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INVESTMENT AGREEMENT
DATED AS OF DECEMBER 28, 2000
BETWEEN
LIH HOLDINGS IV, LLC
AND
XXXX INTERNATIONAL HOLDINGS, INC.
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THIS INVESTMENT AGREEMENT is made and entered into as of December
28, 2000 by and between LIH HOLDINGS IV, LLC, a Delaware limited liability
company (the "Purchaser") and XXXX INTERNATIONAL HOLDINGS, INC., a Delaware
corporation (the "Company").
WHEREAS, the Company is a party to that certain Credit Agreement,
dated February 27, 1998, (as such agreement has been amended, supplemented or
otherwise modified, including, without limitation, by that certain Waiver and
Fourth Amendment to Credit Agreement, dated November 13, 2000 and as it may
hereafter be further amended, restated, supplemented, modified, refinanced or
replaced (the "Credit Agreement")) with Xxxx Industries, Incorporated,
Deflecta-Shield Corporation, Belmor Autotron Corp., DFM Corp, Auto Ventshade
Company and Smittybilt, Inc. (the foregoing entities are collectively
referred to herein as the "Borrowers"), Xxxx Acquisition Corp., BAC
Acquisition Co, Trailmaster Products, Inc., Delta III, Inc., Ventshade
Holdings, Inc. and Xxxxxx Financial, Inc., individually as a lender and in
its capacity as agent ("Agent") for a number of lenders who executed the
Credit Agreement (the "Lenders").
WHEREAS, Agent on behalf of the Lenders, the Company, Harvest
Partners III, L.P. ("Harvest"), and the Borrowers have entered into that certain
Capital Call Agreement, dated November 13, 2000 and as it may hereafter be
amended, supplemented or otherwise modified (the "Capital Call Agreement")
pursuant to which Harvest has agreed to invest, or to cause its designee to
invest, up to an additional $10,000,000 in equity of the Company on the terms
and conditions set forth in the Capital Call Agreement.
WHEREAS, as required by the Capital Call Agreement, the Company
desires to sell to the Purchaser and the Purchaser desires to purchase from the
Company, up to 10,000 shares of Series C Preferred Stock, par value $0.01 per
share (the "Series C Preferred Stock"), of the Company.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following defined
terms shall have the meanings indicated below:
"Actions or Proceedings" means any action, suit, proceeding,
arbitration or Governmental or Regulatory Authority investigation or audit.
"Affiliate" means, as applied to any Person, (i) any other Person
directly or indirectly controlling, controlled by or under common control with
that Person, (ii) any other Person that owns or controls 5% or more of any class
of equity securities (including any equity
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securities issuable upon the exercise of any Option) of that Person or any of
its Affiliates, or (iii) any member, director, partner, officer, agent, employee
or relative of such Person. For the purposes of this definition, "control"
(including with correlative meanings, the terms "controlling", "controlled by",
and "under common control with") as applied to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through ownership of voting
securities or by contract or otherwise. For the purpose of this Agreement, (i)
neither the Purchaser nor any of its Affiliates shall be deemed to be
"Affiliates" of the Company or any Subsidiary and (ii) neither the Company, any
Subsidiary, nor any of their respective Affiliates shall be deemed to be
"Affiliates" of the Purchaser.
"Agent" has the meaning ascribed to it in the introductory
paragraphs of this Agreement.
"Agreement" means this Investment Agreement and the schedules hereto
and the certificates delivered in connection herewith, as the same may be
amended, modified or restated from time to time in accordance with the terms
hereof.
"Assets and Properties" of any Person means all assets and
properties of every kind, nature, character and description (whether real,
personal or mixed, whether tangible or intangible, whether absolute, accrued,
contingent, fixed or otherwise and wherever situated), including the goodwill
related thereto, operated, owned or leased by such Person, including without
limitation cash, cash equivalents, accounts and notes receivable, chattel paper,
documents, instruments, general intangibles, real estate, equipment, inventory,
goods and intellectual property.
"Borrowers" has the meaning ascribed to it in the introductory
paragraphs of this Agreement.
"Business Day" means a day other than Saturday, Sunday or any day on
which banks located in the State of New York or the State of Minnesota are
authorized or obligated to close.
"Business or Condition of the Company" means the business, condition
(financial or otherwise), results of operations, and Assets and Properties of
the Company and the Subsidiaries taken as a whole.
"Capital Call Agreement" has the meaning ascribed to it in the
introductory paragraphs of this Agreement.
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"Charter" means the Certificate of Incorporation of the Company, as
amended, after giving effect to the filing of the Series C Certificate of
Designation with the Secretary of State of the State of Delaware.
"Closing" means the closing of the transactions contemplated by
Section 2.2 or Section 2.3, as applicable.
"Closing Date" means the date on which the Initial Closing or the
Second Closing, as applicable, actually occurs.
"Common Stock" means shares of common stock, $.10 par value, of the
Company.
"Company" has the meaning ascribed to it in the introductory
paragraphs of this Agreement.
