SERIES D PREFERRED SHARES
PURCHASE AGREEMENT
DATED NOVEMBER 22, 2000
AMONG
THE DERBY CYCLE CORPORATION
AND
QUANTUM INDUSTRIAL PARTNERS LDC
XXXXXX EQUITY INVESTORS III, L.P., and
PERSEUS CYCLE L.L.C.
TABLE OF CONTENTS
SECTION 1: PURCHASE AND SALE OF SERIES D PREFERRED SHARES 1
1A. Basic Transaction 1
1B. Purchase Price 1
1C. The Closing 1
1D. Authorization of the Series D Preferred Shares 1
SECTION 2: CONDITIONS TO THE CLOSING 2
2A. Obligations 2
2B. Closing Documents 3
2C. Certificate of Incorporation 3
2D. Junior Subordinated Notes 3
3A. General 4
3B. Third Party Notices and Consents 4
3C. Governmental Notices and Consents 4
3D. Operation of Business 4
3E. Full Xxxxxx 0
0X. Xxxxxx of Material Developments 5
SECTION 4: POST-CLOSING COVENANTS AND AGREEMENTS 6
4A. Financial Statements and Other Information 6
4B. Inspection of Property, Books and Records 6
4C. Affirmative Covenants 6
4D. Current Public Information 7
4E. Use of Xxxxxxxx 0
0X. Disclosure of Investment 7
4G. Withholding 8
SECTION 5: REPRESENTATIONS AND WARRANTIES OF THE COMPANY 8
i
5A. Due Incorporation and Status 8
5B. Corporate Power 8
5C. Binding Obligations 8
5D. Non-Contravention 9
5E. Consents 9
5F. No Default 9
5G. No Litigation 9
5H. All Information is Accurate in all Material Respects 9
5I. Tax Liabilities 10
5J. Ownership of Assets 10
5K. Intellectual Property Rights 10
5L. Environmental Matters 10
5M. ERISA 11
5N. Investment Company Xxxxxx 00
0X. Financial Statements 12
5P. Absence of Certain Changes 12
5Q. Insurance 13
5R. Debt Instruments 13
5S. Certain Contracts and Commitments 13
5T. Labor Matters 13
5U. Compliance with Law 14
5V. Foreign Corrupt Practices Act 14
5W. Valid Issuance 15
5X. Capitalization 15
5Y. Finders' Fees 15
SECTION 6: INVESTORS' REPRESENTATIONS 16
6A. Corporate Existence and Power 16
6B. Authorization 16
ii
6F. Private Placement 16
SECTION 7: DEFINITIONS 17
SECTION 8: TERMINATION, SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS, ETC 23
8A. Conditions of Termination 23
8B. Effect of Terminations 24
8C. Survival of Representations, Warranties, Agreements and Covenants, Etc. 24
SECTION 9: INDEMNIFICATION AND CONTRIBUTION 24
9A. Indemnification of Investors 24
9B. Indemnification of the Company, Directors and Officers 25
9C. Actions against Parties; Notification 25
9D. Contribution 26
SECTION 10: MISCELLANEOUS 27
10A. Expenses 27
10B. Remedies 27
10D. Understanding Among the Investors 27
10F. Consent to Amendments 27
10G. Successors and Assigns 27
10H. Severability 28
10I. Counterparts 28
10J. Descriptive Headings; Interpretation 28
10K. No Strict Construction 28
10L. Complete Agreement 28
10M. Delivery by Facsimile 29
10N. Governing Law 29
10O. Notices 29
iii
THE DERBY CYCLE CORPORATION
SERIES D PREFERRED SHARES PURCHASE AGREEMENT
THIS AGREEMENT (as such agreement is amended, modified or supplemented
from time to time this "Agreement") is made as of November 22, 2000, by and
---------
among The Derby Cycle Corporation, a Delaware corporation (the "Company"),
-------
Quantum Industrial Partners LDC, a Cayman Islands limited duration company
("Xxxxx"), Xxxxxx Equity Investors III, L.P. ("Xxxxxx"), a Delaware limited
------ ------
partnership, and Perseus Cycle, L.L.C. ("Perseus"), a Delaware limited liability
-------
company, (collectively the "Investors", and individually an "Investor"). Except
--------- --------
as otherwise indicated herein, capitalized terms used herein are defined in
Section 8 hereof. The Company and the Investors may collectively be referred to
herein as the "Parties" or singularly as a "Party".
------- -----
The Parties hereto agree as follows:
Section 1. Purchase and Sale of Series D Preferred Shares.
----------------------------------------------
1A. Basic Transaction. On and subject to the terms and conditions of
this Agreement, the Investors agree to purchase from the Company, and the
Company agrees to sell to the Investors, all of its Series D Preferred Shares
for the consideration specified below in this Section 1.
1B. Purchase Price. Each Investor agrees to pay to the Company at the
Closing the amount set forth opposite its name on the Schedule of Investors
attached hereto by delivery of cash payable by wire transfer or delivery of
other immediately available funds to the account of the Company set forth in
Section 10M hereof.
1C. The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at 9:00 a.m. EST on the second
business day following the satisfaction or waiver of all conditions to the
obligations of the Parties to consummate the transactions contemplated hereby or
such other date as the Investors and the Company may mutually determine (the
"Closing Date").
1D. Authorization of the Series D Preferred Shares. The Company shall
authorize the issuance and sale to the Investors of 12,000 shares of Preferred
Stock, Series D, of the Company, par value $.01 per share (the "Series D
Preferred Shares"), having the rights and preferences as set forth in this
Agreement, in the Third Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") attached hereto as Exhibit A and in the Amended
and Restated Shareholders' Agreement attached hereto as Exhibit B.
Section 2. Conditions to the Closing.
-------------------------
2A. Obligations. The obligations under this Agreement of each
Investor and the Company are subject to the satisfaction as of the Closing of
the following conditions:
1
(i) the representations and warranties set forth in Sections 5 and
6 below shall be true and correct in all material respects at and as of the
Closing Date;
(ii) the Company and the Investors shall have performed and complied
with all of their respective covenants required to be performed hereunder
prior to the Closing in all material respects and after giving effect to
the issuance and sale of Series D Preferred Shares, no default shall have
occurred under this Agreement and no default or event of default shall have
occurred under the Indentures, the Senior Credit Facility or under any
other Debt Instrument evidencing an obligation of more than $250,000;
(iii) there shall not be any injunction, judgment, order, decree,
ruling, or charge in effect preventing consummation of any of the
transactions contemplated by this Agreement;
(iv) the Company shall have obtained an increased commitment for its
Senior Credit Facility of the Deutschmark equivalent of $11,500,000.
(v) the Investors shall have received from counsel to the Company
an opinion in form and substance as set forth in Exhibit C attached hereto,
---------
addressed to the Investors, and dated as of the Closing Date;
(vi) the Company's Certificate of Incorporation shall be in form and
substance as previously delivered to the Investors, a copy of which is
attached hereto as Exhibit A, shall be in full force and effect under the
---------
laws of the State of Delaware as of the Closing and shall not have been
amended or modified;
(vii) the Company's bylaws shall be in form and substance as
previously delivered to the Investors, a copy of which is attached hereto
as Exhibit D (the "Bylaws"), shall be in full force and effect as of the
--------- ------
Closing and shall not have been amended or modified;
(viii) the Company shall have simultaneously sold to each Investor the
Series D Preferred Shares to be purchased by such Investor hereunder at the
Closing and shall have received payment therefor in full;
(ix) the Company and the Investors shall have entered into the
Amended and Restated Shareholders' Agreement in the form and substance set
forth as Exhibit B hereto;
---------
(x) a director nominated by Xxxxx shall have been elected to the
board of directors of the Company and shall hold such position as of the
Closing Date;
(xi) the approval of the Board of Directors and the Shareholders of
the company of this Agreement and the other operative documents and the
transactions contemplated hereby;
2
(xii) the Investors and their special counsel shall have completed a
due diligence of the Company's and its Affiliates Company's business and
affairs with results satisfactory to each Investor and their special
counsel.
(xiii) the Company or the Investors may waive any condition specified
in this Section 2 if they execute a notice in writing so stating at or
prior to the Closing.
2B. Closing Documents. The Company shall have delivered to the
Investors all of the following documents:
(i) an Officer's Certificate, dated the date of the Closing,
stating that the conditions specified in Section 2A(i)-(xi), inclusive,
have been fully satisfied;
(ii) certified copies of the resolutions duly adopted by the Board
authorizing (A) the execution, delivery and performance of this Agreement
and each of the other agreements contemplated hereby, (B) the issuance and
sale of the Series D Preferred Shares to the Investors at the Closing, and
(C) the consummation of all other transactions contemplated by this
Agreement;
(iii) certified copies of the Certificate of Incorporation and the
Company's Bylaws, each as in effect at the Closing;
(iv) an incumbency certificate for each officer of the Company
executing this Agreement and each other document hereunder;
(v) copies of all material governmental, regulatory, third party
and other consents, approvals and filings, if any, required in connection
with the consummation of the transactions hereunder (including, without
limitation, all blue sky law filings and waivers of any preemptive rights
and rights of first refusal with respect to the issuance of the Series D
Preferred Shares hereunder) and the other agreements described herein; and
(vi) good standing certificates for the jurisdiction of
incorporation of the Company and in U.S. jurisdictions where the Company
has material operations as set forth on Schedule 2B(vi).
