LEHMAN BROTHERS MERCHANT BANKING PARTNERS IV L.P. c/o LEHMAN BROTHERS INC. NEW YORK, NEW YORK 10022
Exhibit 10.1
XXXXXX
BROTHERS MERCHANT BANKING PARTNERS IV L.P.
c/x
XXXXXX BROTHERS INC.
000
XXXX XXXXXX, 0xx XXXXX
XXX
XXXX, XXX XXXX 00000
May 22, 2008
CONFIDENTIAL
Xxxxxxxx
Corporation
000 Xxxxx
Xxxxx Xxxx Xxxx
Xxxxxxxxxxxx,
XX 00000-0000
This
Letter Agreement is being delivered by Xxxxxx Brothers Merchant Banking Partners
IV L.P. (the “Fund”) to Xxxxxxxx
Corporation, a Missouri corporation (the “Company”), in
connection with the execution of that certain Agreement and Plan of Merger,
dated as of the date hereof (as it may be amended from time to time, the “Merger Agreement”),
among Clothesline Holdings, Inc., a Delaware corporation (“Parent”), Clothesline
Acquisition, Inc., a Missouri corporation (“Merger Sub”) and the
Company, pursuant to which Merger Sub will merge with and into the Company.
Capitalized terms used but not defined herein shall have the meanings ascribed
to them in the Merger Agreement. The Fund and the Company hereby agree as
follows:
1. OBLIGATIONS. To
induce the Company to enter into the Merger Agreement, the Fund hereby
absolutely, unconditionally and irrevocably guarantees to the Company, on the
terms and conditions set forth herein, the payment of the Parent Termination Fee
under Section 7.03(b)(iv) or the Parent Financing Termination Fee under Section
7.03(b)(v) of the Merger Agreement and, in each case, any amounts payable by
Parent under Section 7.03(d) of the Merger Agreement, such amount to be paid in
cash within two Business Days (as such terms are defined in the Merger
Agreement) of the failure of Parent to pay the Parent Termination Fee or the
Parent Financing Termination Fee in accordance with the Merger
Agreement. Under no circumstances shall the maximum amount payable by
the Fund hereunder exceed $10,000,000.
2. NATURE OF THE
OBLIGATIONS. The Company shall not be obligated to file any claim
relating to the Parent Termination Fee or the Parent Financing Termination Fee
in the event that Parent becomes subject to a bankruptcy, reorganization or
similar proceeding, and the failure of the Company to so file shall not affect
the Fund’s obligations hereunder. If any payment to the Company hereunder is
rescinded or must otherwise be returned for any reason whatsoever, the Fund
shall remain liable hereunder with respect to the Parent Termination Fee or the
Parent Financing Termination Fee as if such payment had not been made (subject
to the terms hereof). This is an unconditional guarantee of payment and not of
collectibility.
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3. CHANGES IN OBLIGATIONS,
CERTAIN WAIVERS. The Fund agrees that the Company may at any time and
from time to time, without notice to or further consent of the Fund, extend the
time of payment of the Parent Termination Fee and the Parent Financing
Termination Fee, and may also make any agreement with Parent or with any other
person interested in the transactions contemplated by the Merger Agreement, for
the extension, renewal, payment, compromise, discharge or release thereof, in
whole or in part, or for any modification of the terms thereof or of any
agreement between the Company and Parent or any such other person without in any
way impairing or affecting the Fund’s obligations under this Letter Agreement.
The Fund agrees that its obligations hereunder shall not be released or
discharged, in whole or in part, or otherwise affected
by: (a) the failure of the Company to assert any claim or demand
or to enforce any right or remedy against Parent or Merger Sub; (b) any
change in the time, place or manner of payment of the Parent Termination Fee or
the Parent Financing Termination Fee or any rescission, waiver, compromise,
consolidation or other amendment or modification of any of the terms or
provisions of the Merger Agreement or any other agreement evidencing, securing
or otherwise executed in connection with the Parent Termination Fee or the
Parent Financing Termination Fee (provided that any such change, rescission,
waiver, compromise, consolidation or other amendment or modification shall be
subject to the prior written consent of Parent to the extent required under the
Merger Agreement); (c) the addition, substitution or release of any entity
or other person interested in the transactions contemplated by the Merger
Agreement (provided that any such addition, substitution or release shall be
subject to the prior written consent of Parent to the extent required under the
Merger Agreement); (d) any change in the corporate existence, structure or
ownership of Parent or any other person interested in the transactions
contemplated by the Merger Agreement; (e) any insolvency, bankruptcy,
reorganization or other similar proceeding affecting Parent or any other person
interested in the transactions contemplated by the Merger Agreement;
(f) the existence of any claim, set-off or other right which the Fund may
have at any time against Parent or the Company, whether in connection with the
Parent Termination Fee, the Parent Financing Termination Fee or
otherwise; or (g) the adequacy of any other means the Company may have of
obtaining payment of the Parent Termination Fee or the Parent Financing
Termination Fee. To the fullest extent permitted by law, the Fund hereby
expressly waives any and all rights or defenses arising by reason of any law
which would otherwise require any election of remedies by the
Company.