"Contract" means any agreement, lease, debenture, note, evidence of
Indebtedness, mortgage, indenture, security agreement or other contract or other
commitment (whether written or oral).
"Credit Agreement" has the meaning ascribed to it in the
introductory paragraphs of this Agreement.
"Dividends" means the shares of Series C Preferred Stock issued as
dividends on the Series C Preferred Stock in accordance with the Series C
Certificate of Designation.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Financial Statement Date" means October 1, 2000.
"GAAP" means United States generally accepted accounting principles,
consistently applied throughout the specified period and in all prior comparable
periods.
"Governmental or Regulatory Authority" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision, any arbitrator, tribunal or panel of
arbitrators and, shall include any stock exchange, quotation service and the
National Association of Securities Dealers.
"Harvest" has the meaning ascribed to it in the introductory
paragraphs of this Agreement.
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"Indebtedness" of any Person means all obligations of such Person
(i) for borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business),
(iv) under capital leases and (v) in the nature of guarantees of the obligations
described in clauses (i) through (iv) above of any other Person.
"Initial Capital Call" has the meaning ascribed to it in Section
2.1
"Initial Closing" means the closing of the transactions contemplated
by Section 2.2.
"Initial Closing Date" means the date on which the Initial Closing
actually occurs.
"Initial Purchase Price" has the meaning ascribed to it in Section
2.1.
"Laws" means all laws, statutes, rules, regulations, ordinances and
other pronouncements having the effect of law of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision or of any Governmental or Regulatory Authority.
"Lenders" has the meaning ascribed to it in the introductory
paragraphs of this Agreement.
"Liens" means any mortgage, pledge, assessment, security interest,
lease, lien, adverse claim, levy, charge or other encumbrance of any kind, or
any conditional sale Contract, title retention Contract or Contract committing
to grant any of the foregoing.
"Option" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other Contract that
gives the right to (i) purchase or otherwise receive or be issued any shares of
capital stock or other equity interests of such Person or any security of any
kind convertible into or exchangeable or exercisable for any shares of capital
stock or other equity interest of such Person or (ii) receive any benefits or
rights similar to any rights enjoyed by or accruing to the holder of shares of
capital stock or other equity interests of such Person, including without
limitation any rights to participate in the equity, income or election of
directors, management committee members or officers of such Person.
"Order" means any writ, judgment, decree, injunction or similar
order of any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
"Person" or "person" means any individual, corporation, joint stock
corporation, limited liability company or partnership, general partnership,
limited partnership, proprietorship,
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joint venture, other business organization, trust, union, association,
Governmental or Regulatory Authority or other entity of any kind.
"Preferred Stock" has the meaning ascribed to it in Section 3.3.
"Purchase Price" has the meaning ascribed to it in Section 2.1.
"Purchaser" has the meaning ascribed to it in the introductory
paragraphs of this Agreement.
"Second Capital Call" has the meaning ascribed to it in Section 2.1.
"Second Closing" means the closing of the transactions contemplated
by Section 2.3.
"Second Closing Date" means the date on which the Second Closing
actually occurs, if at all.
"Second Purchase Price" has the meaning ascribed to it in Section
2.1.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Series C Certificate of Designation" means the Certificate of
Designation with respect to the Series C Preferred Stock in the form attached as
Exhibit A, to be filed with the Secretary of State of the State of Delaware
prior to the Closing.
"Series C Preferred Stock" has the meaning ascribed to it in the
introductory paragraphs of this Agreement.
"Shares" has the meaning ascribed to it in Section 2.1.
"Subsidiary" means any Person in which the Company, directly or
indirectly through Subsidiaries or otherwise, beneficially owns more than fifty
percent (50%) of either the equity interests in, or the voting control of, such
Person.
1.2 Certain Conventions. Unless the context of this Agreement
otherwise requires, (i) words of any gender include each other gender, (ii)
words using the singular or plural number also include the plural or singular
number, respectively, (iii) the terms "hereof," "herein," "hereby" and
derivative or similar words refer to this entire Agreement, (iv) the terms
"Article" or "Section" refer to the specified Article or Section of this
Agreement, and (v) the phrases "ordinary course of business" and "ordinary
course of business consistent with past
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practice" refer to the business and practice of the Company or a Subsidiary. All
accounting terms used herein and not expressly defined herein shall have the
meanings given to them under GAAP.
ARTICLE II
SALE OF SHARES; CLOSING
2.1 Purchase and Sale. At the Closing, the Company shall initially
issue and sell to the Purchaser, and the Purchaser shall purchase from the
Company, 5,000 shares of Series C Preferred Stock (the "Initial Capital Call"),
free and clear of all Liens, for an aggregate purchase price (payable in cash in
the manner provided in Section 2.2) equal to $5,000,000 (the "Initial Purchase
Price"). If required under the Capital Call Agreement, the Company shall
subsequently issue and sell to the Purchaser, and the Purchaser shall
subsequently purchase from the Company, 5,000 additional shares of Series C
Preferred Stock (the "Second Capital Call"), free and clear of all Liens, for an
aggregate purchase price (payable in cash in the manner provided in Section 2.2)
equal to $5,000,000 (the "Second Purchase Price"). The shares of Series C
Preferred Stock to be issued in the Initial Capital Call and in the Second
Capital Call are collectively referred to herein as the "Shares" and the Initial
Purchase Price and Second Purchase Price are collectively referred to herein as
the "Purchase Price."