2C. Certificate of Incorporation. The Company shall have duly
adopted, executed and filed with the Secretary of State of Delaware the
Certificate of Incorporation, establishing, inter alia, the terms and the
relative rights and preferences of the Series D Preferred Shares, the Series D-1
Preferred Shares and the Company shall not have adopted or filed any other
document designating terms, relative rights or preferences of its Series D
Preferred Shares, other than the Certificate of Incorporation.
2D. Junior Subordinated Notes. With effect from the Closing Date,
all outstanding Junior Subordinated Notes will be cancelled by the Company and
be deemed paid in full in exchange for 7,400 shares of Preferred Stock, Series
D-1 of the Company, par value $.01 per share (the "Series D-1 Preferred
Shares"), having the rights and preferences as set forth in
3
this Agreement, in the Certificate of Incorporation and in the Amended and
Restated Shareholders' Agreement will be issued to Xxxxxx and Perseus.
Section 3. Pre-Closing Covenants and Agreements
------------------------------------
Each of the Investors and the Company agrees as follows with respect to the
period between the date of this Agreement and the Closing:
3A. General. Each of the Investors and the Company shall use
reasonable best efforts to take all action and to do all things necessary,
proper or advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of the
conditions set forth in Section 2 above) and including providing to the
Company's senior lenders any information required by the senior lenders in
connection with the Company obtaining an increased commitment under its existing
Senior Credit Facility. At the Closing, the appropriate Parties shall execute
and deliver the agreements and instruments contemplated hereby to be executed
and delivered at the Closing.
3B. Third Party Notices and Consents. The Parties shall, and the
Company shall cause each Subsidiary to, use reasonable best efforts to give
required notices to third parties and obtain any required third party consents
in connection with the matters contemplated by this Agreement.
3C. Governmental Notices and Consents. Each of the Investors and the
Company shall give any notices to, make any filings with, and use reasonable
best efforts to obtain any authorizations, consents and approvals of,
governments and governmental agencies to the extent required in connection with
the matters contemplated by this Agreement.
3D. Operation of Business. The Company shall, and shall cause each
Subsidiary to, operate its respective business only in the usual and ordinary
course of business consistent with past custom and practice. Without limiting
the generality of the foregoing, prior to the Closing, the Company shall not,
and shall not permit any of its Subsidiaries to:
(i) take any action or omit to take any action which act or omission
would result in a breach of any of the representations, warranties or
covenants made by the Company in this Agreement;
(ii) take any action or omit to take any action which act or omission
could reasonably be expected to have a Material Adverse Effect;
(iii) omit to take any action set forth in Paragraph 4D.
Notwithstanding the foregoing, nothing in this Paragraph 3D shall
prohibit the Company from taking any action or omitting to take any action as
required or as expressly contemplated by this Agreement.
3E. Full Access. The Company will permit, and the Company will cause
each Subsidiary to permit, representatives of the Investors full access at all
times but in a manner so as
4
not to interfere with the normal business operations of the Company and its
Subsidiaries to the Company's personnel and to business, financial, legal, tax,
compensation and other data and information concerning the Company's and its
Subsidiaries' affairs and operations. Each Investor agrees that any oral,
written or recorded information provided to any Investor pursuant to the terms
of this Agreement shall be deemed Confidential Information. Xxxxx acknowledges
that all Confidential Information provided to them by the Company is subject to
the terms of the Confidentiality Agreement dated August 29, 2000 among Xxxxx
Private Equity Partners, LLC and the Company, the terms of which pertaining to
confidential information are incorporated herein by reference. Each Investor
shall maintain the confidentiality of such Confidential Information), received
from the Company, its Subsidiaries and its advisors in the course of the reviews
contemplated by this Paragraph 3E and will not use any of the Confidential
Information except in connection with this Agreement and shall not disclose any
Confidential Information to third parties; provided that each Investor may
deliver or disclose Confidential Information to (A) its directors, officers,
employees, agents, attorneys and affiliates (to the extent such disclosure
directly relates to the administration of the investment represented by the
Series D Preferred Shares), (B) its financial advisors and other professional
advisors involved in the negotiation and/or administration of the investment
represented by the Series D Preferred Shares, who agree to sign confidentiality
agreements in form and substance satisfactory to the Company, (C) any other
holder of any Series D Preferred Shares, (D) any Person from which it offers to
purchase any security of the Company (if such Person has agreed to sign a
confidentiality agreement in form and substance satisfactory to the Company
prior to its receipt of such Confidential Information), (E) any federal or state
regulatory authority having jurisdiction over it, (F) any nationally recognized
rating agency that requires access to information about its investment
portfolio, (G) any lender of such Investor or (H) as may be necessary upon the
advice of counsel in connection with any litigation relating to this Agreement
which such Investor is a Party. Each holder of Series D Preferred Shares, by its
acceptance of such stock, will be deemed to have agreed to be bound by and to be
entitled to the benefits and burdens of this Paragraph 3E as though it were a
party to this Agreement. On reasonable request by the Company in connection with
the delivery to any holder of a Series D Preferred Shares of information
required to be delivered to such holder under this Agreement or requested by
such holder (other than a holder that is a party to this Agreement or its
nominee), such holder will enter into an agreement with the Company embodying
the provisions of this Paragraph 3E. Upon termination of this Agreement, each
Investor will return and will procure that any Persons to whom it has delivered
Confidential Information pursuant to Clause A above will return to the Company
and its Subsidiaries all tangible embodiments (and all copies) of the
Confidential Information which are in its possession.
3F. Notice of Material Developments. Each Party will give prompt
written notice to the others of any material adverse development causing a
breach of any of his or its own representations and warranties. No disclosure by
any Party pursuant to this Paragraph 3F, however, shall prevent or cure any
misrepresentation or breach of warranty.
Section 4. Post-Closing Covenants and Agreements.
-------------------------------------
4A. Financial Statements and Other Information. So long as Investors
own the Series D Preferred Shares as contemplated by this Agreement, the Company
covenants to deliver to the Investors:
5
(a) as soon as available and in any event within thirty (30)
Business Days after the end of each month, a copy of the unaudited monthly
management accounts for the Company and its Material Affiliated Companies in the
form required to be provided on the date hereof by the Company pursuant to
Section 19.1(a)(iii) of the Senior Credit Facility;
(b) as soon as available and in any event within forty five (45)
days after the end of each fiscal quarter, a copy of the unaudited quarterly
consolidated accounts for the Company and its Material Affiliated Companies in
the form required to be provided on the date hereof by the Company pursuant to
Section 19.1(a)(ii) of the Senior Credit Facility;
(c) as soon as available and in any event within one hundred and
fifty (150) days after and as of the end of each Fiscal Year, the audited
consolidated financial accounts for the Company and its Material Affiliated
Companies in the form required to be provided on the date hereof pursuant to
Section 19.1(a)(i)(A) of the Senior Credit Facility, and any audited financial
accounts provided pursuant to Sections 19.1(a)(i)(B) or 19.1(a)(i)(C) of the
Senior Credit Facility, if such audited financial accounts are prepared;
(d) from time to time, such other information or documents
respecting the business, properties or the condition or operations, financial or
otherwise, of the Company or any of its Material Affiliated Companies as the
Investors may reasonably from time to time request.
4B. Inspection of Property, Books and Records. The Company shall,
and shall cause each Material Affiliated Company to, permit any Investor or any
representatives or agents of any Investor at such times as any Investor may
request, to (i) visit and inspect any of the properties of the Company and its
Subsidiaries, (ii) examine the corporate and financial records of the Company
and its Subsidiaries (including, without limitation, all internal management
documents, reports of operations, reports of adverse developments, management
letters, communications with shareholders or directors and press releases) and
make copies thereof or extracts therefrom and (iii) discuss the affairs,
finances and accounts of any such corporations with the directors, officers, key
employees and independent accountants of the Company and its Subsidiaries. Such
inspection shall be made at the expense of such Investor, unless there has been
a breach of this Agreement, the Certificate of Incorporation or the Amended and
Restated Shareholders' Agreement, in which case such inspection shall be made at
the expense of the Company.
4C. Affirmative Covenants. So long as any Series D Preferred Shares
remain outstanding, the Company shall, and shall cause each Subsidiary to,
unless it has received the prior written waiver of the holders of a majority of
the outstanding Series D Preferred Shares:
(i) continue the Business and refrain from engaging in any business
activities or operations substantially different from or unrelated to the
Business;
(ii) maintain and keep in force in all material respects insurance of
the types and the amounts customarily carried in lines of business similar
to its line of business, including without limitation, fire, extended
coverage, public liability, property damage, business interruption,
environmental liability and workers' compensation insurance;
6
(iii) maintain adequate books and records in accordance with GAAP;
(iv) maintain in full force and effect its corporate existence,
rights, governmental approvals and franchises and all licenses, permits and
qualifications necessary or appropriate in the conduct of business as
proposed to be conducted, except where failure to do so, individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect;
(v) comply with all applicable laws, rules, regulations and orders,
noncompliance with which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect;
(vi) comply with all covenants of the Company set forth in Section 9
of Part B of Article Four of the Certificate of Incorporation, which
Section 9 of Part B of Article Four is hereby incorporated in this
Agreement in its entirety, as if fully set forth herein.
