this Agreement (including the documents and instruments referred
to in this Agreement) is not intended to and does not confer
upon any person other than the parties hereto any rights or
remedies under this Agreement. The Principal Additional Investor
and any Indemnified Persons, respectively, shall be entitled to
enforce and rely on the provisions listed in the immediately
preceding sentence as if they were a party to this Agreement.
14. Prior Negotiations; Entire
Agreement. This Agreement (including the
agreements attached as exhibits to and the documents and
instruments referred to in this Agreement constitutes the entire
agreement of the parties and supersedes all prior agreements
(including the Original Agreement), arrangements or
understandings, whether written or oral, between the parties
with respect to the subject matter of this Agreement, except
that the parties hereto acknowledge that any confidentiality
agreements heretofore executed among the parties will continue
in full force and effect.
15. GOVERNING LAW; VENUE. THIS
AGREEMENT WILL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK. THE INVESTORS HEREBY
IRREVOCABLY SUBMIT TO THE JURISDICTION OF, AND VENUE IN, THE
UNITED STATES COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND
WAIVE ANY OBJECTION BASED ON FORUM NON CONVENIENS. EACH PARTY
ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND
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UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH,
TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT.
16. Counterparts. This Agreement
may be executed in any number of counterparts, all of which will
be considered one and the same agreement and will become
effective when counterparts have been signed by each of the
parties and delivered to the other party (including via
facsimile or other electronic transmission), it being understood
that each party need not sign the same counterpart.
17. Waivers and Amendments. This
Agreement may be amended, modified, superseded, cancelled,
renewed or extended, and the terms and conditions of this
Agreement may be waived, only by a written instrument signed by
all the parties or, in the case of a waiver, by the party
waiving compliance. In addition, the Investor shall not enter
into any amendment to or waiver under the Principal Additional
Investor Agreement which will adversely affect the rights or
obligations of the Company under this Agreement or with respect
to the Principal Additional Investor Agreement, without the
prior written consent of the Company, nor shall the Investor
permit the termination of the Principal Additional Investor
Agreement. No delay on the part of any party in exercising any
right, power or privilege pursuant to this Agreement will
operate as a waiver thereof, nor will any waiver on the part of
any party of any right, power or privilege pursuant to this
Agreement, nor will any single or partial exercise of any right,
power or privilege pursuant to this Agreement, preclude any
other or further exercise thereof or the exercise of any other
right, power or privilege pursuant to this Agreement. The rights
and remedies provided pursuant to this Agreement are cumulative
and are not exclusive of any rights or remedies which any party
otherwise may have at law or in equity.
18. Adjustment to Shares. If,
prior to the Closing Date, the Company effects a
reclassification, stock split (including a reverse stock split),
stock dividend or distribution, recapitalization, merger, issuer
tender or exchange offer, or other similar transaction with
respect to any shares of its capital stock, references to the
numbers of such shares and the prices therefore shall be
equitably adjusted to reflect such change and, as adjusted,
shall, from and after the date of such event, be subject to
further adjustment in accordance herewith.
19. Headings. The headings in this
Agreement are for reference purposes only and will not in any
way affect the meaning or interpretation of this Agreement.
20. Publicity. The Company and
Investor each shall consult with each other prior to issuing any
press releases (and provide each other a reasonable opportunity
to review and comment upon such release) or otherwise making
public announcements with respect to the transactions
contemplated by this Agreement, and prior to making any filings
with any third party or any governmental entity (including any
national securities exchange or interdealer quotation service)
with respect thereto, except as may be required by law or by the
request of any governmental entity.
[Signature
Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their respective officers thereunto
duly authorized, all as of the date first written above.
XXXXX LEMMERZ INTERNATIONAL, INC.
| By: |
/s/ Xxxxx
X. Xxxx
|
Name: Xxxxx X. Xxxx
| Title: | Vice President, Finance and |
Chief Financial Officer
DEUTSCHE BANK SECURITIES INC.