2.2 Initial Closing. The Initial Closing shall take place at such
location as the parties mutually agree on the date on which each of the
conditions precedent set forth in Article VI and Article VII shall have been
satisfied or waived as provided therein. At the Initial Closing, the Purchaser
shall pay the Initial Purchase Price by wire transfer of immediately available
funds to the account specified by the Company by written notice delivered to the
Purchaser at least two (2) Business Days before the Initial Closing Date.
Simultaneously, the Company shall deliver to the Purchaser certificates,
registered in the name of the Purchaser, representing the shares of Series C
Preferred Stock issued in the Initial Capital Call. At the Initial Closing,
there shall also be delivered to the Company and the Purchaser the opinions,
certificates and other Contracts, documents and instruments to be delivered
under Articles VI and VII.
2.3 Second Closing. The Second Closing, if required under the
Capital Call Agreement, shall take place at such location as the parties
mutually agree on the date on which each of the conditions precedent set forth
in Article VI and Article VII shall have been satisfied or waived as provided
therein. At the Second Closing, the Purchaser shall pay the Second Purchase
Price by wire transfer of immediately available funds to the account specified
by the Company by written notice delivered to the Purchaser at least two (2)
Business Days before the Second Closing Date. Simultaneously, the Company shall
deliver to the Purchaser certificates, registered in the name of the Purchaser,
representing the shares of Series C Preferred Stock issued in the Second Capital
Call. At the Second Closing, there shall also be delivered to the
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Company and the Purchaser the opinions, certificates and other Contracts,
documents and instruments to be delivered under Articles VI and VII.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser that the
statements contained in this Article III are true and correct as of the date of
this Agreement and will be true and correct as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Article III).
3.1 Organization of the Company. The Company is a corporation duly
organized, validly existing and in good standing under the Laws of the State of
Delaware, is duly qualified, licensed or admitted to do business and is in good
standing in those jurisdictions in which the ownership, use or leasing of its
Assets and Properties or the conduct or nature of its business, makes such
qualification, licensing or admission necessary, except where the failure to be
so qualified, licensed, admitted or in good standing will not, individually or
in the aggregate, have a material adverse effect on the Business or Condition of
the Company.
3.2 Power and Authority. The Company has the requisite power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder, to consummate the transactions contemplated hereby. The execution and
delivery by the Company of this Agreement, the performance by the Company of its
obligations hereunder, the consummation of the transactions contemplated hereby,
have been duly and validly authorized by all necessary action on the part of the
Board of Directors of the Company, which action of the Board of Directors is the
only corporate action necessary therefore. This Agreement has been duly and
validly executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company, in each case enforceable against the Company
in accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws relating to the enforcement of creditors'
rights generally and by general principles of equity.
3.3 Capital. As of the date hereof and prior to the transactions
contemplated by this Agreement, the authorized capital stock of the Company
consists of 25,000,000 shares of Common Stock, 3,000,000 shares of Class B
Common Stock, par value $0.01 (the "Class B Common Stock"), and 506,602 shares
of Preferred Stock, par value $0.01 (the "Preferred Stock") of which 394,315
shares are designated as Series B Preferred Stock (the "Series B Preferred
Stock"), of which (i) approximately 9,368,000 shares of Common Stock are
outstanding, all of which are validly issued, fully paid and non-assessable, and
have been issued in compliance with all applicable federal and state securities
laws, (ii) no shares of Class B Common Stock are outstanding and (iii) 167,000
shares of Series B Preferred Stock are
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outstanding. Immediately after giving effect to the Closing and the other
transactions contemplated by this Agreement to occur on the Closing Date, (i)
the authorized capital stock of the Company will consist of 25,000,000 shares of
Common Stock, 3,000,000 shares of Class B Common Stock and 506,602 shares of
Preferred Stock, of which 363,000 shares are designated as Series B Preferred
Stock and of which 30,000 shares shall be designated Series C Preferred Stock,
in each case having the terms and conditions specified in the Charter, (ii) the
outstanding capital stock of the Company will consist of 9,368,000 shares of
Common Stock, 167,000 shares of Series B Preferred Stock and 5,000 shares of
Series C Preferred Stock (upon the Initial Closing) and 10,000 shares of Series
C Preferred Stock (upon the Second Closing). Except for the Series C Preferred
Stock and except as set forth on Schedule 3.3, there are no, and immediately
after giving effect to the Closing and the other transactions contemplated by
this Agreement to occur on the Closing Date, there will not be any outstanding
Options with respect to the Company, no agreements, arrangements or
understandings to issue Options with respect to the Company and no preemptive
rights or agreements, arrangements or understandings to issue preemptive rights
with respect to the issuance or sale of the Company's capital stock. Upon
issuance at the Closing, the certificate or certificates representing the Shares
purchased hereunder to the Purchaser will grant the Purchaser good and valid
title to the Shares free and clear of all Liens, and all the Shares will have
been duly authorized, validly issued and fully paid and will be nonassessable.