4D. Current Public Information. Subject to Section 4F, the Company
shall file all reports required to be filed by it under the Securities Act and
the Securities Exchange Act and the rules and regulations adopted by the
Securities and Exchange Commission thereunder.
4E. Use of Proceeds. The Company shall use the proceeds of the
purchase of Series D Preferred Shares for working capital and general corporate
purposes.
4F. Disclosure of Investment. From and after the date hereof, the
Company agrees that it will not, (i) except as may be necessary or desirable (x)
in connection with a request by a governmental agency, regulatory or supervisory
authority or court or as required by law and other than to affiliates of the
Investors, and employees of the Investors or its affiliates, and potential
investors in the Company or (y) in connection with a request by any lender to
the Company, disclose the transactions contemplated by this Agreement, or (ii)
use in advertising or publicity the name of any other Party hereto, or any
partner or employee of any other Party hereto or any of its respective
affiliates, or any trade name, trademark, trade device, service xxxx, symbol or
any abbreviation, contraction or simulation thereof owned by any other Party
hereto or any of their respective affiliates, in either case without the prior
written consent of such Party, such consent not to be unreasonably withheld or
delayed. From and after the date hereof, neither the Company nor any of its
Affiliated Companies will represent, directly or indirectly, that any product or
any service provided by the Company or any of its subsidiaries have been
approved or enclosed by any Investors without the prior written consent of such
Investor.
4G. Withholding. The Company will not withhold any U.S. federal tax
on any payment to or on behalf of any holder or beneficial owner of Series D
Preferred Shares in connection with any redemption of such shares, unless a
change in relevant tax law after the date hereof mandates such withholding. With
regard to Treasury Regulation Section 1.305-5(b)(5), the Company will neither
report on its tax returns nor provide notice to the holders of the Series D
Preferred Shares, that there is any constructive distribution under Treasury
Regulation Section 1.305-5(b) with respect to the Series D Preferred Shares.
7
Section 5. Representations and Warranties of the Company.
---------------------------------------------
As of the date hereof and the Closing Date, the Company represents and warrants
the following:
5A. Due Incorporation and Status. Except as set forth on Schedule 5A,
each of Company and the Company's Material Affiliated Companies is an entity
duly organized, validly existing and in good standing (in jurisdictions where a
concept of good standing exists) under the laws of the place of its
incorporation, possesses the capacity to xxx and be sued in its own name, and
has the power to carry on its business substantially as now being (or will
immediately after the Closing Date be) conducted and to own its property and
other assets. Except as set forth on Schedule 5A, the Company is qualified to
transact business as a foreign corporation in, and is in good standing (in
jurisdictions where a concept of good standing exists) under the laws of, those
jurisdictions listed on Schedule 5A under its name, which jurisdictions
constitute all of the jurisdictions wherein the character of the property owned
or leased or the nature of the activities conducted by it makes such
qualification necessary, except where the failure to so qualify could not
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect.
5B. Corporate Power. Except as set forth in Schedule 5B, the Company
has the full power to execute, deliver and perform its obligations under this
Agreement and the other Operative Documents; all necessary corporate,
shareholder and other action has been taken to authorize the execution, delivery
and performance of the same.
5C. Binding Obligations. Except as set forth in Schedule 5C, this
Agreement, the other Operative Documents and any other document or instrument
executed or delivered or to be executed or delivered by the Company hereunder
and thereunder has been duly executed and delivered by the Company and
constitute, valid and binding obligations; except (a) as such enforcement is
limited by bankruptcy, insolvency and other similar laws affecting the
enforcement of creditors' rights generally and (b) for limitations imposed by
general principles of equity.
5D. Non-Contravention. Except as set forth in Schedule 5D, the
execution and delivery of this Agreement, the other Operative Documents and
other documents executed and delivered hereunder or thereunder by the Company
and the performance of each of its obligations hereunder or thereunder, and
compliance with their respective provisions, will not (a) to the knowledge of
the Company contravene any existing applicable law, statute, rule or regulation
or any judgment, decree or permit of any Governmental Authority to which it is
subject, conflict with, or result in any breach of the terms of, or constitute a
default under, any agreement or other instrument to which the Company is
expressed to be a party or is subject to, or by which it, or any of its property
is bound in a manner which is reasonably likely to result in any Liability on
the part of the Investors to any third party by reason of any such conflict, (b)
result in the creation of or requirement to create, any material Lien on the
assets of the Company, or (c) contravene or conflict with any provision of the
Certificate of Incorporation and By-Laws (or similar or analogous documents) of
the Company.
5E. Consents. Except as set forth in Schedule 5E, all material
authorizations, approvals, consents, licenses, exemptions, filings,
registrations and other matters required by law
8
for or in consequence of (a) the entry into and performance by the Company, or
the validity of the Agreement, the other Operative Documents and any of the
agreements or the transactions to be implemented pursuant thereto or (b) the
carrying on of the business of the Company and each of the Company's Affiliated
Companies in the ordinary course, have been obtained or effected or will be
obtained or effected prior to the date required by law.
5F. No Default. Except as set forth in Schedule 5F, none of the
Company or the Company's Material Affiliated Companies is in breach of or
default under any Indebtedness or any other agreement to which it is a party or
which is binding on it or any of its assets which breach or default could
reasonably be expected to have a Material Adverse Effect.
5G. No Litigation. Except as set forth in Schedule 5G, no action,
litigation, arbitration, alternative dispute resolution or administrative or
regulatory proceeding is taking place or pending against the Company or any of
the Company's Material Affiliated Companies nor are there any current labor
disputes involving the Company or any of the Company's Material Affiliated
Companies and, so far as the Company is aware, no such action, litigation,
arbitration, alternative dispute resolution or administrative or regulatory
proceeding or labor dispute is threatened.
5H. All Information is Accurate in all Material Respects. Except as
set forth in Schedule 5H, all financial and other information provided in
writing by, or on behalf of the Company or any of the Company's Material
Affiliated Companies to the Investors in connection with this Agreement prior to
the date of this Agreement was true and accurate in all material respects when
given and (so far as the Company is aware having made due inquiries) there are
no other facts or matters the admission of which would have made any such
statement or information provided misleading or an inaccurate representation of
the situation described therein and all opinions, projections and forecasts
given or made have been made in good faith and based upon reasonable
assumptions.
5I. Tax Liabilities. Each of the Company and the Company's Material
Affiliated Companies has timely filed all tax returns required to be filed by
it, and all such tax returns were correct and complete in all material respects.
All taxes owed by the Company or any of the Company's Material Affiliated
Companies (whether or not shown on any tax return) have been paid or duly
provided for in the financial statements in accordance with GAAP. Except as set
forth on Schedule 5I, there are no material disputes or claims concerning any
tax liability of the Company or any of the Company's Material Affiliated
Companies either (i) claimed or raised by any authority in writing, or (ii) as
to which the Company has knowledge after due inquiry. The Company has adequate
reserves for disputed taxes which have not yet been paid. The Company has not
been a United States real property holding corporation within the meaning of
Section 897(c)(1)(A)(ii) of the IRC during the applicable period specified in
Section 897(c)(1)(A) (ii).
5J. Ownership of Assets. Except as set forth in Schedule 5J, the
Company and each of the Company's Material Affiliated Companies will have good
title to, or valid leases or licenses of, or are otherwise entitled to use and
permit other Material Affiliated Companies to use, all tangible assets necessary
to conduct their business substantially as conducted by it at the Closing Date.
9
5K. Intellectual Property Rights. Except as set forth in Schedule 5K:
(a) (i) the Company and each of the Company's Material Affiliated
Companies owns or has licensed to it all the intellectual property rights which
are material in the context of its business and which are required by it in
order for it to carry on its business as it is presently conducted, and (ii) so
far as the Company is aware (after due and careful inquiry) none of the Company
or the Company's Material Affiliated Companies, in carrying on its business,
infringes any intellectual property rights of any third party in any way.
(b) None of the material intellectual property rights of the Company
and of the Company's Material Affiliated Companies is, to the Company's
knowledge, being infringed, nor, to the Company's knowledge, is there any
threatened infringement of such intellectual property rights by any third party.
(c) To the Company's knowledge, all material registered intellectual
property rights owned by the Company and the Company's Material Affiliated
Companies are subsisting and all actions (including payment of all fees)
required to maintain the same in full force and effect have been taken.
5L. Environmental Matters. Except as set forth in Schedule 5L:
(a) The Company and each of the Company's Material Affiliated
Companies has obtained all requisite authorizations required for the carrying on
of its business as currently conducted and has at all times complied in all
material respects with (i) the terms and conditions of such authorizations and
(ii) all other applicable Environmental and Safety Laws except where non
compliance in subclauses (i) or (ii) would not be reasonably expected to cause a
Material Adverse Effect.
