1
Exhibit 2.1
EXCHANGE AGREEMENT
AMONG
XXXXXXX HOLDINGS INC.,
XXXXXXX FASTENERS INC.,
SARATOGA PARTNERS III, L.P.,
SARATOGA PARTNERS III, C.V.,
SARATOGA MANAGEMENT COMPANY, LLC
AND
THE HOLDERS OF THE OUTSTANDING
11-1/4% SENIOR NOTES DUE 2007 OF
XXXXXXX FASTENERS INC.
NAMED IN EXHIBIT A HERETO
DATED AS OF AUGUST 3, 2001
2
TABLE OF CONTENTS
Page
----
ARTICLE 1
DEFINITIONS
1.1. Definitions.......................................................... 2
ARTICLE 2
THE EXCHANGE
2.1. Exchange............................................................. 4
2.2. Closing.............................................................. 5
2.3. Deliveries........................................................... 5
2.4. U.S. Federal Income Tax Treatment.................................... 5
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF HOLDINGS AND FASTENERS
3.1. Representations and Warranties of Holdings and Fasteners............. 5
3.1.1. Organization and Standing................................... 6
3.1.2. Authority and Enforceability................................ 6
3.1.3. Consents and Approvals...................................... 7
3.1.4. No Violations............................................... 7
3.1.5. Validity of Stock........................................... 8
3.1.6. Litigation and Claims Against Holdings or Fasteners......... 8
3.1.7. Capitalization.............................................. 8
3.1.8. Reports and Financial Statements............................ 9
3.1.9. Undisclosed Liabilities..................................... 10
3.1.10. Material Contracts.......................................... 10
3.1.11. Compliance.................................................. 11
3.1.12. Title to Property and Assets................................ 11
3.1.13. Insurance................................................... 11
-i-
3
3.1.14. Related Party Transactions.................................. 12
3.1.15. No Fees..................................................... 12
3.1.16. Proprietary Rights.......................................... 12
3.1.17. Employee Benefit Plans...................................... 13
3.1.18. Labor Relations; Employees.................................. 14
3.1.19. Environmental Matters....................................... 14
ARTICLE 4
REPRESENTATIONS AND WARRANTIES AND
OTHER AGREEMENTS OF THE HOLDERS
4.1. Representations and Warranties of the Holders......................... 16
4.1.1. Ownership of Notes........................................... 16
4.1.2. Authority.................................................... 17
4.1.3. Consents and Approvals....................................... 17
4.1.4. Investment Intent............................................ 17
4.1.5. Investor Sophistication...................................... 17
4.2. Restricted Securities................................................. 17
4.3. Tax Advice............................................................ 18
ARTICLE 5
REPRESENTATIONS AND WARRANTIES AND
OTHER AGREEMENTS OF SARATOGA
5.1. Representations and Warranties of Saratoga............................ 18
5.1.1. Authority.................................................... 19
5.1.2. Consents and Approvals....................................... 19
5.2. Representations and Warranties of Saratoga Management Company......... 19
5.2.1. Investment Intent............................................ 19
5.2.2. Investor Sophistication...................................... 19
5.3. Restricted Securities................................................. 20
-ii-
4
Page
----
SECTION 6
ADDITIONAL AGREEMENTS
6.1. Further Assurances.............................................. 20
6.2. Post-Closing Exchange........................................... 21
6.2.1. Post-Closing Exchange Offer............................ 21
6.2.2. Review of Exchange Offer Materials..................... 21
6.3. Purchase Option................................................. 21
6.3.1. Purchase Option........................................ 21
6.3.2. Assignment of Purchase Option.......................... 22
6.3.3. Deliveries............................................. 22
6.4. Waiver by Employees of Change of Control Provisions............. 23
6.5. Certain Transfer Restrictions................................... 23
6.6. Supplemental Indenture.......................................... 23
6.7. Management Fees................................................. 23
ARTICLE 7
CONDITIONS PRECEDENT TO OBLIGATIONS
7.1. Conditions Precedent to Obligations of the Holders............... 24
7.1.1. Representations and Warranties True..................... 24
7.1.2. Performance of Covenants and Agreements................. 24
7.1.3. Delivery of Closing Certificate......................... 24
7.1.4. Indenture............................................... 25
7.1.5. Greenwich Agreement..................................... 25
7.1.6. Termination and Release Agreements...................... 25
7.1.7. Merger Agreement........................................ 25
7.1.8. Other Deliveries........................................ 25
7.1.9. Opinion of Hunton & Xxxxxxxx............................ 25
7.1.10. Board Resolutions....................................... 25
7.2. Conditions Precedent to Obligations of Holdings and Fasteners.... 26
7.2.1. Representations and Warranties True..................... 26
7.2.2. Performance of Covenants and Agreements................. 26
7.2.3. Delivery of Closing Certificate......................... 26
7.2.4. Greenwich Additional Investment......................... 26
7.2.5. Warrant Agreements...................................... 26
7.3. Conditions Precedent to Obligations of Saratoga.................. 27
7.3.1. Representations and Warranties True..................... 27
-iii-
5
Page
----
7.3.2. Performance of Covenants and Agreements................. 27
7.3.3. Delivery of Closing Certificate......................... 27
7.3.4. Saratoga Agreement...................................... 27
7.3.5. Opinion of Hunton & Xxxxxxxx............................ 27
7.4. Conditions Precedent to Obligations of the Parties............... 27
7.4.1. Stockholders Agreement.................................. 27
7.4.2. Registration Rights Agreement........................... 28
7.4.3. Treatment of Senior Debt................................ 28
7.4.4. Mutual Releases......................................... 28
7.4.5. Employee Waivers........................................ 28
7.4.6. Equity Compensation Plans; Stock Options................ 28
ARTICLE 8
MISCELLANEOUS
8.1. Entirety......................................................... 28
8.2. Counterparts..................................................... 29
8.3. Fees and Expenses................................................ 29
8.4. Notices and Waivers.............................................. 29
8.5. Table of Contents and Captions................................... 32
8.6. Assignment....................................................... 32
8.7. Successors and Assigns........................................... 32
8.8. Severability..................................................... 32
8.9. Applicable Law................................................... 32
8.10. Amendment........................................................ 33
8.11. Third Party Beneficiaries........................................ 33
8.12. Further Assurances............................................... 33
8.13. Survival......................................................... 33
8.14. Publicity........................................................ 33
8.15. Subordination.................................................... 34
-iv-
6
TABLE OF SCHEDULES AND EXHIBITS
Schedule 3.1.7 - Outstanding Options
Schedule 3.1.10 - Material Contracts
Schedule 3.1.16(a) - Proprietary Rights
Schedule 3.1.16(b) - Company Rights
Schedule 3.1.17(a) - Employee Benefit Plans
Schedule 3.1.17(d) - Payments, Vestings or Liabilities
Schedule 3.1.17(e) - Claims With Respect to Plans
Schedule 3.1.17(f) - Rights to Amend Plans
Schedule 3.1.18 - Labor Relations; Employees
Schedule 3.1.19 - Environmental Matters
Exhibit A - Holders; Saratoga; Warrants
Exhibit B - Form of Supplemental Indenture
Exhibit C - Form of Indenture
Exhibit D - Form of Greenwich Agreement
Exhibit E - Forms of Termination and Release Agreements
Exhibit F Form of Merger Agreement
Exhibit G - Form of Warrant Agreements
Exhibit H - Form of Saratoga Agreement
Exhibit I - Form of Stockholders Agreement
Exhibit J - Form of Registration Rights Agreement
Exhibit K - [Intentionally Omitted.]
Exhibit L - Form of Mutual Release
-v-
7
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (this "Agreement") is made and entered
into as of August 3, 2001 by and among Xxxxxxx Holdings Inc., a Delaware
corporation ("Holdings"), Xxxxxxx Fasteners Inc., a Delaware corporation
("Fasteners"), Saratoga Partners III, L.P., a Delaware partnership ("Saratoga
L.P."), Saratoga Partners III, C.V., a corporation organized under the laws of
the Netherlands Antilles ("Saratoga C.V." and, together with Saratoga L.P.,
"Saratoga"), Saratoga Management Company, LLC, a Delaware limited liability
company ("Saratoga Management Company"), and the noteholders named in Exhibit A
attached hereto (the "Holders").