The
Company hereby covenants and agrees that it shall not institute, and shall cause
its subsidiaries and Controlled Affiliates (as defined below) not to institute,
and shall instruct each affiliate that is not a Controlled Affiliate not to
institute in the name of or on behalf of the Company or any other person, any
proceeding or bring any other claim arising under, or in connection with, the
Merger Agreement or the transactions contemplated thereby, against the Fund,
Parent, Merger Sub, the Fund Affiliates or Parent Affiliates (as defined below)
except for claims against the Fund under this Letter Agreement, and the Fund
hereby covenants and agrees that it shall not institute, and shall cause its
affiliates not to institute, any proceeding asserting that this Letter Agreement
is illegal, invalid or unenforceable, in whole or in part. The Company shall not
have any obligation to proceed at any time or in any manner against, or exhaust
any or all of the
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Company’s
rights against, any person liable for the Parent Termination Fee or the Parent
Financing Termination Fee prior to proceeding against the Fund hereunder. For
purposes of this Letter Agreement, “Controlled Affiliate”
of any person means any affiliate that such person directly or indirectly
controls (within the meaning of Rule 12b-2 of the Securities and Exchange Act of
1934) and, for purposes of this Letter Agreement, includes the directors and
officers of such person. Notwithstanding anything to the contrary
contained in this Letter Agreement, the Company hereby agrees that to the extent
Parent is relieved by the Company of its obligations under Sections 7.03(b)(iv),
7.03(b)(v) or 7.03(d) of the Merger Agreement, the Fund shall be similarly
relieved of its obligations under this Letter Agreement.
4. NO WAIVER; CUMULATIVE
RIGHTS. No failure on the part of the Company to exercise, and no delay
in exercising, any right, remedy or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by the Company of any right,
remedy or power hereunder preclude any other or future exercise of any right,
remedy or power. Each and every right, remedy and power hereby granted to the
Company or allowed it by law or other agreement shall be cumulative and not
exclusive of any other, and may be exercised by the Company at any time or from
time to time.
5. REPRESENTATIONS AND
WARRANTIES. The Fund hereby represents and warrants that:
(a) the
execution, delivery and performance of this Letter Agreement have been duly
authorized by all necessary action and do not contravene any provision of the
Fund’s charter, partnership agreement, operating agreement or similar
organizational documents or any law, regulation, rule, decree, order, judgment
or material contractual restriction binding on the Fund or its
assets;
(b) all
consents, approvals, authorizations, permits of, filings with and notifications
to, any governmental authority necessary for the due execution, delivery and
performance of this Letter Agreement by the Fund have been obtained or made and
all conditions thereof have been duly complied with, and no other action by, and
no notice to or filing with, any governmental authority or regulatory body is
required in connection with the execution, delivery or performance of this
Letter Agreement;
(c) this
Letter Agreement constitutes a legal, valid and binding obligation of the Fund
enforceable against the Fund in accordance with its terms, subject to
(i) the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws affecting creditors’ rights
generally, and (ii) general equitable principles (whether considered in a
proceeding in equity or at law); and
(d) the
Fund has the financial capacity to pay and perform its obligations under this
Letter Agreement, and all funds necessary for the Fund to pay the obligations
under this Letter Agreement shall be available to the Fund for so
long as this Letter Agreement shall remain in effect in accordance with Section 8
hereof.
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6. NO ASSIGNMENT.
Neither the Fund nor the Company may assign its rights, interests or obligations
hereunder to any other person (except by operation of law) without the prior
written consent of the Company or the Fund, as the case may be; provided, that Fund
may assign all or a portion of its obligations hereunder to an affiliate or to
an entity managed or advised by an affiliate of Fund, provided that no such
assignment shall relieve Fund of any liability or obligation hereunder except to
the extent actually performed or satisfied by the assignee.
