EXHIBIT 10.6
WARRANT AGREEMENT
WARRANT AGREEMENT (this "Agreement") dated as of November 17, 1995
between Cambridge Industries Holdings, Inc., a corporation incorporated under
the laws of the State of Delaware (with its successors, the "Company") and
Bankers Trust Company (the "Initial Holder").
W I T N E S S E T H :
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WHEREAS, Cambridge Industries, Inc. (the "Borrower"), the Company,
certain lenders from time to time party thereto, and Bankers Trust Company, as
agent for such lenders, are parties to a Credit Agreement dated as of November
17, 1995 (as the same shall be modified, amended and supplemented and in effect
from time to time, the "Credit Agreement");
WHEREAS, in order to induce Bankers Trust Company to enter into the
Credit Agreement, the Company has agreed to issue the Warrants (as hereinafter
defined) to the Initial Holder upon the occurrence of certain events;
WHEREAS, the Company has authorized the issuance of the Warrants which
are exercisable, pursuant to the terms and conditions thereof, for Class A
Common Stock of the Company; and
WHEREAS, the Initial Holder now desires to subscribe for, and the
Company now desires to issue to the Initial Holder, upon the terms and
conditions set forth herein, the Warrants substantially in the form of Exhibit A
hereto (the "Warrants");
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Definitions.
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1.01 Definitions. The following terms, as used herein, shall have the
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following respective meanings:
"Affiliate" shall mean, with respect to any Person, any other Person
that directly or indirectly controls, or is under common control with, or is
controlled by, such Person, it being understood that in any event the Borrower
and its Affiliates shall be considered Affiliates of the Company. As used in
this definition, "control" (including, with its correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of power to direct
or cause the direction of the management and policies of such Person (whether
through ownership of securities or partnership or other ownership interests,
contract or otherwise), provided that, in any event (other than for purposes of
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Section 4.05 hereof), any Person which owns, directly or indirectly, more than
10% of the securities having ordinary voting power for the election of directors
or other governing body of a corporation or more than 10% of the partnership or
other ownership interests of any Person (other than as a limited partner of such
other Person) will be deemed to control such corporation or other Person.
Notwithstanding the foregoing, neither the Initial Holder nor any of its
Affiliates shall be deemed to be an Affiliate of the Company.
"Bank Holder" shall mean the Initial Holder and any other Holder that
becomes a "Bank," as such term is defined in the Credit Agreement or is an
Affiliate of a Bank.
"Borrower" shall have the meaning provided in the first recital hereof.
"Business Day" shall mean any day other than a Saturday, Sunday or any
other day on which commercial banks are required by law or authorized to close
in New York City.
"Class A Common Stock" shall mean and include the Company's authorized
Class A Common Stock, $.01 par value, as constituted on the date hereof.
"Company" shall have the meaning provided in the first recital hereof.
"Credit Agreement" shall have the meaning provided in the first recital
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
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"GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the United States.
"Holder" initially shall mean the Initial Holder and each other holder
of any Warrant or Warrant Share that is a direct or indirect transferee of the
Initial Holder or any other Holder.
"Initial Holder" shall have the meaning provided in the first paragraph
hereof.
"Person" shall mean an individual, a corporation, a limited liability
company, a company, a voluntary association, a general partnership, a limited
partnership, a trust, an unincorporated organization or a government or any
agency, instrumentality or political subdivision thereof.
"Registration Agreement" shall mean the Registration Agreement, dated as
of November 17, 1995 among the Company and various holders of its capital stock,
as same may be amended, modified or supplemented from time to time.
"Regulation Y" shall mean the Regulation Y promulgated by the Board of
Governors of the Federal Reserve System or any successor regulation.
"Required Holders" shall mean the holders of more than 50% of all
Warrant Shares (assuming the full exercise thereof).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Stockholders Agreement" shall mean the Stockholders Agreement dated as
of November 17, 1995 among the Company and various holders of its capital stock,
as same may be amended, modified or supplemented from time to time.
"Warrant" shall mean a Warrant substantially in the form of Exhibit A
hereto, and any Warrant or Warrants issued upon transfer thereof or in
substitution therefor.
"Warrantholder" shall mean the holder of any Warrant.
"Warrant Share" shall mean any share of Class A Common Stock issued or
issuable upon exercise of any Warrant. For purposes of this Agreement, a
Warrant Share shall be
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"outstanding" from and after the date hereof until the redemption or
cancellation of such Warrant Share (or, if the related Warrant has not been
exercised, the expiration, repurchase or cancellation of such Warrant) by the
Company.