WHEREAS, Holdings and Fasteners desire to refinance certain
indebtedness evidenced by Fasteners' outstanding 11-1/4% Senior Notes due 2007
(the "Old Notes");
WHEREAS, certain holders of such outstanding Old Notes have
agreed to exchange such Old Notes for (i) common stock, par value $0.01 per
share, of Fasteners (the "Common Stock") and (ii) new 14% Subordinated
Pay-in-Kind Bonds due 2013 (the "New Bonds" (which term shall include any
pay-in-kind bonds issued or issuable pursuant thereto));
WHEREAS, simultaneously with the Closing, Holdings shall merge
with and into Fasteners and the existing common stockholders of Holdings shall
receive shares of Common Stock and warrants to purchase Common Stock;
WHEREAS, Holdings and Fasteners are parties to the Amended and
Restated Credit Agreement dated as of November 26, 1997, as amended and restated
as of November 30, 1999 (the "Credit Agreement"), by and among Fasteners,
Holdings, PCI Group, Inc. ("PCI"), Xxx Fastener Company, LLC ("Xxx"), Scomex,
Inc. ("Scomex" and, together with Holdings, Fasteners, PCI and Xxx, the "Credit
Parties"), the financial institutions and persons party thereto as lenders from
time to time (the "Banks"), Credit Agricole Indosuez, as issuing bank ("Issuing
Bank"), administrative agent (the "Administrative Agent") and collateral agent
for the Banks and the Issuing Bank (the "Collateral Agent"), and UBS AG,
Stamford Branch, as documentation agent and syndication agent for the Banks and
the Issuing Bank (collectively with the Credit Parties, the Banks, the
Administrative Agent and the Collateral Agent, the "Credit Agreement Parties");
WHEREAS, concurrently with the execution of this Agreement,
Holdings and Fasteners are entering into an amendment to the Credit Agreement
(the "Amendment Agreement") dated as of the date hereof, and an amended and
restated credit agreement dated as of the date hereof, by and among the Credit
Agreement Parties (the "Amended and Restated Credit Agreement" and, together
with the Amendment Agreement, the "Amendment"), with
8
-2-
respect to, among other things, certain waivers and modifications to be made
with respect to the Credit Agreement; and
WHEREAS, it is intended for U.S. federal income tax purposes that
the exchange provided for herein shall qualify as a reorganization within the
meaning of Section 368(a)(1)(E) of the Internal Revenue Code of 1986, as amended
(the "Code");
NOW, THEREFORE, in consideration of the foregoing and of the
respective representations, warranties and agreements set forth herein, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1. Definitions. The following terms are defined in the
sections indicated:
Defined Term Section
------------ -------
Action........................................... Section 3.1.6
Additional Holders............................... Section 6.2.1
Administrative Agent............................. Recitals
Agreement........................................ Preamble
Amended and Restated Credit Agreement............ Recitals
Amendment........................................ Recitals
Amendment Agreement.............................. Recitals
Banks............................................ Recitals
Birch............................................ Section 8.3
Closing.......................................... Section 2.2
Closing Date..................................... Section 2.2
Code............................................. Recitals
Collateral Agent................................. Recitals
Commission....................................... Section 3.1.8
Common Stock..................................... Recitals
Company Rights................................... Section 3.1.16
Contingent Payment............................... Section 8.3
Contract......................................... Section 3.1.4
Credit Agreement................................. Recitals
Credit Agreement Parties......................... Recitals
9
-3-
Defined Term Section
------------ -------
Credit Parties................................... Recitals
Environmental Laws............................... Section 3.1.19
ERISA............................................ Section 3.1.17
ERISA Plan....................................... Section 3.1.17
Exchange......................................... Section 2.1
Exchange Offer Materials......................... Section 6.2.1
Fasteners........................................ Preamble
Governmental Entity.............................. Section 3.1.3
Greenwich Agreement.............................. Section 7.1.5
Greenwich Entities............................... Section 8.3
Greenwich Management Fee......................... Section 6.8
GSC.............................................. Section 8.3
GSC Loans........................................ Section 7.2.4
GSCP (US)........................................ Section 8.3
Holders.......................................... Preamble
Holdings......................................... Preamble
Indenture........................................ Section 2.1
Issuing Bank..................................... Recitals
Law.............................................. Section 3.1.4
Liens............................................ Section 3.1.4
Materials of Environmental Concern............... Section 3.1.19
Merger Agreement................................. Section 7.1.7
Mutual Release................................... Section 7.4.4
New Bonds........................................ Recitals
Normalized EBITDA................................ Section 8.3
Notice of Default................................ Section 3.1.9
Offer............................................ Section 6.2.1
Old Indenture.................................... Section 6.2.1
Old Notes........................................ Recitals
Order............................................ Section 3.1.4
PCI.............................................. Recitals
Permitted Assignee............................... Section 6.3.2
Plan............................................. Section 3.1.17
Post-Closing Exchange............................ Section 6.2.1
Proprietary Rights............................... Section 3.1.16
Purchase Option.................................. Section 6.3.1
Purchase Option Amount........................... Section 6.3.1
10
-4-
Defined Term Section
------------ -------
Purchase Option Consideration.................... Section 6.3.1
Xxx.............................................. Recitals
Registration Rights Agreement.................... Section 7.4.2
Required Banks................................... Section 3.1.4
Revolving Loan Banks............................. Section 3.1.4
Saratoga Agreement............................... Section 7.3.4
Saratoga C.V..................................... Preamble
Saratoga L.P..................................... Preamble
Saratoga Management Company...................... Preamble
Saratoga Management Fee.......................... Section 6.8
Scomex........................................... Recitals
Securities Act................................... Section 4.1.5
Stockholders Agreement........................... Section 7.4.1
Supplemental Indenture........................... Section 6.6
10-K............................................. Section 3.1.8
10-Q............................................. Section 3.1.8
Termination and Release Agreements............... Section 7.1.6
Tranche B Loans.................................. Section 6.3.1
Tranche B Notes.................................. Section 6.3.1
Transaction Documents............................ Section 3.1.2
Unione........................................... Section 8.3
Warrant Agreements............................... Section 7.2.5
Warrants......................................... Section 3.1.2
ARTICLE 2
THE EXCHANGE
2.1. Exchange. Upon the terms and subject to the conditions
set forth in this Agreement, and at the Closing, Fasteners agrees to issue and
deliver to each Holder (i) Common Stock, to be issued in the amounts set forth
on Exhibit A hereto, and (ii) New Bonds, to be issued at a rate of $400 of
principal amount of New Bonds for each $1,000 of principal amount of Old Notes,
in exchange for cancellation of the Old Notes held by such Holder (whether
beneficially or of record) (such exchanges collectively, the "Exchange"), in
each case as set forth on Exhibit A hereto. The New Bonds are to be issued
pursuant to an
11
-5-
Indenture (the "Indenture") dated as of the date hereof between Fasteners and
Wilmington Trust Company, as trustee.
2.2. Closing. The closing of the transactions contemplated by
Section 2.1 hereof (the "Closing") shall take place on August 3, 2001, or at
such other time as the parties hereto shall mutually agree (the "Closing Date")
at the offices of Xxxxx Xxxxxxxxxx LLP, 1301 Avenue of the Americas, New York,
New York or at such other place as the parties hereto shall mutually agree.
2.3. Deliveries. At the Closing: (i) the Holders shall deliver
to Fasteners the Old Notes held by the Holders, together with such other written
instruments and accompanying documentation as may be reasonably necessary or
appropriate to cancel such Old Notes; and (ii) Fasteners shall deliver to the
Holders (A) one or more certificates representing the number of shares of Common
Stock registered in the name of each Holder as set forth on Exhibit A hereto,
together with such other written instruments and accompanying documentation as
may be reasonably necessary or appropriate to give effect to the issuance of
such shares to the Holders, and (B) one or more global certificates representing
the New Bonds, which certificate or certificates shall be deposited with The
Depository Trust Company for credit to the respective accounts of each Holder in
the principal amounts set forth on Exhibit A hereto.
2.4. U.S. Federal Income Tax Treatment. The parties hereto (i)
agree that it is their intention that the Exchange contemplated hereby qualify
as a reorganization within the meaning of Section 368(a)(1)(E) of the Code
pursuant to which no gain or loss is recognized and (ii) hereby adopt this
Agreement as a plan of reorganization within the meaning of Treasury Regulation
Section 1.368-2(g).
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF HOLDINGS AND FASTENERS
3.1. Representations and Warranties of Holdings and Fasteners.
Each of Holdings and Fasteners hereby, jointly and severally, represents and
warrants to the Holders and Saratoga that the statements contained in this
Section 3.1 are correct and complete as to itself and its subsidiaries as of the
date of this Agreement, other than those representations and warranties that
speak only as of a specified date:
12
-6-
3.1.1. Organization and Standing. Each of Holdings and Fasteners
is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Each of the subsidiaries of
Holdings and Fasteners, all of which subsidiaries are listed on Exhibits
21.1 and 21.2 to the 10-K, is a corporation or limited liability company
duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation or organization. Each of Holdings,
Fasteners and their subsidiaries has full corporate or other power and
authority to carry on its business as it is currently conducted and to
own and operate the properties currently owned and operated by it. Each
of Holdings, Fasteners and their subsidiaries is duly qualified or
licensed to do business and is in good standing as a foreign corporation
or limited liability company authorized to do business in all
jurisdictions in which the character of the properties owned or the
nature of the business conducted by it would make such qualification or
licensing necessary, except where the failure to be so qualified or
licensed would not have a material adverse effect on the financial
condition, properties or business of Holdings, Fasteners and their
subsidiaries, taken as a whole.
3.1.2. Authority and Enforceability. Each of Holdings, Fasteners
and their subsidiaries has full corporate power and authority to execute
and deliver this Agreement, the Supplemental Indenture, the Indenture,
the New Bonds, the Greenwich Agreement, the Termination and Release
Agreements, the Merger Agreement, the Saratoga Agreement, the Warrant
Agreements, the Warrants to purchase Common Stock to be issued pursuant
to the Warrant Agreements (the "Warrants"), the Stockholders Agreement,
the Registration Rights Agreement, the Mutual Release and the Amendment
(collectively, the "Transaction Documents") to which it is a party and
to perform its obligations hereunder and thereunder. The Transaction
Documents to which each is a party and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by Holdings and Fasteners and their subsidiaries, as the case
may be, and the Transaction Documents to which each is a party have been
duly executed and delivered by each of Holdings and Fasteners and their
subsidiaries, as the case may be. The New Bonds and the Warrants have
been duly authorized, executed, authenticated, issued and delivered.
Each of the Transaction Documents to which it is a party constitutes a
legally valid, binding and enforceable obligation of each of Holdings
and Fasteners and their subsidiaries, as the case may be, except as
enforceability may be limited by (A) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
relating to or affecting creditors' rights generally and (B) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
13
-7-
3.1.3. Consents and Approvals. No notices, reports, registrations
or other filings are required to be made by or on behalf of Holdings,
Fasteners or any of their subsidiaries with, nor are any consents,
approvals or authorizations required to be obtained by or on behalf of
Holdings, Fasteners or any of their subsidiaries from, any court or
other governmental, administrative or regulatory authority in the United
States or elsewhere (each, a "Governmental Entity") in connection with
the execution, delivery or performance of this Agreement or, at the time
of their execution, delivery and performance, the other Transaction
Documents, or the consummation of the transactions contemplated hereby
and thereby, in each case except for those the failure to make or obtain
which, individually or in the aggregate, is not material.
