SECURITIES REPURCHASE AGREEMENT
Exhibit 10.26
THIS SECURITIES REPURCHASE AGREEMENT (this “Agreement”) is made as of April 12, 2007
by and among Horsehead Holding Corp., a Delaware corporation (the “Company”), each of the
holders of common stock of the Company, par value $0.01 per share (the “Common Stock”), set
forth in Exhibit A-1 hereto (collectively, the “Stock Sellers”) and each of the holders of
warrants which provide for the right to purchase Common Stock set forth in Exhibit A-2 hereto
(collectively, the “Warrant Sellers” and, together with the Stock Sellers, the
“Sellers”).
WHEREAS, the Company has entered into a Purchase/Placement Agreement, dated as of April 4,
2007 (the “Purchase/Placement Agreement”), with Friedman, Billings, Xxxxxx & Co., Inc.
(“FBR”) pursuant to which the Company has agreed to sell, and FBR has agreed to purchase
from the Company or place on behalf of the Company, 12,151,184 shares of Common Stock (the
“Offering”), at a purchase price of $13.50 per share;
WHEREAS, the proceeds from the Company’s sale of its Common Stock in the Offering will be
placed into an escrow account until the application of the proceeds of the Offering has been
approved by the U.S. Federal Energy Regulatory Commission (“FERC”), and following such
approval, the proceeds will be released to the Company (the “Proceed Release”);
WHEREAS, the Stock Sellers desires to sell to the Company, and the Company desires to buy
directly from the Stock Sellers, an aggregate of 6,213,076 shares of Common Stock (the
“Shares”), and the Warrant Sellers desire to sell to the Company, and the Company desires
to buy directly from the Warrant Sellers, warrants to purchase an aggregate of 5,938,108 shares of
Common Stock (the “Warrants” and, together with the Shares, the “Repurchased
Securities”); and
WHEREAS, the sale of the Repurchased Securities by the Sellers and the purchase of the
Purchased Securities by the Company is conditioned upon the closing of the Offering and the Proceed
Release.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. Delivery of Share Certificates and Warrants
(a) Concurrent with the execution of this Agreement, each Seller shall (to the extent such
certificates are not currently in the possession of Xxxxxxxx & Xxxxx LLP) deliver to the offices of
the Company’s attorneys, Xxxxxxxx & Xxxxx LLP, Attn: Xxxxx Xxxx, 000 Xxxx Xxxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000, the stock certificates and/or warrant certificates representing the Repurchased
Securities to be sold by such Seller, accompanied by duly executed a stock assignments in the form
of Exhibit B attached hereto and duly executed warrant assignments in the form of
Exhibit C attached hereto (provided that such endorsements shall not be deemed effective
until the Repurchase Effective Time (as defined below)). The Company shall not be obligated to
deliver the payment pursuant to Sections 2(b) or 3(b) below or replacement
securities pursuant to Section 4 below to a Seller until such Seller shall have so
delivered the stock certificates and/or warrant certificates representing, immediately prior to the
Repurchase Effective Time, the Repurchased Securities to be purchased from such Seller accompanied
by such duly executed assignments; provided that if any stock certificates and/or warrant
certificates representing, immediately prior to the Repurchase Effective Time, the Repurchased
Securities to be sold by a Seller shall have been lost, stolen or destroyed, upon (i) the making of
an affidavit of that fact by the holder claiming such stock certificate and/or warrant certificate
to be lost, stolen or destroyed, and (ii) if
such holder is not an institutional investor, the posting by such holder of a bond, if
required by the Company, in such reasonable form and amount as the Company shall require as
indemnity against any claim that may be made against the Company with respect to such stock
certificate and/or warrant certificate, then, for purposes of this Section 1, such stock
certificate and/or warrant certificate shall be deemed to have been delivered to the Company. In
the event that this Agreement is terminated pursuant to Section 7, the Company shall
return, or cause to be returned, to each Seller any stock certificates or warrant certificates that
have been delivered by such Seller to the Company pursuant to this Section 1.