1.02 Accounting Terms and Determinations. Unless otherwise specified
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herein, all accounting terms used herein shall be interpreted, all determination
with respect to accounting matters hereunder shall be made, and all financial
statements and certificates and reports as to financial matter required to be
delivered hereunder shall be prepared, in accordance with GAAP.
Section 2. Terms and Conditions of Issuance of Warrants.
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2.01 Issuance of the Warrants. In consideration of the premises and
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other good and valuable consideration, the Company hereby agrees to issue on the
date hereof to the Initial Holder Warrants to purchase 2671.51 shares of Class A
Common Stock (as such number may be adjusted as provided in the Warrants).
Section 3. Representations and Warranties of the Company. The Company
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represents and warrants to each Holder as follows:
3.01 Authorization. The Company has all necessary power and authority
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to execute, deliver and perform its obligations under this Agreements and the
Warrants and to issue and deliver the Warrants and Warrant Shares; the
execution, delivery and performance by the Company of this Agreement and the
Warrants have been duly authorized by all necessary action; each of this
Agreement and the Warrants has been duly executed and delivered by the Company
and constitutes the legal, valid and binding obligation of the Company
enforceable in accordance with its terms, subject, as to enforceability, to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws relating to creditors' rights generally and to
general equitable principles.
3.02 Valid Issuance. The Warrants, when issued and delivered pursuant
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hereto, and the Warrant Shares when issued and delivered pursuant to the
Warrants, will be validly issued, fully paid and non-assessable, with no
liability on the part of the holders thereof, and are not subject to any
preemptive rights, rights of first refusal or rights of first offer. Except for
the registration rights as
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set forth in the Registration Agreement, the Company is not under any obligation
to cause the registration of any of its presently outstanding securities or any
of its securities which hereafter may be issued.
3.03 No Breach. None of the execution and delivery of this Agreement
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and the Warrants, the consummation of the transactions herein or therein
contemplated, including the issuance and delivery of the Warrants and, upon the
exercise of the Warrants, the Warrant Shares, or compliance with the terms and
provisions hereof or thereof will conflict with or result in a breach of, or
require any consent under, the Certificate of Incorporation or By-Laws of the
Company, or any applicable law or regulation, or any order, writ, injunction or
decree of any court or governmental authority or agency, or any agreement or
instrument to which the Company is a party or by which it is bound or to which
any of its properties or assets is subject, or constitute a default under any
such agreement or instrument or result in the creation or imposition of any lien
upon any of the revenues or assets of the Company pursuant to the terms of any
such agreement of instrument.
3.04 Approvals. No authorization, approvals or consents of, and no
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filings or registrations with, any governmental or regulatory authority or
agency, which have not already been made or obtained, are necessary for the
execution, delivery or performance by the Company of this Agreement and the
Warrants, the consummation of the transactions contemplated herein and therein
or the validity or enforceability hereof or thereof.
3.05 Capitalization. The authorized capital stock of the Company on
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the date hereof consists of (i) 200,000 shares of Class A Common Stock, $.01 par
value, of which 55,000 shares are issued and outstanding, (ii) 29,000 shares of
Class L Common Stock, $.01 par value, of which 25,000 shares are issued and
outstanding, (iii) 45,000 shares of Class P Common Stock, $.01 par value, of
which 45,000 shares are issued and outstanding and (iv) 1,000 shares of
preferred stock, of which 1,000 shares are issued and outstanding. There are no
other outstanding shares of capital stock of the Company and, except for the
Warrants and other options and warrants disclosed in writing to the Initial
Holder prior to the date hereof, no outstanding options or warrants to acquire
any shares of capital stock of the Company.
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3.06 Offer of Warrants. Neither the Company nor any Person acting on
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its behalf has directly or indirectly offered the Warrants or any part thereof
or any similar securities for sale to, or solicited any offer to buy any of the
same from, or otherwise approached or negotiated in respect thereof with, any
Person other than the Initial Holder. Neither the Company nor any Person acting
on its behalf has taken or will take any action which would subject the issuance
and sale of the Warrants to the provisions of Section 5 of the Securities Act,
or to the provisions of any state securities law requiring registration of
securities, notification of the issuance or sale thereof or confirmation of the
availability of any exemption from such registration except pursuant to this
Agreement, the Stockholders Agreement and the Registration Agreement.
Section 4. Covenants.