The Company has taken all necessary corporate action to reserve the full number
of shares of Common Stock issuable upon conversion of the Shares and the
dividends of shares of Series C Preferred Stock thereon (the "Dividends"). The
Common Stock issuable upon conversion of the Shares and the Dividends, when
issued upon such conversion, will be duly authorized, validly issued, fully paid
and nonassessable. Neither the execution, delivery or performance by the Company
of this Agreement, the issuance of the Shares as contemplated hereby, the
issuance of shares of Common Stock upon conversion of the Shares or the
Dividends, nor the consummation of the transactions contemplated by this
Agreement will give rise to or result in (with or without notice, lapse of time
or both) any antidilution adjustment, acceleration of vesting or other change
under or to any Option, except as set forth on Schedule 3.3 hereto. In the event
that the Second Capital Call is not required and thus, the 5,000 shares of
Series C Preferred Stock that could have been issued pursuant to the Second
Capital Call plus the shares of Series C Preferred Stock that would have been
issued or accrued as dividends thereon are not issued to the Purchaser, such
shares of Series C Preferred Stock shall be retired and shall revert to the
status of authorized, undesignated and unissued preferred stock.
3.4 Subsidiaries. Each Subsidiary is a corporation duly organized,
validly existing and in good standing under the Laws of its jurisdiction of
incorporation and has full corporate power and authority to conduct its business
as and to the extent now conducted and to own, use and lease its Assets and
Properties. Each Subsidiary is duly qualified, licensed or admitted to do
business and is in good standing in those jurisdictions in which the ownership,
use or leasing of such Subsidiary's Assets and Properties, or the conduct or
nature of its business, makes such qualification, licensing or admission
necessary, except where the failure to be so qualified, licensed, admitted or in
good standing will not, individually or in the aggregate, have a
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material adverse effect on the Business or Condition of the Company. All of the
outstanding shares of capital stock of each Subsidiary have been duly authorized
and validly issued, are fully paid and nonassessable, and are owned,
beneficially and of record, by the Company or Subsidiaries wholly owned by the
Company, free and clear of all Liens other than Liens in favor of Agent, for its
benefit and the benefit of the Lenders under the Credit Agreement. There are no
outstanding Options with respect to any Subsidiary. Except for the Subsidiaries,
the Company holds no equity, partnership, joint venture or other interest in any
Person, except for such equity, partnership, joint venture or other interest in
any Person that is de minimis.
3.5 No Conflicts. The execution and delivery by the Company of
this Agreement, the performance by the Company of its respective obligations
hereunder, the consummation of the transactions contemplated hereby (including,
without limitation, the filing of the Series C Certificate of Designation, the
issuance of the Shares and the issuance of the Common Stock issuable upon
conversion of the Shares) does not and will not: (a) conflict with or result in
a violation or breach of any of the terms, conditions or provisions of the
Company's certificate of incorporation or by-laws; (b) conflict with or result
in a violation or breach of any term or provision of any Law or Order applicable
to the Company or any Subsidiary or any of their respective Assets and
Properties; and (c) does not and will not, (i) conflict with or result in a
violation or breach of, (ii) constitute (with or without notice or lapse of time
or both) a default under, (iii) require the Company or any Subsidiary to obtain
any consent, approval or action of, make any filing with or give any notice to
any Person (other than the consent of Agent under the Credit Agreement) as a
result or under the terms of, (iv) result in any termination, cancellation,
acceleration or modification of, or give to any Person any right of termination,
cancellation, acceleration or modification in or with respect to, (v) give to
any Person any additional rights or entitlement to increased, additional,
accelerated or guaranteed payments under, (vi) other than liabilities under this
Agreement and the transactions contemplated by this Agreement, result in the
creation of any new, additional or increased liability of the Company or any
Subsidiary under or (vii) result in the creation or imposition of any Lien upon
the Company or any Subsidiary or any of their respective Assets and Properties
under, any Contract to which the Company or any Subsidiary is a party or by
which any of their respective Assets and Properties are bound.
3.6 Governmental Approvals and Filings. No consent, approval or
action of, filing with or notice to any Governmental or Regulatory Authority on
the part of the Company (other than the filing of the Series C Certificate of
Designation with the Secretary of State of the State of Delaware) is required in
connection with the execution, delivery and performance of this Agreement, the
consummation of the transactions contemplated hereby.