(b) So far as the Company is aware (after due and careful inquiry),
no Hazardous Material has been used, disposed of, generated, stored,
transported, dumped, released, deposited, owned, leased, occupied or controlled
by the Company or any of the Company's Material Affiliated Companies (including
any off-site waste management or disposal location utilized by the Company or
any of the Company's Material Affiliated Companies) in circumstances where this
would be reasonably likely to result in the imposition of a liability on the
Company or any of the Company's Material Affiliated Companies.
(c) So far as the Company is aware (after due and careful inquiry)
there is no claim alleging a violation of any Environmental and Safety Laws
(whether in respect of any site previously or currently owned or occupied by the
Company or any Material Affiliated Company or otherwise) pending or threatened,
and there are no past or present acts, omissions, events or circumstances that
would be likely to form the basis of any such claim (whether in respect of any
site previously or currently owned or occupied by the Company or any Material
Affiliated Company), against the Company or any Material Affiliated Company
which in each case is reasonably likely to be determined against the Company or
such Material Affiliated Company, as the case shall be.
(d) Neither the Company nor any of its Material Affiliated Companies
has received any notice from any third party of violation of any Environmental
and Safety Law.
10
5M. ERISA. Except as set forth in Schedule 5M:
(a) No act, omission or transaction has occurred which will result in
imposition on the Company, any of the Company's Material Affiliated Companies,
or any ERISA Affiliate (whether directly or indirectly) of (i) either a civil
penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section
4975 of the IRC, or (ii) breach of fiduciary duty liability damages under
Section 409 of ERISA.
(b) Neither the Company, any of the Company's Material Affiliated
Companies nor any ERISA Affiliate has maintained or contributed to any Plan that
is or was subject to Title IV of ERISA or to the minimum funding requirements of
Section 302 of ERISA or Section 412 of the IRC.
(c) Payment has been made of all amounts which the Company, any of
the Company's Material Affiliated Companies or any ERISA Affiliate is required,
under the terms of each multiemployer plan within the meaning of Section 3(37)
of ERISA (each such plan, a "Plan") or applicable law, to have paid as
----
contributions to such Plan except where non payment would not be reasonably
expected to cause a Material Adverse Effect.
(d) Each of the Company, the Company's Material Affiliated Companies
and the ERISA Affiliates are in compliance with the presently applicable
provisions of ERISA and the IRC with respect to each Multiemployer Plan except
where non compliance would not be reasonably expected to cause a Material
Adverse Effect.
(e) None of the Company, the Company's Material Affiliated Companies,
nor any ERISA Affiliate (nor any trade or business that was an ERISA Affiliate)
has at any time contributed to or been obliged to contribute to any
Multiemployer Plan which, upon the complete or partial withdrawal from such
Multiemployer Plan, could result in the imposition of complete or partial
withdrawal liability.
5N. Investment Company Status. Each of the Company and the Company's
Affiliated Companies either is not an "investment company" within the meaning of
the United States Investment Company Act of 1940, as amended, or is exempt from
all provisions of such Act, as amended.
5O. Financial Statements. Except as set forth in Schedule 5O:
(a) Save as fully and fairly disclosed in the Financial Statements,
the financial information in relation to the Company and the Company's Material
Affiliated Companies contained in the Financial Statements was prepared in
accordance with GAAP and gives a true and fair view of the state of affairs of
the Company and the Company's Material Affiliated Companies as at the date to
which they were prepared and as at such date there were no material liabilities
of the Company and the Company's Material Affiliated Companies which were not
disclosed by or shown as being provided for in the Financial Statements.
(b) There has been no Material Adverse Change in the business,
operations, assets, prospects, or financial condition of the Company and the
Company's Material Affiliated Companies (taken as a whole) since December 31,
1999.
11
(c) The Financial Statements includes or consolidates into such
financial information the results of the Company and each of the Company's
Subsidiaries or does not consolidate or include the results of any other
company, limited partnership or like entity or business.
5P. Absence of Certain Changes. Since December 31, 1999, except as
set forth on Schedule 5P, neither the Company nor any of its Material Affiliated
Companies has:
(a) borrowed or agreed to borrow any funds except in the ordinary
course of business and consistent with past practice;
(b) sold, transferred, assigned or otherwise disposed of any of its
property or assets in excess individually of $250,000 or permitted, or allowed,
any of its property or assets to be subjected to any Lien or restriction of any
kind, except for properties and assets sold or encumbered in the ordinary course
of business and consistent with past practice;
(c) declared, paid or set aside for payment any dividend or other
distribution in respect of its capital stock or other securities or equity
interests or, directly or indirectly, redeemed, purchased or otherwise acquired
any shares of its capital stock or other securities or equity interests;
(d) made any change in any method of accounting or accounting
practice or any change in depreciation or amortization policies or rates
theretofore adopted; or
(e) experienced any event resulting in a Change of Control.
5Q. Insurance. Except as set forth in Schedule 5Q, there has been
maintained for the Company and each of its Material Affiliated Companies
insurance in such amounts and covering such risks as is usually carried by
companies engaged in similar businesses and owning or leasing similar
properties. All such policies are in full force and effect, and all premiums
with respect thereto are currently paid.
5R. Debt Instruments. Schedule 5R contains a complete list of all
loan agreements, promissory notes, letters of credit, security agreements or
other financing documents to which the Company or any of its Primary Affiliated
Companies is a party or by which the Company or any of its Primary Affiliated
Companies or any of their properties or assets (excluding equipment subject to
any equipment lease), is bound which individually involve an obligation of
$100,000 or more (the "Debt Instruments"). Except as set forth in Schedule 5R,
there are no existing defaults by the Company or any of its Primary Affiliated
Companies or any other obligor under or party to any such Debt Instrument
including, without limitation, the Senior Credit Facility, and no event has
occurred which (whether with notice, lapse of time, or both, or the happening or
occurrence of any other event) would constitute a default by Company or any of
its Primary Affiliated Companies under any such Debt Instrument including,
without limitation, the Senior Credit Facility.
5S. Certain Contracts and Commitments. Except as set forth in
Schedule 5S:
12
(a) Neither the Company nor any of its Primary Affiliated Companies
has any collective bargaining or union contracts or agreements;
(b) Neither the Company nor any of its Primary Affiliated Companies
has entered into any written agreement restricting it from carrying on its
business within the United States or any subdivision thereof; and
(c) Neither the Company nor any of its Primary Affiliated Companies
is a party to any "safe harbor lease" as defined in Section 168(f)(8) of the
Internal Revenue Code of 1954 as in effect prior to amendment by the Tax Equity
and Fiscal Responsibility Act of 1982.
5T. Labor Matters. Except to the extent set forth in Schedule 5T:
(a) the Company and each of its Primary Affiliated Companies is and
has been in material compliance with all applicable laws respecting employment
and employment practices, terms and conditions of employment and wages and
hours, including, without limitation, any such laws respecting employment
discrimination, occupational safety and health, and unfair labor practices;
(b) there is no unfair labor practice complaint against the Company
or any of its Primary Affiliated Companies pending or to the Company's knowledge
threatened before the National Labor Relations Board or any comparable state,
local, foreign, regional or territorial agency;
(c) there is no labor strike, dispute, slowdown or stoppage actually
pending or, to the Company's knowledge, threatened against or directly affecting
the Company or any of its Primary Affiliated Companies;
(d) no union representation question exists and, to the Company's
knowledge, no union organization effort is underway, respecting the employees of
the Company or any of its Primary Affiliated Companies;
(e) no grievance or arbitration proceeding arising out of or under
collective bargaining agreements is pending and no claims therefore exist;
(f) neither Company nor any of its Primary Affiliated Companies has
experienced any material work stoppage in the last eighteen (18) months;
(g) neither the Company nor any of its Primary Affiliated Companies
is delinquent in payments to any of its employees for any wages, salaries,
commissions, bonuses or other direct compensation for any services performed by
them to the Closing Date or amounts required to be reimbursed to such employees;
5U. Compliance with Law. Except as set forth in Schedule 5U, so far
as the Company is aware, the Company and each of its Material Affiliated
Companies is in compliance with all laws, regulations and orders applicable to
the Business, including, without limitation, applicable building, zoning or
health laws, ordinances and regulations except in each such case where non
compliance would not reasonably be expected to have a Material Adverse Effect.
13
Neither the Company nor any of its Material Affiliated Companies has received
any notification that it is in violation of any such laws, regulations or orders
and neither the Company nor any of its Material Affiliated Companies nor so far
as the Company is aware, any employee thereof (while acting in such capacity),
has made any payment to any Person, which payment violates any statute or law.
5V. Foreign Corrupt Practices Act. Except as set forth in Schedule
5V, neither the Company nor any of its Material Affiliated Companies has made,
offered or agreed to offer anything of value to any government official,
political party, candidate for political office or any person that the Company
or any of its Material Affiliated Companies knows or has reason to know will
offer anything of value to any government official, political party or candidate
for political office, nor has it taken any action which would cause it to be in
violation of any law of any foreign jurisdiction or the United States of
America, including the Foreign Corrupt Practices Act of 1977, as amended. To the
Company's knowledge, there is not now nor has there ever been, for as long as
all present members of the senior management of the Company have been employed
by the Company or any of the Company's Material Affiliated Companies, any
employment of, or beneficial ownership of the Company or any of its Material
Affiliated Companies by, any foreign governmental or political official nor, to
the Company's knowledge, has there ever been any employment of, or beneficial
ownership of the Company or any of its Material Affiliated Companies by, any
foreign government or political official.
