================================================================================
EXECUTION COPY
SECURITIES PURCHASE AGREEMENT
by and among
MMH HOLDINGS, INC.
(a Delaware corporation),
as Issuer,
and
CIBC XXXXXXXXXXX CORP.,
as Initial Purchaser
---------------------------------
Dated as of March 23, 1998
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions.....................................................1
Section 1.2. Accounting Terms; Financial Statements..........................8
ARTICLE II.
ISSUE OF SECURITIES; PURCHASE AND SALE OF SECURITIES; RIGHTS OF HOLDERS OF
SECURITIES; OFFERING BY INITIAL PURCHASER
Section 2.1. Issue of Securities.............................................8
Section 2.2. Purchase, Sale and Delivery of Securities.......................9
Section 2.3. Registration Rights of Holders of Securities...................10
Section 2.4. Offering by the Initial Purchaser..............................10
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; RESALE OF SECURITIES
Section 3.1. Representations and Warranties of the Company..................10
Section 3.2. Resale of Shares...............................................26
ARTICLE IV.
CONDITIONS PRECEDENT TO CLOSING
Section 4.1. Conditions Precedent to Obligations of the Initial Purchaser...26
ARTICLE V.
COVENANTS
Section 5.1. Covenants......................................................31
ARTICLE VI.
FEES
Section 6.1. Costs, Expenses and Taxes......................................34
ARTICLE VII.
INDEMNITY
Section 7.1. Indemnity......................................................35
Section 7.2. Contribution...................................................38
Section 7.3. Registration Rights............................................39
ARTICLE VIII.
MISCELLANEOUS
Section 8.1. Survival of Provisions.........................................39
Section 8.2. Termination....................................................39
Section 8.3. No Waiver; Modifications in Writing............................40
Section 8.4. Information Supplied by the Initial Purchaser..................41
Section 8.5. Communications.................................................41
Section 8.6. Execution in Counterparts......................................41
Section 8.7. Successors.....................................................42
Section 8.8. Governing Law..................................................42
Section 8.9. Severability of Provisions.....................................42
Section 8.10. Headings......................................................42
Schedule I Subsidiaries
Exhibit A Form of Common Stock Registration Rights Agreement
Exhibit B Form of Preferred Stock Registration Rights Agreement
Exhibit C Form of Opinion of Akin, Gump, Strauss, Xxxxx & Xxxx, LLP
ii
SECURITIES PURCHASE AGREEMENT, dated as of March 23, 1998 (the
"Agreement"), by and among MMH HOLDINGS, INC., a Delaware corporation (the
"Company") and CIBC XXXXXXXXXXX CORP. (the "Initial Purchaser").
In consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions. As used in this Agreement, and unless the
context requires a different meaning, the following terms have the meanings
indicated:
"Act" means the Securities Act of 1933, as amended, and the rules
and regulations of the Commission thereunder.
"Affiliate" means, with respect to any Person, any other Person
which directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Person in question. For
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling", "controlled by" and "under common control with"), as
used with respect to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by agreement or
otherwise; provided, however, that beneficial ownership of at least 10% of the
voting securities of a Person shall be deemed to be control.
"Agreement" means this Agreement, including its schedules and
exhibits, as the same may be amended, supplemented or modified in accordance
with the terms hereof.
"Basic Documents" means, collectively, this Agreement, the
Certificate of Designation, the Debenture Indenture, the Preferred Stock
Registration Rights Agreement, the Common Stock Registration Rights Agreement,
the Unit Agreement, the Units, the Preferred Shares (including Dividend Shares),
the Unit Common Shares, the Debentures (including In-Kind Debentures) and, in
each case, all other agreements, instruments and documents executed and
delivered by the Company or its Subsidiaries in connection therewith.
"Blooma" means Xxxxxx Blooma Engineering Pte Ltd.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking
institutions in the City of New York are authorized or obligated by law to
close.
"capital interests" has the meaning set forth in Section 3.1(d).
"Certificate of Designation" means the certificate of designation
under which the Preferred Shares will be issued.
"Closing" has the meaning set forth in Section 2.2(b) of this
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Act.
"Commonly Controlled Entity" has the meaning set forth in Section
3.1(q) of this Agreement.
"Common Shares" means, collectively, the Unit Common Shares and the
Voting Common Shares.
"Common Stock Registration Rights Agreement" means the Common Stock
Registration Rights and Stockholders' Agreement, dated as of the date of the
Closing, among the Company, Chartwell, L.P. and the Initial Purchaser,
substantially in the form attached hereto as Exhibit A.
"Credit Agreement" means the Credit Agreement to be dated as of the
date of Closing, among Xxxxxx Material Handling, the Company, Material Handling
LLC, Xxxxxx Material Handling, Ltd., Mondel ULC, Kaverit Steel and Crane ULC,
and Canadian Imperial Bank of Commerce, as Administrative Agent, Credit Agricole
Indosuez, as Syndication Agent, and BankBoston, N.A., as Documentation Agent,
and the lending institutions named therein.
"Debentures" mean the 12% Senior Subordinated Debentures, due 2008,
of the Company, issuable in exchange for Preferred Shares pursuant to the
Certificate of Designation and benefitting from the terms of the Debenture
Indenture.
"Debenture Trustee" means a trustee to be appointed by the Company
as trustee under the Debenture Indenture prior to the exchange of Preferred
Shares for Exchange Debentures.
"Debenture Indenture" means the indenture, in the form delivered to
the Transfer Agent at the Time of Purchase, to be entered into between the
Company and a trustee prior to the exchange of Preferred Shares for Debentures.
2
"Default" means any event, act or condition which, with notice or
lapse of time or both, would constitute an Event of Default.
"Dividend Shares" has the meaning set forth in Section 3.1(l) of
this Agreement.
"Enforceability Exceptions" has the meaning set forth in Section
3.1(f).
"Environmental Law" has the meaning set forth in Section 3.1(z) of
this Agreement.
"Equity Investment" has the meaning set forth in the Memoranda.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Event of Default" means any event defined as an Event of Default
under the Debenture Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
"Exchange Preferred Shares" has the meaning set forth in the
Preferred Stock Registration Rights Agreement.
"Final Memorandum" has the meaning set forth in Section 2.1 of this
Agreement.
"Financial Advisor" has the meaning set forth in the introductory
paragraph of this Agreement.
"Financing Documents" means the Credit Agreement, the Working
Capital Facilities and the Surety Arrangement and, in each case, all other
agreements, instruments and documents executed and delivered by the Company or
its Subsidiaries in connection therewith.
"Foreign Plans" has the meaning set forth in Section 3.1(v) of this
Agreement.
"HarnCo" means Harnischfeger Corporation, a Delaware corporation.
"Indemnified Party" has the meaning set forth in Section 7.1(c) of
this Agreement.
"Indemnifying Party" has the meaning set forth in Section 7.1(c) of
this Agreement.
3
"Initial Purchaser" has the meaning set forth in the introductory
paragraph of this Agreement.
"In-kind Debentures" has the meaning set forth in Section 3.1(l) of
this Agreement.
"Lien" means, with respect to any property or assets of any Person,
any mortgage or deed of trust, pledge, hypothecation, assignment, deposit
arrangement, security interest, lien, charge, easement, encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such property or assets, conditional
sales, or other title retention agreement having substantially the same economic
effect as any of the foregoing.
"Material Adverse Effect" means, with respect to the Company and its
Subsidiaries, a material adverse effect on the business (including the MHE
Business), condition (financial or otherwise), results of operations or
prospects of the Company and its Subsidiaries, taken as a whole, after giving
effect to each of the Transactions, or a material adverse effect on the ability
of the Company to perform its obligations under the Basic Documents to which it
is a party, including this Agreement.
"Material Handling LLC" means Material Handling LLC, a Delaware
limited liability company.
"Memoranda" has the meaning set forth in Section 2.1 of this
Agreement.
"MHE Business" means the Material Handling Equipment Business of
Harnischfeger Industries, Inc.
"MHE Entities" means each Subsidiary of Xxxxxx Material Handling
engaged in the MHE Business after giving effect to the Transactions, as if the
Transactions had occurred as of the date of this Agreement.
"MHE Investments" means MHE Investments, Inc., a Delaware
corporation.
"Xxxxxx Delivered Documents" means, collectively, the Basic
Documents, the Financing Documents and the Recapitalization Documents.
"Xxxxxx Material Handling" means Xxxxxx Material Handling, Inc., a
Delaware corporation.
"Note Indenture" means the indenture dated as of the Time of
Purchase by and among the Company, the guarantors thereunder and the Trustee
under which the Notes and the guarantees thereof will be issued.
4
"Note Purchase Agreement" means the Securities Purchase Agreement,
dated as of March 23, 1998, among Xxxxxx Material Handling, as issuer, the
Guarantors party thereto, as guarantors, CIBC Xxxxxxxxxxx Corp. and Xxxxxxx,
Xxxxx & Co., as Initial Purchasers and Indosuez Capital, as financial advisor.
"Notes" means the $200,000,000 aggregate principal amount of 9-1/2%
Senior Notes due 2008 of the Company to be issued under the Note Indenture.
"October 1997 Drop Down" means the contribution on October 26, 1997
by HarnCo of the assets comprising the MHE Business to Material Handling LLC, an
indirect Subsidiary of the Company, pursuant to the Separation Agreement.
"Offering Materials" has the meaning provided therefor in Section
7.1(a) of this Agreement.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, incorporated or unincorporated association,
joint-stock company, trust, government (or an agency or political subdivision
thereof) or other entity of any kind.
"PORTAL" means the Private Offerings, Resales and Trading through
Automated Linkages Market.
"Preferred Shares" means the Company's 12% Series A Senior
Exchangeable Preferred Stock, par value $.01 per share.
"Preferred Stock" means the preferred stock included in the Units
being issued pursuant to this Agreement.
"Preferred Stock Registration Rights Agreement" means the Preferred
Stock Registration Rights Agreement dated as of date of the Closing by and
between the Company and the Initial Purchaser, substantially in the form
attached hereto as Exhibit B.
"Preliminary Memorandum" has the meaning set forth in Section 2.1 of
this Agreement.
"Private Exchange Preferred Shares" has the meaning set forth in the
Preferred Stock Registration Rights Agreement.
"Proceeding" has the meaning set forth in Section 7.1(c) of this
Agreement.
"QIB" has the meaning set forth in Section 3.2 of this Agreement.
"Recapitalization" has the meaning set forth in the Memoranda.
5
"Recapitalization Agreement" means the Recapitalization Agreement,
dated as of January 28, 1998, among HarnCo, the sellers named therein and MHE
Investments, together with Amendment No. 1 thereto, dated as of March 5, 1998.
"Recapitalization Documents" means the Recapitalization Agreement,
together with all other agreements, instruments and documents executed and
delivered, or to be executed and delivered as of the Time of Purchase, by MHE
Investments, the Company, Xxxxxx Material Handling or its Subsidiaries in
connection therewith, including, without limitation, the Trademark License
Agreement, by and between Harnischfeger Technologies Inc. and Xxxxxx Material
Handling; the Confidentiality and Non-Competition Agreement, by and between
Harnischfeger Industries, Inc. and Xxxxxx Material Handling; the Component and
Manufactured Products Supply Agreement, by and between HarnCo and Xxxxxx
Material Handling; the Transition Services Agreement, by and between HarnCo and
Xxxxxx Material Handling; the Credit Indemnification Agreement, by and between
Harnischfeger Industries, Inc. and Xxxxxx Material Handling; and the Assumption
Agreement, by and between HarnCo and Material Handling LLC.
