EXECUTION COPY
PREFERRED STOCK PURCHASE AGREEMENT
dated as of January 31, 2007
by and among
WOLVERINE TUBE, INC.
and
THE PURCHASERS SIGNATORY HERETO
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS.....................................................1
1.1 Definitions.....................................................1
ARTICLE II PURCHASE AND SALE...............................................7
2.1 Closing.........................................................7
2.2 Closing Deliveries..............................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES..................................9
3.1 Representations and Warranties of the Company...................9
3.2 Disclaimer of Other Representations and Warranties; Knowledge..19
3.3 Representations and Warranties of the Purchasers...............19
ARTICLE IV OTHER AGREEMENTS OF THE PARTIES................................21
4.1 Transfer Restrictions..........................................21
4.2 Furnishing of Information......................................22
4.3 Integration....................................................22
4.4 Reservation and Listing of Securities..........................22
4.5 Access.........................................................22
4.6 Use of Proceeds................................................23
4.7 D & O Insurance; Board.........................................23
4.8 Properties, Business Insurance.................................23
4.9 Indemnification................................................23
4.10 Approvals; Taking of Actions...................................24
4.11 Purchaser Directors............................................24
4.12 Registered Exchange Offer......................................25
4.13 Rights Offering; Standby.......................................26
4.14 Stockholder Approval...........................................27
ARTICLE V CONDITIONS.....................................................29
5.1 Conditions Precedent to the Obligations of the Purchasers......29
5.2 Conditions Precedent to the Obligations of the Company.........30
ARTICLE VI MISCELLANEOUS..................................................31
6.1 Exclusive Dealing..............................................31
6.2 Termination....................................................31
6.3 Fees and Expenses..............................................32
6.4 HSR Act Filings................................................32
6.5 Entire Agreement...............................................33
6.6 Notices........................................................33
6.7 Amendments; Waivers............................................34
6.8 Construction...................................................34
6.9 Successors and Assigns.........................................34
6.10 No Third-Party Beneficiaries...................................34
6.11 Governing Law; Venue; Waiver of Jury Trial.....................34
6.12 Survival.......................................................35
6.13 Execution......................................................35
6.14 Severability...................................................35
6.15 Rescission and Withdrawal Right................................35
6.16 Remedies.......................................................35
6.17 Adjustments in Share Numbers and Prices........................35
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PREFERRED STOCK PURCHASE AGREEMENT
This Preferred Stock Purchase Agreement is entered into and dated as
of January 31, 2007 (this "Agreement"), by and among WOLVERINE TUBE, INC., a
corporation incorporated under the laws of the state of Delaware (the
"Company"), and each of the purchasers identified on the signature pages hereto
(each, a "Purchaser," and collectively, the "Purchasers," and together with the
Company, the "Parties" and each, individually, a "Party").
WHEREAS, subject to the terms and conditions set forth in this
Agreement and pursuant to Section 4(2) of the Securities Act, as amended, and
Rule 506 promulgated thereunder, the Company desires to issue and sell to each
Purchaser, and each Purchaser, severally and not jointly, desires to purchase
from the Company, certain securities of the Company pursuant to the terms set
forth herein.
WHEREAS, the Company has authorized a new series of convertible
preferred stock designated as the Series A Convertible Preferred Stock of the
Company (the "Series A Preferred Stock"), having the rights, preferences,
privileges and restrictions set forth in the Series A Preferred Stock
Certificate of Designations (the "Series A Certificate of Designations"),
attached hereto as Exhibit A, which Series A Preferred Stock shall be
convertible into the Common Stock, par value $0.01 per share, of the Company
(the "Common Stock") in accordance with the terms of the Series A Certificate of
Designations.