5W. Valid Issuance. All of the issued and outstanding capital stock
of the Company and each of its Primary Affiliated Companies has been duly
authorized, validly issued, is fully paid and non-assessable, and has been
issued in compliance with the Securities Act and all applicable state securities
laws, or any comparable laws, rules and ordinances. The shares of Series D
Preferred Stock to be issued to the Investors have been duly authorized, issued
in accordance with the Purchase Agreement, will be validly issued, fully paid,
non assessable and free and clear of any liens other than those imposed by the
Investor.
5X. Capitalization. As of the Closing Date the authorized, capital
stock of the Company consists of 25,000 shares of Series A Preferred Stock,
3,000 shares of Series B Preferred Stock, 100 shares of Series C Preferred
Stock, 52,180 shares of Series D Preferred Stock, 7,500 shares of Series D-1
Preferred Shares, 200,000 shares of Class A Common Stock, 15,000 shares of Class
B Common Stock and 30,000 shares of Class C Common Stock. All of the issued and
outstanding shares are held as set forth in Schedule 5X. Except as set forth on
Schedule 5X, there are no outstanding or authorized options, warrants, purchase
rights, or other contracts or commitments that could require the Company to
issue, sell, or otherwise cause to become outstanding any of its capital stock.
Except as set forth on Schedule 5X, there are no outstanding or authorized stock
appreciation, phantom stock, profit participation, or similar rights with
respect to the Company.
5Y. Finders' Fees. There are no fees and commissions of any
investment banker, broker, finder or other intermediary which has been retained
by or is authorized to act on behalf of the Company in connection with the
transactions contemplated by this Agreement.
5Z. Offering Exemption. Assuming the accuracy of the representations
and warranties made by the Investors in Section 6, the offer and sale of the
Series D Preferred Shares
14
as contemplated hereby and all prior issuances of equity securities of the
Company required to be integrated under the Securities Act are exempt from
registration under the Securities Act and under applicable state securities and
the securities laws of the District of Columbia, the State of New York and the
State of Connecticut, as currently in effect. The Company has not offered any of
its capital stock, or any other securities, for sale to, or solicited any offers
to buy any of the foregoing from the Investors, or otherwise approached or
negotiated with any other person in respect thereof, in such a manner as to
require registration under the Securities Act.
Section 6. Investors' Representations.
--------------------------
Each of the Investors hereby represents and warrants for itself as of
the date hereof and the Closing Date, that:
6A. Existence and Power. Such Investor is an entity duly organized
and validly existing and in good standing (in such jurisdictions where the
concept of good standing exists)) under the laws of the jurisdiction of
organization.
6B. Authorization. The execution, delivery and performance by such
Investor of this Agreement and the consummation of the transactions contemplated
hereby are within such Investor's corporate, limited liability company,
partnership or limited partnership powers and have been duly authorized by all
necessary corporate, limited liability company or partnership action on the part
of such Investor. This Agreement constitutes and, when executed and delivered in
accordance with its terms a valid and binding agreement of such Investor,
enforceable against such Investor in accordance with its terms, except (a) as
such enforcement is limited by bankruptcy, insolvency and other similar laws
affecting the enforcement of creditors' rights generally and (b) for limitations
imposed by general principles of equity.
6C. Private Placement.
(i) Each Investor understands that the offering and sale of the
Series D Preferred Shares is intended to be exempt from registration under
Rule 506 of Regulation D of the Securities Act and any applicable state
securities or blue sky laws.
(ii) The Series D Preferred Shares to be acquired by each Investor
pursuant to this Agreement is being acquired for its own account and
without a view to the resale or distribution of such Series D Preferred
Shares or any interest therein other than in a transaction exempt from
registration under the Securities Act or in a registered offering; provided
that nothing contained herein shall prevent any Investor from transferring
such securities in compliance with the provisions of the Amended and
Restated Shareholders' Agreement.
(iii) Each Investor is an "Accredited Investor" as such term is
-------------------
defined in Regulation D under the Securities Act.
(iv) Each Investor has sufficient knowledge and experience in
financial and business matters so as to be capable of evaluating the merits
and risks of its investment in the Series D Preferred Shares and such
Investor is capable of bearing the economic risks
15
of such investment, including a complete loss of its investment in the
Series D Preferred Shares. Such Investor understands its investment in the
Series D Preferred Shares involves a high degree of risk.
(v) Each Investor has been furnished with and carefully read a copy
of the Company's Form 10-K dated March 30, 2000 and this Agreement and has
been given the opportunity to ask questions of, and receive answers from,
the Company concerning the terms and conditions of the Series D Preferred
Shares and other related matters. The Company has made available to such
Investor or its agents all documents and information relating to an
investment in the Series D Preferred Shares requested by or on behalf of
such Investor.
(vi) Each Investor understands that the Series D Preferred Shares
have not been and are not being registered under the Securities Act or any
state securities laws, and may not be offered, sold, pledged or otherwise
transferred other than in accordance with the provisions of Certificate of
Incorporation or Amended and Restated Shareholders' Agreement.
(vii) Each Investor understands that the Securities shall bear a
restrictive legend substantially in the following form:
"The securities represented by this certificate were
originally issued on November ___, 2000, and have not
been registered under the Securities Act of 1933, as
amended. The transfer of the securities represented by
this certificate is subject to the conditions specified
in the Second Amended and Restated Amended and Restated
Shareholders' Agreement dated as of November ___, 2000,
and as amended and modified from time to time, between
the issuer (the "Company") and certain investors, and
-------
the Company reserves the right to refuse the transfer
of such securities until such conditions have been
fulfilled with respect to such transfer. A copy of such
conditions shall be furnished by the Company to the
holder hereof upon written request and without charge."
In addition, certificates representing Series D Preferred Shares shall
bear the following legend:
"The Company will furnish the holder of this
certificate information concerning the designations,
relative rights, preferences and limitations applicable
to each class of shares including the liquidation and
dividend preferences and the voting and conversion
rights of the Series D Preferred Shares, on request in
writing and without charge."
Section 7. Definitions.
-----------
For the purposes of this Agreement, the following terms have the
meanings set forth below:
16
"Affiliate" of any particular Person means any other Person
controlling, controlled by or under common control with such particular Person,
where "control" means the possession, directly or indirectly, of the power to
direct the management and policies of, or make investment decisions for, a
Person whether through the ownership of voting securities, contract or
otherwise. With respect to the Company, "control" includes, without limitation,
the direct or indirect beneficial ownership of more than ten percent (10%) of
the voting securities or voting equity of such Person or the power to direct or
cause the direction of the management and policies of such Person whether by
contract or otherwise.
"Amended and Restated Shareholders' Agreement" means the Second
Amended and Restated Shareholders' Agreement, dated the date hereof, by and
among the Company, Derby Finance S.a.r.l., DC Cycle, L.L.C., Perseus Cycle,
L.L.C. and Xxxxx as such agreement is amended, restated, modified or
supplemented from time to time.
"Applicable Law" means, in respect of any Person, all provisions of
constitutions, statutes, rules, regulations and orders of governmental bodies or
regulatory agencies, whether foreign or domestic, applicable to such Person,
including, without limiting the foregoing, and all Environmental and Safety
Laws, and all orders, decisions, judgments and decrees of all courts and
arbitrators in proceedings or actions to which the Person in question is a party
or by which it is bound.
"Business" means the business of the Company and its Material
Affiliated Companies as conducted immediately prior to the date hereof.
"Certificate of Incorporation" has the meaning set forth in Paragraph
1D hereof.
"Change of Control" has the same meaning as the term "Change of
Control" as such term is defined in the Indentures on the date hereof.
"Class A Common Stock" means shares of Common Stock of the Company,
Class A, par value $.01 per share.
"Class B Common Stock" means shares of Common Stock of the Company,
Class B, par value $.01 per share.
"Class C Common Stock" means shares of Common Stock of the Company,
Class C, par value $.01 per share.
"Closing" has the meaning set forth in Paragraph 1C.
"Closing Date" has the meaning set forth in Paragraph 1C.
"Common Stock" means the Class A Common Stock, Class B Common Stock
and Class C Common Stock.
"Confidential Information" means any information delivered whether
verbally or in writing to any Investor by or on behalf of the Company or any
Subsidiary of the Company in connection with the transactions contemplated by or
otherwise pursuant to this Agreement;
17
provided that such term does not include information that (i) was publicly known
--------
or otherwise lawfully known to such Investor prior to the time of such
disclosure or (ii) subsequently becomes publicly known through no act or
omission by such Investor or any persons acting on its behalf or (iii) otherwise
becomes known to such Investor other than through disclosure by the Company or
any Subsidiary of the Company or (iv) constitutes financial statements delivered
to such Investor under this Agreement that are otherwise publicly available.
"Debt Instrument" has the meaning set forth in Paragraph 5R.