3.1.4. No Violations. The execution, delivery and performance
of each of the Transaction Documents will not:
(a) violate or contravene any provision of the
certificate of incorporation or bylaws or similar
organizational documents of Holdings or Fasteners or any of
their subsidiaries;
(b) violate, conflict with, or constitute or result
in a default, acceleration or termination of, or entitle any
party to terminate, accelerate or cause a default under (in
each case, with or without notice or lapse of time or both),
any provision of any agreement, license, lease, contract,
loan, note, mortgage, indenture, bond or other written or oral
obligation (each, a "Contract") to which Holdings or Fasteners
or any of their subsidiaries is a party or by which any of
their assets is bound that is listed in Schedule 3.1.10,
except, in each case, for rights waived in accordance with
Section 7.4.5 and for such violations, conflicts, breaches or
defaults which individually or in the aggregate would not
reasonably be expected to have a material adverse effect on
the financial condition, results of operations, assets or
business of Holdings, Fasteners and their subsidiaries, taken
as a whole, or on Holdings' or Fasteners' ability to perform
its obligations hereunder and are not reasonably likely to
prohibit, restrict or delay Holdings' or Fasteners' or their
subsidiaries' performance of the Transaction Documents;
(c) except pursuant to the terms of the Transaction
Documents, result in the creation or imposition of any liens,
mortgages, security interests, charges, restrictions, pledges,
equitable interests, rights of first refusal, preemptive
rights, adverse claims or other encumbrances of any nature
whatsoever (collectively, "Liens") with respect to any of the
assets or properties of Holdings or Fasteners or any of their
subsidiaries;
14
-8-
(d) require Holdings or Fasteners or any of their
subsidiaries to obtain the consent, waiver, authorization or
approval of any person except for any consent, waiver,
authorization or approval which has already been obtained
(including, without limitation, the consent of the Required Banks
and the Revolving Loan Banks (each as defined in the Credit
Agreement)); or
(e) violate, contravene or conflict with any award,
judgment, decree or other order of any Governmental Entity (each,
an "Order"), any statute, law, rule or regulation (each, a "Law")
or any permit applicable to Holdings or Fasteners or any of their
subsidiaries.
3.1.5. Validity of Stock. (a) The shares of Common Stock to be
issued hereunder, upon issuance by Fasteners on the Closing Date, will
be duly authorized and validly issued, fully paid and nonassessable and
free and clear of any Liens, and will not have been issued in violation
of any preemptive right or similar rights of any shareholder of
Fasteners.
(b) The shares of Common Stock issuable upon exercise of the
Warrants upon the Closing Date will be duly authorized and validly
issued, fully paid and nonassessable and free and clear of any Liens,
and, when issued upon exercise of the Warrants, will not have been
issued in violation of any preemptive right or similar right of any
shareholder of Fasteners.
3.1.6. Litigation and Claims Against Holdings or Fasteners. There
are no actions, suits, claims, investigations or other legal or
administrative proceedings by or before any Governmental Entity or
arbitration panel (each, an "Action") or Orders pending or, to the
knowledge of Holdings or Fasteners, threatened against Holdings or
Fasteners or any of their subsidiaries or any of their assets, at law or
in equity, individually or in the aggregate, that would or would
reasonably be expected to have a material adverse effect on the
financial condition, results of operations, assets or business of
Holdings, Fasteners and their subsidiaries, taken as a whole, or are
material to Holdings' or Fasteners' or any of their subsidiaries'
ability to perform its obligations hereunder or reasonably likely to
prohibit or restrict or delay Holdings' or Fasteners' or any of their
subsidiaries' performance of the Transaction Documents.
3.1.7. Capitalization. (a) The authorized capital stock of
Holdings consists, or will consist, immediately prior to the Closing,
solely of 15,000,000 shares of common stock, of which 9,801,053 are
issued and outstanding, and 1,000,000 shares of preferred stock, none of
which are issued and outstanding. The authorized capital stock of
Fasteners consists, or will consist, immediately prior to the Closing,
solely of
15
-9-
150,000,000 shares of Common Stock, of which 1,000 are issued and
outstanding. All of the issued shares of capital stock of Holdings and
Fasteners have been duly authorized, validly issued, fully paid and
nonassessable, and are free and clear of all Liens, except Liens
pursuant to the Credit Agreement. All of the issued shares of capital
stock of or other equity interests in each subsidiary of Holdings and
Fasteners have been duly authorized, validly issued, fully paid and
nonassessable, and are owned directly or indirectly by Holdings and
Fasteners, free and clear of all Liens, except Liens pursuant to the
Credit Agreement. As of the date hereof, except pursuant to this
Agreement, the Warrant Agreements or the Stockholders Agreement and
except as set forth on Schedule 3.1.7, there are no outstanding or
authorized shares of phantom stock, options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights, stock
appreciation rights, profit sharing rights or similar rights or other
contracts or commitments or preemptive rights that could require
Holdings, Fasteners or any of their subsidiaries to issue, sell or
otherwise cause to become outstanding any of its capital stock or any
other debt or equity security, and there are no outstanding securities
convertible or exchangeable into shares of such capital stock or any
other debt or equity security. As of the date hereof, except pursuant
to the Stockholders Agreement and the Registration Rights Agreement,
and after giving effect to the Termination and Release Agreements,
there are no agreements to which Holdings, Fasteners or any of their
subsidiaries is a party or, to the knowledge of either Holdings or
Fasteners, to which any stockholder is a party, providing for voting
rights, rights of first refusal, calls, commitments, stock restriction
or other similar rights relating to any securities of Holdings,
Fasteners or any of their subsidiaries.
(b) All outstanding options and warrants to purchase shares of
capital stock of or any other equity interests in Holdings, Fasteners or
any of their subsidiaries other than those referred to in clause (ii) of
Section 7.4.6 have an exercise price substantially greater than the fair
market value of the Common Stock as of the date hereof.
3.1.8. Reports and Financial Statements. The consolidated
financial statements of Holdings and its consolidated subsidiaries
included in (i) Holdings' and Fasteners' annual report on Form 10-K for
the fiscal year ended December 31, 2000 filed with the Securities and
Exchange Commission (the "Commission") on April 2, 2001 (the "10-K"),
and (ii) Holdings' and Fasteners' quarterly report on Form 10-Q for the
fiscal quarter ended March 31, 2001 filed with the Commission on May 14,
2001 (the "10-Q") were prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods
involved and fairly present the consolidated financial position of
Holdings and its consolidated subsidiaries as of the dates thereof and
the consolidated results of their operations and changes in financial
position for the periods then ended. The 10-K and 10-Q, as of their
respective dates,
16
-10-
did not contain any untrue statement of a material fact or fail 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.
3.1.9. Undisclosed Liabilities. Except (a) as and to the extent
reflected or adequately reserved against in the unaudited consolidated
balance sheet of Holdings as of March 31, 2001 or in the notes thereto,
(b) for liabilities which have been incurred since March 31, 2001 in the
ordinary course of business consistent with past practice, and (c) as
disclosed in the letter dated June 12, 2001 from the Administrative
Agent and Collateral Agent to Holdings and Fasteners as to certain
defaults (the "Notice of Default"), there are no liabilities or
obligations, secured or unsecured (whether absolute, accrued, contingent
or otherwise), matured or unmatured, of Holdings or Fasteners or any of
their subsidiaries which would be required, in accordance with United
States generally accepted accounting principles applied on a consistent
basis, to be reflected or reserved against in the unaudited consolidated
balance sheet of Holdings as of March 31, 2001 or in the notes thereto
or that, individually or in the aggregate, would or would reasonably be
expected to have a material adverse effect on the financial condition,
results of operations, assets or business of Holdings, Fasteners and
their subsidiaries, taken as a whole. Except as disclosed in the Notice
of Default, since March 31, 2001, there has not been any material
adverse change in the financial position, earnings, results of
operations, assets or business of Holdings, Fasteners and their
subsidiaries, taken as a whole.
3.1.10. Material Contracts. (a) Schedule 3.1.10 contains a
list of all material contracts to which Holdings, Fasteners or any of
their subsidiaries is a party, including executory contracts,
agreements, licenses or commitments, whether written or oral, to which
Holdings, Fasteners or any of their subsidiaries is bound, of the type
referred to below:
(i) all notes, bonds, mortgages and other obligations for
borrowed money, including guaranteed obligations
(other than the Old Indenture and the Credit
Agreement);
(ii) all leases relating to real property and personal
property;
(iii) all agreements and commitments relating to joint
ventures, partnerships and equity or debt
investments;
17
-11-
(iv) all employment, bonus and severance agreements, as
well as employee stock option and benefit plans,
including individual stock option agreements; and
(v) all agreements or commitments relating to capital
expenditures, the disposition or acquisition of
assets, the sale of products or services, or the
purchase of materials, products or services,
involving amounts in excess of $100,000 or which
otherwise materially affect the business and
operations of Holdings, Fasteners and their
subsidiaries, taken as a whole.
(b) True and complete copies of the agreements set forth on
Schedule 3.1.10 have been furnished to the Holders prior to the date of
this Agreement. All contracts set forth on Schedule 3.1.10 are valid and
binding obligations of Holdings, Fasteners and/or the applicable
subsidiary, as the case may be, and to the knowledge of Holdings and
Fasteners, the other party thereto. Except for the defaults described in
the Notice of Default, none of Holdings, Fasteners or any of their
subsidiaries is in default under any of the contracts listed in Schedule
3.1.10, and no event has occurred, which, with notice or lapse of time
or both, could constitute a default, except for such defaults that,
individually or in the aggregate, would not or would not reasonably be
expected to have a material adverse effect on the financial condition,
results of operations, assets or business of Holdings, Fasteners and
their subsidiaries, taken as a whole, and to the knowledge of Holdings
and Fasteners, no other party thereto is in material default thereunder.
3.1.11. Compliance. Each of Holdings, Fasteners and their
subsidiaries has complied in all material respects with all federal,
state, local and foreign laws, regulations and orders applicable to its
business and has obtained all federal, state, local and foreign
governmental licenses, registrations and permits necessary for the
conduct of its business, and such licenses, registrations and permits
are in full force and effect.
3.1.12. Title to Property and Assets. Each of Holdings, Fasteners
and their subsidiaries has good and marketable title to all of its real
properties and assets and has good and valid title to, or a valid
leasehold interest in, its other property, in each case free and clear
of all Liens (other than Liens pursuant to the Credit Agreement). The
properties and assets of Holdings, Fasteners and their subsidiaries are
in good operating condition and repair in all material respects.