2. Sale of Shares.
(a) Sale of the Shares. At 12:00 P.M. Eastern Standard Time (the “Repurchase
Effective Time”) on the date following the Proceed Release (the “Closing Date”), and
upon the terms and conditions set forth in this Agreement, each Stock Seller shall sell, transfer,
and assign to the Company, the Shares owned by such Stock Seller, and the Company shall purchase
from each Stock Seller, all of the right, title, and interest in and to the Shares held by such
Stock Seller.
(b) Deliveries by the Company. On the Closing Date, the Company shall deliver to each
Stock Seller, if such Stock Seller has performed all of its obligations under Section 1 of
this Agreement in a manner reasonably satisfactory to the Company, a cashier’s check or wire
transfer of immediately available funds to a bank account designated by such Stock Seller in
writing to the Company no later than three business days prior to the Closing Date in an aggregate
amount equal to the product of (i) the number of Shares to be purchased from such Stock Seller by
the Company and (ii) 12.555, representing payment in full for the Shares purchased from such Stock
Seller pursuant hereto.
(c) Effect on Shares. As of the Repurchase Effective Time, the Shares purchased
hereby shall no longer be outstanding and shall automatically be cancelled and retired and shall
cease to exist, and each Stock Seller shall cease to have any rights with respect thereto, other
than the right to receive the applicable payment payable in respect of such Stock Seller’s Shares
pursuant to Section 2(b). Any certificate to the extent formerly representing Shares
purchased hereby shall, from and after the Repurchase Effective Time, solely represent the right to
receive the payment payable pursuant to Section 2(b).
3. Sale of Warrants.
(a) Sale of the Warrants. On the Closing Date, and upon the terms and conditions set
forth in this Agreement, each Warrant Seller shall sell, transfer, and assign to the Company, the
Warrants held by such Warrant Seller, and the Company shall purchase from each Warrant Seller, all
of the right, title, and interest in and to the Warrants held by such Warrant Seller.
(b) Deliveries by the Company. On the Closing Date, the Company shall deliver to each
Warrant Seller, if such Warrant Seller has performed all of its obligations under Section 1
of this Agreement in a manner reasonably satisfactory to the Company, a cashier’s check or wire
transfer of immediately available funds to a bank account designated by such Warrant Seller in
writing to the Company no later than three business days prior to the Closing Date in an aggregate
amount equal to (i) the product of (A) the number of shares of Common Stock that such Warrant
Seller’s Warrants purchased hereby entitle such person to purchase, and (B) 12.555, minus (ii) the
aggregate exercise prices for the shares of Common Stock issuable upon exercise of the Warrants to
be purchased hereby held by such Warrant Seller, representing payment in full for the Warrants
purchased from such Warrant Seller pursuant hereto.
2
(c) Effect of the Transaction. As of the Repurchase Effective Time, the Warrants
purchased hereby shall no longer be outstanding and shall automatically be cancelled and terminated
and shall cease to exist, and each Warrant Seller shall cease to have any rights with respect
thereto, other than the right to receive the payment payable in respect of such Warrant Seller’s
Warrants pursuant to Section 3(b). Any warrant certificate, to the extent formerly
representing any Warrant purchased hereby shall, from and after the Repurchase Effective Time,
solely represent the right to receive the payment payable pursuant to Section 3(b).
4. The Closing. The closing of the transactions contemplated hereby (the
“Closing”) shall take place on the Closing Date at the offices of Xxxxxxxx & Xxxxx LLP in
Chicago, Illinois at the Repurchase Effective Time, or at such other place or on such other date as
may be mutually agreeable to the Sellers and the Company.
5. Representations and Warranties of the Seller. Each Seller, severally and not jointly,
hereby represents and warrants to the Company that:
(a) Ownership. All of the Repurchased Securities are owned of record and beneficially
by such Seller, and such Seller has good and marketable title to the Repurchased Securities, free
and clear of all security interests, claims, liens, pledges, options, encumbrances, charges,
agreements, voting trusts, proxies, and other arrangements or restrictions whatsoever
(“Encumbrances”), other than pursuant to applicable securities laws and the Securityholders
Agreement dated as of December 23, 2003 by and among the Company and its equityholders.