"Employee Pension Plan" means any Plan which is (i) maintained by the
Company, any of its Subsidiaries or any of its ERISA Affiliates and (ii) subject
to Part 3 of Title I of ERISA.
"Environmental and Safety Laws" means any and all applicable current
and future treaties, laws, statutes, regulations, enforceable requirements,
binding determinations, orders, decrees, judgments, injunctions, permits,
approvals, authorizations, licenses, permissions, notices or binding agreements
issued, promulgated or entered by any Governmental Authority, relating to the
environment, to employee health or safety, to preservation or reclamation of
natural resources, or to the management, release or threatened release of
contaminants or noxious odors, including, in the case of Persons subject to the
laws of the United States, the Hazardous Materials Transportation Act, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986 ("CERCLA"),
the Solid Waste Disposal Act, as amended by the Resource Conservation and
Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984, the
Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977,
the Clean Air Act of 1970, as amended by the Clean Air Act Amendments of 1990,
the Toxic Substances Control Act of 1976, the Occupational Safety and Health Act
of 1970, as amended, the Emergency Planning and Community Right-to-Know Act of
1986, the Safe Drinking Water Act of 1974, as amended, and any similar or
implementing state law, and all amendments or regulations promulgated
thereunder.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.
"ERISA Affiliates" means any Person, including a Subsidiary or an
Affiliate of the Company, that is a member of any group of organizations (within
the meaning of Code Sections 414(b), (c), (m) or (o)) of which the Company is a
member.
"Financial Statements" means (i) the audited consolidated balance
sheet of the Company and the Company's Material Affiliated Companies and the
related statements of income and cash flows for the fiscal year ending December
31, 1999, and (ii) the unaudited balance sheet of Company and Company's Material
Affiliated Companies and the related statements of income and cash flows for the
six-month period ending June 30, 2000.
"Fiscal Year" means the fiscal year of the Company, which shall be the
twelve-month period ending on the last day in the month of December.
18
"GAAP" means generally accepted accounting principles and practices,
consistently applied, as promulgated in (i) the documents of Rule 203 of the
Code of Professional Conduct of the American Institute of Certified Public
Accountants, (ii) Statement of Accounting Standards No. 43 "Omnibus Statement on
Auditing Standards" of the Auditing Standards Board of the American Institute of
Certified Public Accountants and (iii) any superseding or supplemental
documentation of equal authority promulgating generally accepted accounting
principles and practices, all as in effect from time to time in the United
States of America.
"Governmental Authority" means any Federal, foreign, regional,
territorial, state, or local court or governmental agency, authority,
commission, department, board, bureau, instrumentality or regulatory body,
including any central bank or comparable agency.
"Hazardous Material" means any substance:
(a) the presence of which requires investigation or remediation under
any Environmental and Safety Law; or
(b) which is or becomes defined as a "hazardous waste," "hazardous
substance," pollutant or contaminant under any Environmental and Safety Law or
which is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by
any Governmental Authority; or
(c) the presence of which on any properties which the Company owns,
leases or operates causes or threatens to cause a nuisance upon such properties
or to adjacent properties or poses or threatens to pose a hazard to the health
or safety of persons on or about such properties; or
(d) the presence of which on adjacent properties could constitute a
trespass by Company; or
(e) without limitation which contains gasoline, diesel fuel or other
petroleum hydrocarbons.
"Indebtedness" means at a particular time, without duplication, (a)
any indebtedness for borrowed money or issued in substitution for or exchange of
indebtedness for borrowed money including, but not limited to, any overdrafts,
loans or any other banking facility; (b) any indebtedness evidenced by bonds,
debentures, notes or other similar instruments; (c) all obligations in respect
of letters of credit, borrowers' acceptances and similar instruments (including
reimbursement obligations with respect thereto); (d) obligations in respect of
deferred purchase price of property (except trade payables);(e) capitalized
lease obligations; and (f) guarantees of the foregoing.
"Indentures" means (a) the Indenture governing the DM Senior Notes
dated as of May 14, 1998 by and among the Company, Lyon Investment B.V. ("Lyon")
----
and IBJ Xxxxxxxx Bank and Trust Company, as Trustee; and (b) the Indenture
governing the U.S. Senior Notes dated as of May 14, 1998 by and among Company,
Lyon and IBJ Xxxxxxxx Bank and Trust Company, as Trustee.
19
"Intellectual Property Rights" means all (i) patents, patent
applications, patent disclosures and inventions, (ii) trademarks, service marks,
trade dress, trade names, logos and corporate names and registrations and
applications for registration thereof together with all of the goodwill
associated therewith, (iii) copyrights (registered or unregistered) and
copyrightable works and registrations and applications for registration thereof,
(iv) mask works and registrations and applications for registration thereof, (v)
computer software, data, data bases and documentation thereof, (vi) trade
secrets and other confidential information (including, without limitation,
ideas, formulas, compositions, inventions (whether patentable or unpatentable
and whether or not reduced to practice), know-how, manufacturing and production
processes and techniques, research and development information, drawings,
specifications, designs, plans, proposals, technical data, copyrightable works,
financial and marketing plans and customer and supplier lists and information),
(vii) other intellectual property rights and (viii) copies and tangible
embodiments thereof (in whatever form or medium).
"Investor Securities" means (i) the Series D Preferred Shares issued
to the Investors hereunder and (ii) any securities issued directly or indirectly
with respect to any of the foregoing securities by way of a stock split, stock
dividend or other division of securities, or in connection with a combination of
securities, recapitalization, merger, consolidation or other reorganization. As
to any particular securities constituting Investor Securities, such securities
shall cease to be Investor Securities when they have been (a) effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering them, (b) distributed to the public through a
broker, dealer or market maker pursuant to Rule 144 under the Securities Act (or
any similar provision then in force) or (c) repurchased or otherwise acquired by
the Company. Any reference herein to a "majority of the Investor Securities" or
the "number of Investor Securities" or words of like effect for purposes of
comparison or calculation shall refer, with respect to any particular Investor
Securities, to the number shares of Common Stock (or equivalent common equity
securities of the Company) then represented by such Investor Securities (on a
fully diluted, as-if-converted basis).
"IRC" means the Internal Revenue Code of 1986, as amended, and any
reference to any particular IRC section shall be interpreted to include any
revision of or successor to that section regardless of how numbered or
classified.
"Junior Subordinated Notes" means the Junior Subordinated Notes (as
such notes may be amended or modified from time to time) issued by the Company
and held by each of Xxxxxx Equity Investors L.P. and Perseus Capital L.L.C. or
their assigns each in the principal amount of $3,500,000, dated July 31, 2000.
"Liabilities" means obligations of any nature, whether absolute,
accrued, contingent or otherwise, whether due or to become due and whether or
not required to be reflected or reserved against on a balance sheet under GAAP.
"Liens" means with respect to any property, any mortgage, lien,
pledge, negative pledge or other agreement not to pledge, assignment, charge,
security interest, title retention agreement, levy, execution, seizure,
attachment, garnishment or other encumbrance of any kind in respect of such
property, whether created by statute, contract, the common law or otherwise, and
whether or not xxxxxx, vested or perfected.
20
"Material Adverse Effect" or "Material Adverse Change" means, with
respect to the Company and its Subsidiaries, any change that, singly or in the
aggregate with all other related changes or effects, is materially adverse to
the business, properties, assets, liabilities, condition (financial or
otherwise), operating results, value, customer, supplier or employee relations
or, except to the extent affected by general economic condition, business
prospects of the Company and its Subsidiaries taken as a whole.
"Material Affiliated Companies" means the Subsidiaries of Company who
are listed on Exhibit E.
---------
"Multiemployer Plan" has the meaning set forth in Paragraph 5M(c).
"Officer's Certificate" means a certificate signed by the Company's
president or its chief financial officer, stating that (i) the officer signing
such certificate has made or has caused to be made such investigations as are
necessary in order to permit him to verify the accuracy of the information set
forth in such certificate and (ii) to the best of such officer's knowledge, such
certificate does not misstate any material fact and does not omit to state any
fact necessary to make the certificate not misleading.
"Operative Documents" means this Agreement, the Certificate of
Incorporation the Amended and Restated Shareholders' Agreement and the other
agreements contemplated hereby.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Plan" means an employee benefit plan within the meaning of Section
3(3) of ERISA or any other employee benefit plan maintained for employees of the
Company or any ERISA Affiliate of the Company, including the Subsidiaries.
"Primary Affiliated Companies" means the Subsidiaries of Company
listed on Exhibit E.
---------
"Reportable Event" means, with respect to any Employee Pension Plan,
an event described in Section 4043(b) of ERISA.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"Securities and Exchange Commission" includes any governmental body or
agency succeeding to the functions thereof.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
as amended, or any similar federal law then in force.
"Senior Credit Facility" means the Credit Agreement dated as of May
12, 1998, as amended and restated from time to time, by and among the Company
and certain of its
21
Subsidiaries and Chase Manhattan plc as Arranger, Chase Manhattan International
Limited, as both Facility Agent and Security Agent, and the financial
institutions named therein as banks.
"Series A Preferred Stock" means shares of Preferred Stock of the
Company, Series A, par value $.01 per share.
"Series B Preferred Stock" means shares of Preferred Stock of the
Company, Series B, par value $.01 per share.