3.7 SEC Documents; Financial Statements. Each report, schedule,
form, statement and other document required to be filed by the Company with the
SEC (each an "SEC Document", and collectively, the "SEC Documents") has been
filed. As of its filing date, each SEC Document complied in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act and none of the SEC Documents, except to the extent that
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information contained in any SEC Document has been revised or superseded by a
later-filed or later declared effective, as the case may be, SEC Document,
contained any untrue statement of a material fact or omitted to state a material
fact (x) necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or (y) required to be
stated therein or necessary to make the statements therein not misleading. The
financial statements of the Company included in the SEC Documents comply in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with GAAP (except as may be indicated in the notes thereto) and
fairly present the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments which will
not have or reflect a material adverse effect on the Business or Condition of
the Company).
3.8 Absence of Changes. Since the Financial Statement Date hereto
or as disclosed in the SEC Documents filed prior to the execution and delivery
hereof, there has not been any event or development which, individually or
together with other such events, did have or could reasonably be expected to
have a material adverse effect on the Business or Condition of the Company. None
of the other representations or warranties in this Agreement shall be deemed to
limit the foregoing.
3.9 Legal Proceedings. There are no Actions or Proceedings pending
or, to the knowledge of the Company, overtly threatened against, relating to or
affecting the Company or any Subsidiary or any of their respective Assets and
Properties, which (i) could reasonably be expected to result in the issuance of
an Order restraining, enjoining or otherwise prohibiting or making illegal the
consummation of any of the transactions contemplated by this Agreement, or (ii)
if determined adversely to the Company or such Subsidiary, could reasonably be
expected to, individually or in the aggregate, have a material adverse effect on
the Business or Condition of the Company.
3.10 Other Negotiations; Brokers. Neither the Company, any
Subsidiary, nor any of their respective Affiliates (nor any investment banker,
financial advisor, attorney, accountant or other Person retained by or acting
for or on behalf of the Company, any Subsidiary or any such Affiliate) (i) has
entered into any agreement that conflicts with any of the transactions
contemplated by this Agreement, or (ii) has entered into any agreement or had
any discussions with any third party regarding any transaction involving the
Company or any Subsidiary which could result in the Purchaser, their respective
members, or the general or limited partners, members, officers, directors,
employees, agents or Affiliates of any of them being subject to any claim for
liability to said third party in connection with this Agreement or the
consummation of any of the transactions contemplated hereby. No agent, broker,
finder, investment banker, financial advisor or other similar Person will be
entitled to any fee, commission or other compensation in connection with any of
the transactions contemplated by
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this Agreement on the basis of any act or statement made or alleged to have been
made by the Company, any Subsidiary, any of their respective Affiliates, or any
investment banker, financial advisor, attorney, accountant or other Person
retained by or acting for or on behalf of the Company, any Subsidiary or any
such Affiliate.
3.11 Exemption from Registration; Restrictions on Offer and Sale of
Same or Similar Securities. Assuming the representations and warranties of the
Purchaser set forth in Section 4.3 are true and correct in all material
respects, the offer and sale of the Shares made pursuant to this Agreement is
exempt from the registration requirements of the Securities Act. Neither the
Company nor any Person (other than the Purchaser and its Affiliates as to which
no representation is made) authorized to act on its behalf has, in connection
with the offering of the Shares, engaged in (i) any form of general solicitation
or general advertising (as those terms are used within the meaning of Rule
502(c) under the Securities Act), (ii) any action involving a public offering
within the meaning of Section 4(2) of the Securities Act, or (iii) any action
that would require the registration under the Securities Act of the offering and
sale of the Shares pursuant to this Agreement or that would violate applicable
state securities or "blue sky" laws. Neither the Company nor any Person (other
than the Purchaser and its Affiliates as to which no representation is made)
authorized to act on its behalf has made, directly or indirectly, any offer or
sale of the Shares or of securities of the same or a similar class as the Shares
that could cause the offer and sale of the Shares contemplated hereby to fail to
be entitled to exemption from the registration requirements of the Securities
Act. As used herein, the terms "offer" and "sale" have the meanings specified in
Section 2(3) of the Securities Act.
3.12 Disclosure. No representation or warranty contained in this
Agreement, and no statement contained in any Schedule or in any certificate,
list or other writing furnished to the Purchaser pursuant to any provision of
this Agreement, including, without limitation, pursuant to Article VI, contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements herein, in the light of the
circumstances under which they were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company that the
statements contained in this Article IV are true and correct as of the date of
this Agreement, and will be true and correct as of the Closing Date (as though
made then and as though the Closing Date was substituted for the date of this
Agreement throughout this Article IV).
4.1 Organization; Power and Authority. The Purchaser is a limited
liability company duly organized, validly existing and in good standing under
the Laws of the State of Delaware. The Purchaser has the requisite power and
authority to execute and deliver this
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Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery by the Purchaser of
this Agreement, the performance by the Purchaser of its obligations hereunder
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by the Purchaser. This Agreement has been duly and validly
executed and delivered by the Purchaser and constitutes the legal, valid and
binding obligation of the Purchaser enforceable against the Purchaser in
accordance with its terms, except as the enforceability hereof may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
other similar laws relating to the enforcement of creditors' rights generally
and by general principles of equity.