WHEREAS, as a condition to the willingness of, and as an inducement
to, the Purchasers to enter into this Agreement, the Company has agreed to
undertake the Registered Exchange Offer and the Rights Offering, each as
described herein, and the Purchasers have agreed to participate, on the terms
and conditions set forth herein, in the Registered Exchange Offer and in
providing financing dependent upon the outcome of the Rights Offering as a
condition to the willingness of and as an inducement to the Company to enter
into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and, severally and not
jointly, each Purchaser, agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. In addition to the terms defined elsewhere in this
Agreement, the following terms shall have the meanings set forth in this Section
1.1:
"$" means U.S. Dollars.
"7.375% Holder" means any holder of the 7.375% Notes.
"7.375% Notes" means the currently outstanding 7.375% Senior
Notes due 2008 issued by the Company.
"10.5% Notes" means the currently outstanding 10.5% Senior Notes
due 2009 issued by the Company.
"Affiliate" of a Person means any other Person that, directly or
indirectly through one or more intermediaries, controls or is controlled by or
is under common control with the first Person. Without limiting the foregoing
with respect to a Purchaser, any investment fund or managed account that
is managed by the same investment manager as such Purchaser will be deemed to be
an Affiliate of such Purchaser.
"Aggregate Purchase Price" has the meaning set forth in Section
2.1.
"Alpine" means The Alpine Group, Inc. and any permitted successor
or assignee thereof.
"Alternative Restructuring" has the meaning set forth in Section
6.1.
"Board" means the board of directors of the Company.
"Business Day" means any day except Saturday, Sunday and any day
on which banking institutions in New York City are authorized or required by law
or other governmental action to close.
"Clearance Date" has the meaning set forth in Section 4.14(b).
"Closing" means the closing of the purchase and sale of the
Shares pursuant to Section 2.1.
"Closing Date" has the meaning set forth in Section 2.1.
"Code" means the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.
"Commission" means the U.S. Securities and Exchange Commission.
"Common Share Equivalents" means, collectively, Options and
Convertible Securities.
"Common Shares" means the shares of Common Stock of the Company
and any securities into which such shares may hereafter be reclassified.
"Common Stock" has the meaning set forth in the recitals to this
Agreement.
"Company Counsel" means LeBoeuf, Lamb, Xxxxxx & XxxXxx LLP,
counsel to the Company.
"Company Intellectual Property Rights" means all Intellectual
Property that is used or held for use in connection with the businesses of the
Company and its Subsidiaries as currently conducted.
"Company Related Persons" has the meaning set forth in Section
6.1.
"Convertible Securities" means any stock or securities (other
than Options) convertible into or exercisable or exchangeable for Common Shares.
"Disclosure Materials" has the meaning set forth in Section
3.1(h).
"DOJ" means the Antitrust Division of the United States
Department of Justice.
"Employee Plan" has the meaning set forth in Section 3.1(m)(i).
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"Employees" means the current and former employees of the Company
and/or any of the Subsidiaries.
"Employment Laws" means any and all Laws in respect of matters
pertaining to employment.
"Environmental Laws" means any and all Laws (including, without
limitation, principles of negligence and strict liability) relating to the
pollution, protection, investigation, remediation, monitoring, damages to, or
restoration of the environment (including, without limitation, natural
resources) or the health or safety of humans.
"Equity Plan" means any stock option plan, stock purchase plan,
stock bonus plan, deferred compensation plan, employee benefit plan or
management grant of the Company, as may be in effect from time to time.
"ERISA" has the meaning set forth in Section 3.1(m)(i).
"ERISA Affiliate" has the meaning set forth in Section 3.1(m)(i).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Agent" means U.S. Bank National Association, or other
national banking association agreed to by the Parties in its capacity as the
initial exchange agent.
"Exchange Notes" means debt securities of the Company identical
in all material respects to the 10.5% Notes (except that the Exchange Notes
shall bear less restrictive debt covenants as mutually agreed between the
Company and the Purchasers).