3.1.13. Insurance. Each of Holdings, Fasteners and their
subsidiaries has in full force and effect insurance policies that are
adequate for their properties and busi-
18
-12-
nesses. True and complete copies of all such insurance policies have
been furnished to the Holders prior to the date of this Agreement. No
notice of cancellation or non-renewal has been received by any of
Holdings, Fasteners or their subsidiaries in the last four years.
3.1.14. Related Party Transactions. Except for (a) this
Agreement, (b) the other Transaction Documents and (c) (i) the Retention
Bonus Agreement dated March 3, 2000 between Fasteners and Xxxxxxx Xxxxx,
(ii) the Retention Bonus Agreement dated September 25, 2000 between
Fasteners and Xxxx X. Xxxxxxxxx, (iii) the Employment Offer dated July
13, 2000 made to Xxxxxxx X. Xxxxxxx by Fasteners and (iv) the Employment
Agreement dated October 10, 1997 between Xxxxxx Xxxxx and Fasteners, and
after giving effect to the Termination and Release Agreements and Mutual
Release, there are no agreements, understandings or proposed
transactions among Holdings or Fasteners or any of its subsidiaries on
the one hand, and any of its respective officers, directors,
shareholders, affiliates, or any affiliate thereof, on the other hand.
3.1.15. No Fees. Except as set forth in Section 8.3 of this
Agreement, no investment banker, financial advisor, consultant or other
intermediary is entitled to any fee or commission from Holdings,
Fasteners or any of their subsidiaries for services rendered on behalf
of Holdings, Fasteners or any of their subsidiaries in connection with
the transactions contemplated by this Agreement or the other Transaction
Documents.
3.1.16. Proprietary Rights. (a) Except as set forth on Schedule
3.1.16(a): (i) each of Holdings, Fasteners and their subsidiaries is the
sole owner, free and clear of any lien or encumbrance, of, or has a
valid license or other right, without the payment of any royalty except
with respect to off-the-shelf software and otherwise on commercially
reasonable terms, to, all U.S. and foreign trademarks, service marks,
logos, corporate and trade names, internet domain names, patents,
registered designs, copyrights, computer software and databases, whether
or not registered, web sites (and all intellectual property and
proprietary rights incorporated therein) and all other trade secrets,
research and development, know-how, proprietary and intellectual
property rights and information, including all grants, registrations and
applications relating thereto (collectively, the "Proprietary Rights"),
necessary or advisable for the conduct of its business as now conducted
or as contemplated to be conducted, except for such Proprietary Rights
the absence of which would not have a material adverse effect on the
financial condition, results of operations, assets or business of
Holdings, Fasteners and their subsidiaries, taken as a whole (such
Proprietary Rights owned by or licensed to Holdings, Fasteners or any of
their subsidiaries, subject to such exception, collec-
19
-13-
tively, the "Company Rights"); (ii) each of Holdings, Fasteners and
their subsidiaries has taken all actions which are necessary or
advisable in order to protect the Company Rights, and to acquire
Proprietary Rights, consistent with prudent commercial practices in the
apparel industry; (iii) each of the rights of Holdings, Fasteners and
their subsidiaries in the Company Rights is valid and enforceable; (iv)
none of Holdings, Fasteners or their subsidiaries has received any
demand, claim, notice or inquiry from any person or entity in respect
of any Company Rights which challenges, threatens to challenge, or
inquires as to whether there is any basis to challenge, the validity
of, or the rights of each of Holdings, Fasteners and their subsidiaries
in, any such Company Rights, and neither Holdings nor Fasteners knows
of any basis for any such challenge; (v) none of Holdings, Fasteners or
their subsidiaries is in violation or infringement of, and none has
violated or infringed, any Proprietary Rights of any other person or
entity, except as would not have a material adverse effect,
individually or in the aggregate, on the financial condition,
properties, results of operations, assets or business of Holdings,
Fasteners and their subsidiaries, taken as a whole; (vi) to the
knowledge of each of Holdings and Fasteners, no person or entity is
infringing any Company Rights; and (vii) except on an arm's-length
basis for value and other commercially reasonable terms, none of
Holdings, Fasteners or their subsidiaries has granted any license with
respect to any Company Rights to any person or entity.
(b) Schedule 3.1.16(b) sets forth a complete and accurate list
of the Company Rights and all license and other agreements relating
thereto.
3.1.17. Employee Benefit Plans. (a) Each employee benefit or
compensation plan, fund, program, arrangement, agreement or policy
maintained or contributed to by Holdings, Fasteners or any of their
subsidiaries or as to which Holdings, Fasteners or any of their
subsidiaries has any liability (each, a "Plan"), including any Plan that
is an "employee benefit plan" within the meaning of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") (each, an
"ERISA Plan"), as of the date hereof is listed on Schedule 3.1.17(a).
(b) Each of Holdings and Fasteners has provided the Holders
with all documents relating to any of the Plans as requested by the
Holders.
(c) None of Holdings, Fasteners or any of their subsidiaries
has engaged in any "prohibited transactions" (as described in Section
4975 of the Code or in Part 4 of Subtitle B of Title I of ERISA) with
respect to any Plan.
(d) Except as disclosed on Schedule 3.1.17(d) (which
disclosure, solely for purposes of this paragraph (d), assumes the
non-existence of Section 6.4 hereof), the
20
-14-
consummation of the transactions contemplated by this Agreement will
not (i) entitle any person to payments under any Plan to which he would
not be entitled if the transactions contemplated by this Agreement were
not consummated, (ii) accelerate the time of payment or vesting, or
increase the amount of compensation or benefits due to any person under
any Plan, or (iii) result in any liability under Title IV of ERISA.
(e) Except as disclosed on Schedule 3.1.17(e), no Plan is
subject to any pending, or to the knowledge of Holdings or Fasteners,
threatened with any, dispute, lawsuit, claim (other than routine claims
for benefits), investigation or complaint to, or by, any person or
Governmental Entity. Except as disclosed on Schedule 3.1.17(e), no Plan
is the subject of an audit or, to the knowledge of Holdings or
Fasteners, under investigation by any Governmental Entity, nor, to the
knowledge of Holdings or Fasteners, is any such audit or investigation
threatened.
(f) Except as disclosed on Schedule 3.1.17(f), each of
Holdings, Fasteners and their subsidiaries has reserved the right to
amend, terminate or modify at any time any Plan or arrangement
providing for post-employment health or life insurance coverage, other
than such benefits required by law.
(g) Except as disclosed on Schedule 3.1.17(a) or as disclosed
in other Schedules hereto, each of the representations and warranties
made by each of Holdings, Fasteners and their subsidiaries under
Section 8.10 of the Credit Agreement (treating "Effective Date" as
referenced therein as the date hereof for purposes of this paragraph
(g)) remains correct and complete.
3.1.18. Labor Relations; Employees. No labor dispute with the
employees of Holdings, Fasteners or any of their subsidiaries exists
or, to the knowledge of Holdings or Fasteners, is imminent that might
have a material adverse effect on the financial condition, results of
operations, assets or business of Holdings, Fasteners and their
subsidiaries, taken as a whole. Except as disclosed on Schedule 3.1.18,
no collective bargaining agreement covering any of the employees of
Holdings, Fasteners or any of their subsidiaries exists, and, to the
knowledge of Holdings or Fasteners, no such agreement is imminent.
3.1.19. Environmental Matters.
(a) Except as disclosed on Schedule 3.1.19 or as would not be
expected to have a material adverse effect, individually or in the
aggregate, on the financial condition, properties, results of
operations, assets or business of Holdings, Fasteners and their
sub-
21
-15-
sidiaries, taken as a whole, (i) each of Holdings and Fasteners and
their subsidiaries is in material compliance with all applicable
federal, state, local, municipal, and foreign laws, codes, ordinances,
rules, regulations, decrees, judgments, directives, orders and
governmental requirements relating to pollution, preservation or
protection of human health or safety or the environment, including,
without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata, and natural resources, and mitigation of
adverse effects thereon (together "Environmental Laws") and including,
without limitation, laws, codes, ordinances, rules, regulations,
decrees, judgments, directives and orders relating to the presence,
manufacture, generation, processing, distribution, use, treatment,
storage, disposal, transport, handling, emission, discharge, release or
threatened release of chemicals, pollutants, contaminants, wastes,
radioactive, toxic or hazardous substances or wastes, petroleum or
petroleum-derived substances, products or wastes, asbestos or
asbestos-containing materials, polychlorinated biphenyls, lead or
lead-based paints or materials, or any constituent, breakdown product
or by-product of any of the foregoing ("Materials of Environmental
Concern"), and recordkeeping, notification, disclosure and reporting
requirements with respect thereto), (ii) each of Holdings and Fasteners
and their subsidiaries possesses all material permits and other
governmental authorizations required under applicable Environmental
Laws and is in material compliance with the terms and conditions
thereof and (iii) each of Holdings and Fasteners and their subsidiaries
is in material compliance with the terms and conditions of any
instrument or agreement pursuant to which any of them has settled or
discharged any liability under Environmental Laws.
(b) Except as disclosed in the 10-K or on Schedule 3.1.19 or
except as would not have a material adverse effect, individually or in
the aggregate, on the financial condition, properties, results of
operations, assets or business of Holdings, Fasteners and their
subsidiaries, taken as a whole, (i) neither Holdings nor Fasteners nor
any of their subsidiaries has received any communication (written or
oral), whether from a governmental authority, citizens group, employee
or otherwise, which alleges that any of Holdings, Fasteners or any of
their subsidiaries (or any person or entity whose liability any of
Holdings, Fasteners or any of their subsidiaries has acquired, retained
or assumed either contractually or by operation of law) is, has been or
may be in violation of or not in compliance with any Environmental Law
or has or may have any liability (including, without limitation,
liability for investigatory costs, cleanup costs, response costs,
corrective action, natural resource damages, property damage, personal
injury, or fines or penalties) under any Environmental Law and (ii)
there are no past or present actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the
release, emission, discharge, presence or disposal of any Materials of
Environmental Concern at any location and at any time,
22
-16-
that could form the basis for any future liability arising under or
relating to Environmental Laws of or to Holdings or Fasteners or any of
their subsidiaries or of or to any person or entity whose liability
Holdings or Fasteners or any of their subsidiaries has acquired,
retained or assumed either contractually or by operation of law.