"Regulation S" has the meaning set forth in Section 3.1(ii) of this
Agreement.
"Securities" has the meaning set forth in Section 2.1 of this
Agreement.
"Separation Agreement" means the Separation Agreement, dated as of
October 26, 1997, between HarnCo and Material Handling LLC.
"Solvent" means, with respect to any Person on a particular date (i)
the fair value (or present fair saleable value) of the assets of such Person
will exceed the sum of its stated debts and liabilities (including identified
contingent liabilities); (ii) the Person is able to realize upon its assets and
pay its debts and other liabilities, contingent obligations and commitments as
they mature and become due in the normal course of business; (iii) such Person
is not incurring debts or liabilities beyond its ability to pay as such debts
and liabilities mature; and (iv) such Person is not engaged in any business or
transaction or is not about to engage in any business or transaction (including,
in the case of Xxxxxx Material Handling and the guarantors of its Notes, on a
consolidated basis, the issuance of the Notes and such guarantees and the
application of proceeds from the sale of such securities by the Xxxxxx Material
Handling (and the application by the Company of such proceeds, together with the
proceeds of the sale of the Securities pursuant to this Agreement, immediately
thereafter), for which at the Time of Purchase as described in the Memoranda)
its property would constitute unreasonably small capital with which to carry on
its business (including the MHE Business) as it is proposed to be conducted
after giving due consideration to the
6
industry in which the Person is engaged; or (v) such Person is otherwise
insolvent. In computing the amount of such contingent liabilities at any time,
it is intended that such liabilities will be computed at the amount that, in
light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.
"State" means each of the states of the United States, the District
of Columbia and the Commonwealth of Puerto Rico.
"State Commission" means any agency of any State having jurisdiction
to enforce such State's securities laws.
"Subsidiaries" means, with respect to any Person, any corporation,
partnership, joint venture, association or other business entity, whether now
existing or hereafter organized or acquired, (i) in the case of a corporation,
of which more than 50% of the total voting power of the capital stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, officers or trustees thereof is held by such first-named Person or
any of its Subsidiaries; or (ii) in the case of a partnership, joint venture,
association or other business entity, with respect to which such first-named
Person or any of its Subsidiaries has the power to direct or cause the direction
of the management and policies of such entity by contract or otherwise or if in
accordance with generally accepted accounting principles such entity is
consolidated with the first-named Person for financial statement purposes;
provided, however, that in respect of the Company, both prior to the Time of
Purchase and on and after the Time of Purchase, the term "Subsidiaries" shall
include, for all purposes of this Agreement, Xxxxxx Material Handling as if the
same was a Subsidiary of the Company at the time in question, except in the case
of Sections 3.1(c) and 3.1(d) hereof.
"Surety Arrangement" means the Surety Arrangement, to be dated as of
the Time of Purchase, by and between an affiliate of Reliance Insurance Company
and Xxxxxx Material Handling.
"Taxes" has the meaning set forth in Section 3.1(s) of this
Agreement.
"Time of Purchase" has the meaning set forth in Section 2.2(b) of
this Agreement.
"Transactions" has the meaning provided therefor in the Memoranda.
"Trustee" means United States Trust Company of New York, as trustee
under the Indenture.
7
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission thereunder.
"Unit Agent" means United States Trust Company of New York, as Unit
Agent under the Unit Agreement.
"Unit Agreement" means the Unit Agreement, dated as of the date of
the Closing, between the Company and the Unit Agent.
"Unit Common Shares" means the non-voting Common Stock, par value
$.01 per share, of the Company.
"Units" means the 57,710 Units issued under the Unit Agreement, each
Unit consisting of one Preferred Share and 720 Unit Common Shares.
"Voting Common Shares" means the voting Common Stock, par value $.01
per share, of the Company.
"Voting Rights Triggering Event" means any event defined as a Voting
Rights Triggering Event under the Certificate of Designation.
"Working Capital Facilities" means the contemplated working capital
facilities to be entered into after the Time of Purchase by the Company and its
Subsidiaries incorporated in South Africa, Singapore and Mexico.
Section 1.2. Accounting Terms; Financial Statements. All accounting
terms used herein and not expressly defined in this Agreement shall have the
respective meanings given to them in accordance with generally accepted
accounting principles in the United States as the same may be in effect from
time to time.
ARTICLE II.
ISSUE OF SECURITIES; PURCHASE AND SALE
OF SECURITIES; RIGHTS OF HOLDERS OF SECURITIES;
OFFERING BY INITIAL PURCHASER
Section 2.1. Issue of Securities. The Company has authorized the
issuance of 57,710 Units, consisting of 52,900 Preferred Shares and 720 Unit
Common Shares. The Preferred Shares are exchangeable, in whole but not in part,
at the option of the Board of Directors of the Company, for the Company's
Debentures on any dividend payment date.
The Units, the Preferred Shares and the Unit Common Shares are
referred to herein collectively as the "Securities."
8
The Securities have not been registered under the Act, and will be
offered and sold to the Initial Purchaser in reliance on exemptions therefrom.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum dated March 6, 1998 (the "Preliminary
Memorandum") and prepared a final offering memorandum dated March 23, 1998 (the
"Final Memorandum" and, together with the Preliminary Memorandum, the
Memoranda") setting forth or including a description of the terms of the
Securities and the Debentures, a description of the Company, its Subsidiaries
and the MHE Business and any material developments relating to the Company, its
Subsidiaries and the MHE Business occurring after the date of the most recent
financial statements included therein.
Section 2.2. Purchase, Sale and Delivery of Securities.
(a) On the basis of the representations, warranties, agreements and
covenants herein contained and subject to the terms and conditions herein
set forth, the Company agrees that it will sell to the Initial Purchaser,
and the Initial Purchaser agrees, that it will purchase the Units from the
Company at the Time of Purchase at a price equal to $998.09 per Unit.
(b) The purchase, sale and delivery of the Securities will take
place at a closing (the "Closing") at the offices of Akin, Gump, Strauss,
Xxxxx & Xxxx, L.L.P., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 9:00 A.M.
New York time, on March 30, 1998, or such later date and time, if any, as
the Initial Purchaser and the Company shall agree. The time at which such
Closing (and the concurrent closing of the Recapitalization, the Equity
Investment and the Credit Agreement) is concluded is herein called the
"Time of Purchase."
(c) Certificates in definitive form for the Securities that the
Initial Purchaser has agreed to purchase hereunder, in such denominations
and registered in such name or names as the Initial Purchaser requests
upon notice to the Company at least 48 hours prior to the Closing, shall
be delivered by or on behalf of the Company to the nominee of The
Depository Trust Company for the account of the Initial Purchaser, against
payment by or on behalf of the Initial Purchaser of the purchase price
therefor by wire transfer of immediately available funds wired in
accordance with the written instructions of the Company. The Company will
make such certificates for the Securities available for inspection by the
Initial Purchaser at the offices of CIBC
9
Xxxxxxxxxxx, or such other place as the Initial Purchaser may designate,
at least 24 hours prior to the Closing.
Section 2.3. Registration Rights of Holders of Securities. The
Initial Purchaser and its direct and indirect transferees of (i) the Preferred
Shares will have such rights with respect to the registration of the Preferred
Shares, the Exchange Preferred Stock and the Debentures under the Act as set
forth in the Preferred Stock Registration Rights Agreement and (ii) the Unit
Common Shares will have such rights with respect to the registration of the Unit
Common Shares as set forth in the Common Stock Registration Rights Agreement.
Section 2.4. Offering by the Initial Purchaser. The Initial
Purchaser proposes to make an offering of the Units at the price and upon the
terms set forth in the Final Memorandum, as soon as practicable after this
Agreement is entered into and as in the judgment of the Initial Purchaser is
advisable.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES; RESALE OF SECURITIES
Section 3.1. Representations and Warranties of the Company. The
Company represents and warrants to and agrees with the Initial Purchaser on and
as of the date hereof and the Time of Purchase as follows:
(a) Each of the Preliminary Memorandum and the Final Memorandum, as
of its respective date and the Final Memorandum as of the Time of
Purchase, did not and will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this Section 3.1(a) do not apply to statements or omissions made in
reliance upon and in conformity with information relating to the Initial
Purchaser furnished to the Company in writing by the Initial Purchaser
expressly for use in the Final Memorandum or any amendment or supplement
thereto or relating to the manner of sale of the Securities by the Initial
Purchaser. Each of the Preliminary Memorandum and the Final Memorandum, as
of its respective date and the Final Memorandum as of the Time of
Purchase, contains all the information that, if requested by a prospective
purchaser of the Securities, would be required to be provided to such
prospective purchaser pursuant to Rule 144A(d)(4) under the Act.
(b) Price Waterhouse LLP is an independent public accounting firm
with respect to the Company and the MHE Business within the meaning of the
Act and the rules and
10
regulations promulgated thereunder. The historical financial statements
(including the related notes) contained in the Memoranda comply in all
material respects with the requirements applicable to a registration
statement on Form S-1 under the Act; such financial statements have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods covered thereby and fairly
present the financial position of the entities purported to be covered
thereby at the respective dates indicated and the results of their
operations and their cash flows for the respective dates indicated; the
summary and selected financial data contained in the Memoranda present
fairly the information shown therein and have been prepared and compiled
on a basis consistent with the financial statements included therein; and
the adjusted and pro forma financial information contained in the
Memoranda has been prepared on a basis consistent with the historical
financial statements contained in the Memoranda (except for the pro forma
adjustments specified therein), includes all material adjustments to the
historical financial information required by Regulation S-X under the Act
and the Exchange Act to reflect the transactions described in the
Memoranda, gives effect to assumptions made on a reasonable basis and
fairly presents the historical and proposed transactions contemplated by
the Memoranda and the Xxxxxx Delivered Documents. The statistical and
market-related data included in the Memoranda are based on or derived from
sources which the Company believes to be reliable and accurate in all
material respects or represents the Company's good faith reasonable
estimates that are made on the basis of data derived from such sources.
(c) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. As of the
date hereof, the Company has no direct or indirect Subsidiaries other than
the MHE Entities and as of the Time of Purchase Xxxxxx Material Handling
will be the only directly held Subsidiary of the Company. Xxxxxx Material
Handling and each MHE Entity is a corporation, limited liability company
or partnership duly incorporated or organized, validly existing and in
good standing under the laws of the state or other jurisdiction of its
incorporation or organization. Each of the Company, Xxxxxx Material
Handling and the MHE Entities is duly qualified and in good standing as a
foreign corporation, limited liability company or partnership and is
authorized to do business in each jurisdiction in which the ownership or
leasing of any property or the character of its operations makes such
qualification necessary, except where the failure to be so qualified would
not have a Material Adverse Effect. Each of the Company, Xxxxxx Material
Handling and the MHE Entities has corporate power and authority to own and
lease its
11
properties and conduct its business (including the MHE Business) as
described in the Memoranda.