4.2 No Conflicts. The execution, delivery and performance of this
Agreement and the consummation by the Purchaser of the transactions contemplated
hereby will not conflict with, or constitute a default under, any agreement,
indenture or instrument to which the Purchaser is a party, or result in a
violation of the Purchaser's operating agreement or any order, judgment or
decree of any court or Governmental or Regulatory Authority having jurisdiction
over the Purchaser or any of its properties, and, except for such filings as may
be required by the Exchange Act, no consent, authorization or order of, or
filing or registration with, any court or Governmental or Regulatory Authority
is required by the Purchaser for the execution, delivery and performance of this
Agreement.
4.3 Purchase for Investment. The Shares will be acquired by the
Purchaser for its own account for the purpose of investment and not with a view
to the resale or distribution of all or any part of the Shares in violation of
the Securities Act, it being understood that the right to dispose of the Shares
shall be entirely within the discretion of the Purchaser. The Purchaser is an
"accredited investor" (as such term is defined in Rule 501(a) of Regulation D
under the Securities Act). Purchaser has such knowledge and experience in
financial and business matters as to be able to evaluate the merits and risks of
an investment in the Shares and is able to bear the economic risk of its
investment in the Shares (including a complete loss of its investment).
Purchaser understands that the Shares have not been registered under the
Securities Act or any state securities laws by reason of an exemption from the
registration requirements of the Securities Act and such state securities laws,
which depend upon, among other things, the accuracy of the representations set
forth herein.
4.4 Brokers. No agent, broker, finder, investment banker,
financial advisor or other similar Person will be entitled to any fee,
commission or other compensation in connection with any of the transactions
contemplated by this Agreement on the basis of any act or statement made by the
Purchaser.
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ARTICLE V
COVENANTS OF THE COMPANY
5.1 Regulatory and Other Approvals. The Company shall and shall
cause each Subsidiary to (a) take all necessary or desirable steps and proceed
diligently and in good faith and use its best efforts, as promptly as
practicable, to obtain all consents, approvals or actions of, to make all
filings with and to give all notices to, Governmental or Regulatory Authorities
or any other Person required of the Company or any Subsidiary to consummate the
transactions contemplated by this Agreement, (b) provide such other information
and communications to such Governmental or Regulatory Authorities or other
Persons as the Purchaser or such Governmental or Regulatory Authorities or other
Persons may reasonably request and (c) cooperate with the Purchaser as promptly
as practicable in obtaining all consents, approvals or actions of, making all
filings with and giving all notices to, Governmental or Regulatory Authorities
or other Persons required of the Purchaser to consummate the transactions
contemplated by this Agreement. The Company will provide prompt notification to
the Purchaser when any such consent, approval, action, filing or notice referred
to in clause (a) above is obtained, taken, made or given, as applicable, and
will advise the Purchaser of any communications (and, unless precluded by Law,
provide the Purchaser with copies of any such communications that are in
writing) with any Governmental or Regulatory Authority or other Person regarding
any of the transactions contemplated by this Agreement.
5.2 Reservation of Shares. The Company will, at all times that the
Shares are outstanding, keep reserved the full number of shares of Common Stock
issuable upon conversion of the Shares and Dividends. The Company will reserve
20,000 shares of Series C Preferred to be issued only as Dividends.
5.3 Use of Proceeds. The Company shall use the proceeds from the
purchase and sale of the Shares hereunder as required by the Credit Agreement
and the Capital Call Agreement.
5.4 Notice and Cure. The Company shall notify the Purchaser
promptly in writing of, and contemporaneously shall provide the Purchaser with
true and complete copies of any and all information or documents relating to,
and the Company shall use its best efforts to cure before the Closing, any
event, transaction or circumstance that causes or shall cause any covenant or
agreement of the Company under this Agreement to be materially breached (if not
qualified by materiality or material adverse effect) or breached (if qualified
by materiality or material adverse effect) or that renders or shall render
materially untrue (if not qualified by materiality or material adverse effect)
or untrue (if qualified by materiality or material adverse effect) any
representation or warranty of the Company contained in this Agreement as if the
same were made on or as of the date of such event, transaction or circumstance.
The Company also shall notify the Purchaser promptly in writing of, and the
Company shall use its best efforts to cure, before the Closing, any material
violation or material breach (in each case, if not
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qualified by materiality or material adverse effect) or any violation or breach
(in each case, if qualified by materiality or material adverse effect) of any
representation, warranty, covenant or agreement made by the Company in this
Agreement, whether occurring or arising before, on or after the date of this
Agreement. No notice given pursuant to this Section shall have any effect on the
representations, warranties, covenants or agreements contained in this Agreement
for purposes of determining satisfaction of any condition contained herein.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF THE PURCHASER
The obligations of the Purchaser hereunder are subject to the
fulfillment, at or before such Closing, of each of the following conditions (all
or any of which may be waived in whole or in part by the Purchaser in its sole
discretion):
6.1 Orders and Laws. There shall not be in effect on the Closing
Date any Order or Law restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement.