(c) Each of Holdings and Fasteners and their subsidiaries has
provided to the Holders all assessments, reports, data, results of
investigations or audits, notices of violation, complaints, agreements
and notices relating to contribution or indemnification rights or
obligations, and other information that Holders have requested that is
in the possession of Holdings or Fasteners or any of their subsidiaries
regarding actual or potential liabilities arising under or relating to
Environmental Laws of or to Holdings, Fasteners or their subsidiaries
or of or to any person or entity whose liability Holdings or Fasteners
or any of their subsidiaries has acquired, retained or assumed either
contractually or by operation of law, except as relates to such
liabilities which, to the best knowledge of Holdings and Fasteners
after due inquiry, would not have a material adverse effect on the
financial condition, properties, results of operations, assets or
business of Holdings, Fasteners and their subsidiaries, taken as a
whole.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES AND
OTHER AGREEMENTS OF THE HOLDERS
4.1. Representations and Warranties of the Holders. (i) Each
Holder that is a Greenwich Entity, jointly and severally with each other Holder
that is a Greenwich Entity, and (ii) each other Holder, severally and not
jointly, hereby represents and warrants to Holdings and Fasteners and Saratoga
that the statements contained in this Section 4.1 with respect to such Holder
are correct and complete as of the date of this Agreement, other than those
representations and warranties that speak only as of a specified date:
4.1.1. Ownership of Notes. (i) The Holder is the owner of all
right, title and interest (legal, record and beneficial) in and to the
Old Notes set forth opposite its name in Exhibit A attached hereto, free
and clear of any and all Liens, and the Holder has not granted, sold,
conveyed, transferred or otherwise disposed of any right, title or
interest (legal, record or beneficial) in and to such Old Notes to any
person; (ii) the Holder has the full right and authority to cancel the
indebtedness represented by such Old Notes as contemplated by this
Agreement; and (iii) upon consummation of the transactions contemplated
hereby, the debt evidenced by such Old Notes will no
23
-17-
longer be outstanding, the Holder will not have any rights thereunder
and none of Holdings, Fasteners or the Holder will have any obligations
thereunder.
4.1.2. Authority. The Holder has the power, authority and
capacity necessary to execute, deliver and perform its obligations
under this Agreement and any of the Transaction Documents to which the
Holder is a party and to consummate the transactions contemplated
hereby and thereby. The execution, delivery and performance of this
Agreement and any other Transaction Document to which the Holder is a
party and the consummation of the transactions contemplated herein and
therein have been duly and validly authorized by all necessary action
in respect thereof on the part of the Holder. This Agreement and any
other Transaction Document to which the Holder is a party represent
legally valid and binding obligations of the Holder, enforceable
against the Holder in accordance with their terms, except as
enforceability may be limited by (A) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
relating to or affecting creditors' rights generally and (B) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
4.1.3. Consents and Approvals. No notices, reports,
registrations or other filings are required to be made by the Holder or
on its behalf with, nor are any consents, approvals or authorizations
required to be obtained by the Holder or on its behalf from, any
Governmental Entity in connection with the execution, delivery or
performance of this Agreement or, at the time of its execution,
delivery and performance, any other Transaction Document to which the
Holder is a party, in each case except for those the failure to make or
obtain which, individually or in the aggregate, is not material.
4.1.4. Investment Intent. The Holder is acquiring the shares
of Common Stock or New Bonds, as the case may be, solely for its own
account and not with a view to, or for resale in connection with, any
distribution thereof.
4.1.5. Investor Sophistication. The Holder is an "accredited
investor" within the meaning of Rule 501 of Regulation D under the
Securities Act of 1933, as amended (the "Securities Act"). The Holder
has such knowledge, skill and experience in business, financial and
investment matters that it is capable of evaluating the merits, risks
and consequences of an investment in the Common Stock or New Bonds, as
the case may be, and the Holder is able to bear the economic risk of
loss of this investment.
4.2. Restricted Securities. Each Holder agrees that, at the
time of issuance, the shares of Common Stock and New Bonds to be issued
hereunder will not be registered
24
-18-
under the Securities Act or qualified under any state securities laws. Such
securities are being issued on the basis that the offering and/or sale by
Fasteners to such Holder provided for in this Agreement and the issuance by
Fasteners of such securities to such Holder under this Agreement are exempt from
registration under the Securities Act and from applicable state securities laws.
Each Holder agrees that Fasteners' reliance on such exemptions is predicated, in
part, on such Holder's representations and warranties and other agreements set
forth in this Agreement. Each Holder acknowledges and agrees that (i) each
certificate representing shares of Common Stock shall bear the restrictive
legend required by the Stockholders Agreement and shall bear substantially the
following legend and (ii) each certificate representing New Bonds shall bear
substantially the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES
LAW AND MAY NOT BE TRANSFERRED UNLESS (i) THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH APPLICABLE STATE
SECURITIES LAWS, OR (ii) IN THE OPINION OF COUNSEL REASONABLY ACCEPTABLE
TO XXXXXXX FASTENERS INC. REGISTRATION UNDER THE SECURITIES ACT OR SUCH
APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH
TRANSFER.
4.3. Tax Advice. Each Holder acknowledges that it has not
relied upon Holdings or Fasteners for any tax advice in connection with its
exchange of its Old Notes for Common Stock and New Bonds.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES AND
OTHER AGREEMENTS OF SARATOGA
5.1. Representations and Warranties of Saratoga. Each of
Saratoga L.P. and Saratoga C.V. hereby represents and warrants, jointly and
severally, to Holdings, Fasteners and each of the Holders that the statements
contained in this Section 5.1 with respect to Saratoga are correct and complete
as of the date of this Agreement, other than those representations and
warranties that speak only as of a specified date:
25
-19-
5.1.1. Authority. Each of Saratoga L.P. and Saratoga C.V. has
the power, authority and capacity necessary to execute, deliver and
perform its obligations under this Agreement and any of the other
Transaction Documents to which it is a party and to consummate the
transactions contemplated hereby and thereby. The execution, delivery
and performance of this Agreement and any other Transaction Document to
which either Saratoga L.P. or Saratoga C.V. is a party and the
consummation of the transactions contemplated herein and therein have
been duly and validly authorized by all necessary action in respect
thereof on the part of Saratoga L.P. or Saratoga C.V., as the case may
be. This Agreement and any other Transaction Document to which Saratoga
L.P. or Saratoga C.V. is a party have been duly executed and delivered
and represent legally valid and binding obligations of each of Saratoga
L.P. or Saratoga C.V., as the case may be, enforceable against Saratoga
L.P. or Saratoga C.V., as the case may be, in accordance with their
terms, except as enforceability may be limited by (A) applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar laws relating to or affecting creditors'
rights generally and (B) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or
at law).
5.1.2. Consents and Approvals. No notices, reports,
registrations or other filings are required to be made by either
Saratoga L.P. or Saratoga C.V. or on either's behalf with, nor are any
consents, approvals or authorizations required to be obtained by either
Saratoga L.P. or Saratoga C.V. from, any Governmental Entity in
connection with the execution, delivery or performance of this
Agreement, or, at the time of its execution, delivery and performance,
any other Transaction Document to which either Saratoga L.P. or
Saratoga C.V. is a party, in each case except for those the failure to
make or obtain which, individually or in the aggregate, is not
material.
5.2. Representations and Warranties of Saratoga Management
Company. Saratoga Management Company hereby represents and warrants to Holdings,
Fasteners and each of the Holders that the statements contained in this Section
5.2 with respect to Saratoga Management Company are complete and correct as of
the date of this Agreement, other than those representations and warranties that
speak only as of a specified date:
5.2.1. Investment Intent. Saratoga Management Company is
acquiring the shares of Common Stock and New Bonds pursuant to Section
8.3 solely for its own account and not with a view to, or for resale in
connection with, any distribution thereof (other than in accordance
with the provisions of Section 6.3).
5.2.2. Investor Sophistication. Saratoga Management Company is
an "accredited investor" within the meaning of Rule 501 of Regulation D
under the Securities
26
-20-
Act. Saratoga Management Company has such knowledge, skill and
experience in business, financial and investment matters that it is
capable of evaluating the merits, risks and consequences of an
investment in the Common Stock and New Bonds, and Saratoga Management
Company is able to bear the economic risk of loss of this investment.
5.3. Restricted Securities. Saratoga Management Company agrees
that, at the time of issuance, the shares of Common Stock and New Bonds to be
issued hereunder will not be registered under the Securities Act or qualified
under any state securities laws. Such securities are being issued on the basis
that the offering and/or sale by Fasteners to Saratoga Management Company
provided for in this Agreement and the issuance by Fasteners of such securities
to Saratoga Management Company under this Agreement are exempt from registration
under the Securities Act and from applicable state securities laws. Saratoga
Management Company agrees that Fasteners' reliance on such exemptions is
predicated, in part, on the representations and warranties of Saratoga
Management Company and other agreements set forth in this Agreement. Saratoga
Management Company acknowledges and agrees that (i) each certificate
representing shares of Common Stock shall bear the restrictive legend required
by the Stockholders Agreement and shall bear substantially the following legend
and (ii) each certificate representing New Bonds shall bear substantially the
following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES
LAW AND MAY NOT BE TRANSFERRED UNLESS (i) THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH APPLICABLE STATE
SECURITIES LAWS, OR (ii) IN THE OPINION OF COUNSEL REASONABLY ACCEPTABLE
TO XXXXXXX FASTENERS INC. REGISTRATION UNDER THE SECURITIES ACT OR SUCH
APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH
TRANSFER.
SECTION 6
ADDITIONAL AGREEMENTS
6.1. Further Assurances. Each of Holdings and Fasteners hereby
covenants and agrees to take all reasonable actions within its power after the
date hereof to effect the transactions contemplated by the Transaction
Documents.