(d) As of the Time of Purchase (after giving effect to the
Transactions, as described in the Memoranda under "The Transactions-The
Recapitalization" and "Security Ownership of Certain Beneficial Owners and
Management"), the Company's authorized capital stock will consist of (i)
100,000 Unit Shares, (ii) 900,000 Voting Shares, (iii) 120,000 Preferred
Shares, (iv) 10,000 Series B Preferred Shares and (v) 60,000 Series C
Preferred Shares, of which (A) 720 Unit Shares will be issued and
outstanding and held initially by the Initial Purchaser, (B) 7,907 Voting
Shares will be issued and outstanding and held by MHE Investments and
2,261 Voting Shares will be issued and outstanding and held by HarnCo, (C)
57,710 Preferred Shares will be issued and outstanding and held initially
by the Initial Purchaser, (D) 4,809 Series B Preferred Shares will be
issued and outstanding and held by HarnCo and (E) 28,855 Series C
Preferred Shares will be issued and outstanding and held by MHE
Investments. All of the issued and outstanding shares of capital stock,
membership interests or partnership interests (collectively, "capital
interests"), as the case may be, of the Company, Xxxxxx Material Handling
and the MHE Entities are validly issued (and, in the case of capital
stock, all of such capital stock is fully paid and nonassessable), and
none of such capital interests were issued in violation of any preemptive
or similar rights. As of the Time of Purchase, the Company will have no
Subsidiaries other than Xxxxxx Material Handling and the MHE Entities.
Schedule I hereto sets forth the name of each Subsidiary of the Company
after giving effect to the Transactions, as of the Time of Purchase, the
type of each class of outstanding capital interests of each such
Subsidiary as of such date and the number and percentage of such capital
interests to be held by the Company or its Subsidiaries, identifying the
name of the Person holding such capital interests. Except as set forth in
the Final Memorandum, after giving effect to the Transactions, (i) at the
Time of Purchase (A) all of the issued and outstanding capital interests
of Xxxxxx Material Handling will be owned by the Company and all of the
issued and outstanding capital interests of Material Handling LLC and each
other MHE Entity will be wholly owned directly or indirectly by Xxxxxx
Material Handling, free and clear of any Liens, except, in each case, as
created in connection with the Credit Agreement and (B) there will be no
outstanding subscriptions, options, warrants, rights, convertible
securities or other binding agreements or commitments of any character
obligating the Company, Xxxxxx Material Handling or any MHE Entity to
issue any securities and (ii) as of the date hereof there is, and at the
Time of Purchase there will be, no agreement, understanding or arrangement
among the Company, Xxxxxx Material Handling or
12
any MHE Entity and their respective capital interest holders or any other
Person (other than with another MHE Entity) relating to the ownership or
disposition of any capital interests in the Company, Xxxxxx Material
Handling or any MHE Entity, the election of directors of the Company,
Xxxxxx Material Handling or any MHE Entity or the governance of the
Company's, Xxxxxx Material Handling's or any MHE Entity's affairs, except
for (A) the Stockholders' Agreement (as defined in the Memoranda) the
Common Stock Registration Rights Agreement, the stockholders' agreement
relating to Blooma and employment agreements, employee stock purchase
agreements and option grants, in each case between the Company and the
executives named in the Final Memorandum and (B) the Common Stock
Registration Rights Agreement, and such agreements will not be breached or
violated as a result of the execution and delivery of, or the consummation
of the transactions contemplated by, this Agreement and Xxxxxx Delivered
Documents or the consummation of the Transactions.
(e) Each of the Company and its Subsidiaries has, or at the Time of
Purchase will have, the full right, power and authority to enter into the
Xxxxxx Delivered Documents (in each case, to the extent a party thereto)
and to carry out their respective obligations thereunder (including,
without limitation, in the case of the Company, issuing the Units in the
manner and for the purpose contemplated by this Agreement) and to
consummate each of the Transactions to which it is a party. The execution,
delivery and performance of the Xxxxxx Delivered Documents and the
consummation of the transactions contemplated thereby have been, or at the
Time of Purchase will have been, authorized by the Company and each of its
Subsidiaries (in each case, to the extent a party thereto), and no other
proceeding or approval on the part of the Company, such Subsidiaries, or
the shareholders of any of the foregoing is necessary, or will be
necessary, at the Time of Purchase, to authorize the execution and
delivery of the Xxxxxx Delivered Documents or the performance of any of
the transactions contemplated thereby.
(f) This Agreement has been duly authorized, executed and delivered
by the Company and (assuming the due authorization, execution and delivery
by the Initial Purchaser) is a valid and legally binding agreement of the
Company, enforceable in accordance with its terms except (i) that the
enforcement hereof may be subject to bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally, and to
general principles of equity and the discretion of the court before which
any proceeding therefor may be brought (the "Enforceability Exceptions")
and (ii) as any rights to indemnity or contribution hereunder may be
limited by
13
federal and state securities laws and public policy considerations.
(g) The Unit Agreement, when executed and delivered by the Company
(assuming the due authorization, execution and delivery by the Unit
Agent), will constitute a valid and legally binding agreement of the
Company, enforceable in accordance with its terms, subject to the
Enforceability Exceptions.
(h) The Units, when issued and delivered by the Company against
payment therefor by the Initial Purchaser in accordance with the terms of
this Agreement (assuming due authentication, execution and delivery
thereof by the Unit Agent in accordance with the Unit Agreement), will be
validly issued, fully paid and nonassessable and free of any preemptive or
similar rights; the certificates for the Units will comply with the
requirements of Delaware General Corporation Law; and the holders of such
Units will not be subject to personal liability by reason of being such
holders.. The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Act.
(i) At the Time of Purchase, the Certificate of Designation relating
to the Preferred Shares and any additional Preferred Shares issued as
dividends in accordance with the terms of the Certificate of Designation
(the "Dividend Shares") will have been duly authorized by the Company. The
Preferred Shares and the Dividend Shares, when issued and delivered by the
Company against payment therefor in accordance with the provisions of this
Agreement, in the case of the Preferred Shares, and in accordance with the
terms of the Certificate of Designation, in the case of the Dividend
Shares, will be validly issued, fully paid and nonassessable and free of
any preemptive or similar rights; the certificates for the Preferred
Shares and the Dividend Shares will comply with the requirements of
Delaware General Corporation Law; and the holders of such Preferred Shares
and Dividend Shares will not be subject to personal liability by reason of
being such holders. At the Time of Purchase, the Company will have
reserved for issuance, and duly authorized the issuance of, the maximum
number of Preferred Shares and Dividend Shares issuable as dividends
pursuant to the terms of the Certificate of Designation. At the Time of
Purchase, the Amended and Restated Certificate of Incorporation of the
Company, by virtue of the Certificate of Designation, will set forth the
rights, preferences and priorities of the Preferred Shares and the
Dividend Shares. At the Time of Purchase, the Exchange Preferred Shares
and the Private Exchange Preferred Shares will have been duly authorized
and, when issued and delivered by the Company in accordance with the
provisions of the Exchange Offer contemplated by the Preferred Stock
14
Registration Rights Agreement, will be validly issued, fully paid and
nonassessable and free of any preemptive or similar rights.
(j) The Unit Common Shares, when issued and delivered by the Company
against payment therefor by the Initial Purchaser in accordance with the
terms of this Agreement, will be validly issued, fully paid and
nonassessable, free of any preemptive or similar rights; the certificates
for the Unit Common Shares will comply with the requirements of Delaware
General Corporation Law; and the holders of such Unit Common Shares will
not be subject to personal liability by reason of being such holders. At
the Time of Purchase, the Voting Common Shares issuable in exchange for
the Unit Common Shares will have been duly authorized and, when issued and
delivered by the Company in accordance with the provisions of the
Company's Amended and Restated Certificate of Incorporation, will be
validly issued, fully paid and nonassessable and free of any preemptive or
similar rights.
(k) The Debenture Indenture, when executed and delivered by the
Company (assuming the due authorization, execution and delivery by the
Debenture Trustee), will constitute a valid and legally binding agreement
of the Company, enforceable against the Company in accordance with its
terms, subject to the Enforceability Exceptions. At the Time of Purchase,
the Debenture Indenture will conform in all material respects to the
requirements of the Trust Indenture Act and the rules and regulations of
the Commission applicable to an indenture which is qualified thereunder.
(l) At the Time of Purchase, the Debentures and any additional
Debentures issued as interest in accordance with the provisions of the
Indenture (the "In-kind Debentures") will have been duly authorized by the
Company. The Debentures and the In-kind Debentures, when executed by the
Company (assuming, in the case of the Debentures and In-kind Debentures,
due authentication by the Debenture Trustee in accordance with the
Debenture Indenture) and delivered upon the exchange of the Preferred
Shares and/or the Dividend Shares, if any, in accordance with the
Certificate of Designation relating to the Preferred Shares and the
Dividend Shares in the case of the Exchange Debentures, or as interest on
outstanding Debentures in accordance with the Debenture Indenture, in the
case of the In-kind Debentures, will have been duly executed, issued and
delivered and will constitute valid and binding obligations of the
Company, enforceable in accordance with their respective terms, subject to
the Enforceability Exceptions.
15
(m) The Common Stock Registration Rights Agreement, when executed
and delivered by the Company (assuming due authorization, execution and
delivery by each other party thereto), will constitute a valid and legally
binding agreement of the Company, enforceable in accordance with its
terms, subject to the Enforceability Exceptions and as any rights to
indemnity or contribution thereunder may be limited by federal and state
securities laws and public policy considerations. No holder of securities
of the Company or any Subsidiary will be entitled to have such securities
registered under the Common Stock Registration Rights Agreement other than
as expressly permitted thereby.
(n) The Preferred Stock Registration Rights Agreement, when executed
and delivered by the Company (assuming the due authorization, execution
and delivery by the Initial Purchaser), will constitute a valid and
legally binding agreement of the Company, enforceable in accordance with
its terms, subject to the Enforceability Exceptions and as any rights to
indemnity or contribution thereunder may be limited by federal and state
securities laws and public policy considerations. No holder of securities
of the Company or any Subsidiary will be entitled to have such securities
registered under the Preferred Stock Registration Rights Agreement other
than as expressly permitted thereby.
(o) Each other Xxxxxx Delivered Document, when duly executed and
delivered by each of the Company, its Subsidiaries and MHE Investments, in
each case, to the extent a party thereto (assuming the due authorization,
execution and delivery thereof by the other parties thereto), will
constitute a valid and legally binding agreement of each of the Company,
its Subsidiaries and MHE Investments, as applicable, enforceable in
accordance with its terms, subject to the Enforceability Exceptions and
except as any rights to indemnity or contribution thereunder may be
limited by federal and state securities laws and public policy
considerations.