7. NOTICES. All notices
and other communications hereunder shall be in writing in the English language
and shall be deemed duly given: (a) on the date of delivery if
delivered personally, or by telecopy upon confirmation of receipt; (b) on
the first Business Day following the date of dispatch if delivered by a
recognized next-day courier service; or (c) on the third Business Day
following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder
shall be delivered as set forth below, or pursuant to such other instructions as
may be designated in writing by the party to receive such notice:
if to the
Fund:
c/x Xxxxxx Brothers Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx X. Xxxxxxx
Telecopy No.: (000)
000-0000
Email:
xxx.xxxxxxx@xxxxxx.xxx
with a
copy (for informational purposes only) to:
Xxxxxx Brothers Merchant Banking
000 Xxxx Xxxxxx, 0xx
Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxx
Telecopy No.: (000)
000-0000
Email:
xxxxxx.xxx@xxxxxx.xxx
with a
copy to (which shall not constitute notice)
White & Case LLP
0000 Xxxxxx xx xxx
Xxxxxxxx
Xxx Xxxx, Xxx Xxxx
00000
Attn: Xxxxxxx X. Xxxxx,
Xx.
Telecopy No.: (000)
000-0000
Email: xxxxxx@xxxxxxxxx.xxx
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if to the
Company:
Xxxxxxxx Corporation
000 Xxxxx Xxxxx Xxxx Xxxx
Xxxxxxxxxxxx,
XX 00000-0000
Attn: Xxxxx X'Xxxx
Telecopy No.: (000)
000-0000
Email:xxxxxx@xxxxxxxx.xxx
with a copy (for informational purposes
only) to:
Xxxxxxx Xxxxxxxx Xxxxxx
LLP
0000 Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx,
Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxx,
Esq.
Telecopy No.: (000)
000-0000
Email: xxxxxxx@xxxxxxx.xxx
8. CONTINUING
OBLIGATION. This Letter Agreement shall remain in full force and effect
and shall be binding on the Fund, its successors and assigns until the Parent
Termination Fee or the Parent Financing Termination Fee has been indefeasibly
paid in full. Notwithstanding the foregoing, this Letter Agreement shall
terminate and the Fund shall have no further obligations under this Letter
Agreement as of the earlier of (i) the Effective Time, and (ii) the
first anniversary of the termination of the Merger Agreement in accordance with
its terms, except as to a claim for payment for the Parent Termination Fee or
the Parent Financing Termination Fee presented by the Company to Parent or the
Fund by such first anniversary. Notwithstanding the foregoing, in the event that
the Company or any of its subsidiaries or Controlled Affiliates asserts in any
litigation or other proceeding that the provisions of Section 1 hereof
limiting the Fund’s liability or the provisions of this Section 8 or
Section 9
hereof are illegal, invalid or unenforceable in whole or in part, or asserting
any theory of liability against the Fund, the Fund Affiliates, Parent or Parent
Affiliates with respect to the transactions contemplated by the Merger Agreement
other than liability of the Fund under this Letter Agreement, or if the Company
fails to instruct any affiliate that is not a Controlled Affiliate not to make
any such assertion prior to such affiliate that is not a Controlled Affiliate
actually making such assertion, then (i) the obligations of the Fund under
this Letter Agreement shall terminate ab initio and be null and
void, (ii) if the Fund has previously made any payment under this Letter
Agreement, it shall be entitled to recover such payment, and (iii) neither
the Fund nor any of its affiliates shall have any liability to the Company with
respect to the transactions contemplated by the Merger Agreement or under this
Letter Agreement.