"Exchange Offer Registration Period" means the one (1)-month
period following the effectiveness of the Exchange Offer Registration Statement,
exclusive of any period during which any stop order shall be in effect
suspending the effectiveness of the Exchange Offer Registration Statement, or
such shorter period as will terminate when all Securities covered by the
Exchange Offer Registration Statement have been exchanged pursuant thereto.
"Exchange Offer Registration Statement" means a registration
statement of the Company on an appropriate form under the Securities Act with
respect to the Registered Exchange Offer, all amendments and supplements to such
registration statement, including post-effective amendments thereto, in each
case including the prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Fees and Expenses" has the meaning set forth in Section 6.3.
"Foreign Benefit Plan" has the meaning set forth in Section
3.1(m)(v).
"Former Real Property" has the meaning set forth in Section
3.1(bb)(i).
"FTC" means the United States Federal Trade Commission.
"GAAP" means U.S. generally accepted accounting principles, as
recognized by the American Institute of Certified Public Accountants or the
Financial Accounting Standards Board,
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consistently applied and maintained on a consistent basis for the Company and
its Subsidiaries throughout the period indicated.
"Governmental Authority" means any government or
quasi-governmental or political subdivision or any agency, authority, bureau,
central bank, commission, department or instrumentality, self-regulatory entity
or any court, tribunal, grand jury or arbitrator, in each case whether foreign
or domestic.
"Hazardous Materials" means petroleum, petroleum products,
petroleum-derived substances, radioactive materials, hazardous wastes,
polychlorinated biphenyls, lead based paint, radon, urea formaldehyde, asbestos
or any asbestos containing materials, and any chemicals, materials or substances
regulated under Environmental Laws or defined as or included in the definition
of "hazardous substances," "hazardous wastes," "extremely hazardous substances,"
"hazardous materials," "hazardous constituents," "toxic substances,"
"pollutants," "contaminants" or any similar denomination intended to classify or
regulate substances by reason of toxicity, carcinogenicity, ignitability,
corrosivity or reactivity under any Environmental Law.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, and the rules and regulations thereunder.
"Indebtedness" of any Person means (a) all indebtedness
representing money borrowed which is created, assumed, incurred or guaranteed in
any manner by such Person or for which such Person is responsible or liable
(whether by guarantee of such indebtedness, agreement to purchase indebtedness
of, or to supply funds to or invest in, others or otherwise), (b) any direct or
contingent obligations of such Person arising under any letter of credit
(including standby and commercial), bankers acceptances, bank guaranties, surety
bonds and similar instruments, and (c) all indebtedness pursuant to clauses (a)
and (b) above of another entity secured by any Lien existing on property or
assets owned by such Person.
"Information Statement" has the meaning set forth in Section
4.10.
"Intellectual Property" means (a) patents (including all
reissues, divisions, continuations, continuations-in-part, re-examinations and
extensions thereof), utility models and design rights, (b) unregistered
trademarks, trademark registrations, trademark applications, unregistered
service marks, service xxxx registrations and service xxxx applications together
with all translations, adaptations, derivations and combinations thereof, (c)
unregistered copyrights and copyright registrations, (d) Internet domain names,
uniform resource locators and the corresponding Internet sites, (e) trade
secrets, inventions, know-how, processes and other proprietary information not
otherwise listed in (a) through (d) above, including, without limitation, moral
and economic rights of authors and inventors (however denominated), confidential
information, technical data, customer lists, corporate and business names, trade
names, trade dress, brand names, logos, show-how, formulae, methods (whether or
not patentable), invention disclosures, designs, processes, procedures,
technology, computer software programs (in both source code and object code
forms), databases, data collections and other proprietary information or
material of any type, and all derivatives, improvements and refinements thereof,
howsoever recorded, or unrecorded, (f) any good will associated with any of the
foregoing, and (g) all copies and tangible embodiments thereof (in whatever form
or medium), and registrations, reservations, applications and renewals for any
of the foregoing assets listed above.
"Knowledge" means the actual knowledge, after conducting a
reasonable investigation, of those Persons listed in Schedule 1.1.