(p) The execution, delivery and performance by the Company, its
Subsidiaries and MHE Investments of the Xxxxxx Delivered Documents to
which they are a party, the issuance and sale by the Company of the
Securities to be issued by it, the execution, delivery and performance by
the Company, its Subsidiaries and MHE Investments of all other agreements
and instruments to be executed by them and delivered pursuant hereto or
thereto or in connection herewith or therewith or in connection with any
of the transactions contemplated hereby or thereby, and compliance by the
Company, its Subsidiaries and MHE Investments with the terms and
provisions hereof and thereof, and consummation of the other Transactions
(as defined in the Final Memorandum) do not and will not (i) violate any
provision of any law, rule
16
or regulation (including, without limitation, Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System), order, writ,
judgment, decree, determination or award presently in effect or in effect
at the Time of Purchase having applicability to the Company, any of its
Subsidiaries or MHE Investments, (ii) violate or conflict with or result
in a breach of or constitute a default under the certificate of
incorporation or by-laws (or similar organizational document) of the
Company, any of its Subsidiaries or MHE Investments, or, as of the Time of
Purchase, any indenture or loan or credit agreement (including, without
limitation, the Financing Documents), or any other material agreement or
instrument which, if the Company were a reporting company pursuant to
Section 13(d) or 15 of the Exchange Act, would be required to be filed
pursuant to Item 601 of Regulation S-K, to which the Company, any of its
Subsidiaries or MHE Investments is or will at such time be a party or by
which the Company, any of its Subsidiaries or MHE Investments or any of
their respective properties or assets may be bound or affected other than
such violations, conflicts or defaults which would not reasonably be
likely to have a Material Adverse Effect, or (iii) except as expressly
contemplated by the Note Indenture, the Financing Documents or the
Debenture Indenture, result in, or require the creation or imposition of,
any Lien upon or with respect to any of the properties or assets now owned
or hereafter acquired by the Company, any of its Subsidiaries or MHE
Investments, except, in each case, where such violation, conflict, default
or creation or imposition of any Lien would not (individually or in the
aggregate) be reasonably likely to have a Material Adverse Effect.
(q) Immediately before and after the consummation of the
Transactions, including those contemplated by this Agreement and the other
Xxxxxx Delivered Documents (including the application of proceeds by the
Company from the issuance and sale of the Securities by the Company at the
Time of Purchase as described in the Memoranda), the Company and its
Subsidiaries, on a consolidated basis, will be Solvent.
(r) Subsequent to the date as of which information is given in the
Final Memorandum to the date hereof, except as contemplated in the Final
Memorandum, there has not been (i) any event or condition that has had or
that could reasonably be expected to have a Material Adverse Effect, (ii)
any transaction entered into by the Company or any of its Subsidiaries
that is material to the Company or its Subsidiaries, taken as a whole,
other than in the ordinary course of business, or (iii) any dividend,
redemption or distribution of any kind declared, paid or made by the
Company on its common stock.
17
(s) There is no action, suit, investigation or proceeding,
governmental or otherwise, in law or in equity, or before any commission
or other administrative authority, in any jurisdiction in which the
Company or its Subsidiaries conducts business, pending or, to the
knowledge of the Company, threatened to which the Company or any of its
Subsidiaries is or would be a party or of which the properties or assets
of the Company or its Subsidiaries are or may be subject, that (i) seeks
to restrain, enjoin, prevent the consummation of or otherwise challenge
the issuance and sale of the Securities by the Company or any of the other
transactions contemplated by the Xxxxxx Delivered Documents or any of the
Transactions, (ii) questions the legality or validity of any such
transactions or seeks to recover damages or obtain other relief in
connection with any such transactions or (iii) could reasonably be
expected to have a Material Adverse Effect. There are no legal or
governmental proceedings that would be required by the Act to be described
in a prospectus relating to the Securities that are not described in the
Final Memorandum.
(t) Neither the Company nor any of its Subsidiaries is currently or,
after giving effect to the consummation of the transactions contemplated
by this Agreement and the other Transactions, will be (i) in violation of
its respective certificate of incorporation or by-laws (or similar
organizational document), (ii) in default (nor will an event occur which
with notice or passage of time or both would constitute such a default)
under or in violation of any indenture or loan or credit agreement or any
other material agreement or instrument to which it is a party or by which
it or any of its properties or assets may be bound or affected, (iii) in
violation of any order of any court, arbitrator or governmental body, or
(iv) in violation of or will have violated any statute, rule or regulation
of any governmental authority, except in each case, which default or
violation (individually or in the aggregate) could not reasonably be
expected to (x) affect the legality, validity or enforceability of any of
the Xxxxxx Delivered Documents in any material respect or (y) have a
Material Adverse Effect.
(u) There are no material licenses, franchises, permits and other
governmental authorizations held by the Company or any of its Subsidiaries
with respect to the conduct of their respective businesses that are not
accurately described in the Memoranda, each, as of their respective dates.
No authorization, consent, approval, license, qualification or formal
exemption from, nor any filing, declaration or registration with, any
court, governmental agency or regulatory authority or any securities
exchange is required in connection with the execution, delivery or
performance by the Company or any of
18
its Subsidiaries (to the extent they are a party thereto) of any of the
Xxxxxx Delivered Documents or consummation of any of the transactions
contemplated thereby or consummation of any of the other Transactions,
except (i) as may be required under state securities or "blue sky" laws or
the laws of any foreign jurisdiction, (ii) such as have been obtained or
made, (iii) as may be required under the Act, the Exchange Act and the
Trust Indenture Act in connection with the performance of obligations
under the Registration Rights Agreement, (iv) as may be required under the
Exchange Act after the Time of Purchase or (v) as would not (individually
or in the aggregate) be reasonably likely to have a Material Adverse
Effect. All such authorizations, consents, approvals, licenses,
qualifications, exemptions, filings, declarations and registrations set
forth in the Final Memorandum (other than as disclosed therein) which are
required to have been obtained by the date hereof have been obtained or
made, as the case may be, and are in full force and effect and not the
subject of any pending or, to the best knowledge of the Company,
threatened attack by appeal or direct proceeding or otherwise, except as
would not reasonably be likely to have a Material Adverse Effect.
(v) Neither the execution and delivery of this Agreement or the
Xxxxxx Delivered Documents, the sale of the Securities to the Initial
Purchaser, nor the consummation of the Transactions will involve any
non-exempt prohibited transaction within the meaning of Section 406 of
ERISA, or Section 4975 of the Code on the part of the Company or any of
its Subsidiaries. The representation made by the Company in the preceding
sentence is made in reliance upon and subject to the accuracy of, and
compliance with, the representations and covenants made or deemed made by
the purchasers of Units from the Initial Purchaser as set forth in the
Final Memorandum under "Notice to Investors." The present value of all
benefits vested under each Employee Benefit Plan maintained by the Company
or its Subsidiaries or any person or entity treated with any such Person
as a single employer under Section 414 of ERISA (a "Commonly Controlled
Entity") (based on the current liability, interest rate and other
assumptions used in preparation of the plan's Form 5500 Annual Report) did
not, as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of
such plan allocable to such accrued benefits. Neither the Company, any of
its Subsidiaries, nor any Commonly Controlled Entity has had a complete or
partial withdrawal from any Multiemployer Plan (as defined in ERISA), and
neither the Company, any of its Subsidiaries, nor any Commonly Controlled
Entity would become subject to any liability under ERISA if the Company,
any Subsidiary, or any such Commonly Controlled Entity were to withdraw
completely from all Multiemployer Plans as of the valuation
19
date most closely preceding the date on which such representation is made
or deemed made. No such Multiemployer Plan is in reorganization or
insolvent. There are no material liabilities of the Company, any of its
Subsidiaries, or any Commonly Controlled Entity for post-retirement
benefits to be provided to their current and former employees under Plans
which are welfare benefit plans (as described in Section 3(l) of ERISA).
The Company and each of its Subsidiaries are substantially and in all
material respects in compliance with all applicable laws with respect to
all employee benefit plans maintained or contributed to in respect of
employees other than those employed in the United States ("Foreign
Plans"). There are no material unfunded liabilities of the Company or its
Subsidiaries in respect of the Foreign Plans.
(w) Each of the Company and its Subsidiaries has good and marketable
title to all real property described in the Final Memorandum as being
owned by it and good and valid title to, or valid and enforceable
leasehold interests in, all properties and assets identified in the Final
Memorandum as owned or leased, respectively, by each of them (including,
without limitation, all those transferred to Material Handling LLC in the
October 1997 Drop-Down), free and clear of all material Liens, except (i)
such Liens as are described in the Final Memorandum or (ii) Liens created
in the ordinary course of business which are Permitted Liens (as defined
in the Indenture). All material leases, contracts and agreements,
including those referred to in the Memoranda, to which the Company or any
of the Subsidiaries is a party or by which any of them are bound are in
full force and effect and are valid and enforceable in accordance with
their terms, except for the Enforceability Exceptions. There is not under
any such material lease, contract or agreement any default by the Company
or any such Subsidiary, or any default that with notice or lapse of time
or both would constitute such a default by the Company or any such
Subsidiary and with respect to which the Company or such Subsidiary has
not taken adequate steps to prevent such default from occurring. To the
knowledge of the Company and its Subsidiaries, there is not under any such
material lease, contract or agreement any default by any other party
thereto or any event that with notice or lapse of time or both would
constitute such a default thereunder by such party.
(x) All tax returns required to be filed by the Company or any of
its Subsidiaries in any jurisdiction (including foreign jurisdictions)
have been duly filed, neither the Company nor any Subsidiary is in default
in the payment of any taxes, assessments, fees and other charges
including, without limitation, withholding taxes, penalties, and interest
("Taxes") with respect thereto, except where
20
the failure to so pay could not reasonably be expected to have a Material
Adverse Effect. There are no actual or, to the knowledge of the Company
and its Subsidiaries, proposed additional tax assessments for any fiscal
period against the Company or any of its Subsidiaries that, individually
or in the aggregate, is reasonably likely to have a Material Adverse
Effect.
(y) Giving effect to the Transactions, there are no material
copyrights, patents, trade names, service marks or domain names, whether
registered or at common law, or applications therefor that are pending or
in the process or preparation (collectively, the "Intellectual Property
Rights") that are directly or indirectly owned, licensed, used, required
for use or controlled in whole or in part by the Company or its
Subsidiaries, and no material licenses or other agreements allowing the
Company or its Subsidiaries to use Intellectual Property Rights of third
parties that, in any such case, are not accurately described in the Final
Memorandum. Except as otherwise described in the Final Memorandum, the
Company and its Subsidiaries are the sole and exclusive owners of the
Intellectual Property Rights described therein, free and clear of any Lien
(other than Permitted Liens) and such Intellectual Property Rights have
not been and are not being challenged in any way or involved in any
pending or threatened unfair competition proceeding. There has been and is
no claim challenging the scope, validity or enforceability of any of the
Intellectual Property Rights. To the knowledge of the Company and its
Subsidiaries, neither the Company nor any of its Subsidiaries has
infringed, or is infringing or is subject to any unfair competition claim
with respect to any Intellectual Property Rights, or any other proprietary
or other intellectual property right of any person or entity and neither
the Company nor any of its Subsidiaries has received or has any knowledge,
after due inquiry, of any such claim or other notice of any such violation
or infringement.
(z) Except as described in the Final Memorandum, each of the Company
and its Subsidiaries is in compliance with all federal, state, local and
foreign laws, and any rules, regulations, orders, decrees, judgments or
injunctions issued or promulgated thereunder relating to pollution and
protection of public and employee health and the environment
("Environmental Law") and with the terms and conditions of any permit,
license or approval required thereunder in connection with the ownership,
operation or use of its business, property and assets where the failure to
be in such compliance could reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect; none of the Company or any
of its Subsidiaries is subject to any liability, absolute or contingent,
under any
21
Environmental Law which liability would, individually or in the aggregate,
be reasonably likely to result in a Material Adverse Effect; and there is
no civil, criminal or administrative action, suit, demand, hearing, notice
of violation or deficiency, investigation, proceeding or notice of
potential responsibility or liability or demand letter or request for
information pending or, to the best knowledge of the Company, threatened
against the Company or any of its Subsidiaries under any Environmental Law
which, if determined adversely to the Company or any such Subsidiary,
would, individually or in the aggregate, be reasonably likely to result in
a Material Adverse Effect.