| By: |
/s/ Xxxxxxx
X. Xxxxxxxx
|
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
| By: |
/s/ Xxxxx
X. Xxxxxx
|
Name: Xxxxx X. Xxxxxx
| Title: | Managing Director |
A-29
SCHEDULE I
|
Defined Term
|
Section
|
|
|
Additional Investors
|
Section 1(m) | |
|
Additional Investor Agreements
|
Section 1(m) | |
|
Affiliate
|
Section 1(l) | |
|
Affiliated Purchaser
|
Section 1(l) | |
|
After-Acquired Shares
|
Section 1(n) | |
|
Aggregate Offering Amount
|
Recitals | |
|
Agreement
|
Recitals | |
|
Basic Subscription Privilege
|
Recitals | |
|
Board of Directors
|
Recitals | |
|
Business Day
|
Section 1(b) | |
|
Capital Structure Date
|
Section 3(d) | |
|
Closing Date
|
Section 1(o) | |
|
Code
|
Section 3(y)(ii) | |
|
Commission
|
Section 3(i) | |
|
Common Stock
|
Recitals | |
|
Company
|
Recitals | |
|
Company ERISA Affiliate
|
Section 3(y)(ii) | |
|
Company Plans
|
Section 3(y)(i) | |
|
Company SEC Documents
|
Section 3(i) | |
|
Credit Agreement
|
Section 5(j) | |
|
Determination Date
|
Section 1(h) | |
|
Direct Subscription Shares
|
Section 1(j) | |
|
Eligible Holder
|
Section 1(a) | |
|
Environmental Laws
|
Section 3(w)(i) | |
|
ERISA
|
Section 3(y)(i) | |
|
Exchange Act
|
Section 3(j) | |
|
Exercise Price
|
Recitals | |
|
Expiration Time
|
Section 1(b) | |
|
GAAP
|
Section 3(j) | |
|
HSR Act
|
Section 3(g) | |
|
Indemnified Person
|
Section 9(a) | |
|
Indemnifying Party
|
Section 9(a) | |
|
Initial Resale Registration
Statement
|
Section 5(a)(i) | |
|
Intellectual Property
|
Section 3(s) | |
|
Investment Decision Package
|
Section 3(k) | |
|
Investor
|
Recitals | |
|
Investor Shares
|
Section 1(k) | |
|
Issuer Free Writing Prospectus
|
Section 3(k) | |
|
Losses
|
Section 9(a) | |
|
Material Adverse Effect
|
Section 3(a) | |
|
Material Customer
|
Section 8(a)(xvii) | |
|
Money Laundering Laws
|
Section 3(dd) | |
|
Monthly Financial Statements
|
Section 5(k) | |
|
Multiemployer Plans
|
Section 3(y)(ii) |
A-30
|
Defined Term
|
Section
|
|
|
OFAC
|
Section 3(ee) | |
|
Option
|
Section 3(d) | |
|
Options
|
Section 3(d) | |
|
Original Agreement
|
Recitals | |
|
Over-Subscription Privilege
|
Recitals | |
|
Preliminary Rights Offering
Prospectus
|
Section 3(k) | |
|
Principal Additional Investor
|
Section 1(m) | |
|
Principal Additional Investor
Agreement
|
Section 1(m) | |
|
Proceedings
|
Section 9(a) | |
|
Proxy Statement
|
Section 5(b)(i) | |
|
Purchase Notice
|
Section 1(h) | |
|
Record Date
|
Section 1(a) | |
|
Registration Rights Agreement
|
Section 3(gg) | |
|
Restricted Period
|
Section 5(e) | |
|
Rights
|
Recitals | |
|
Rights Exercise Period
|
Section 1(b) | |
|
Rights Offering
|
Recitals | |
|
Rights Offering Commencement Date
|
Section 1(b) | |
|
Rights Offering Fees
|
Section 2(a)(ii) | |
|
Rights Offering Prospectus
|
Section 3(k) | |
|
Rights Offering Registration
Statement
|
Section 3(k) | |
|
Rights Ratio
|
Section 1(a) | |
|
Satisfaction Notice
|
Section 1(h) | |
|
SEC Transaction Documents
|
Section 5(a)(ii) | |
|
Section 203
|
Section 3(kk) | |
|
Securities Act
|
Section 3(a) | |
|
Securities Act Effective Date
|
Section 3(k) | |
|
Shares
|
Recitals | |
|
Significant Subsidiary
|
Section 3(a) | |
|
Single-Employer Plan
|
Section 3(z)(ii) | |
|
Stand-By Commitment Fee
|
Section 2(a)(i) | |
|
Standstill Agreement
|
Section 5(l)(iii) | |
|
Stock Plans
|
Section 3(d) | |
|
Subscription Agent
|
Section 1(c) | |
|
Subsidiary
|
Section 3(a) | |
|
Takeover Statute
|
Section 3(nn) | |
|
Take-Up
Fee
|
Section 2(a)(ii) | |
|
Taxes
|
Section 3(x) | |
|
Tax Returns
|
Section 3(x)(i) | |
|
Termination Fee
|
Section 11(d) | |
|
Transaction Agreements
|
Section 3(b) | |
|
Transaction Expenses
|
Section 2(c) | |
|
Unsubscribed Shares
|
Section 1(k) | |
|
Warrants
|
Section 1(d) | |
|
11(c)(ii) Termination Fee
|
Section 11(d) |
A-31