"Series C Preferred Stock" means shares of Preferred Stock of the
Company, Series C, par value $.01 per share.
"Series D Preferred Shares" has the meaning set forth in Paragraph 1D.
"Series D-1 Preferred Stock" means shares of Preferred Stock of the
Company, Series D-1, par value $.01 per share.
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business
entity of which (i) if a corporation, a majority of the total voting power
of shares of stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a
combination thereof, or (ii) if a limited liability company, partnership,
association or other business entity, a majority of the partnership or
other similar ownership interest thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that Person or a combination thereof. Notwithstanding the
foregoing, "Subsidiary" also shall include each "significant subsidiary" of
----------
the Company, as such term is defined in Rule 1-02 of Regulations S-X. For
purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association
or other business entity if such Person or Persons shall be allocated a
majority of limited liability company, partnership, association or other
business entity gains or losses or shall be or control any managing
director or general partner of such limited liability company, partnership,
association or other business entity. For purposes of this Agreement, if
the context does not otherwise specify in respect of which Person the term
"Subsidiary" is used, the term "Subsidiary" shall refer to a Subsidiary of
---------- ----------
the Company.
Section 8. Termination, Survival of Representations, Warranties,
----------------------------------------------------
Covenants, etc.
--------------
8A. Conditions of Termination. This Agreement may be terminated at
any time prior to the Closing:
(i) by the mutual written consent of each Investor and the Company;
and
(ii) by an Investor or the Company if there has been a material
misrepresentation, material breach of warranty or material breach of a
covenant by the Company in the representations and warranties or covenants
set forth in this Agreement
22
or the Schedules and Exhibits attached hereto, which in the case of any
breach of covenant has not been cured within 15 business days after written
notification thereof by such Investor to the Company.
In the event of termination by either an Investor or the Company pursuant
to this Section 8, written notice thereof (describing in reasonable detail the
basis therefore) shall forthwith be delivered to the other parties to this
Agreement.
8B. Effect of Termination. In the event of termination of this
Agreement by either an Investor or the Company as provided above, this Agreement
shall forthwith become void and of no further force and effect, except that the
covenants and agreements set forth in Paragraph 8A, this Paragraph 8B and
Xxxxxxxxx 0X and Section 9 shall survive such termination indefinitely, and
except that nothing in Paragraph 8A or this Paragraph 8B shall be deemed to
release any Party from any liability for any breach by such Party of the terms
and provisions of this Agreement or to impair the right of any party to compel
specific performance by another party of its obligations under this Agreement.
8C. Survival of Representations, Warranties, Agreements and
Covenants, Etc. All representations and warranties hereunder shall survive the
Closing for a period of two years, provided, however, that (i) the
representations and warranties set forth in Paragraphs 5A, 5B, 5W and 5X shall
survive indefinitely and (ii) the representations made in Paragraphs 5I(a), 5L,
5M, 5N and 5V shall survive until 60 days after the expiration of the applicable
statute of limitations (including extensions thereof). All statements contained
in any Schedule to this Agreement or in any certificate or other instrument
delivered by the Company pursuant to Section 2B shall constitute representations
and warranties by the Company under this Agreement. All agreements contained
herein shall survive until, by their respective terms, they are no longer
operative.
Section 9. Indemnification and Contribution.
--------------------------------
9A. Indemnification of Investors. In consideration of the Investors'
execution and delivery of this Agreement and acquiring the Series D Preferred
Shares hereunder and in addition to all of the Company's other obligations under
this Agreement, the Company shall defend, protect, indemnify and hold harmless
each Investor, each other holder of Investor Securities and each Person, if any,
who controls any Investor within the meaning of Section 15 of the Securities Act
or Section 20 of the Securities Exchange Act, and all of their officers,
directors, employees and agents (including, without limitation, those retained
in connection with the transactions contemplated by this Agreement)
(collectively, the "Investor Indemnitees") from and against any and all actions,
causes of action, suits, claims, losses, diminution of value, costs, penalties,
fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Investor Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements and expenses incurred in the investigation or
defense of any of the same or in asserting, preserving or enforcing any of their
respective rights hereunder (the "Indemnified Liabilities"), incurred by the
Investor Indemnitees or any of them as a result of, or arising out of, or
relating to (a) the execution, delivery, performance or enforcement of this
Agreement, the other Operative Documents and any other instrument, document or
agreement executed pursuant hereto by any of the Investor Indemnitees or (b) any
breach of any covenant, agreement, representation or warranty of
23
the Company under this Agreement, the other Operative Documents or any other
instrument, document or agreement contemplated hereby to which the Company is a
party, provided, however, that the Company's indemnification obligations
hereunder shall not extend to any Indemnified Liabilities to the extent arising
out of, relating to or resulting from the gross negligence or willful misconduct
of any Investor Indemnitee. To the extent that the foregoing undertaking by the
Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law prior to any application
of Paragraph 9D.
9B. Indemnification of the Company, Directors and Officers. Xxxxx
agrees to indemnify and hold harmless the Company, its directors and officers
(collectively "Company Indemnities") from and against any Indemnified
Liabilities incurred by the Company Indemnities or any of them as a result of,
or arising out of, or relating to (a) the execution, delivery, performance or
enforcement of this Agreement, the other Operative Documents and any other
instrument, document or agreement executed pursuant hereto by any of the Company
Indemnities or (b) any breach of any covenant, agreement, representation or
warranty of any Investor under this Agreement, the other Operative Documents or
any other instrument, document or agreement contemplated hereby to Xxxxx is a
party; provided, however, that Xxxxx' indemnification obligations hereunder
shall not extend to any Indemnification Liabilities to the extent arising out
of, relating to or resulting from the gross negligence or willful misconduct of
any Company Indemnitee and provided further, that in no event shall the
indemnification obligations of Xxxxx under Paragraph 9B exceed the gross
proceeds of any sale by such Investor of the Series D Preferred Shares then held
by it. To the extent that the foregoing undertaking by Xxxxx may be
unenforceable for any reason, Xxxxx shall make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law prior to any application of Paragraph 9D.
9C. Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof, and in any event shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. An indemnifying party may participate at its own
expense in the defense of such action; provided, however, that counsel to the
indemnifying party shall not (except with the consent of the indemnified party)
also be counsel to the indemnified party. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to
any local counsel) separate from their own counsel for all indemnified parties
in connection with any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect to which indemnification or contribution could be sought
under this Section 9 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising
24
out of such litigation, investigation, proceeding or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.
9D. Contribution. In order to provide for just and equitable
contribution in circumstances under which the indemnification provided for in
this Section 9 is for any reason held to be unenforceable by an indemnified
party in respect of any Indemnified Liabilities, then each indemnifying party
shall contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company, on the one hand, and the Investors, on the other hand, from the
offering of the Series D Preferred Shares pursuant to this Agreement or (ii) if
the allocation provided by clause (i) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company, on
the one hand, and the Investors, on the other hand, in connection with the
statements or omissions which resulted in such Indemnified Liabilities as well
as any other relevant equitable considerations; provided however, that in no
event shall contribution obligations of Xxxxx under this Paragraph 9D exceed the
gross proceeds of any sale by Xxxxx of the Series D Preferred Shares then held
by it.
The relative fault of the Company, on the one hand, and the Investors,
on the other hand, shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statements of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Investors and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Investors agree that it would not be just and
equitable if contribution pursuant to this Paragraph 9D were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Paragraph 9D . The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Paragraph 9D shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
For purposes of this Paragraph 9D, each Person, if any, who controls
an Investor within the meaning of Section 15 of the Securities Act or Section 20
of the Securities Exchange Act shall have the same rights to contribution as
such Investor, and each officer and director of the Company and each Person, if
any, who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Securities Exchange Act shall have the same rights to
contribution as the Company.
25
Section 10. Miscellaneous.
-------------
10A. Expenses. The Company shall pay the reasonable out of pocket
fees, costs and expenses (including reasonable attorney's fees and expenses)
arising in connection with: (i) the due diligence review of the Company and its
Subsidiaries, the preparation, negotiation and execution of the Summary of
Terms, this Agreement, Operative Documents, and the other agreements
contemplated hereby and the consummation of the transactions contemplated hereby
or thereby, (ii) stamp and other taxes which may be payable in respect of the
execution and delivery of this Agreement or the issuance, delivery or
acquisition of any shares of Series D Preferred Shares at the Closing and (iii)
any filing with any governmental agency with respect to its investment in the
Company prior to Closing;
10B. Remedies. Each holder of Investor Securities shall have all
rights and remedies set forth in this Agreement and the Certificate of
Incorporation and all rights and remedies which such holders have been granted
at any time under any other agreement or contract and all of the rights which
such holders have under any law or at equity. Any Person having any rights under
any provision of this Agreement shall be entitled to enforce such rights
specifically (without posting a bond or other security), to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law or at equity.
10C. Understanding Among the Investors. The determination of each
Investor to purchase the Series D Preferred Stock pursuant to this Agreement has
been made by such Investor independent of any other Investor and independent of
any statements or opinions as to the advisability of such purchase or as to the
properties, business, prospects or condition (financial or otherwise) of the
Company and its Subsidiaries which may have been made or given by any other
Investor or by any agent or employee of any other Investor. In addition, it is
acknowledged by each of the other Investors that Xxxxxx has not acted as an
agent of such Investor in connection with making its investment hereunder and
that Xxxxxx shall not be acting as an agent of such Investor in connection with
monitoring its investment hereunder.