(aa) There has been no resignation or termination of employment of
any officer or key employee of the Company or any Subsidiary and the
Company has no knowledge of any impending or threatened resignation or
termination of employment in any case that would have a Material Adverse
Effect. Except as set forth in the Memoranda, neither the Company nor any
Subsidiary has entered into any severance or similar arrangement in
respect of any present or former employees that would be required to be
disclosed in a prospectus relating to the Securities under the Act. There
is no strike, labor dispute, slowdown or work stoppage with the employees
of the Company or any of its Subsidiaries which is pending or, to the best
knowledge of the Company, threatened.
(bb) Neither the Company nor any Subsidiary has, since the date of
the latest audited financial statements contained in the Memoranda,
sustained any loss or interference with its business from fire, explosion,
flood, accident or other calamity, whether or not covered by insurance, or
from any labor dispute, or has become a party to or the subject of any
litigation, court or governmental action, investigation, order or decree,
in any case otherwise than as set forth in the Final Memorandum, which in
any case has had, or would reasonably be expected to have, a Material
Adverse Effect.
(cc) Each of the Company and its Subsidiaries carries insurance
(including self insurance) in such amounts and covering such risks as in
its reasonable determination is adequate for the conduct of its business
(including the MHE Business) and the value of its properties.
(dd) On or prior to the date hereof, there were transferred by
HarnCo to Material Handling LLC all of the assets described in the
Separation Agreement required to be so transferred thereunder. After
giving effect to such transfers, Material Handling LLC has good and
marketable title to all such assets, and none of such assets are
22
subject to any Lien except Permitted Liens. At the Time of Purchase,
Material Handling LLC will be a wholly-owned direct Subsidiary of Xxxxxx
Material Handling, and Xxxxxx Material Handling will own valid title to
all of the membership interests of Material Handling LLC free and clear of
any Liens except Permitted Liens and all of the assets relating to the MHE
Business will be owned directly or indirectly by the Company as
contemplated in the Recapitalization Agreement except as disclosed under
"Certain Relationships and Related Transactions" in the Memoranda.
(ee) Each of the Xxxxxx Delivered Documents conform in all material
respects to the descriptions thereof in the Final Memorandum to the extent
such Xxxxxx Delivered Documents would be required by the Act to be
described in a prospectus relating to the Securities. There are no
contracts or other documents that would be required by the Act to be
described in a prospectus relating to the Securities that are not
described in the Final Memorandum.
(ff) The Company has delivered to the Initial Purchaser a true and
correct copy of the Recapitalization Agreement, together with all related
agreements or forms of agreement and all schedules and exhibits thereto
(including the Recapitalization Documents), and as of the date hereof
there have been no amendments, alterations, modifications or waivers of
any of the provisions thereof since its applicable date of execution or
from the form in which any such agreement has been delivered to the
Initial Purchaser, except for any such amendment, modification or waiver a
copy of which has been delivered to the Initial Purchaser. There exists as
of the date hereof no event or condition that would constitute a breach or
default by any of the parties to the Recapitalization Agreement or such
other agreement that would result in a Material Adverse Effect or
materially adversely affect the ability to consummate any of the
Transactions.
(gg) The Company and its Subsidiaries (i) make and keep accurate
books and records and (ii) maintain internal accounting controls which
provide reasonable assurance that (A) transactions are executed in
accordance with management's specific authorization, (B) transactions are
recorded as necessary to permit preparation of their consolidated
financial statements and to maintain accountability for their assets, (C)
access to their assets is permitted only in accordance with management's
specific authorization and (D) the reported accountability for their
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
23
(hh) None of the Company, any of its Subsidiaries, nor, to the
Company's knowledge, any director, officer, agent, employee or other
person associated with or acting on behalf of the Company or any of the
Subsidiaries, (i) has used any funds of the Company or any of its
Subsidiaries during the last five years for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political
activity, (ii) made any unlawful payment to any foreign or domestic
government official or employee from corporate funds, (iii) violated or is
in violation of any provision of the Foreign Corrupt Practices Act of
1977, or (iv) made any bribe, rebate, influence payment, kickback or other
unlawful payment which, in each instance, could reasonably be expected to
have a Material Adverse Effect on the Company and its Subsidiaries.
Neither the Company nor any of its Subsidiaries does business with the
government of Cuba or any person or affiliate thereof located in Cuba
within the meaning of Florida Statutes Section 517.075.
(ii) Neither the Company nor any Subsidiary is, or at the Closing
Date will be, (i) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" thereof, within the meaning of the
Public Utility Holding Company Act of 1935, as amended or (ii) an
"investment company" or a company "controlled by" an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, and
the rules and regulations thereunder.
(jj) Assuming the accuracy of the Initial Purchaser's
representations and warranties set forth in Section 3.2 hereof and the due
performance by the Initial Purchaser of the covenants and agreements set
forth in Section 3.2 hereof, no form of general solicitation or general
advertising was used by the Company, any of its Subsidiaries or any of
their respective representatives in connection with the offer and sale of
the Securities or any other similar securities of the Company or any of
its Subsidiaries. Neither the Company, any of its Subsidiaries nor any
Person authorized to act for any of them has, either directly or
indirectly, sold or offered for sale any of the Securities, or solicited
any offers to buy any thereof from, or has otherwise approached or
negotiated in respect thereof with, any Person or Persons other than with
or through the Initial Purchaser; and assuming the accuracy of the Initial
Purchaser's representations and warranties set forth in Section 3.2 hereof
and the due performance by the Initial Purchaser of the covenants and
agreements set forth in Section 3.2 hereof, the Company agrees that
neither it, any of its Subsidiaries nor any Person acting on its or their
behalf will sell or offer for sale any Securities to, or solicit any
offers to buy any Securities from, or otherwise approach or negotiate in
respect thereof with, any Person or
24
Persons so as thereby to bring the issuance or sale of any of the
Securities within the provisions of Section 5 of the Act.
(kk) Assuming the accuracy of the Initial Purchaser's
representations and warranties set forth in Section 3.2 hereof, and the
due performance by the Initial Purchaser of the covenants and agreements
set forth in Section 3.2 hereof, it is not necessary, in connection with
the issuance and sale of the Securities to the Initial Purchaser and the
offer, resale and delivery of the Securities by the Initial Purchaser in
the manner contemplated by this Agreement and the Memoranda to register
them under the Act or to qualify the Debenture Indenture under the Trust
Indenture Act.
(ll) No securities of the Company or any of its Subsidiaries are of
the same class (within the meaning of Rule 144A under the Act) as any of
the Securities and listed on a national securities exchange registered
under Section 6 of the Exchange Act, or quoted in a U.S. automated
inter-dealer quotation system. Neither the Company nor any of its
Subsidiaries have, directly or indirectly or through any agent, sold,
offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Act), which is or will be
integrated with the sale of the Securities in a manner that would require
registration of the Securities under the Act.
(mm) Neither the Company nor any of its Subsidiaries has taken, nor
will any of them take, directly or indirectly, any action designed to, or
that might be reasonably expected to, cause or result in stabilization or
manipulation of the price of any of the Securities or that is prohibited
by Regulation M under the Exchange Act.
(nn) None of the Company, its Subsidiaries, any of their respective
Affiliates or any person acting on its or their behalf (other than the
Initial Purchaser) has engaged in any directed selling efforts (as that
term is defined in Regulation S under the Act ("Regulation S") with
respect to any of the Securities and the Company, its Subsidiaries and
their respective Affiliates and any person acting on its or their behalf
(other than the Initial Purchaser) have acted in accordance with the
offering restrictions requirement of Regulation S.
(oo) No forward-looking statement (within the meaning of Section 27A
of the Act and Section 21E of the Exchange Act) contained in the
Preliminary Memorandum or the Final Memorandum has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good faith.
25
(pp) Except as stated in the Final Memorandum, the Company does not
know of any claims for services, either in the nature of a broker's
commission, finder's fee or financial advisory fee, with respect to the
offering of the Securities and the transactions contemplated by the Final
Memorandum.
Section 3.2. Resale of Shares. The Initial Purchaser represents and
warrants that it is a "qualified institutional buyer" as defined in Rule 144A
under the Act ("QIB"). The Initial Purchaser agrees with the Company that (a) it
has not and will not, directly or indirectly, solicit offers for, or offer or
sell, any of the Securities by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Act) or in any
manner involving a public offering within the meaning of Section 4(2) of the
Act; (b) has not and will not, directly or indirectly, engage in any "directed
selling efforts" (as defined in Regulation S under the Act); and (c) it has and
will solicit offers for the Securities only from, and will offer the Securities
only to (i) in the case of offers inside the United States, Persons whom it
reasonably believes to be QIBs or, if any such Person is buying for one or more
institutional accounts for which such Person is acting as fiduciary or agent,
only when such Person has represented to it that each such account is a QIB, to
whom notice has been given that such sale or delivery is being made in reliance
on Rule 144A, and, in each case, in transactions under Rule 144A and (ii) in the
case of offers outside the United States, to Persons other than U.S. Persons
("foreign purchasers," which term shall include dealers or other professional
fiduciaries in the United States acting on a discretionary basis for foreign
beneficial owners (other than an estate or trust)). The Company acknowledges and
agrees that the Initial Purchaser may sell Securities to any Affiliate of an
Initial Purchaser and that any such Affiliate may sell Securities purchased by
it to an Initial Purchaser.
ARTICLE IV.
CONDITIONS PRECEDENT TO CLOSING
Section 4.1. Conditions Precedent to Obligations of the Initial
Purchaser. The obligation of the Initial Purchaser to purchase the Securities to
be purchased by it hereunder is subject to the satisfaction of the following
conditions:
(a) At the Time of Purchase, the Initial Purchaser shall have
received an opinion, addressed to the Initial Purchaser in form and
substance satisfactory to counsel to the Initial Purchaser and dated the
Time of Purchase, from Akin, Gump, Strauss, Xxxxx & Xxxx, LLP, counsel to
the Company, in substantially the form set forth in Exhibit C hereto and
(ii) a reliance letter, addressed to the Initial Purchaser, in form and
substance satisfactory to counsel to
26
the Initial Purchaser and dated the Time of Purchase, from each of (A)
Akin, Gump, Strauss, Xxxxx & Xxxx, LLP, counsel to the Company, entitling
the Initial Purchaser to rely upon their opinion being issued to the
lenders under the Credit Facilities relating to the Financing Documents
and dated the Time of Purchase and (B) Xxxxxxxx & Xxxxx, counsel to
HarnCo, entitling the Initial Purchaser to rely upon their opinion being
issued to the Company relating to the Recapitalization Documents and dated
the Time of Purchase, which opinion shall be substantially in the form
attached as Exhibit H to the Recapitalization Agreement.
(b) The Initial Purchaser shall have received an opinion, addressed
to the Initial Purchaser in form and substance satisfactory to the Initial
Purchaser and dated the Time of Purchase, of Xxxxxxx Xxxx & Xxxxxxxxx,
counsel to the Initial Purchaser, as to such matters as the Initial
Purchaser shall reasonably request.