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4.01 Maintenance of Existence; Conduct of Business. The Company will
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preserve and maintain its corporate existence as a corporation under the
Delaware General Corporation Law and all of its rights, privileges and
franchises necessary in the ordinary course of its business, and will conduct
its business in a regular manner.
4.02 Inspection. The Company covenants and agrees that it will
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permit each Holder and its representatives to inspect the properties of the
Company, to examine and make extracts and copies from the books and records of
the Company during normal business hours and to discuss with management the
business and affairs of the Company.
4.03 Information. The Company covenants and agrees that it will
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deliver to each Holder such financial statements and other information regarding
the Company or any of its subsidiaries that the Company is obligated to prepare
and deliver to any shareholder of the Company, in each case at the same time
such financial statements and other information are delivered to any such
shareholder. The Company hereby acknowledges and agrees that each Holder may
share with any of its Affiliates any information related to the Company and any
of its subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of the Company and its subsidiaries).
4.04 Transactions with Affiliates. The Company will not, directly or
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indirectly, enter into any transaction with or for the benefit of any Affiliate;
provided that this Section 4.04 shall not prohibit (i) any such transaction
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entered into on an arm's length basis containing terms which are no less
favorable to the Company than those terms that would be obtained in a similar
transaction with a Person which is not an Affiliate and (ii) any such
transaction between the Company and any subsidiary or affiliate thereof or any
stockholder which is permitted pursuant to, and conducted in accordance with,
the terms and provisions of the Credit Agreement.
4.05 Repurchase of Common Stock. The Company covenants and agrees
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that it will not, without the prior written consent of each affected Bank
Holder, to the extent that such Bank Holder is subject to the provisions of the
Bank Holding Company Act of 1956, as amended (including Regulation Y promulgated
thereunder), directly or indirectly, purchase, redeem, retire or otherwise
acquire any shares of capital stock of the Company if, as a result of such
purchase, redemption, retirement or other acquisition, any Bank Holder, together
with its Affiliates, will own, or be deemed to own, Warrant Shares or other
shares of capital stock of the Company representing capital equal to 5% or more
of the aggregate shares of capital stock of the Company then outstanding
(assuming the full exercise of all Warrants then held by such Bank Holder and
its Affiliates).
4.06 Regulatory Matters. The Company agrees to cooperate in good
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faith with and assist any Bank Holder or any of the Bank Holder's Affiliates as
such Bank Holder may reasonably request in connection with any United States
regulatory issues that may arise with respect to the Company. Anything herein or
in the Warrants to the contrary notwithstanding, in the event that any Bank
Holder or any of such Bank Holder's Affiliates shall determine that it is
illegal or unduly burdensome, by reason of regulatory restriction, for such Bank
Holder or such Affiliate to continue to hold some or all of the Warrants or its
Warrant Shares or any other securities of the Company held by it, such Bank
Holder or such Affiliate, as the case may be, may sell or otherwise dispose of
that portion of its Warrants or Warrant Shares, as the case may be, that such
Bank Holder or such Affiliate determines to be appropriate in light of such
regulatory restrictions in as prompt and orderly a manner as is reasonably
necessary. The Company shall cooperate with and assist such Bank Holder or such
Affiliate, as the case may be, in disposing of such Warrants or Warrant Shares,
and (without limiting the foregoing) at the request of such Bank Holder or such
Affiliate, as the case may be, the Company shall provide (and authorize such
Bank Holder or such Affiliate, as the case may be, to provide) financial and
other information concerning
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the Company to any prospective purchaser of the Warrants or Warrant Shares
owned by such Bank Holder or such Affiliate, as the case may be, subject to
appropriate confidentiality arrangements. The provisions of this Section 4.06
shall inure solely to the benefit of such Bank Holders and their Affiliates
which are subject to the provisions of the Bank Holding Company Act of 1956, as
amended (including Regulation Y promulgated thereunder).
Section 5. Compliance with the Securities Act.
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5.01 Representations and Warranties. Each Holder by its acceptance of
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the Warrants represents and warrants as follows:
(a) Such Holder is acquiring the Warrants and the related Warrant
Shares for its own account and not as nominee or agent for any other Person
and not for offer or sale in any manner that would be in violation of the
securities laws of the United States of America or any state thereof,
without prejudice, however, to its right at all times to sell or otherwise
dispose of all or any part of said Warrants or Warrant Shares under a
registration under the Securities Act or any applicable state securities
laws or under an exemption from such registration available under such act
or any applicable state securities laws.
(b) Such Holder is an "accredited" investor within the meaning of
Regulation D promulgated under the Securities act.