10D. Consent to Amendments. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended or modified and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of each Investor. No other course of dealing between the Company and the
holder of any Investor Securities or any delay in exercising any rights
hereunder or under the Certificate of Incorporation shall operate as a waiver of
any rights of any such holders.
10E. Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not. In addition, and whether or not any express assignment has been made, the
provisions of this Agreement which are for any Investor's benefit as an Investor
or holder of Investor Securities are also for the benefit of, and enforceable
by, any subsequent holder of such Investor Securities.
26
10F. Severability. Whenever possible, each provision of this
Agreement shall 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 prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
10G. 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.
10H. Descriptive Headings; Interpretation. The descriptive headings
of this Agreement are inserted for convenience only and do not constitute a
substantive part of this Agreement. Whenever required by the context, any
pronoun used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular forms of nouns, pronouns, and verbs
shall include the plural and vice versa. Reference to any agreement, document,
certificate, or instrument means such agreement, document, certificate or
instrument as the same is amended, waived or otherwise modified from time to
time in accordance with the terms thereof and, if applicable, hereof. Words such
as "herein," "hereunder," "hereof" and the like shall be deemed to refer to this
Agreement as a whole and not to any particular document or article, Section,
paragraph or other portion of a document. The use of the words "include" or
"including" in this Agreement shall be by way of example rather than by
limitation. The use of the words "or," "either" or "any" shall not be exclusive.
10I. No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
10J. Complete Agreement. Except as otherwise expressly set forth
herein, this Agreement and the other agreements, certificates and instruments
contemplated hereby embody the complete agreement and understanding of the
parties hereto and supersede and preempt any prior understandings, agreements or
representations by or among the parties, whether written or oral, which may have
related to the subject matter hereof in any way, and such agreements may not be
contradicted or varied by evidence of prior, contemporaneous or subsequent oral
discussions or understandings of the parties. The parties hereto acknowledge and
agree there are no oral understandings or agreements between them with respect
to the subject matter hereof.
10K. Delivery by Facsimile. This Agreement, the agreements referred
to herein, and each other agreement or instrument entered into in connection
herewith or therewith or contemplated hereby or thereby, and any amendments
hereto or thereto, to the extent signed and delivered by means of a facsimile
machine, shall be treated in all manner and respects as an original agreement or
instrument and shall be considered to have the same binding legal effect as if
it were the original signed version thereof delivered in person. At the request
of any party hereto or to any such agreement or instrument, each other party
hereto or thereto shall re-execute original forms thereof and deliver them to
all other parties. No party hereto or to any such agreement or instrument shall
raise the use of a facsimile machine to deliver a signature or the
27
fact that any signature or agreement or instrument was transmitted or
communicated through the use of a facsimile machine as a defense to the
formation or enforeceability of a contract and each such party forever waives
any such defense.
10L. Governing Law. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and the
exhibits and schedules hereto 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 rules or provisions (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.
10M. Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when delivered personally
to the recipient, telecopied to the recipient (with hard copy sent by overnight
courier in the manner provided hereunder) if sent prior to 4:00 p.m. New York
time on a business day (and otherwise, on the immediately succeeding business
day), one business day after being sent to the recipient by reputable overnight
courier service (charges prepaid) or three business days after being mailed to
the recipient by certified or registered mail, return receipt requested and
postage prepaid. Such notices, demands and other communications shall be sent to
each Investor at the address indicated on the Schedule of Investors and to the
Company at the address indicated below:
The Derby Cycle Corporation
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Attn: Xxxxxx X. Xxxxx
Telecopy No. x0 000 000 0000
Telephone No. + 0 000 000 0000
Account Number:
28
IN WITNESS WHEREOF, the parties hereto have executed this Series D
Preferred Shares Purchase Agreement on the date first written above.
THE COMPANY: THE DERBY CYCLE CORPORATION
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Its: Chief Financial Officer
--------------------------
THE INVESTORS: QUANTUM INDUSTRIAL PARTNERS
LDC
By: /s/ Xxxxxxx X. Xxxx
---------------------------
Its: Attorney-in-Fact
--------------------------
XXXXXX EQUITY INVESTORS III, L.P.
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------
Its: Managing Director
--------------------------
PERSEUS CYCLE L.L.C.
By: /s/ Xxxxxxx X. Xxxx
---------------------------
Its: Managing Director
--------------------------
SCHEDULE OF INVESTORS
Names and Addresses No. of Shares of Total Purchase
Series D Price for
Preferred Shares Series D
Preferred
Shares
1. Quantum Industrial Partners LDC 7,500 $7,500,000
Xxxx Xxxxxxxx 0
Xxxxxxx, Xxxxxxxxxxx
Xxxxxxxxxxx Antilles
Telecopy: (000) 0-000-0000
Attention: Quantum Group Administrator
with a copy to
Xxxxx Fund Management LLC
000 0/xx/ Xxxxxx, 00/xx/ xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
2. Xxxxxx Equity Investors III, L.P. 2,250 $2,250,000
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx X.X. 00000
Xxxxxx Xxxxxx of America
Attn: Xxxxxx Xxxxxxxx
Telecopy No.: + 1 202 371 0150
with a copy to
Xxxxxxxx & Xxxxx
Tower 00
Xxx Xxxxx Xxxxxx
Xxxxxx XX0X 0XX
XX
Telecopy: x00 000 000 0000
Attention: X. Xxxxxx Xxxxx, Esq.
3. Perseus Cycle L.L.C. 2,250 $2,250,000
The Army & Navy Club Building
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxxx Xxxx
Telecopy No.: + 1 202 453 6215
LIST OF EXHIBITS
Exhibit A - Third Amended and Restated Certificate of Incorporation
Exhibit B - Second Amended and Restated Amended and Restated Shareholders'
Agreement
Exhibit C - Form of Opinion of Xxxxxxxx & Xxxxx
Exhibit D - Bylaws of the Company
Exhibit E - Material Affiliated Companies and Primary Affiliated Companies
LIST OF DISCLOSURE SCHEDULES
Schedule 5A - Due Incorporation and Status
----------------------------
Schedule 5B - Corporate Power
---------------
Schedule 5C - Binding Obligations
-------------------
Schedule 5D - Non-Contravention
-----------------
Schedule 5E - Consents
--------
Schedule 5F - No Default
----------
Schedule 5G - No Litigation
-------------
Schedule 5H - All Information is Correct in all Material Respects
---------------------------------------------------
Schedule 5I - Tax Liabilities
---------------
Schedule 5J - Ownership of Assets
-------------------
Schedule 5K - Intellectual Property Rights
----------------------------
Schedule 5L - Environmental Matters
---------------------
Schedule 5M - ERISA
-----
Schedule 5N - Investment Company Status
-------------------------
Schedule 5O - Financial Statements
--------------------
Schedule 5P - Absence of Certain Changes
--------------------------
Schedule 5Q - Insurance
---------
Schedule 5R - Debt Instruments
----------------
Schedule 5S - Certain Contracts and Commitments
---------------------------------
Schedule 5T - Labor Matters
-------------
Schedule 5U - Compliance with Law
-------------------
Schedule 5V - Foreign Corrupt Practices Act
-----------------------------
Schedule 5W - Valid Issuance
--------------
Schedule 5X - Capitalization
--------------
EXHIBIT E
Material Affiliated Companies
Derby Holding Limited
Raleigh Industries Limited
Raleigh International Limited
Derby Cycle Corporation Limited
Raleigh Industries of Canada Limited
The Derby Cycle Corporation
Raleigh BV
Raleigh Europe BV
Koninklijke Gazelle BV
Derby Nederland BV
Derby Holding BV
Lyon Investments BV
Derby Holding (Deutschland) GmbH
Raleigh Fahrrader GmbH
NW Sportgerate GmbH
Derby Cycle Werke GmbH
Xxxxxxxxx Xxxxxx Bike Parts GmbH
Univega Worldwide GmbH
Univega Beteiligungen GmbH
Univega Bikes & Sports Europe GmbH (formerly MS Sport Vertirebs GmbH)
Derby Farrader GmbH
Derby WS
Vermogenswerwaltungs GmbH
Xxxxxx Xxxxxxx GmbH
Curragh Finance Company
Raleigh Ireland Limited
The British Cycle Corporation Limited
Derby Investment Holding (Pty) Limited
Pro Bike South Africa (Pty) Limited
Derby Sweden AB
Xxxxxxxx.xxx Inc
Primary Affiliated Companies
Raleigh Industries Ltd., a corporation formed under the laws of England and
Wales
Derby Cycle Werke GmbH, a corporation formed under the laws of the Federal
Republic of Germany
Koninklijke Gazelle BV, a corporation formed under the laws of the Netherlands
Raleigh Industries of Canada Limited, a corporation formed under the laws of
Canada
Probike S.A. (Pty) Ltd., a corporation formed under the laws of South Africa.
Confirm with Company