In rendering such opinions in accordance with Sections 4.1(a) and
(b), each such counsel may rely as to factual matters upon certificates or
other documents furnished by officers and directors of the Company and
representations of the Initial Purchaser and by government officials, and
upon such other documents as such counsel deem appropriate as a basis for
their opinion. Each such counsel may specify the jurisdictions in which it
is admitted to practice and that it is not admitted to practice in any
other jurisdiction or an expert in the law of any other jurisdiction. To
the extent such opinion concerns the laws of any other such jurisdiction
such counsel may rely upon the opinion of counsel (satisfactory to the
Initial Purchaser) admitted to practice in such jurisdiction. Any opinion
relied upon by such counsel as aforesaid shall be delivered to the Initial
Purchaser together with the opinion of such counsel, which opinion shall
state that such counsel believes that their and the Initial Purchaser's
reliance thereon is justified.
(c) The Initial Purchaser shall have received from Price Waterhouse
LLP a comfort letter or letters dated the date hereof and the Time of
Purchase in form and substance satisfactory to counsel to the Initial
Purchaser.
(d) The Initial Purchaser shall have received a report from
Valuation Research Corporation, in form and substance satisfactory to
counsel to the Initial Purchaser, indicating that the Company and its
Subsidiaries, on a consolidated basis, is Solvent, before and after giving
effect to the Transactions, including those contemplated by this Agreement
and the other Xxxxxx Delivered Documents (including the application of
proceeds by the Company from the issuance and
27
sale of the Units by the Company at the Time of Purchase as described in
the Final Memorandum).
(e) The representations and warranties made by the Company herein
shall be true and correct in all material respects (except for changes
expressly provided for in this Agreement) on and as of the Time of
Purchase with the same effect as though such representations and
warranties had been made on and as of the Time of Purchase, after giving
effect to the consummation of all of the Transactions; the Company shall
have complied in all material respects with all agreements as set forth in
or contemplated hereunder and in the other Basic Documents required to be
performed by the Company at or prior to the Time of Purchase.
(f) Subsequent to the date of the Final Memorandum, there shall not
have been any change which has had or could be reasonably likely to have a
Material Adverse Effect.
(g) At the Time of Purchase, after giving effect to the consummation
of the transactions contemplated by this Agreement, the other Xxxxxx
Delivered Documents and the other Transactions, there shall exist no
Default or Event of Default on the part of the Company or its Subsidiaries
(assuming that the Exchange Indenture is in effect at such time) or Voting
Rights Triggering Event.
(h) The purchase of and payment for the Securities by the Initial
Purchaser hereunder shall not be prohibited or enjoined (temporarily or
permanently) by any applicable law or governmental regulation (including,
without limitation, Regulation G, T, U or X of the Board of Governors of
the Federal Reserve System).
(i) At the Time of Purchase, the Initial Purchaser shall have
received a certificate, dated the Time of Purchase, and executed by the
President and the Vice President - Finance of the Company, to the effect
that:
(i) All of the representations and warranties of the Company
set forth in this Agreement are true and correct as if made on and
as of the Time of Purchase and the Company has complied in all
material respects with all agreements and satisfied all conditions
on their part to be performed or satisfied at or prior to the Time
of Purchase.
(ii) The issuance and sale of the Securities pursuant to this
Agreement and the Final Memorandum and the consummation of the
Transactions have not been enjoined (temporarily or permanently) and
no restraining order or other injunctive order has been
28
issued and there has not been any legal action, order, decree or
other administrative proceeding instituted or threatened against the
Company relating to the issuance of the Securities or in connection
with any of the other Transactions.
(iii) Subsequent to the date of this Agreement and since the
date of the most recent financial statements in the Final Memorandum
(exclusive of any amendment or supplement thereto after the date
hereof), there has not occurred (A) any change, or any development
involving a prospective change, in or affecting the general affairs,
management, business, condition (financial or other), properties,
prospects or results of operations of the Company or the
Subsidiaries or the MHE Business, both before and after giving
effect to the Recapitalization and the other Transactions, not
contemplated by the Final Memorandum that would materially adversely
affect the market for the Securities, or (B) any event or
development relating to or involving any of the Company or the
Subsidiaries that makes any statement made in the Final Memorandum
untrue or that requires the making of any addition to or change in
the Final Memorandum in order to state a material fact required by
any applicable law, rule or regulation to be stated therein or
necessary in order to make the statements therein not misleading.
(iv) There has not been any change in the capital stock of the
Company or any of its Subsidiaries nor any material increase in the
consolidated short-term or long-term debt of the Company from that
set forth in or contemplated in the Final Memorandum and the Company
and the Subsidiaries have no liabilities or obligations, contingent
or otherwise (whether or not in the ordinary course of business),
that are material to the Company, its Subsidiaries and the MHE
Business, taken as a whole, both before and after giving effect to
the Recapitalization and the other Transactions, other than those
reflected in the Final Memorandum.
(j) At the Time of Purchase, each of the Xxxxxx Delivered Documents
and the other material documents pertaining to the Transactions shall have
been executed and delivered by the respective parties thereto and shall be
in full force and effect.
(k) Contemporaneously with the Time of Purchase, the
Recapitalization and each other transaction contemplated in the
Recapitalization Documents shall be consummated on the terms set forth in
the Recapitalization Agreement and such
29
other Recapitalization Documents as in effect as of the date hereof.
(l) Contemporaneously with the Time of Purchase, Xxxxxx Material
Handling shall have received at least $55 million aggregate cash proceeds
from borrowings under the Credit Agreement.
(m) Contemporaneously with the Time of Purchase, the transactions
contemplated under the Note Purchase Agreement shall have been consummated
and Xxxxxx Material Handling shall have received at least $200 million
aggregate cash proceeds (less applicable commissions) from the offering
contemplated therein.
(n) HarnCo shall have received at least $54 million aggregate cash
proceeds from MHE Investments, and all other transactions contemplated in
connection with the Equity Investment (including the retention by HarnCo
of capital interests in the Company with aggregate implied value of not
less than $12 million) shall have been consummated.
(o) Xxxxxx Material Handling shall have redeemed or repurchased 100
shares, representing 50% of its issued and outstanding shares, of common
stock from the Company for aggregate cash consideration of $225 million.
(p) The Company shall have redeemed or repurchased 1,512.317 shares
of its Series C Preferred Stock, and 88,319.182 shares of its common
stock, representing 73% of its issued and outstanding shares of capital
stock from HarnCo for aggregate cash consideration of $282 million.
(q) Each of the Xxxxxx Delivered Documents and the other material
documents pertaining to the Transactions shall be reasonably satisfactory
in form and substance to the Initial Purchaser and shall have been
executed and delivered by all the respective parties thereto and shall be
in full force and effect.
(r) All proceedings taken in connection with the issuance of the
Securities (including the due authentication thereof by the Trustee) and
the transactions contemplated by this Agreement, the other Xxxxxx
Delivered Documents and the other material documents pertaining to the
Transactions and all documents and papers relating thereto shall be
satisfactory to the Initial Purchaser and counsel to the Initial
Purchaser. The Initial Purchaser and counsel to the Initial Purchaser
shall have received copies of such papers and documents as they may
reasonably request in connection therewith, including, without limitation,
true and correct copies of each of the Xxxxxx Delivered Documents
certified
30
as such by an officer of the Company, all in form and substance reasonably
satisfactory to them.
(s) The issuance and sale of the Securities hereunder shall not have
been enjoined (temporarily or permanently) at the Time of Purchase.
(t) There shall not have been any announcement by any "nationally
recognized statistical rating organization," as defined for purposes of
Rule 436(g) under the Act, that (A) it is downgrading its rating assigned
to the Preferred Stock being issued by the Company pursuant to this
Agreement or the Notes of Xxxxxx Material Handling being issued pursuant
to the Notes Purchase Agreement, or (B) it is reviewing its rating
assigned to any debt securities of the Company or Xxxxxx Material Handling
with a view to possible downgrading, or with negative implications, or
direction not determined.
(u) The Securities shall have been approved by the NASD for trading
in the PORTAL Market and accepted by The Depository Trust Company for
clearance and settlement through The Depository Trust Company.
On or before the Time of Purchase, the Initial Purchaser and counsel to
the Initial Purchaser shall have received such further documents, opinions,
certificates and schedules or other instruments relating to the business,
corporate, legal and financial affairs of the Company and its Subsidiaries as
they may reasonably request.
ARTICLE V.
COVENANTS
Section 5.1. Covenants. The Company covenants and agrees with the
Initial Purchaser that:
(a) The Company will not amend or supplement the Final Memorandum or
any amendment or supplement thereto of which the Initial Purchaser shall
not previously have been advised and furnished a copy for a reasonable
period of time prior to the proposed amendment or supplement and as to
which the Initial Purchaser shall not have given their consent, which
consent shall not be unreasonably withheld. The Company will promptly,
upon the reasonable request of the Initial Purchaser or counsel to the
Initial Purchaser, make any amendments or supplements to the Preliminary
Memorandum or the Final Memorandum that may be necessary or advisable in
the opinion of the Initial Purchaser or counsel to the Initial Purchaser
to make the statement therein not
31
misleading or in connection with the resale of the Securities by the
Initial Purchaser.
(b) The Company will cooperate with the Initial Purchaser in
arranging for the qualification of the Securities for offering and sale
under the securities or "blue sky" laws of such jurisdictions as the
Initial Purchaser may designate and will continue such qualifications in
effect for as long as may be reasonably necessary to complete the resale
of the Securities; provided, however, that in connection therewith, the
Company shall not be required to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction or
subject itself to service of process in suits or taxation in excess of a
nominal dollar amount in any such jurisdiction where it is not then so
subject.
(c) If, at any time prior to the completion of the distribution by
the Initial Purchaser of the Securities, any event occurs or information
becomes known as a result of which the Final Memorandum as then amended or
supplemented would include any untrue statement of a material fact, or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
or if for any other reason it is necessary at any time to amend or
supplement the Final Memorandum to comply with applicable law, the Company
will immediately notify the Initial Purchaser thereof (who thereafter will
not use such Final Memorandum until appropriately amended or supplemented)
and will prepare, at the expense of the Company, an amendment or
supplement to the Final Memorandum that corrects such statement or
omission or effects such compliance; provided, however, that the Company's
obligation hereunder shall not be applicable to the extent resale by the
Initial Purchaser may be accomplished pursuant to a registration statement
filed by the Company pursuant to the Registration Rights Agreement.
(d) The Company will, without charge, provide to the Initial
Purchaser and to counsel to the Initial Purchaser as many copies of the
Preliminary Memorandum and the Final Memorandum or any amendment or
supplement thereto as they may reasonably request.
(e) The Company will apply the net proceeds from the sale of the
Securities as set forth under "Use Of Proceeds" in the Final Memorandum.
(f) For and during the period ending on the date no Securities are
outstanding, the Company will furnish to the Initial Purchaser copies of
all reports and other
32
communications (financial or otherwise) furnished by the Company to the
holders of its securities generally and, promptly after available, copies
of any reports or financial statements furnished to or filed by the
Company with the Commission or any national securities exchange on which
any class of securities of the Company may be listed.