27
-21-
6.2. Post-Closing Exchange.
6.2.1. Post-Closing Exchange Offer. Fasteners hereby covenants
and agrees that it will proceed as promptly as practicable to take all
necessary steps, subject to compliance with the Indenture with respect
to the Old Notes dated as of November 26, 1997 by and among Fasteners,
Holdings and United States Trust Company of New York, as trustee, as
amended (the "Old Indenture"), and applicable state and federal
securities laws, to offer to exchange Common Stock and New Bonds in
exchange for cancellation of the Old Notes held by each holder of Old
Notes other than the Holders, at the same rates of exchange provided
for in Section 2.1 (the "Offer"). Upon written request from Fasteners,
each Holder and Saratoga shall provide promptly information reasonably
required to be included in any exchange offer materials relating to the
Offer (the "Exchange Offer Materials"); provided that any such
information shall be limited to information with respect to such Holder
or Saratoga, if any, as the case may be. The remaining holders of Old
Notes (if any) that exchange their Old Notes pursuant to the Offer are
referred to herein as the "Additional Holders". The Offer shall be
completed by the earlier of (i) 20 business days (as defined in Rule
14d-1(g) under the Securities Exchange Act of 1934, as amended) after
the date of commencement of the Offer and (ii) the 60th day after the
Closing Date. It shall be a condition to the consummation of the
exchange to be solicited pursuant to the Offer (the "Post-Closing
Exchange") that all Additional Holders shall agree to be subject to the
provisions of Section 6.3.
6.2.2. Review of Exchange Offer Materials. Fasteners shall
provide to Saratoga and each of the Holders copies of any Exchange
Offer Materials that refer to Saratoga or any Holder or relate to the
transactions contemplated by this Agreement no later than three (3)
business days prior to the distribution of such materials. Saratoga and
each of the Holders may comment on such Exchange Offer Materials, but
understand and agree that Fasteners' determination as to its disclosure
obligations under federal securities and other laws shall control.
Except with respect to any information supplied by Saratoga and the
Holders in accordance with Sections 6.2.1 and 6.2.2, Saratoga and the
Holders shall have no obligations with respect to any Exchange Offer
Materials.
6.3. Purchase Option.
6.3.1. Purchase Option. The parties agree that Saratoga shall
have the right, at its option (the "Purchase Option"), which Saratoga
contemplates assigning to the Permitted Assignees pro rata according to
their ownership of, or participation in, Tranche B Notes (as defined in
the Credit Agreement), exercisable upon 10 days'
28
-22-
written notice from Saratoga, which notice, if given, shall be given on
or prior to the 20th day after the earlier of the completion of the
Post-Closing Exchange or the expiration of the Offer, to purchase from
each Holder and Additional Holder (if any) Common Stock and New Bonds
received for the Old Notes tendered by such Holder or Additional Holder
(if any), pro rata in proportion to the amount of Old Notes tendered by
such Holder or Additional Holder (if any) in the Exchange or the
Post-Closing Exchange, as the case may be, as a percentage of all Old
Notes tendered in the Exchange and the Post-Closing Exchange. Saratoga
may exercise the Purchase Option for up to an aggregate amount of
Common Stock and New Bonds valued at $7,500,000 (it being understood
that the New Bonds will be valued at par and the Common Stock will be
valued on the basis of an assumed total equity value of Fasteners of
$21,900,000). The proportion of Common Stock and New Bonds to be
received pursuant to the exercise of the Purchase Option will be the
same proportion as received by the Holders in the Exchange. Saratoga
may exercise the Purchase Option (a) by paying up to $7,500,000 in
cash, or (b) by transferring Tranche B Notes with a value of up to
$7,500,000 (such Tranche B Notes to be valued at the repayment price
therefor provided in Section 5.02(A)(d)(ii) of the Amended and
Restated Credit Agreement, plus accrued interest) (it being understood
that if Saratoga, for example, exercises the Purchase Option for an
aggregate of Common Stock and New Bonds valued at $7,500,000, the
principal amount of Tranche B Notes transferred to the Holders and
Additional Holders (if any) will be less than $7,500,000), or (c) by
paying and/or transferring a combination of cash and Tranche B Notes
pursuant to the terms of (a) and (b) above. Such cash and/or Tranche B
Notes are called the "Purchase Option Consideration". Saratoga shall
determine, in its sole discretion, the aggregate amount of Common
Stock and New Bonds with respect to which it will exercise the
Purchase Option, up to a maximum of $7,500,000 value of Common Stock
and New Bonds. Saratoga agrees to deliver to each Holder and each
Additional Holder (if any) its pro rata share of the Purchase Option
Consideration in exchange for such Holder's or Additional Holder's (if
any) pro rata share of such Common Stock and New Bonds. The Purchase
Option Consideration shall be paid to the Holders and the Additional
Holders (if any) in cash, and/or, at Saratoga's option, Tranche B
Notes representing Tranche B Loans; provided that any Tranche B Notes
so offered shall be exchanged on a pro rata basis in proportion to the
amount of Common Stock and New Bonds purchased from each Holder and
Additional Holder (if any). Notwithstanding the foregoing, the Holders
may allocate among themselves (x) the Common Stock and New Bonds to be
delivered to Saratoga and/or any Permitted Assignee upon exercise of
the Purchase Option and (y) the Purchase Option Consideration
delivered to the Holders for such Common Stock and New Bonds.
6.3.2. Assignment of Purchase Option. Saratoga may assign any
portion of the Purchase Option to any other person or entity that is a
holder of, or participant in, Tranche B Notes on the same terms as
provided for herein; provided that such holder or participant is an
"accredited investor" within the meaning of Rule 501 of Regulation D
under the Securities Act (each holder or participant to which Saratoga
shall assign the Purchase Option in accordance with the foregoing
proviso, a "Permitted Assignee").
6.3.3. Deliveries. In the event Saratoga and/or any Permitted
Assignee(s) exercise the Purchase Option, (i) each Holder and each
Additional Holder (if any) shall deliver to Saratoga and/or such
Permitted Assignee(s) one or more certificates, each accompanied by
an executed stock power or properly endorsed, as appropriate,
representing its pro rata portion of the Common Stock and New Bonds
with respect to which the Pur-
29
-23-
chase Option is exercised, and (ii) Saratoga and/or each such Permitted
Assignee shall deliver to the Holders and the Additional Holders (if any) the
Purchase Option Consideration, consisting of (A) immediately available funds by
wire transfer to such bank accounts as are designated in writing by the Holders
and the Additional Holders (if any) and/or (B) Tranche B Notes representing
Tranche B Loans. Subject to the last sentence of this Section 6.3.3, the
Purchase Option Consideration will be tendered pro rata to each Holder and
Additional Holder (if any) in proportion to the amount of Old Notes exchanged
by each in the Exchange or the Post-Closing Exchange (if consummated), as the
case may be. In addition, it is a condition to exercise of the Purchase Option
that Saratoga and/or each Permitted Assignee shall deliver to the Holders and
Additional Holders (if any) a certificate with substantially the same
representations, warranties and agreements contained in Sections 4.1.4, 4.1.5
and 4.2 of this Agreement with respect to the Common Stock and New Bonds that
Saratoga and/or each Permitted Assignee will acquire pursuant to the Purchase
Option. Notwithstanding the foregoing, the Holders may allocate among
themselves (x) the Common Stock and New Bonds to be delivered to Saratoga
and/or any Permitted Assignee upon exercise of the Purchase Option and (y) the
Purchase Option Consideration delivered to the Holders for such Common Stock
and New Bonds, and the Purchase Option Consideration will be tendered to the
Holders in the amounts indicated by the Holders to Saratoga.
6.4. Waiver by Employees of Change of Control Provisions.
Holdings and Fasteners shall use their reasonable best efforts to cause each
employee of Holdings, Fasteners and any of their subsidiaries who may be
entitled to any payments under any "change of control" provisions in any
employment agreement or arrangement as a result of the consummation of the
transactions contemplated hereby or by any other Transaction Document to waive
all such payments to which such employee may be entitled.
6.5. Certain Transfer Restrictions. In addition to any
restriction on transfer of the Common Stock and New Bonds provided for in any
Transaction Document or under applicable law, each Holder agrees that it will
not transfer any Common Stock or New Bonds until the Purchase Option provided
for in Section 6.3 may no longer be exercised or unless the transferee agrees to
be subject to the provisions of Section 6.3 (which transferee shall be
reasonably acceptable to Saratoga). It shall be a condition to any Additional
Holder's participation in the Post-Closing Exchange that such Additional Holder
shall agree that it will not transfer any Common Stock or New Bonds until the
Purchase Option provided for in Section 6.3 may no longer be exercised or unless
the transferee agrees to be subject to the provisions of Section 6.3 (which
transferee shall be reasonably acceptable to Saratoga).
6.6. Supplemental Indenture. Each Holder hereby consents to
the modifications to be made to the Old Indenture pursuant to a Supplemental
Indenture substantially in the form of Exhibit B hereto (the "Supplemental
Indenture").
6.7. Management Fees. Fasteners covenants and agrees that
neither it nor any of its subsidiaries shall, and each of the Greenwich Entities
covenants and agrees that it shall not cause Fasteners or any of its
subsidiaries to, make any quarterly payment of the man-
30
-24-
agement services fee contemplated by Section 3.1 of the Greenwich Agreement (the
"Greenwich Management Fee") to any Greenwich Entity or any affiliate thereof
unless the payment of the management services fee contemplated by Section 3.1 of
the Saratoga Agreement (the "Saratoga Management Fee") with respect to the same
quarter is made at the same time; provided that in the event that Fasteners does
not have sufficient funds to pay the full amount of the Greenwich Management Fee
and the Saratoga Management Fee with respect to any quarter, the Saratoga
Management Fee with respect to such quarter may be reduced in proportion to any
reduction of the Greenwich Management Fee with respect to such quarter. It is
understood and agreed that the Greenwich Management Fee shall not be paid in an
amount in excess of, or below, $1,000,000.