6.2 Certificates of Designation. The Purchaser shall have received
evidence satisfactory to it that the Class C Certificate of Designation,
substantially in the form of Exhibit A hereto, has been duly filed with the
Office of the Secretary of State of the State of Delaware and has become
effective in accordance with its terms.
6.3 Delivery of Certificates. Duly executed certificates
representing the Shares shall have been delivered to the Purchaser.
6.4 Capital Call Agreement. The Capital Call Agreement shall be in
effect and shall require the investment contemplated, including in the amount
set forth in Section 2 hereof, by this Agreement.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE COMPANY
The obligations of the Company hereunder are subject to the
fulfillment, at or before the Closing, of each of the following conditions (all
or any of which may be waived in whole or in part by the Company in its sole
discretion):
7.1 Payment of Purchase Price. The Purchaser shall have paid
the applicable Purchase Price for the Shares.
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7.2 Orders and Laws. There shall not be in effect on the Closing
Date any Orders or Laws that became effective after the execution and delivery
of this Agreement restraining, enjoining or otherwise prohibiting or making
illegal the consummation of any of the transactions contemplated by this
Agreement.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS
Notwithstanding any right of the Purchaser (whether or not
exercised) to investigate the affairs of the Company or any right of any party
(whether or not exercised) to investigate the accuracy of the representations
and warranties of another party contained in this Agreement or the waiver of any
condition to Closing, the Company, on the one hand, and the Purchaser, on the
other hand, have the right to rely fully upon the representations, warranties,
covenants and agreements of the other contained in this Agreement. The
representations, warranties, covenants and agreements of the Company and the
Purchaser contained in this Agreement will survive the Closing (a) indefinitely
with respect to the covenants and agreements herein and the representations and
warranties contained in Sections 3.1, 3.2, 3.3, 3.4 and 3.10 and 4.1 and 4.4 and
(b) until the third anniversary of the Closing Date with respect to all other
representations and warranties.
ARTICLE IIX
TERMINATION
9.1 Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned upon termination of Capital
Call Agreement or any amendment thereto that eliminates the obligation of
Harvest to fund any call obligation.
9.2 Effect of Termination. If this Agreement is validly terminated
pursuant to Section 9.1, this Agreement will forthwith become null and void, and
there will be no liability or obligation on the part of the Company or the
Purchaser, except that the provisions with respect to expenses in Section 10.3
will continue to apply following any such termination.
ARTICLE X
MISCELLANEOUS
10.1 Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally against written receipt or by facsimile transmission or
mailed by prepaid first class certified mail, return receipt requested, or
mailed by overnight courier prepaid, to the parties at the following addresses
or facsimile numbers:
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(a) If to the Purchaser, to:
LIH Holdings IV, LLC
c/o Harvest Partners, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No: (000) 000-0000
Attn: Xxx Xxxxxxxx
with a copy (which shall not constitute notice) to:
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx
1251 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile No: (000) 000-0000
Attn: Xxxxxxx Xxxxx, Esquire
(b) If to the Company, to:
Xxxx International Holdings, Inc.
0000 Xxxxxxxxx Xxxxxxx XX
Xxxxx 0000
Xxxxxx, Xxxxxxx 00000
Facsimile No: (000) 000-0000
Attn: Chief Executive Officer
with a copy (which shall not constitute notice) to:
Xxxxxxx, Street and Deinard
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Facsimile No: (000) 000-0000
Attn: Xxxx Xxxxx, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, (iii) if delivered by
mail in the manner described above to the address as provided in this Section,
be deemed given
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on the earlier of the third Business Day following mailing or upon receipt and
(iv) if delivered by overnight courier to the address as provided in this
Section, be deemed given on the earlier of the first Business Day following the
date sent by such overnight courier or upon receipt (in each case regardless of
whether such notice, request or other communication is received by any other
Person to whom a copy of such notice is to be delivered pursuant to this
Section). Any party from time to time may change its address, facsimile number
or other information for the purpose of notices to that party by giving notice
specifying such change to the other party hereto.
10.2 Entire Agreement. This Agreement supersedes all prior
discussions and agreements between the parties with respect to the subject
matter hereof and contains the sole and entire agreement between the parties
hereto with respect to the subject matter hereof.
10.3 Fees and Expenses. In the event that (i) the transactions
contemplated by this Agreement are consummated or (ii) this Agreement is
terminated, the Company shall reimburse the Purchaser for all the reasonable
fees and expenses (including the fees and expenses of counsel, consultants and
accountants), incurred by the Purchaser prior to the Closing in connection with
this Agreement and the transactions contemplated hereby.