(g) None of the Company or any of its Affiliates will sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
"security" (as defined in the Act) which could be integrated with the sale
of any of the Securities in a manner which would require the registration
under the Act of any of the Securities.
(h) The Company will not, and will not permit any of its
Subsidiaries to, solicit any offer to buy or offer to sell the Securities
by means of any form of general solicitation or general advertising (as
those terms are used in Regulation D under the Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the Act.
(i) For so long as any of the Securities remain outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the Act
and not salable in full under Rule 144 under the Act (or any successor
provision), the Company will make available, upon request, to any seller
of such Securities the information specified in Rule 144A(d)(4) under the
Act, unless the Company is then subject to Section 13 or 15(d) of the
Exchange Act.
(j) The Company will use its reasonable best efforts to (i) permit
the Securities to be included for quotation on PORTAL and (ii) permit the
Securities to be eligible for clearance and settlement through The
Depository Trust Company.
(k) During the period beginning from the date hereof and continuing
until the Time of Purchase, the Company will not offer, sell, contract to
sell or otherwise dispose of, except as provided in this Agreement, any
securities of the Company that are substantially similar to the
Securities, without the prior written consent of the Initial Purchaser.
(l) The Company will use its reasonable best efforts to do and
perform all things required to be done and performed by them under this
Agreement and the other Basic Documents prior to or after the Closing and
to satisfy all conditions precedent on their part to the obligations of
the Initial Purchaser to purchase and accept delivery of the Securities.
33
ARTICLE VI.
FEES
Section 6.1. Costs, Expenses and Taxes. The Company agrees to pay
all costs and expenses incident to the performance of its obligations under this
Agreement, whether or not the transactions contemplated herein are consummated
or this Agreement is terminated pursuant to Section 8.2 hereof, including, but
not limited to, all costs and expenses incident to (i) its negotiation,
preparation, printing, typing, reproduction, execution and delivery of this
Agreement and each of the other Basic Documents, any amendment or supplement to
or modification of any of the foregoing and any and all other documents
furnished pursuant hereto or thereto or in connection herewith or therewith,
(ii) any costs of printing the Preliminary Memorandum and the Final Memorandum
and any amendment or supplement thereto, (iii) all arrangements relating to the
delivery to the Initial Purchaser of copies of the foregoing documents, (iv) the
fees and disbursements of the counsel, the accountants and any other experts or
advisors retained by the Company, (v) preparation (including printing), issuance
and delivery to the Initial Purchaser of the Securities, including transfer
agent fees, (vi) the qualification of the Securities under state securities and
"blue sky" laws, including filing fees and reasonable fees and disbursements in
connection with such counsel's preparation of "blue sky" memoranda, not to
exceed $5,000, of counsel to the Initial Purchaser, (vii) its respective
expenses and the cost of any private or chartered jets in connection with any
meetings with prospective investors in the Securities, (viii) fees and expenses
of the Trustee, the Debenture Trustee (if any), the Unit Agent, and the transfer
agent for the Preferred Shares and the Unit Common Shares, including fees and
expenses of counsel to each such Person, (ix) all expenses and listing fees
incurred in connection with the application for quotation of the Securities on
PORTAL, (x) any fees charged by investment rating agencies for the rating of the
Securities and (xi) except as limited by Article VII, all costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses), if
any, in connection with the enforcement of this Agreement, the Securities or any
other agreement furnished pursuant hereto or thereto or in connection herewith
or therewith. In addition, the Company shall pay any and all stamp, transfer and
other similar taxes (but excluding any income, franchise, personal property, ad
valorem or gross receipts taxes) payable or determined to be payable in
connection with the execution and delivery of this Agreement, any of the other
Basic Documents or the issuance of the Securities, and shall save and hold the
Initial Purchaser harmless from and against any and all liabilities with respect
to or resulting from any delay in paying, or omission to pay, such taxes (other
than if such delay is caused by the Initial Purchaser).
ARTICLE VII.
34
INDEMNITY
Section 7.1. Indemnity.
(a) Indemnification by the Company. The Company agrees and covenants
to hold harmless and indemnify the Initial Purchaser and any director,
officer, employee, agent or controlling Person of any of the foregoing
from and against any losses, claims, damages, liabilities and expenses
(including expenses of investigation) to which the Initial Purchaser and
such Affiliates of the Initial Purchaser may become subject arising out of
or based upon any untrue statement or alleged untrue statement of any
material fact contained in the Memoranda and any amendments or supplements
thereto, any documents filed with the Commission or any State Commission
(collectively, the "Offering Materials") or arising out of or based upon
the omission or alleged omission to state in any of the Offering Materials
a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the Company
shall not be liable under this paragraph (a) to the extent that such
losses, claims, damages or liabilities arose out of or are based upon an
untrue statement or omission or alleged untrue statement or omission made
in any of the documents referred to in this paragraph (a) in reliance upon
and in conformity with the information relating to the Initial Purchaser
furnished in writing by the Initial Purchaser for inclusion therein (or to
the extent such losses, claims, damages or liabilities arose out of or are
based upon a breach by an Initial Purchaser or the Financial Advisor for
any representation or warranty contained in Section 3.2 of this
Agreement); provided, further, that the Company shall not be liable under
this paragraph (a) to the extent that such losses, claims, damages or
liabilities arose out of or are based upon an untrue statement or omission
or alleged untrue statement or omission made in any Memoranda that is
corrected in the Final Memorandum (or any amendment or supplement thereto)
if the person asserting such loss, claim, damage or liability purchased
Securities from the Initial Purchaser in reliance on such Memoranda but
was not given the Final Memorandum (or any amendment or supplement
thereto) on or prior to the confirmation of the sale of such Securities.
The Company further agrees to reimburse the Initial Purchaser for any
reasonable legal and other expenses as they are incurred by it in
connection with investigating, preparing to defend or defending any
lawsuits, claims or other proceedings or investigations for which
indemnification may be sought under this paragraph (a); provided that if
the Company reimburses an Initial Purchaser hereunder for any expenses
incurred in connection with a lawsuit, claim or other proceeding for which
indemnification is sought, such Initial Purchaser hereby
35
agrees to refund such reimbursement of expenses to the extent that the
losses, claims, damages or liabilities arise out of or are based upon an
untrue statement or omission or alleged untrue statement or omission made
in any of the documents referred to in this paragraph (a) in reliance upon
and in conformity with the information relating to such Initial Purchaser
furnished in writing by such Initial Purchaser for inclusion therein (or
for a breach by such Initial Purchaser of any representation or warranty
contained in this Agreement). The Company further agrees that the
indemnification, contribution and reimbursement commitments set forth in
this Article VII shall apply whether or not an Initial Purchaser is a
formal party to any such lawsuits, claims or other proceedings. The
indemnity, contribution and expense reimbursement obligations of the
Company under this Article VII shall be in addition to any liability the
Company may otherwise have.
(b) Indemnification by the Initial Purchaser. The Initial Purchaser
agrees and covenants to hold harmless and indemnify the Company and any
director, officer, employee, agent or controlling Person of any of the
foregoing from and against any losses, claims, damages, liabilities and
expenses insofar as such losses, claims, damages, liabilities or expenses
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Offering Materials, or any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or omission was made in reliance upon and in conformity
with the information relating to an Initial Purchaser furnished in writing
by such Initial Purchaser for inclusion therein. The indemnity,
contribution and expense reimbursement obligations of the Initial
Purchaser under this Article VII shall be in addition to any liability the
Initial Purchaser may otherwise have.
(c) Procedure. If any Person shall be entitled to indemnity
hereunder (each an "Indemnified Party"), such Indemnified Party shall give
prompt written notice to the party or parties from which such indemnity is
sought (each an "Indemnifying Party") of the commencement of any action,
suit, investigation or proceeding, governmental or otherwise (a
"Proceeding"), with respect to which such Indemnified Party seeks
indemnification or contribution pursuant hereto; provided, however, that
the failure so to notify the Indemnifying Parties shall not relieve the
Indemnifying Parties from any obligation or liability except to the extent
that the Indemnifying Parties have been prejudiced materially by such
failure. The Indemnifying Parties shall have the right, exercisable by
giving written notice to an
36
Indemnified Party promptly after the receipt of written notice from such
Indemnified Party of such Proceeding, to assume, at the Indemnifying
Parties' expense, the defense of any such Proceeding, with counsel
reasonably satisfactory to such Indemnified Party; provided, however, that
an Indemnified Party or Parties (if more than one such Indemnified Party
is named in any Proceeding) shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or parties unless: (1) the Indemnifying Parties agree to
pay such fees and expenses; or (2) the Indemnifying Parties fail promptly
to assume the defense of such Proceeding or fail to employ counsel
reasonably satisfactory to such Indemnified Party or Parties; or (3) the
named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party or Parties and the Indemnifying Party
or an Affiliate of the Indemnifying Party and such Indemnified Parties,
and the Indemnified Parties shall have been advised in writing by counsel
that there may be one or more legal defenses available to such Indemnified
Party or Parties that are different from or additional to those available
to the Indemnifying Parties and in the reasonable judgment of such counsel
it is advisable for such Indemnified Parties to employ separate counsel,
in which case, if such Indemnified Party or Parties notifies the
Indemnifying Parties in writing that it elects to employ separate counsel
at the expense of the Indemnifying Parties, the Indemnifying Parties shall
not have the right to assume the defense thereof with respect to the
Indemnified Parties and such counsel shall be at the expense of the
Indemnifying Parties, it being understood, however, that the Indemnifying
Parties shall not, in connection with any one such Proceeding or separate
but substantially similar or related Proceedings in the same jurisdiction,
arising out of the same general allegations or circumstances, be liable
for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for such Indemnified
Party or Parties (which firm (and local counsel, if any) shall be
designated in writing by such Indemnified Party or Parties), or for fees
and expenses that are not reasonable. No Indemnified Party or Parties will
settle any Proceeding without the consent of the Indemnifying Party or
Parties (but such consent shall not be unreasonably withheld). Each
Indemnified Party shall use its best efforts to cooperate with the
Indemnifying Parties in the defense of any such Proceeding. No
Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending or threatened
Proceeding in respect of which any Indemnified Party is or could have been
or a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement (i) includes an unconditional
release of
37
such Indemnified Party from all liability or claims that are the subject
of such Proceeding and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act, by or on behalf of
any Indemnified Party.
Section 7.2. Contribution. If for any reason the indemnification
provided for in Section 7.1 of this Agreement is unavailable to an Indemnified
Party, or insufficient to hold it harmless, in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then each applicable
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect not only the relative benefits received by the
Indemnifying Party on the one hand and the Indemnified Party on the other from
the offering of the Securities, but also the relative fault of the Indemnifying
and Indemnified Parties in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Indemnifying and Indemnified Parties shall be deemed to be in the same
proportion as the total proceeds from the offering of the Securities (net of
discounts but before deducting expenses) received by the Company bear to the
total discounts and commissions received by the Initial Purchaser. The relative
fault of the Indemnifying and Indemnified Parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Indemnifying or Indemnified Parties and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The amount paid or payable by
a party as a result of the losses, claims, damages and liabilities referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any such
claim.
