CONFORMED COPY
EXHIBIT (10)(xxii)(e)
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AUCTION MARKET PREFERRED STOCK
INVESTMENT AGREEMENT
Dated as of February 7, 2002
by and among
THE XXXXXXX WORKS
and
XXXXXXX LOGISTICS, INC.
for the benefit of
BNP PARIBAS
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This AUCTION MARKET PREFERRED STOCK INVESTMENT AGREEMENT (this
"AGREEMENT") is dated as of February 7, 2002 and is by and between THE XXXXXXX
WORKS, a Connecticut corporation (the "PARENT") and XXXXXXX LOGISTICS, INC., a
Delaware corporation (the "COMPANY"), and is made and entered into for the
benefit of BNP PARIBAS, a societe anonyme organized and existing under the laws
of France (the "INVESTOR").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, pursuant to an Auction Market Preferred Stock
Subscription Agreement, dated as of February 4, 2002, between the Company and
the Parent (the "SUBSCRIPTION AGREEMENT"), the Parent has agreed either to
subscribe for, or to procure the purchase by another person or persons of, and
the Company has agreed to issue, 11,445 shares of Auction Market Preferred
Stock, par value $0.01 per share, of the Company (the "AMPS SHARES"), which
shares are to be issued under the Certificate of Rights, Powers, Designations
and Preferences, and the Qualifications, Limitations or Restrictions of the
Auction Market Preferred Stock of the Company (the "CERTIFICATE OF
DESIGNATIONS") at a subscription price per share equal to the Liquidation
Preference (as defined below) of such shares (the "ISSUE PRICE");
WHEREAS, pursuant to the Auction Market Preferred Stock
Procurement Agreement dated as of February 7, 2002 between the Parent and the
Investor (the "PROCUREMENT AGREEMENT"), the Investor has agreed to subscribe for
the AMPS Shares and pay the Issue Price to the Company; and
WHEREAS, the Parent has agreed to provide certain undertakings
for the benefit of the Investor relating to the Company and the AMPS Shares;
NOW, THEREFORE, the parties, intending to be bound, hereby
agree as follows:
ARTICLE I
DEFINITIONS
Terms not otherwise defined herein shall have the meanings set
forth in Annex A to the Procurement Agreement (with terms defined in the
singular having comparable meanings when used in the plural and vice-versa),
unless the context otherwise requires.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE PARENT
AND THE COMPANY
Each of the Parent and the Company represents and warrants on
behalf of itself for the benefit of the Investor as of the date of this
Agreement as follows and each of the Parent and the Company acknowledges that
the Investor and its affiliates has relied on such representations and
warranties in connection with the Investor's purchase of the AMPS Shares:
Section 2.1 Organization. The Parent is a corporation, organized and
existing under the laws of the State of Connecticut. The Company is a
corporation organized and existing under the laws of the State of Delaware. Each
of the Parent and the Company has the requisite corporate power and authority to
enter into the Transaction Documents to which it is a party and to perform its
obligations thereunder. The Parent represents and warrants that it owns all of
the outstanding shares of the Common Stock of the Company. The Company
represents and warrants that it is not licensed to conduct a banking business in
any jurisdiction.
Section 2.2 Authorization and Validity of Transaction Documents. The
Transaction Documents to which it is a party have each been duly authorized,
executed and delivered by it to the extent that it is a party thereto and
(assuming that each Transaction Document to which it is a party is a valid and
binding agreement of the other parties thereto, enforceable against such other
parties in accordance with its terms) each constitutes a valid and binding
agreement thereof enforceable in accordance with its terms subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other similar laws of
general applicability relating to or affecting creditor's rights and to general
equity principles.
Section 2.3 Non-Contravention. The execution, delivery and performance
of the Transaction Documents by it to the extent that it is a party thereto does
not and will not in any material respect (i) violate any provision of the
organizational documents of such company, (ii) conflict with, result in a breach
of, or constitute a default under, or result in the termination, cancellation or
acceleration (whether after the giving of notice or lapse of time or both) of
any right or obligation of such company under, any material agreement, license,
permit or undertaking to which such company is a party or by which it is bound
or to which any of its assets are subject, or result in the creation of any
liens, charges, encumbrances, security interests, options, pledges, restrictions
or any other claims or third party rights upon said assets, except as otherwise
contemplated by the Transaction Documents or (iii) violate or result in a breach
of or constitute a default under any judgment, order, injunction, decree, law,
rule, regulation or other restriction of any court or governmental or monetary
authority to which such company is subject, in cases of (i), (ii) and (iii)
except for any violation, conflict, breach or default, or termination,
cancellation or acceleration, or liens, charges, encumbrances, security
interests, options, pledges, restrictions or claims or rights which would not
have a material adverse effect on the financial condition or operations of the
Parent or the Company and their respective subsidiaries taken as a whole or on
the ability of the Parent or the Company to perform its obligations under the
Transaction Documents.