ARTICLE 7
CONDITIONS PRECEDENT TO OBLIGATIONS
7.1. Conditions Precedent to Obligations of the Holders. The
obligation of the Holders to consummate and effect the transactions contemplated
by this Agreement and the other agreements to be delivered in connection
herewith shall be subject to the satisfaction, or the waiver by the Holders, of
the following conditions:
7.1.1. Representations and Warranties True. The
representations and warranties of Holdings, Fasteners, Saratoga L.P.
and Saratoga C.V. contained in this Agreement and each other
Transaction Document to which Holdings, Fasteners, Saratoga L.P. or
Saratoga C.V. may be a party shall be true as of and on the Closing
Date with the same effect as though made on such date, except for those
representations and warranties that speak only as of a specified date.
7.1.2. Performance of Covenants and Agreements. Each of
Holdings, Fasteners, Saratoga L.P. and Saratoga C.V. shall have
performed and complied, in all material respects, with all covenants
and agreements required by the Transaction Documents to be performed or
complied with by each on or before the Closing Date.
7.1.3. Delivery of Closing Certificate. Each of Holdings,
Fasteners, Saratoga L.P. and Saratoga C.V. shall have delivered to the
Holders a certificate, dated as of the Closing Date and signed on
behalf of each of them by one of its respective executive officers, to
the effect that, to the best of such executive officer's knowledge (in
its capacity as such and without personal liability) after reasonable
investigation, each of the
31
-25-
conditions specified in Sections 7.1.1 and 7.1.2 above has been
satisfied or waived by the Holders.
7.1.4. Indenture. Fasteners and Wilmington Trust Company shall
have entered into the Indenture with respect to the New Bonds
substantially in the form attached hereto as Exhibit C.
7.1.5. Greenwich Agreement. Each of the parties thereto shall
have executed and delivered a Management and Financial Advisory
Agreement substantially in the form attached hereto as Exhibit D (the
"Greenwich Agreement").
7.1.6. Termination and Release Agreements. Each of the parties
thereto shall have executed and delivered Termination and Release
Agreements substantially in the forms attached hereto as Exhibit E (the
"Termination and Release Agreements").
7.1.7. Merger Agreement. Each of Fasteners and Holdings shall
execute and deliver a Merger Agreement substantially in the form
attached hereto as Exhibit F (the "Merger Agreement"), pursuant to
which Holdings will merge with and into Fasteners (with Fasteners as
the surviving entity) and the common stockholders of Holdings will be
issued Common Stock of Fasteners simultaneously with the consummation
of the Exchange.
7.1.8. Other Deliveries. Each of Holdings and Fasteners shall
have delivered to the Holders in form and substance satisfactory to the
Holders, the following:
(a) Long-form certificates of good standing from the
Secretary of State of the State of Delaware, dated a date
reasonably close to the Closing Date; and
(b) Certificate of the Secretary of each of Holdings
and Fasteners, dated as of the Closing Date, as to such
company's certificate of incorporation, bylaws, resolutions
and the incumbency and signatures of its signing officers.
7.1.9. Opinion of Hunton & Xxxxxxxx. Xxxxxx & Xxxxxxxx,
counsel for Holdings and Fasteners, shall have delivered an opinion,
dated the Closing Date, to the Holders in form and substance
satisfactory to the Holders.
7.1.10. Board Resolutions. Resolutions of the board of
directors of each of Holdings and Fasteners, revising the exercise
price of all options and warrants to purchase shares of capital stock
of Holdings, Fasteners or any of their subsidiaries, to ensure that the
rights of the option and warrant holders are not substantially enlarged
as a
32
-26-
consequence of the Exchange and confirming that such options and
warrants have an exercise price substantially greater than the fair
market value of the Common Stock.
7.2. Conditions Precedent to Obligations of Holdings and
Fasteners. The obligations of Holdings and Fasteners to consummate the
transactions contemplated by this Agreement and the other agreements to be
delivered herewith shall be subject to the satisfaction, or waiver by Holdings
and Fasteners, of the following conditions:
7.2.1. Representations and Warranties True. The
representations and warranties of each Holder and Saratoga L.P. and
Saratoga C.V. contained in this Agreement and each other Transaction
Document to which such Holder, Saratoga L.P. or Saratoga C.V. is a
party shall be true as of and on the Closing Date with the same effect
as though made on such date, except for those representations and
warranties that speak only as of a specified date.
7.2.2. Performance of Covenants and Agreements. Each Holder,
Saratoga L.P. and Saratoga C.V. shall have performed and complied, in
all material respects, with all covenants and agreements required by
this Agreement or any other Transaction Document to which such Holder,
Saratoga L.P. or Saratoga C.V., is a party to be performed or complied
with by such Holder, Saratoga L.P. or Saratoga C.V. on or before the
Closing Date.
7.2.3. Delivery of Closing Certificate. Each Holder, Saratoga
L.P. and Saratoga C.V. shall have delivered to Holdings and Fasteners a
certificate, dated as of the Closing Date and signed on behalf of such
Holder, Saratoga L.P. or Saratoga C.V., by one of its executive
officers, to the effect that, to the best of such executive officer's
knowledge (in its capacity as such and without personal liability)
after reasonable investigation, each of the conditions specified in
Sections 7.2.1 and 7.2.2 above has been satisfied or waived by Holdings
and Fasteners.
7.2.4. Greenwich Additional Investment. One or more of the
Greenwich Entities shall have made the GSC Loans (as defined in the
Amendment) in accordance with the terms set forth with respect thereto
in the Amendment.
7.2.5. Warrant Agreements. Each of the parties thereto shall have
executed and delivered Warrant Agreements substantially in the forms
attached hereto as Exhibit G (the "Warrant Agreements"), and Fasteners
shall have issued the warrants (each such warrant exercisable for one
share of Common Stock, subject to adjustment in accordance with the
Warrant Agreements) contemplated thereby to the existing stockholders of
Holdings in the amounts set forth on Exhibit A hereto.
33
-27-
7.3. Conditions Precedent to Obligations of Saratoga. The
obligations of Saratoga C.P. and Saratoga C.V. to consummate the transactions
contemplated by this Agreement and the other agreements to be delivered herewith
shall be subject to the satisfaction, or waiver by Saratoga, of the following
conditions:
7.3.1. Representations and Warranties True. The
representations and warranties of Holdings, Fasteners and each Holder
contained in this Agreement and each other Transaction Document to
which Holdings, Fasteners or any Holder may be a party shall be true as
of and on the Closing Date with the same effect as though made on such
date, except for those representations and warranties that speak only
as of a specified date.
7.3.2. Performance of Covenants and Agreements. Each of
Holdings, Fasteners and each Holder shall have performed and complied,
in all material respects, with all covenants and agreements required by
the Transaction Documents to be performed or complied with by each on
or before the Closing Date.
7.3.3. Delivery of Closing Certificate. Each of Holdings,
Fasteners and each Holder shall have delivered to Saratoga a
certificate, dated as of the Closing Date and signed on behalf of each
of them by one of its respective executive officers (in its capacity as
such and without personal liability), to the effect that, to the best
of such executive officer's knowledge after reasonable investigation,
each of the conditions specified in Sections 7.3.1 and 7.3.2 above has
been satisfied or waived by Saratoga.
7.3.4. Saratoga Agreement. Each of the parties thereto shall
have executed and delivered a Management and Financial Advisory
Agreement substantially in the form attached hereto as Exhibit H (the
"Saratoga Agreement").
7.3.5. Opinion of Hunton & Xxxxxxxx. Xxxxxx & Xxxxxxxx,
counsel for Holdings and Fasteners, shall have delivered an opinion,
dated the Closing Date, to Saratoga in form and substance reasonably
satisfactory to Saratoga.
7.4. Conditions Precedent to Obligations of the Parties. The
obligations of all parties hereto to consummate the transactions contemplated by
this Agreement and the other agreements to be delivered in connection herewith
shall be subject to the satisfaction, or waiver by all parties hereto, of the
following conditions:
7.4.1. Stockholders Agreement. Each of the parties thereto
shall have executed and delivered a Stockholders Agreement
substantially in the form attached hereto as Exhibit I (the
"Stockholders Agreement").
34
-28-
7.4.2. Registration Rights Agreement. Each of the parties
thereto shall have executed and delivered a Registration Rights
Agreement substantially in the form attached hereto as Exhibit J (the
"Registration Rights Agreement").
7.4.3. Treatment of Senior Debt. Each of the Credit Agreement
Parties, the Required Banks and the Revolving Loan Banks under the
Credit Agreement shall have entered into the Amendment, in form and
substance reasonably satisfactory to Holdings, Fasteners, Saratoga and
the Greenwich Entities.
7.4.4. Mutual Releases. Each of the parties thereto shall have
executed and delivered a Mutual Release Agreement substantially in the
form attached hereto as Exhibit L (the "Mutual Release").
7.4.5. Employee Waivers. Each employee of Holdings and
Fasteners and any of their subsidiaries who may be entitled to any
payments under any "change of control" provisions in any employment
agreement or arrangement as a result of the consummation of the
transactions contemplated hereby or by any other Transaction Document
shall deliver to Holdings and Fasteners a waiver of all such payments
to which such employee may be entitled.
7.4.6. Equity Compensation Plans; Stock Options. Each of
Holdings, Fasteners and their subsidiaries shall have (i) terminated
all stock option plans and other equity compensation plans, which
provide for the grant of options to purchase shares of capital stock of
Holdings, Fasteners or any of their subsidiaries, and (ii) taken all
actions necessary to provide that all outstanding options or warrants
held by current employees of Holdings, Fasteners or any of their
subsidiaries to purchase shares of capital stock of Holdings, Fasteners
or any of their subsidiaries have been cancelled without payment,
including, without limitation, having obtained all necessary consents
from the holders of such options and warrants to effectuate such
cancellation.