"Laws" means any federal, state, local, municipal or other law,
common law, rule, regulation, order, judgment, injunction, decree, code,
ordinance, ruling, policy, guideline or common, decision, arbitral or
administrative law or principle of law or equity or other restriction of any
Governmental Authority to which the Company or a Subsidiary is subject
(including federal and state securities laws and regulations), or by which any
property or asset of the Company or a Subsidiary is bound or affected.
"Lien" means any lien, charge, claim, security interest,
encumbrance, right of first refusal or other restriction.
"Losses" means any and all damages, fines, penalties,
deficiencies, liabilities, claims, losses (including loss of value), judgments,
awards, settlements, taxes, actions, obligations and costs and expenses in
connection therewith (including, without limitation, interest, court costs and
fees and expenses of attorneys, accountants and other experts, and any other
expenses of litigation or other Proceedings (including costs of investigation,
preparation and travel) or of any default or assessment), but not including
punitive damages unless such punitive damages are awarded to a Person in a Third
Party Claim.
"Management Agreement" has the meaning set forth in Section
2.2(a)(iv).
"Material Adverse Effect" means any event, occurrence, fact,
circumstance, violation, development or change, that, individually or in the
aggregate with any other event, occurrence, fact, circumstance, violation,
development or change, has had or could reasonably be expected to have: (i) a
material adverse effect on the legality, validity or enforceability of any
Transaction Document, or (ii) a material adverse effect on the results of
operations, assets, business, prospects or condition (financial or otherwise) of
the Company and the Subsidiaries, taken as a whole, or (iii) a material
impairment of the Company's or any Subsidiary's ability to perform fully on a
timely basis its obligations under any Transaction Document; provided, however,
that "Material Adverse Effect" shall exclude any such effect arising out of or
in connection with: (A) general economic or business conditions or changes
therein, including changes in interest or currency rates or commodity prices, or
any act of terrorism, similar calamity or war or any escalation or worsening of
the same; provided that in each case no such condition, change or act
disproportionately affects the Company; or (B) the negotiation, execution,
announcement or existence or terms of this Agreement or the performance of this
Agreement or the consummation of the transactions contemplated hereby (including
any occurrence or condition arising out of the identity of or facts relating to
Purchasers).
"Material Contract" means any agreement, individually or together
with other similar agreements, that is or would be required to be filed as an
exhibit to the SEC Reports pursuant to Item 601(b)(10) of Regulation S-K of the
Commission, or any other agreement material to the business of the Company.
"Meeting" has the meaning set forth in Section 4.14(b).
"Minimum Ownership Percentage" has the meaning set forth in
Section 4.13(a).
"Option Shares" has the meaning set forth in Section 4.13(a).
"Options" means any rights, warrants or options to, directly or
indirectly, subscribe for or purchase Common Shares or Convertible Securities.
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"Permits" means all certificates, authorizations, approvals and
permits of Governmental Authorities required for the Company or any such
Subsidiary to own, lease and operate its properties or to conduct their
respective businesses as currently conducted or contemplated to be conducted.
"Person" means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, Governmental Authority (or an agency or
subdivision thereof) or other entity of any kind.
"Plainfield" means Plainfield Asset Management LLC and any
permitted successor or assignee thereof.
"Proceeding" means an action, claim, suit, grievance,
arbitration, complaint, inquiry, notice of violation, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition).
"Proposal" has the meaning set forth in Section 4.14(a).
"Purchaser Counsel" means Proskauer Rose LLP, counsel to the
Purchasers.
"Purchaser Designee" has the meaning set forth in Section
4.11(a)(i).
"Real Property" means any real property currently owned,
operated, used or leased by the Company or any Subsidiary.
"Registered Exchange Offer" shall mean the offer of the Company
to issue and deliver to 7.375% Holders that are not prohibited by any law or
policy of the Commission from participating in such offer, in exchange for such
7.375% Holders' respective 7.375% Notes, a like aggregate principal amount of
Exchange Notes, or other exchange of the Company's outstanding debt securities
for new securities as may be agreed between the Company and the Purchasers.