Section 2.4 Authorizations. There are no authorizations, approvals,
consents or waivers required to have been obtained by it from, or notice or
filing required to have been given by it to, or made by it with, any
governmental or monetary authority or other person in connection with the
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execution and delivery of, and the performance by it of its obligations under,
the Transaction Documents, except those which (a) have heretofore been, or will
be timely, obtained, made, given or filed, (b) need to be obtained, made, given
or filed by Investor or (c) may be required by the Republic of France or except
where the failure of which to be obtained, made, given or filed, would not have
a material adverse effect on the financial condition or operations of the Parent
or the Company and their respective subsidiaries taken as a whole or on the
ability of the Parent or the Company to perform their respective obligations
under the Transaction Documents.
Section 2.5 Solvency. It is solvent as of the date hereof and will not
be rendered insolvent as a result of the issuance of the AMPS Shares or the
execution of the Transaction Documents on the Closing Date. It has not commenced
or approved the commencement of any proceedings for the liquidation, dissolution
or winding up of the affairs of such company.
Section 2.6 No Immunity. It is not entitled to the benefit of any
defense of sovereign immunity in any action to enforce its obligations under any
of the Transaction Documents.
Section 2.7 No Litigation. To the best of its knowledge, no judicial,
administrative or arbitral proceeding is pending or is threatened, as of the
Closing Date against it which would have a material adverse effect on the
legality or validity of the Transaction Documents to which it is a signatory or
on its ability to perform its obligations under the Transactions Documents to
which it is a party.
ARTICLE III
COVENANTS
Section 3.1 Dividends. For so long as the Investor is the beneficial
owner of any AMPS Shares, the Parent agrees for the benefit of the Investor
that, subject to the Company's having sufficient current profits and retained
earnings and in accordance with Article IVA of the Certificate of Designations,
the Parent shall cause the declaration and payment by the Company of the full
amount of Dividends when scheduled to be paid. For the avoidance of doubt, it is
hereby confirmed that no dividend payment or any other payment by the Company
with respect to any AMPS Shares benefits from or is otherwise entitled to a
guarantee from any party, whether or not affiliated with the Company.
Section 3.2 Notices; Financial Information. For so long as the Investor
is the beneficial owner of any AMPS Shares, the Parent agrees for the benefit of
the Investor as follows:
(a) The Parent shall notify the Investor of any event or occurrence
which could reasonably be expected to result in an Acceleration Event (other
than pursuant to a Parent Adverse Law Change, an AMPS Adverse Law Change or any
other change in law or regulatory provisions) immediately upon becoming aware of
such event or occurrence and give full details thereof and of any action taken
(or to be taken) as a result thereof.
(b) The Parent shall make available to the Investor the annual and
quarterly financial statements of the Parent by filing such financial statements
with the Securities and Exchange Commission in accordance with United States
securities laws, available to the public on the website xxx.xxx.xxx. Upon
request by the Investor, the Company shall furnish to the Investor the annual
and quarterly financial statements of the Company, certified by an officer of
the Company as presenting fairly (under United
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States generally acceptable accounting principles) the financial
condition of the Company as of the date thereof (subject, in the case of any
such quarterly statements, to customary year-end adjustments), within 90 days of
the end of each calendar year and 30 days of the end of each calendar quarter,
respectively.
(c) The Parent shall give the Investor not less than 30 days prior
notice of a direct or indirect investment by the Company in any entity
(regardless of the value of such investment) or the creation of any direct or
indirect subsidiary (whether or not wholly owned) or branch or other similar
establishment of the Company, together with such information requested by the
Investor as is reasonably necessary for the Investor to determine whether the
Investor can be taxed on the undistributed income or profits of the new
investment, subsidiary, branch or similar establishment.
Section 3.3 Auction Procedures. The Parent agrees for the benefit of
the Investor as follows:
(a) The Parent shall designate an Auction Agent and a Broker-Dealer on
or prior to the date required by the Certificate of Designations in connection
with each Auction.
(b) The Parent shall provide a valid Bid for all of the AMPS Shares in
the first Auction (including an Auction on an Accelerated Auction Date but this
obligation shall extend to no subsequent Auctions). In the event that the Parent
has failed to comply with this clause (b) and the Investor has not otherwise
effected a sale of any of the AMPS Shares held by it pursuant to such Auction,
the Parent shall pay to the Investor on demand, as liquidated damages, an amount
equal to the Liquidation Preference of each such AMPS Share plus interest on
such amount at the rate equal to Overnight LIBOR accruing daily from the date of
such Auction to the date of payment of such amount, plus any costs of collection
(including legal fees and expenses) incurred by the Investor in connection
therewith, less the net proceeds received by the Investor as a result of a sale
by the Investor of such AMPS Shares effected subsequent to such Auction Date,
provided that any of such AMPS Shares not theretofore sold by the Investor shall
be transferred to the Parent upon payment by the Parent to the Investor of the
amounts required by this sentence.