ARTICLE 8
MISCELLANEOUS
8.1. Entirety. This Agreement and the other agreements to be
delivered in connection herewith embody the entire agreement among the parties
with respect to the subject matter hereof and thereof, and all prior agreements
between the parties with respect thereto are hereby and thereby superseded in
their entirety, except that the Confidentiality
35
-29-
Agreement dated April 27, 2001 between Holdings and GSCP, L.P. (NJ) shall
survive until terminated in accordance with the terms thereof.
8.2. Counterparts. Any number of counterparts of this
Agreement may be executed and each such counterpart shall be deemed to be an
original instrument, but all such counterparts together shall constitute but one
instrument.
8.3. Fees and Expenses. Except as otherwise provided herein,
Fasteners shall pay all fees, costs and expenses incurred by it or Holdings or
on its or Holdings' behalf and by Saratoga, Birch Advisors, LLC ("Birch"), GSC
Recovery II, L.P. ("GSC"), GSCP Recovery (US) L.L.C. ("GSCP (US)"), Unione
Italiana (U.K.) Reinsurance Company, Limited ("Unione") and Greenwich Street
Capital Partners II, L.P. (collectively with GSC, GSCP (US) and Unione, the
"Greenwich Entities") in connection with this Agreement, the other Transaction
Documents and the transactions contemplated hereby and thereby, including,
without limiting the generality of the foregoing, fees, costs and expenses of
the financial consultants, accountants and counsel of each of the foregoing.
Without limiting the provisions of the preceding sentence, in connection with
this Agreement, the other Transaction Documents and the transactions
contemplated hereby and thereby, (i) Fasteners shall, at the Closing, pay Birch
a fee of $800,000 in cash; (ii) Fasteners shall, at the Closing, pay Saratoga
Management Company an aggregate fee of (a) $500,000 in cash and (b) Common Stock
and New Bonds as set forth on Exhibit A hereto, representing an amount of Common
Stock and New Bonds with an aggregate value of $300,000, such Common Stock and
New Bonds to be valued on the basis of an assumed total equity value of
Fasteners of $21,900,000 and such New Bonds to be valued at par value; and (iii)
Fasteners shall pay Saratoga Management Company a fee in the form of a
contingent payment of $500,000 (the "Contingent Payment"). The Contingent
Payment will be earned and paid upon (i) Fasteners generating $30,000,000 or
more in Normalized EBITDA for any four consecutive fiscal quarters or (ii) the
Greenwich Entities receiving $90,000,000 in total gross proceeds from dividends,
sale proceeds or any other consideration due to their investment in Fasteners.
The payment of the Contingent Payment will be subject to the restrictions set
forth in the Saratoga Subordination of Management Fees Agreement, dated as of
the date hereof, between Fasteners and Saratoga Management Company. Capitalized
terms used in this Section 8.3 but not defined herein shall have the meanings
given them in the Credit Agreement. "Normalized EBITDA" means EBITDA (as defined
in the Indenture), less (i) one-time or unusual or non-recurring charges, (ii)
restructuring charges, (iii) write-offs, (iv) transaction fees and expenses and
(v) fees paid pursuant to the Greenwich Agreement and the Saratoga Agreement.
8.4. Notices and Waivers. All notices, requests, instructions,
claims, demands, consents and other communications required or permitted to be
given under this Agreement shall be in writing and shall be deemed to have been
duly given on the date deliv-
36
-30-
ered by hand or by courier service such as Federal Express, or by other
messenger (or, if delivery is refused, upon presentment) or upon receipt by
facsimile transmission (with confirmation), or upon delivery by registered or
certified mail (return receipt requested), postage prepaid, to the parties at
the following addresses (or to such other persons or addresses as the person to
whom notice is given may have previously furnished to the other in writing in
the manner set forth above (provided that notice of any change in address shall
be effective only upon receipt thereof)):
(a) If to Holdings or Fasteners:
Xxxxxxx Fasteners Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: President
with a copy to:
Hunton & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxx, Esq.
(b) If to Saratoga:
Saratoga Partners III, L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxxxx X. Xxxxxxxx
37
-31-
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxx, Esq.
(c) If to any of the Greenwich Entities:
GSC Partners
000 Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
with a copy to:
Xxxxx Xxxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxx, Esq. and
Xxxxxx Xxx, Esq.
(d) Cerberus International, LTD
c/o Partridge Hill Overseas Management, LLC
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxx
38
-32-
with a copy to:
Xxxxxxx, Xxxx & Xxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
8.5. Table of Contents and Captions. The table of contents,
table of exhibits and captions contained in this Agreement are solely for
convenient reference and shall not be deemed to affect the meaning or
interpretation of any article, section, or paragraph hereof or thereof.
8.6. Assignment. Except as provided in Section 6.3.2, no party
hereto may assign any rights under this Agreement and any such purported
assignment of rights shall be void.
8.7. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of and be enforceable by the successors of
the parties hereto.
8.8. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, void, or unenforceable, the remainder of the terms, provisions,
covenants and restrictions shall remain in full force and effect and shall in no
way be affected, impaired or invalidated.
8.9. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF
ANY OTHER JURISDICTION. EACH PARTY HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY, COUNTY OF NEW
YORK FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE OTHER TRANSACTION DOCUMENTS (OTHER THAN THE AMENDMENT) OR ANY
ANCILLARY DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH
PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH
39
-33-
A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY ANCILLARY
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
8.10. Amendment. This Agreement may not be amended, modified
or supplemented and no waivers of or consents to departures from the provisions
hereof may be given unless consented to in writing by three-fourths in interest
of the Holders, on the one hand, and Fasteners, on the other hand; provided that
Sections 6.2.2, 6.3, 7.2.4, 7.3.4 and 8.3 may not be amended, modified or
supplemented and no waivers of or consents to departures from the provisions
thereof may be given unless consented to in writing by Saratoga. Unless
otherwise specified in such waiver or consent, a waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it is given.
8.11. Third Party Beneficiaries. Nothing expressed or implied
in this Agreement or any agreement delivered in connection herewith is intended
or shall be construed to confer upon or give to any third party (other than
parties released under the Termination and Release Agreements and the Mutual
Release) any rights or remedies against any party hereto.
8.12. Further Assurances. Each of the parties hereto covenants
and agrees upon the request of the other, to do, execute, acknowledge and
deliver or cause to be done, executed, acknowledged and delivered all such
further acts, deeds, documents, assignments, transfers, conveyances, powers of
attorney and assurances as may be reasonably necessary or desirable to give full
effect to this Agreement.
8.13. Survival. The representations and warranties contained
herein and in any certificate or writing delivered pursuant hereto shall not
survive the Closing.
8.14. Publicity. None of the parties hereto shall issue any
press release or make any public disclosure regarding the transactions
contemplated hereby unless such press release or public disclosure shall be
approved by those parties mentioned in such press release or public disclosure
in advance. Notwithstanding the foregoing, each of the parties hereto may, in
documents required to be filed by it with the Commission or other Governmental
Entity, make such statements with respect to the transactions contemplated by
this Agreement as each may be advised by counsel is legally necessary or
advisable, and may make such disclosure as it is advised by its counsel is
required by law.
40
-34-
8.15. Subordination. Each of the parties hereto agrees that any
damages suffered by, or claims of rescission by, any of the Holders as a result
of any breach of this Agreement by Holdings, Fasteners or its subsidiaries shall
be considered to be obligations or liabilities of Fasteners and its
subsidiaries, the payment of which is subordinated in right of payment and
exercise of remedies to the prior payment in full (as defined in the Indenture)
of all Senior Debt (as defined in the Indenture) of Fasteners and its
subsidiaries on the same terms, mutatis mutandis, as the payment of the
Subordinated Debt (as defined in the Indenture) is subordinated to the prior
payment in full of the Senior Debt pursuant to the Indenture.
[Signature Pages Follow]
41
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed in their respective names by their respective duly authorized
representatives, all as of the day and year first above written.
XXXXXXX HOLDINGS INC.
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Executive Officer
XXXXXXX FASTENERS INC.
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Executive Officer
S-1
42
SARATOGA PARTNERS III, L.P.
By: Saratoga Management Company, LLC,
its Investment Manager
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Principal
SARATOGA PARTNERS III, C.V.
By: Saratoga Management Company, LLC,
its Investment Manager
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Principal
SARATOGA MANAGEMENT COMPANY, LLC
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Principal
S-2
43
HOLDERS:
GSC RECOVERY II, L.P.
By: GSC Recovery II GP, L.P.,
its General Partner
By: GSCP (N.J.), L.P.,
its General Partner
By: GSCP (N.J.), Inc., its
General Partner
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
GSCP RECOVERY (US) L.L.C.
By: Greenwich Street Capital
Partners II, L.P., its General
Partner
By: Greenwich Street
Investments II, L.L.C.,
its General Partner
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
UNIONE ITALIANA (U.K.) REINSURANCE
COMPANY, LIMITED
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
X-0
00
XXXXXXXXX XXXXXX CAPITAL
PARTNERS II, L.P.
By: GREENWICH STREET INVESTMENTS
II, L.L.C., its General Partner
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
CERBERUS INTERNATIONAL, LTD.
By: Xxxxxxxxx Xxxx Overseas Management, LLC,
its Investment Manager
By: /s/ Xxxx X. Neporent
-------------------------------
Name: Xxxx X. Neporent
Title: Vice President
S-4
45
Exhibit A
Holders
-------
Principal Amount Shares of Principal Amount
of Old Notes Common Stock of New Bonds
Holder to Be Cancelled to Be Received to Be Received
------ --------------- -------------- --------------
GSC Recovery II, L.P. $10,950,000 9,756,502 $4,380,000
GSCP Recovery (US) L.L.C. $76,750,000 68,384,617 $30,700,000
Unione Italiana (U.K.) Reinsurance
Company, Limited $3,500,000 3,118,517 $1,400,000
Greenwich Street Capital Partners II, L.P. $300,000 267,301 $120,000
Cerberus International, LTD $7,500,000 6,682,536 $3,000,000
Saratoga
--------
Shares of Principal Amount
Common Stock of New Bonds
to Be Received Pursuant to Be Received Pursuant
Holder to Section 8.3 to Section 8.3
------ -------------- --------------
Saratoga Management Company, LLC 545,893 $193,861