(b) Authorization; No Breach. The execution, delivery and performance of this
Agreement has been duly authorized by such Seller. This Agreement constitutes a valid and binding
obligation of such Seller, enforceable in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium, or other laws affecting
creditors’ rights generally and limitations on the availability of equitable remedies. The
execution and delivery by such Seller of this Agreement, and the fulfillment of and compliance with
the terms hereof by such Seller, do not and shall not conflict with or result in a breach of the
terms, conditions or provisions of, or require any authorization, consent, approval, exemption or
other action by or notice to any court or administrative or governmental body pursuant to, its
limited liability company operating agreement or any material law, statute, rule or regulation to
which such Seller is subject, or any material agreement, instrument, order, judgment or decree to
which such Seller is subject, except where any such condition would not have a material adverse
effect on such Seller or its ability to perform its obligations hereunder. Such Seller has full
right, power and authority to sell, assign, transfer and deliver the Repurchased Securities to be
sold by such Seller hereunder.
(c) Information. Such Seller has had an opportunity to ask questions and receive
answers concerning the terms and conditions of the repurchase of Shares and Warrants pursuant
hereto and has had full access to such other information concerning the Company and its
subsidiaries as it has requested. Such Seller has also been provided a copy of and reviewed the
preliminary offering memorandum dated March 26, 2007 related to the Offering.
6. Representations and Warranties of the Company. The Company hereby represents and
warrants to each of the Sellers that:
(a) Authorization; No Breach. The execution, delivery and performance of this
Agreement has been duly authorized by the Company. This Agreement constitutes a valid and binding
obligation of the Company, enforceable in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium, or other laws affecting
creditors’ rights generally
3
and limitations on the availability of equitable remedies. The execution and delivery by the
Company of this Agreement, and the fulfillment of and compliance with the respective terms hereof
by the Company, do not and shall not conflict with or result in a breach of the terms, conditions
or provisions of, or require any authorization, consent, approval, exemption or other action by or
notice to any court or administrative or governmental body pursuant to, its certificate of
incorporation or bylaws or any material law, statute, rule or regulation to which the Company is
subject, or any material agreement, instrument, order, judgment or decree to which the Company or
any subsidiary is subject, except where any such condition would not have a material adverse effect
on the Company or its ability to perform its obligations hereunder.
7. Termination. In the event that the FERC approval is not obtained within the time
periods prescribed in the Purchase/Placement Agreement and the Common Stock sold pursuant thereto
is redeemed by the Company, then this Agreement shall terminate automatically and the Company shall
promptly thereafter return all certificates representing Shares and/or Warrants to the holders
thereof. Upon termination, this Agreement will forthwith become void and there will be no
liability on the part of any party hereto to any other party hereto or its stockholders or
directors or officers in respect thereof, except that the provisions of this Section 7
shall continue in full force and effect.
8. General Provisions.
(a) Survival of Representations. All representations and warranties contained herein
or made in writing by any party in connection herewith shall survive the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby, regardless of any
investigation made by a party or on its behalf.
(b) Expenses. The parties will each pay their own costs and expenses (including
attorneys’ fees and expenses) incurred in connection with the preparation, negotiation and
consummation of this Agreement and the transactions contemplated hereby.
(c) Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will
not affect any other provision or any other jurisdiction, but this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision
had never been contained herein.
(d) Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, any one of which need not contain the signatures of more than one party, but all such
counterparts taken together shall constitute one and the same Agreement.
(e) Successors and Assigns. Except as otherwise provided herein, this Agreement shall
bind and inure to the benefit of and be enforceable by any of the parties hereto and their
respective successors and assigns (including subsequent holders of Shares).
(f) Descriptive Headings; Interpretation. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this Agreement. The use of the
word “including” in this Agreement shall be by way of example rather than by limitation.