10.4 Further Assurances; Future HSR Filing. At any time and from
time to time after the Closing, the Company shall execute and deliver to the
Purchaser such other documents and instruments, provide such materials and
information and take such other actions as the Purchaser may reasonably request
more effectively to vest title to the Shares in the Purchaser and to otherwise
cause the Company to fulfill its other obligations under this Agreement. The
parties hereto agree that, prior to the conversion of the Series C Preferred
Stock into Common Stock, they may be required to file a Notification and Report
Form and related material with the Federal Trade Commission and the Antitrust
Division of the United States Department of Justice under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended. Each party agrees that it will
use its best efforts to obtain an early termination of the applicable waiting
period, and will make any further filings pursuant thereto that may be
necessary, proper, or advisable in connection therewith.
10.5 Waiver. Any term or condition of this Agreement may be waived
at any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. No waiver by any
party of any term or condition of this Agreement, in any one or more instances,
shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion. All remedies, either under
this Agreement or by Law or otherwise afforded, will be cumulative and not
alternative.
10.6 Amendment. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
10.7 Third Party Beneficiaries. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors and permitted
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assigns, and it is not the intention of the parties to confer third-party
beneficiary rights, and this Agreement does not confer any such rights, upon any
other Person.
10.8 No Assignment; Binding Effect. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned (by operation of Law or
otherwise) by the Company without the prior written consent of the Purchaser and
any attempt to do so will be void ab initio. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by the Purchaser without
the prior written consent of the Company and any attempt to do so will be void
ab initio. Subject to the preceding sentence, this Agreement shall bind and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns, including, without limitation, any holder of
the Shares.
10.9 Headings; Construction. The headings used in this Agreement
have been inserted for convenience of reference only and do not define or limit
the provisions hereof. The parties hereto agree that this Agreement is the
product of negotiation between sophisticated parties and individuals, all of
whom were represented by counsel, and each of whom had an opportunity to
participate in and did participate in, the drafting of each provision hereof.
Accordingly, ambiguities in this Agreement, if any, shall not be construed
strictly or in favor of or against any party hereto but rather shall be given a
fair and reasonable construction without regard to the rule of contra
proferentum. The words "include," "includes" and "including" shall be deemed to
be followed by the phrase "without limitation."
10.10 Invalid Provisions. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under any present or future Law, and if
the rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (i) such provision will be fully
severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(iii) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance here from and (iv) in lieu of such illegal,
invalid or unenforceable provision, there will be added automatically as a part
of this Agreement a legal, valid and enforceable provision as similar in terms
to such illegal, invalid or unenforceable provision as may be possible.
10.11 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of New York.
10.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
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10.13 Limited Recourse. Notwithstanding anything in this Agreement,
or any other document, agreement or instrument contemplated hereby to the
contrary, the obligations of the Purchaser hereunder shall be without recourse
to any Affiliate of the Purchaser or any stockholder, partner, member, officer,
director, manager, employee or agent of Purchaser or such Affiliates, and shall
be limited to the assets of the Purchaser; provided, however, nothing herein
shall affect the obligations of Harvest pursuant to the Capital Call Agreement.
10.14 Consent to Jurisdiction and Service of Process. EACH OF THE
COMPANY AND THE PURCHASER CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL
COURT LOCATED WITHIN THE COUNTY OF NEW YORK, STATE OF NEW YORK AND IRREVOCABLY
AGREES THAT ALL ACTIONS OR PROCEEDINGS RELATING TO THIS AGREEMENT MAY BE
LITIGATED IN SUCH COURTS. EACH OF THE COMPANY AND THE PURCHASER ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS RESPECTIVE PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREES TO BE BOUND
BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. EACH OF THE
COMPANY AND THE PURCHASER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE PARTY AT THE ADDRESS SPECIFIED IN THIS AGREEMENT, SUCH SERVICE TO BECOME
EFFECTIVE FIFTEEN (15) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL IN ANY WAY
BE DEEMED TO LIMIT THE ABILITY OF ANY PARTY HERETO TO SERVE ANY SUCH LEGAL
PROCESS, SUMMONS, NOTICES AND DOCUMENTS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW OR TO OBTAIN JURISDICTION OVER OR TO BRING ACTIONS, SUITS OR
PROCEEDINGS AGAINST ANY OF THE OTHER PARTIES HERETO IN SUCH OTHER JURISDICTIONS,
AND IN SUCH MANNER, AS MAY BE PERMITTED BY ANY APPLICABLE LAW.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officer of each party hereto as of the date
first above written.
LIH HOLDINGS IV, LLC
By:
--------------------------------------
Name:
--------------------------------
Title:
-------------------------------
XXXX INTERNATIONAL HOLDINGS, INC.
By:
--------------------------------------
Name: Xxxxxx X. Vollmershausen
Title: President and Chief Executive Officer
[SIGNATURE PAGE TO INVESTMENT AGREEMENT]
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SCHEDULE 3.3
The Company has 1,650,000 shares of common stock reserved under two stock option
incentive plans and has an additional 100,000 shares of common stock reserved
under a stock option plan for its non-employee directors.