5.02 Transfer Restriction; Legend. No Holder will sell, transfer or
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otherwise dispose of any warrant or Warrant Share other than to an Affiliate of
such Holders or in transaction that complies with the registration requirements
of Section 5 of the Securities Act or pursuant to an exemption (including,
without limitation, sales under Rules 144 and 144A promulgated under the
Securities Act) therefrom. Each Warrant or certificate or instrument (if any)
representing the Warrant Shares issued upon exercise of the Warrants (and each
Warrant or certificate or instrument (if any) representing the Warrant Shares
issued to transferees of such Warrant or certificate or instrument (if any)),
unless at such time as the same is no longer required under the applicable
requirements of the Securities Act, shall bear the following legends:
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"THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT."
Section 6. Miscellaneous.
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6.01 Expenses. The Company agrees to pay all fees and
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disbursements of the Initial Holder (including the reasonable fees and expenses
of its counsel) in connection with the purchase and sale of the Warrants as
contemplated by this Agreement or any amendments thereto and the fees and
disbursements of the Initial Holder (including the reasonable fees and expenses
of its counsel) in connection with the negotiation, execution, delivery and
enforcement of this Agreement, the Stockholders Agreement, the Registration
Agreement and/or the Warrants or any waiver or consent hereunder or thereunder
or any amendment hereof or thereof. In addition, the Company agrees to pay any
and all stamp, transfer and other similar taxes payable or determined to be
payable in connection with the execution and delivery of this Agreement any
Warrants or the issuance or transfer of the Warrants.
6.02 Notices. All notices and other communications provided
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for herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made by telex, telegraph,
telecopy, cable or other writing and telexed, telecopied, telegraphed, cabled,
mailed or delivered to the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof; or, as to any party, at
such other address as shall be designated by such party in a notice to the
Company given in accordance with this Section 6.02. All such communications
shall be deemed to have been duly given when transmitted by telex or telecopier,
delivered to the telegraph or cable office or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
6.03 Exclusion. This Agreement and the Warrants shall be
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binding upon, and inure solely to the benefit of the Company and the Holders,
and no other Person shall acquire or have any right under or by virtue of this
Agreement or the Warrants (other than any such Person to whom such Holders have
transferred an interest in the Warrants pursuant to the terms thereof and
hereof).
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6.04 Specific Performance. The Company acknowledges and agrees that in
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the event of any breach of this Agreement or the Warrants by the Company, the
Holders would be irreparably harmed and could not be made whole by monetary
damages. The Company accordingly agrees (i) to waive the defense in any action
for specific performance that a remedy at law would be adequate, and (ii) that
the Holders, in addition to any other remedy to which they may be entitled at
law or in equity, shall be entitled to compel specific performance of this
Agreement or the Warrants in any action instituted in the United States
District Court for the Southern District of New York, or, in any court of the
United States or any state thereof having subject matter jurisdiction for such
action.
6.05 Warrantholder Not a Stockholder. Prior to the exercise of any of its
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Warrants, no Warrantholder shall, except as specifically provided herein, be
entitled to any of the rights of, or be deemed to be, a stockholder in the
Company.
6.06 No Waivers. No failure or delay by any party in exercising any
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rights, power or privilege hereunder or under the Warrants shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies provided herein shall be cumulative and not
exclusive of any rights or remedies provided by law.
6.07 Amendments and Waivers. Any provision of this Agreement or the
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Warrants may be amended or waived if, but only if, such amendment or waiver is
in writing and signed by the Company, the Required Holders and, until such time
as the Initial Holder (or any Affiliate thereof) no longer holds any Warrants or
Warrant Shares, the Initial Holder (or such Affiliates).
6.08 Governing Law. This Agreement and the Warrants shall be governed by
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and construed in accordance with the laws of the State of New York, without
giving effect to the principles of conflict of laws thereof.
6.09 Counterparts. This Agreement may be signed in two or more
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counterparts, each of which shall be an original, with the same effect as if the
signatories thereto and hereto were upon the same instrument,
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
CAMBRIDGE INDUSTRIES HOLDINGS,
INC.
By /s/ Xxxxxxx X. Xxxxxxxx
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Title: President
Address for Notices:
c/o Cambridge Industries, Inc.
000 Xxxxxx Xxxxx Xxxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
BANKERS TRUST COMPANY
By /s/ Xxxx Xxx Xxxxx
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Title: Managing Director
Address for Notices:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No. : (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxx Xxx Xxxxx
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