(g) Choice of Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without giving effect to any choice of law or conflict of
law rules or
4
provisions (whether of the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Delaware.
(h) WAIVER OF TRIAL BY JURY. EACH OF THE PARTIES TO THIS AGREEMENT IRREVOCABLY AND
UNCONDITIONALLY WAIVERS THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT
OF, CONNECTION WITH OR RELATING TO THIS AGREEMENT, THE MATTERS CONTEMPLATED HEREBY, OR THE ACTIONS
OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT.
(i) Remedies. Each of the parties to this Agreement will be entitled to enforce its
rights under this Agreement specifically, to recover damages and costs (including attorneys’ fees)
caused by any breach of any provision of this Agreement and to exercise all other rights existing
in its favor. The parties hereto agree and acknowledge that money damages may not be an adequate
remedy for any breach of the provisions of this Agreement and that any party in its sole discretion
may apply to any court of competent jurisdiction (without posting any bond or deposit) for specific
performance and/or other injunctive relief in order to enforce or prevent any violations of the
provisions of this Agreement.
(j) Amendment and Waiver. The provisions of this Agreement may be amended and waived
only with the prior written consent of the parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
5
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written
above.
| HORSEHEAD HOLDING CORP. | ||||||
| By: Name: Title: |
/s/ Xxxxx X. Xxxxxxx
President and CEO |
|||||
| SUN HORSEHEAD, LLC | ||||||
| By: Name: Title: |
/s/ Xxxxx Xxxxxxx
Vice President |
|||||
| XXXXXXXX STREET PARTNERS VI | ||||||
| By: Name: Title: |
/s/ Xxxxxxx X. Xxxxxxxxx
Managing Partner |
|||||
| XXXXXX XXXX | ||||||
| /s/ Xxxxxx Xxxx | ||||||
| XXXX XXXXXX | ||||||
| /s/ Xxxx Xxxxxx | ||||||
| XXXX XXXXXXXX | ||||||
| /s/ Xxxx Xxxxxxxx | ||||||
Signature Page to Securities Repurchase Agreement
| XXXXX XXXXX | ||||||
| /s/ Xxxxx Xxxxx | ||||||
| XXXXXXXX XXXXXX TRUST | ||||||
| By: Name: Title: |
/s/ Xxxxxx Xxxxxx
Trustee |
|||||
| JLT INVESTMENTS LP | ||||||
| By: Name: Title: |
/s/ Xxxxxx Xxxxxx
General Partner |
|||||
| GERMANTOWN VENTURES, LLC | ||||||
| By: Name: Title: |
/s/ Xxx X. Xxxxxx
Managing Member |
|||||
| XXXXXX XXXX | ||||||
| /s/ Xxxxxx Xxxx | ||||||
| XXXX XXXX | ||||||
| /s/ Xxxx Xxxx | ||||||
| XXXXX XXXX | ||||||
| /s/ Xxxxx Xxxx | ||||||
Signature Page to Securities Repurchase Agreement
| XXXX XXXXX | ||||||
| /s/ Xxxx Xxxxx | ||||||
| XXXX XXXX | ||||||
| /s/ Xxxx Xxxx | ||||||
| H.I.G. SUN CAPITAL PARTNERS, INC. | ||||||
| By: Name: Title: |
/s/ Xxxx Xxxxxxxx
Co-President |
|||||
| IL VENTURE CAPITAL, LLC | ||||||
| By: | /s/ Xxx X. Xxxxxx
|
|||||
| Name: Title: |
Xxx X. Xxxxxx Managing Member |
|||||
| XXXXXXXX XXXXXX | ||||||
| /s/ Xxxxxxxx Xxxxxx | ||||||
| XXXXX XXXXXX | ||||||
| /s/ Xxxxx Xxxxxx | ||||||
Signature Page to Securities Repurchase Agreement
EXHIBIT A
HOLDERS OF REPURCHASED SECURITIES
Exhibit A-1