"Registration Rights Agreement" that certain Registration Rights
Agreement, dated as of the Closing Date, by and among the Company and each of
the Purchasers, substantially in the form of Exhibit B, as the same may be
amended, modified or supplemented from time to time.
"Related Person" means any Affiliate of a Purchaser and any
officer, director, partner, advisor, controlling person, employee or agent of a
Purchaser or any of their respective Affiliates.
"Rights Offering" has the meaning set forth in Section 4.13(a).
"Rights Offering Registration Statement" has the meaning set
forth in Section 4.13(b).
"Rule 144" and "Rule 424" means Rule 144 and Rule 424,
respectively, promulgated by the Commission pursuant to the Securities Act, as
such Rules may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as such
Rule.
"Securities" means the Shares and the Underlying Shares issued or
issuable (as applicable) to the applicable Purchaser pursuant to the Transaction
Documents.
"Securities Act" means the Securities Act of 1933, as amended.
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"SEC Reports" has the meaning set forth in Section 3.1(h).
"Series A Certificate of Designations" has the meaning set forth
in the recitals to this Agreement.
"Series A Preferred Stock" has the meaning set forth in the
recitals to this Agreement.
"Shares" means the shares of Series A Preferred Stock which are
being purchased by the Purchasers pursuant to this Agreement.
"Standby Period" has the meaning set forth in Section 4.13(a).
"Standby Shares" has the meaning set forth in Section 4.13(a).
"Subsidiaries" has the meaning set forth in Section 3.1(a).
"Third Party Claim" means the assertion of any claim or demand
made by, or any action, proceeding or investigation instituted by, any Person
not a party to this Agreement.
"Trading Day" means (a) any day on which the Common Shares are
listed or quoted and traded on a Trading Market, or (b) if the Common Shares are
not then listed or quoted and traded on a Trading Market, then any Business Day.
"Trading Market" means the New York Stock Exchange or, at any
time the Common Shares are not listed for trading on the New York Stock
Exchange, any other national securities exchange, other trading market or
quotation system, if the Common Shares are then listed or quoted on such
exchange, market or system.
"Transaction Documents" means this Agreement, the Series A
Certificate of Designations, the Securities, the Registration Rights Agreement,
the Voting Agreement, the Management Agreement, the Information Statement and
any other documents or agreements executed in connection with the transactions
contemplated by this Agreement.
"Transactions" means the transactions contemplated by the
Transaction Documents.
"Trustee" means U.S. Bank National Association, in its capacity
as trustee for the Exchange Notes.
"Underlying Shares" has the meaning set forth in Section 3.1(f).
"U.S." means the United States of America.
"Voting Agreement" means that certain Voting Agreement among the
Company and the holders of the Series A Preferred Stock.
ARTICLE II
PURCHASE AND SALE
2.1 Closing. Subject to the terms and conditions set forth in this
Agreement, at the Closing, the Company shall issue and sell to each Purchaser,
and each Purchaser shall purchase from the Company, the number of Shares
indicated below such Purchaser's name on Schedule 2.1 for a purchase
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price of $1,000 per Share and an aggregate purchase price for all of the
Purchasers of $50,000,000 (the "Aggregate Purchase Price"). The Closing shall
take place at the New York offices of Purchaser Counsel at 10:00 a.m. local
time, on a date designated by the Purchasers which is reasonably satisfactory to
the Company, which shall be as soon as practicable, but not later than five (5)
Business Days after the satisfaction or waiver of all of the conditions set
forth in Article V (other than those conditions which by their nature must be
satisfied on the Closing Date), or at such other location or time as the parties
may agree (such date on which the Closing occurs, the "Closing Date").