The Company, on the one hand, and the Initial Purchaser, on the
other hand, agree that it would not be just and equitable if contribution
pursuant to the immediately preceding paragraph were determined pro rata or per
capita or by any other method of allocation which does not take into account the
equitable considerations referred to in such paragraph. Notwithstanding any
other provision of this Section 7.2, the Initial Purchaser shall not be
obligated to make contributions hereunder that in the aggregate exceed the total
discounts, commissions and other compensation received by the Initial Purchaser
under this Agreement, less the aggregate amount of any damages that such Initial
Purchaser has otherwise been required to pay by reason of the untrue or alleged
untrue statements or a breach of a representation or warranty or the omissions
or
38
alleged omissions to state a material fact. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation.
Section 7.3. Registration Rights. Notwithstanding anything to the
contrary in this Article VII, the indemnification and contribution provisions of
the Preferred Stock Registration Rights Agreement and the Common Stock
Registration Rights Agreement, respectively, shall govern any claim with respect
thereto.
ARTICLE VIII.
MISCELLANEOUS
Section 8.1. Survival of Provisions. The representations, warranties
and covenants of the Company and its officers and the Initial Purchaser made
herein, the indemnity and contribution agreements contained herein and each of
the provisions of Articles VI, VII and VIII shall remain operative and in full
force and effect regardless of (a) the investigation made by or on behalf of the
Company, the Initial Purchaser or any Indemnified Party, (b) acceptance of any
of the Securities and payment therefor, (c) any termination of this Agreement or
(d) disposition of the Securities by an Initial Purchaser whether by redemption,
exchange, sale or otherwise.
Section 8.2. Termination. (a) This Agreement may be terminated in
the sole discretion of the Initial Purchaser by notice to the Company given
prior to the Time of Purchase in the event that the Company shall have failed,
refused or been unable to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder at or prior thereto or, if at or
prior to the Closing:
(i) the Company or any of its Subsidiaries shall have
sustained any loss or interference with respect to its businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any strike, labor
dispute, slow down or work stoppage or any legal or governmental
proceeding, which loss or interference, in the sole judgment of the
Initial Purchaser, has had or has a Material Adverse Effect, or
there shall have been any event or development that, individually or
in the aggregate, has or could be reasonably likely to have a
Material Adverse Effect (including without limitation a change in
control of the Company or any of its Subsidiaries), except in each
case as described in the Final Memorandum (exclusive of any
amendment or supplement thereto);
39
(ii) trading in securities generally on the New York Stock
Exchange, American Stock Exchange or the Nasdaq National Market
shall have been suspended or minimum or maximum prices shall have
been established on any such exchange or market;
(iii) a banking moratorium shall have been declared by New
York or United States authorities;
(iv) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B)
an outbreak or escalation of any other insurrection or armed
conflict involving the United States or any other national or
international calamity or emergency, or (C) any material change in
the financial markets of the United States which, in the case of
(A), (B) or (C) above and in the sole judgment of the Initial
Purchaser, makes it impracticable or inadvisable to proceed with the
offering or the delivery of the Securities as contemplated by the
Final Memorandum; or
(v) the Preferred Stock shall have been downgraded or placed
on any "watch list" for possible downgrading by any nationally
recognized statistical rating organization.
(b) Termination of this Agreement pursuant to this Section 8.2 shall
be without liability of any party to any other party except as provided in
Section 8.1 hereof. If for any reason the Securities are not delivered by
or on behalf of the Company as provided herein (other than by reason of a
failure by the Initial Purchaser to purchase the Units after satisfaction
of all the conditions set forth in Section 4.1 hereof), in addition to any
liability the Company may have as provided in Section 8.1 hereof, the
Company will reimburse the Initial Purchaser for all out-of-pocket
expenses approved in writing by it including fees and disbursements of
counsel, reasonably incurred by the Initial Purchaser in making
preparations for the purchase, sale and delivery of the Securities.
Section 8.3. No Waiver; Modifications in Writing. No failure or
delay on the part of the Company or the Initial Purchaser in exercising any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The remedies provided for herein are cumulative and are not exclusive of
any remedies that may be available to the Company or the Initial Purchaser at
law or in equity or otherwise. No waiver of or consent to any departure by
40
the Company or the Initial Purchaser from any provision of this Agreement shall
be effective unless signed in writing by the party entitled to the benefit
thereof, provided that notice of any such waiver shall be given to each party
hereto as set forth below. Except as otherwise provided herein, no amendment,
modification or termination of any provision of this Agreement shall be
effective unless signed in writing by or on behalf of each of the Company and
the Initial Purchaser. Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by the Company or the Initial Purchaser from the
terms of any provision of this Agreement, shall be effective only in the
specific instance and for the specific purpose for which made or given. Except
where notice is specifically required by this Agreement, no notice to or demand
on the Company in any case shall entitle the Company to any other or further
notice or demand in similar or other circumstances.
Section 8.4. Information Supplied by the Initial Purchaser. The
statements set forth in the third paragraph, the third sentence of the sixth
paragraph and the eighth and ninth paragraphs under the heading "Plan of
Distribution" in the Final Memorandum (to the extent such statements relate to
such Initial Purchaser) constitute the only information furnished by the Initial
Purchaser to the Company for the purposes of Sections 3.1(a) and 7.1(a) and (b)
hereof.
Section 8.5. Communications. All notices, demands and other
communications provided for hereunder shall be in writing, and, (a) if to the
Initial Purchaser, shall be given by registered or certified mail, return
receipt requested, telex, telegram, telecopy, courier service or personal
delivery, addressed to CIBC Xxxxxxxxxxx Corp., 000 Xxxxxxxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxxxxxxx, with a copy to Xxxxxxx
Xxxx & Xxxxxxxxx, One Citicorp Center, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxxxxx X. Xxxxxxx, Esq., and (b) if to the Company, shall be
given by similar means to MMH Holdings, Inc., 000 X. Xxxxxx Xxxx Xxxxxx, Xxx
Xxxxx, Xxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxx, General Counsel, with a
copy to Akin, Gump, Strauss, Xxxxx & Xxxx, LLP, 0000 Xxx Xxxxxxxxx Xxxxxx, X.X.,
Xxxxx 000, Xxxxxxxxxx, X.X. 00000 Attention: Xxxxxxx X. Xxxxx, Xx., Esq. In each
case notices, demands and other communications shall be deemed given when
received.
Section 8.6. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same Agreement.
41
Section 8.7. Successors. This Agreement shall inure to the benefit
of and be binding upon the Initial Purchaser and the Company and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
Person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained; this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such Persons and for the benefit of no other Person except that (i)
the indemnities of the Company contained in Section 7.1(a) of this Agreement
shall also be for the benefit of the directors, officers, employees and agents
of the Initial Purchaser and any Person or Persons who control the Initial
Purchaser within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act and (ii) the indemnities of the Initial Purchaser contained in
Section 7.1(b) of this Agreement shall also be for the benefit of the Company,
its directors, officers, employees and agents and any Person or Persons who
control the Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act. No purchaser of any Securities from the Initial Purchaser will
be deemed a successor because of such purchase.
Section 8.8. Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
Section 8.9. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 8.10. Headings. The Article and Section headings and Table
of Contents used or contained in this Agreement are for convenience of reference
only and shall not affect the construction of this Agreement.
42
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first written above.
MMH HOLDINGS, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
The foregoing Agreement is hereby confirmed
and accepted as of the date first written
above:
INITIAL PURCHASER:
CIBC XXXXXXXXXXX CORP.
By: /s/ Xxxx Xxxxxxxxxx
------------------------------------------
Name: Xxxx Xxxxxxxxxx
Title: Managing Director
43
SCHEDULE I
Outstanding
Capital Percentage of
Subsidiaries Interests Holder Class Held
------------ --------- ------ ----------
3014794 Nova Xxxxxx Material
Scotia ULC Handling, LLC
Birmingham Crane & 10,000 PHMH Holding
Hoist, Inc. Company
Butters 100,000 Invercoe Engineering
Engineering Limited
Services Limited MHE Canada. ULC
Xxxxxx Material
Handling, LLC
CMH Material 99% Harnischfeger 100%
Handling, LLC Distribution &
Service, LLC
1% PHME Service,
Inc.
EPH Material 99% Harnischfeger 100%
Handling, LLC Distribution &
Service, LLC
1% PHME Service,
Inc.
Harnischfeger 99% Material Handling 100%
Distribution & Equipment Nevada
Service, LLC Corporation
1% PHME Service,
Inc.
Hercules S.A. de 8,000 com. Xxxxxx Material
C.V. 28,610 v. Handling, Inc.
3,624,390 v. PHME Holding Co.
HPH Material 99% Harnischfeger 100%
Handling, LLC Distribution &
Service, LLC
1% PHME Service,
Inc.
Xxxxxxxxx ULC 1 3014794 Nova
Scotia ULC
Invercoe 100,000 Lowfile Limited
Engineering Ltd. 14,286A
Kaverit Steel & 20 3014794 Nova
Crane ULC Scotia ULC
100 Xxxxxx
Linear Motors Mechanical
Limited Handling Ltd.
Lowfile Limited 100 RedCrown, ULC
Material Handling 100 PHMH Holding
Equipment Nevada Company
Corporation
Material Handling, 100% Xxxxxx Material 100%
LLC Handling, Inc.
Outstanding
Capital Percentage of
Subsidiaries Interests Holder Class Held
------------ --------- ------ ----------
MHE Technologies, Inc. 000 XXXX Xxxxxxx Xx.
XXX Xxxxxx ULC Xxxxxx Material
Handling, Inc.
Xxxxxx Material Xxxxxx Material
Handling, Ltd. Handling, Inc.
MMH (Holdings) Ltd. 175,000 ord. Lowfile Limited
775,000 A ord.
37,975,000 B ord.
10,725,000 C pr.
Harnischfeger
Holdings Ltd.
MMH International 3,776,471 MMH (Holdings) Ltd.
Ltd.
Mondel ULC 8,000 0000000 Nova Scotia ULC
Xxxxxx Blooma Pte 37,500 PHMH Holding Co. 85%
Ltd. 56,250 Soh Heng Keow
56,250 Xxx Xxx Xxxx
Xxxxxx Material MMH Holdings, Inc.
Handling, Inc.
Xxxxxx Mechanical 1,000 MMH International
Handling, Inc. Limited
Xxxxxx Mechanical 9,949,678 ord. MMH (Holdings)
Handling, Ltd. 300,000 cum pr. Ltd.
Xxxxxx Mechanical 200 MMH International Ltd.
Handling, Pty Ltd.
MPH Crane, Inc. 450nv PHMH Holding Co.
50v
NPH Material 98 Material Handling
Handling, Inc. Equipment Nevada Corp.
2 PHME Service, Inc. 50%(?)
P&H Middle East Ltd. 1 PHMH Holding Co.
PHME Service, Inc. 000 XXXX Xxxxxxx Xx.
XXXX Holding Co. 350 Xxxxxx Material
250 Handling, Inc.
RedCrown, ULC 99.9% Xxxxxx Material
Handling, Ltd.
.1% Xxxxxx Material Handling,
Inc.
Royce Ltd. 2 Xxxxxx Mechanical
Handling Limited
SPH Crane & Hoist, PHMH Holding Company
Inc.
Outstanding
Capital Percentage of
Subsidiaries Interests Holder Class Held
------------ --------- ------ ----------
U.K. Crane Services 2 Xxxxxx Mechanical
Ltd. Handling Limited
Xxxxxxx Xxxxx Co. 2 Xxxxxx Mechanical
Handling Limited