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9. NO RECOURSE. The
Company acknowledges that the sole assets of Parent are cash in a de minimis amount and its
rights under the Merger Agreement, and that no additional funds are expected to
be contributed to Parent unless and until the Closing occurs. Notwithstanding
anything that may be expressed or implied in this Letter Agreement or any
document or instrument delivered contemporaneously herewith, and notwithstanding
the fact that the Fund may be a partnership or limited liability company, by its
acceptance of the benefits of this Letter Agreement, the Company acknowledges
and agrees that it has no right of recovery against, and no personal liability
shall attach to, the former, current or future security holders, directors,
officers, employees, agents, affiliates, members, managers, general or limited
partners or assignees of the Fund, Parent, Merger Sub or any former, current or
future security holder, director, officer, employee, general or limited partner,
member, manager, affiliate, agent, assignee or representative of any of the
foregoing (collectively, the “Fund Affiliates” or
“Parent
Affiliates”), through Parent or otherwise, whether by or through
attempted piercing of the corporate, partnership or limited liability company
veil, by or through a claim by or on behalf of Parent or Merger Sub against the
Fund, Fund Affiliates, or Parent Affiliates, (including a claim to enforce the
commitment letter dated as of the date hereof from the Fund) by the enforcement
of any assessment or by any legal or equitable proceeding, by virtue of any
statue, regulation or applicable law, or otherwise, except for its rights to
recover from the Fund (but not the Fund Affiliates or Parent Affiliates
(including any general partner or managing member)) the Parent Termination Fee
or the Parent Financing Termination Fee under and to the extent provided in this
Letter Agreement subject to the limitations described herein. Recourse against
the Fund under this Letter Agreement shall be the sole and exclusive remedy of
the Company and all of its subsidiaries and affiliates against the Fund, the
Fund Affiliates, Parent, Merger Sub, and Parent Affiliates in respect of any
liabilities or obligations arising under, or in connection with, the Merger
Agreement or the transactions contemplated thereby or hereby. Nothing set forth
in this Letter Agreement shall be construed to confer or give to any person
(including any person acting in a representative capacity) other than the
Company and the Fund any rights or remedies against any person other than the
Company and the Fund as expressly set forth herein.
10. GOVERNING LAW. This
Letter Agreement will be governed by, and construed in accordance with, the Laws
of the State of New York, without giving effect to any applicable principles of
conflict of laws that would cause the Laws of another State to otherwise govern
this Agreement.
11. SUBMISSION TO
JURISDICTION. Each of the parties hereto irrevocably agrees that any
legal action or proceeding with respect to this Letter Agreement and the rights
and obligations arising hereunder, or for recognition and enforcement of any
judgment in respect of this Letter Agreement and the rights and obligations
arising hereunder brought by the other party hereto or its successors or assigns
shall be brought and determined exclusively in any state or federal court
sitting in the Borough of Manhattan of The City of New York, or in the event
(but only in the event) that such court does not have subject matter
jurisdiction over such action or proceeding, in the United States District Court
for the Southern District of New York.
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Each of
the parties hereto agrees that mailing of process or other papers in connection
with any such action or proceeding in the manner provided in Section 8.05
of the Merger Agreement or in such other manner as may be permitted by
applicable laws, will be valid and sufficient service thereof. Each of the
parties hereto hereby irrevocably submits with regard to any such action or
proceeding for itself and in respect of its property, generally and
unconditionally, to the personal jurisdiction of the aforesaid courts and agrees
that it will not bring any action relating to this Letter Agreement or any of
the transactions contemplated by this Letter Agreement in any court or tribunal
other than the aforesaid courts. Each of the parties hereto hereby irrevocably
waives, and agrees not to assert, by way of motion, as a defense, counterclaim
or otherwise, in any action or proceeding with respect to this Letter Agreement
and the rights and obligations arising hereunder, or for recognition and
enforcement of any judgment in respect of this Letter Agreement and the rights
and obligations arising hereunder (i) any claim that it is not personally
subject to the jurisdiction of the above named courts for any reason other than
the failure to serve process in accordance with this Section 11,
(ii) any claim that it or its property is exempt or immune from
jurisdiction of any such court or from any legal process commenced in such
courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise)
and (iii) to the fullest extent permitted by the applicable law, any claim
that (x) the suit, action or proceeding in such court is brought in an
inconvenient forum, (y) the venue of such suit, action or proceeding is
improper or (z) this Letter Agreement, or the subject matter hereof, may
not be enforced in or by such courts.
12. WAIVER OF JURY TRIAL.
EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS LETTER AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY.
13. COUNTERPARTS. This
Letter Agreement may be executed and delivered (including by facsimile
transmission) in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the same
instrument.
(Signature
page follows)
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Sincerely,
XXXXXX
BROTHERS MERCHANT
BANKING PARTNERS
IV L.P.
By:
Xxxxxx Brothers Merchant Banking
Associates IV L.P., its General
Partner
By:
Xxxxxx Brothers Merchant Banking
Associates IV L.L.C., its General
Partner
By: Xxxxxx Xxx
Name:
Xxxxxx Xxx
Title:
Vice President
Accepted
and agreed:
Xxxxxxxx
Corporation
By: Xxxxxxx X.
X'Xxxx
Name:
Xxxxxxx X. X'Xxxx
Title:
President and CEO
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