| Number of Shares of | ||||
| Stock Sellers | Common Stock Held | |||
Sun Horsehead, LLC |
5,647,171 | |||
Xxxxxx Xxxx |
9,654 | |||
Xxxx Xxxxxx |
9,654 | |||
Xxxx Xxxxxxxx |
9,654 | |||
Xxxxx Xxxxx |
51,505 | |||
Xxxxxxxx Xxxxxx Trust |
16,098 | |||
JLT Investments LP |
16,098 | |||
Germantown Ventures, LLC |
80,478 | |||
IL Venture Capital, LLC |
128,766 | |||
Xxxxxx Xxxx |
32,189 | |||
Xxxx Xxxx and Xxxxx Xxxx |
32,189 | |||
Xxxxxxxx Xxxxxx |
15,518 | |||
Xxxx Xxxxx |
16,098 | |||
Xxxxx Xxxxxx |
15,518 | |||
Xxxxxxxx Street Partners VI |
93,653 | |||
Xxxxx Xxxx |
1,609 | |||
H.I.G. Sun Capital Partners, Inc. |
37,224 | |||
Exhibit A-2
| Number of | ||||
| Warrant Sellers | Shares upon Exercise | |||
Sun Horsehead, LLC |
5,525,201.3 | |||
Xxxxxx Xxxx |
9,228.9 | |||
Xxxx Xxxxxx |
9,228.9 | |||
Xxxx Xxxxxxxx |
9,228.9 | |||
Xxxxx Xxxxx |
49,226.9 | |||
Xxxxxxxx Xxxxxx Trust |
15,385.5 | |||
JLT Investments LP |
15,385.5 | |||
Germantown Ventures, LLC |
76,915.8 | |||
Xxxxxx Xxxx |
30,765.1 | |||
Xxxx Xxxx |
30,765.1 | |||
Xxxx Xxxxx |
15,385.5 | |||
Xxxxx Xxxx |
1,537.1 | |||
H.I.G. Sun Capital Partners, Inc. |
21,280.6 | |||
Xxxxx Xxxxxx |
2,752.9 | |||
Xxxxxxxx Xxxxxx |
2,752.9 | |||
IL Venture Capital, LLC |
123,066.5 | |||
EXHIBIT B
ASSIGNMENT SEPARATE FROM CERTIFICATE
[For transfers of Common Stock
(and appointment of attorney in fact)]
[For transfers of Common Stock
(and appointment of attorney in fact)]
FOR VALUE RECEIVED, the undersigned, subject to the terms and conditions of the
Securities Repurchase Agreement dated as of April , 2007, does hereby sell, assign and transfer
unto Horsehead Holding Corp., a Delaware corporation (the “Company”), the number of shares of
Common Stock, par value $.01 per share, of the Company, standing in his or her or its name on the
books of said Company represented by the Certificate Number(s) set forth on Annex A attached
hereto, and does hereby irrevocably constitute and appoint the secretary of the Company attorney to
transfer the said stock on the books of the Company with full power of substitution in the
premises.
Dated: , 2007
|
|
|||
| [Seller] |
Annex A
| Shares of | ||
Certificate Number
|
Common Stock | |
EXHIBIT C
ASSIGNMENT
[For transfers of Warrants]
[For transfers of Warrants]
FOR VALUE RECEIVED, the undersigned registered holder of the within Warrant, subject to
the terms and conditions of the Securities Repurchase Agreement dated as of April , 2007, hereby
sells, assigns and transfers unto Horsehead Holding Corp., a Delaware corporation (the “Company”),
the right represented by such Warrant to purchase the number of shares set forth on Annex A
attached hereto of Common Stock, par value $.01 per share, of the Company, to which such Warrant
relates, and hereby irrevocably constitutes and appoints the secretary of the Company attorney to
make such transfer on the books of the Company maintained for such purpose, with full power of
substitution in the premises.
Dated: , 2007
|
|
|||
| [Seller] |
Annex A
Warrant
|
Shares of Common Stock Represented by | |
Certificate Number
|
Certificate | |