Section 3.4 Capitalization. For so long as the Investor is the
beneficial owner of any AMPS Shares, the Parent shall (a) remain the holder of
all of the Common Stock of the Company and (b) give the Investor not less than
ten (10) Business Days prior written notice of any proposed change in the
capitalization of the Company which would affect the percentage of (i) the
aggregate number of shares or aggregate stated capital of the capital stock of
the Corporation or (ii) the aggregate voting power of the holders of the capital
stock of the Corporation, represented by the AMPS Shares held by the Investor,
such that, in any case, such percentage held by the Investor is less than 5% or
greater than or equal to 25%.
Section 3.5 Authorizations. The Parent shall obtain all authorizations,
approvals, consents or waivers required to be obtained by it from, or notice or
filing required to be given by it to, or made by it with, any governmental or
monetary authority or other person in connection with the performance of its
obligations under the Transaction Documents, except those which need to be
obtained, made, given or filed by Investor or may be required by the Republic of
France or except those the failure of which to be obtained, made, given or filed
would not have a material adverse effect on the financial condition or
operations of the Parent or the Company and their respective subsidiaries taken
as a whole or on the ability of the Parent or the Company to perform their
respective obligations under the Transaction
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Documents.
ARTICLE IV
INDEMNIFICATION
Section 4.1 Each of the Company and the Parent hereby agrees jointly
and severally to indemnify, defend and hold harmless the Investor, without
duplication of any other indemnification of Investor under the Transaction
Documents or otherwise or reimbursement or benefit from any other source,
against any increased cost of or loss of intended benefit, including without
limitation, interest, penalties, fines, levies and other similar charges, and
reasonable costs and expenses (including reasonable legal fees and expenses of
counsel), net of any tax relief or benefit (collectively, "Losses"), imposed on,
sustained, incurred or suffered by or asserted against Investor, as a result of
any breach by the Company or the Parent of any covenant or agreement contained
in Article III hereof or Article III of the Voting Agreement or as a result of
any indemnification payment made in respect thereof, other than Losses (1)
resulting from or arising out of negligence, bad faith or willful misconduct of
Investor, (2) that constitute consequential damages or (3) without limiting the
effect of Section 6.2 of the Note Purchase Agreement, arising with respect to
the imposition of United States withholding taxes.
Section 4.2 Duty to Mitigate Losses. Each of the Parent, the Company
and Investor has an obligation to use reasonable best efforts to mitigate Losses
subject to indemnification pursuant to this Article IV.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.1 Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Neither this Agreement nor any of
the rights granted herein, nor any of the other interests and obligations
created hereunder, shall be assigned or delegated by any of the parties hereto
without the prior express written consent of the other parties; provided,
however, that the rights of the Investor under this Agreement shall be
assignable by the Investor to a transferee of AMPS Shares transferred by the
Investor in accordance with Section 5.1 of the Procurement Agreement.
Section 5.2 Third Party Beneficiary. The Investor shall be a third
party beneficiary of this Agreement with the right to enforce all covenants of
the parties hereto which are made for the benefit of the Investor. No act or
failure to act by the Parent or the Company in compliance with this Agreement or
failure to perform any obligation, agreement or covenant under this Agreement
shall relieve the parties hereto of their obligations and covenants hereunder
which are made for the benefit of the Investor nor shall any such action or
failure to act or perform prevent the Investor from enforcing all such
obligations and covenants for its benefit.
Section 5.3 No Modification or Termination. This Agreement shall not be
modified
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or terminated prior to the initial Auction Date.
Section 5.4 Governing Law. This Agreement is governed by, and shall be
construed in accordance with, the laws of the State of New York without regard
to principles of conflicts of laws.
Section 5.5 Waiver of Jury Trial. EACH PARTY HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR BETWEEN
THE PARTIES HERETO ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH OR THEREWITH AND FOR ANY COUNTERCLAIM THEREIN.
EITHER PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
Section 5.6 Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute one and the same instrument.
Section 5.7 Notices. Any notice pursuant to the Transaction Documents
shall be in writing signed by or on behalf of the party giving it and may be
served by sending it by confirmed facsimile, personal delivery or overnight
courier to the address of the other parties set forth below (or to such other
address as any such other party shall have specified by not less than fifteen
days prior notice given in accordance with this Section). Notice shall be
received for purposes thereof:
(1) in the case of personal delivery or overnight courier, on the
day delivery at the address of the relevant party is confirmed by a
signed receipt of such notice, or if such day is not a Business Day, on
the first Business Day thereafter; and
(2) in the case of a facsimile transmission, on the day a
confirmation of receipt is received or, if such day is not a Business
Day, on the first Business Day thereafter.
To The Xxxxxxx Works:
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Address: The Xxxxxxx Works
0000 Xxxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxxx 00000
XXX
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
Corporate Counsel
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To the Company:
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Address: Xxxxxxx Logistics, Inc.
0000 Xxxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxxx 00000
XXX
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx
Corporate Counsel
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf by its duly authorized officer as of the
date first above written.
THE XXXXXXX WORKS
By: /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
Vice President & Treasurer
XXXXXXX LOGISTICS, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
President