2.2 Closing Deliveries.
(a) At the Closing, the Company shall deliver or cause to be
delivered to each Purchaser the following:
(i) a certificate representing the number of the Shares
indicated below such Purchaser's name on the signature pages hereto under the
heading "Shares," registered in the name of such Purchaser;
(ii) evidence that the Series A Certificate of Designations
has been filed with the Secretary of State of the State of Delaware and become
effective on or prior to the Closing Date;
(iii) the Registration Rights Agreement, duly executed by
the Company;
(iv) the Management Agreement among the Company and Alpine
(the "Management Agreement"), in the form of Exhibit C, duly executed by the
Company;
(v) the legal opinion of Company Counsel, in the form of
Exhibit D-1, executed by such counsel and the legal opinion of in-house counsel
of the Company in the form of Exhibit D-2, executed by such counsel;
(vi) a certificate dated as of the Closing Date and signed
by the Chief Executive Officer of the Company certifying as to the fulfillment
of each of the conditions set forth in Sections 5.1(a), (b), (e), (f) and (g);
(vii) a certificate of the Secretary of the Company, dated
as of the Closing Date, certifying as to: (A) the signatures and titles of the
officers of the Company executing each of the Transaction Documents; and (B)
resolutions of the Board authorizing and approving all matters in connection
with the Transaction Documents and the Transactions; and
(viii) any other documents required to be delivered to such
Purchaser pursuant to Section 5.1 and any other documents reasonably requested
by such Purchaser or Purchaser Counsel.
(b) At the Closing, each Purchaser or an authorized officer
thereof shall deliver or cause to be delivered to the Company the following: (i)
the purchase price indicated below such Purchaser's name on the signature pages
hereto under the heading "Purchase Price," in U.S. Dollars and in immediately
available funds, by wire transfer to an account designated in writing by the
Company for such purpose; (ii) each Transaction Document to which such Purchaser
is a signatory, duly executed by such Purchaser; (iii) the Management Agreement,
duly executed by Alpine; and (iv) a certificate from each Purchaser dated as of
the Closing Date and signed by an authorized officer of such Purchaser
certifying as to the fulfillment of each of the conditions set forth in Section
5.2(a) and Section 5.2(b).
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. The Company hereby
represents and warrants to each Purchaser, as of the date hereof and as of the
Closing as follows:
(a) Subsidiaries. The Company does not directly or indirectly
control or own any equity or similar interest in any other corporation,
partnership, joint venture or other business association or entity, other than
those listed in Schedule 3.1(a)(1) (each of which, a "Subsidiary"). Except as
disclosed in Schedule 3.1(a)(2), the Company owns, directly or indirectly, all
of the capital stock of each Subsidiary free and clear of any Liens, other than
restrictions on transfer pursuant to the Transaction Documents or arising under
U.S. federal or state securities laws and regulations, and all the issued and
outstanding shares of capital stock of each Subsidiary are validly issued and
are fully paid, non-assessable and free of preemptive and similar rights.
(b) Organization and Qualification. Except as disclosed in
Schedule 3.1(b)(1), each of the Company and the Subsidiaries is an entity duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with the requisite power and authority to own
and use its properties and assets and to carry on its business as currently
conducted or contemplated to be conducted. Except as disclosed in Schedule
3.1(b)(2), each of the Company and the Subsidiaries is duly qualified to conduct
business and is in good standing as a foreign corporation in each jurisdiction
in which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, would not have a Material Adverse Effect.
(c) Authorization; Enforcement. The Company has the requisite
power and authority to enter into and to consummate the Transactions and
otherwise to carry out its obligations under the Transaction Documents. The
execution and delivery of each of the Transaction Documents by the Company and
the consummation by the Company of the Transactions have been duly authorized by
all necessary action on the part of the Company and no further consent or action
is required by the Company, its Board or, subject to stockholder approval of the
Proposal, its stockholders. Each Transaction Document has been (or upon delivery
will have been) duly executed by the Company and, when delivered in accordance
with the terms hereof, will constitute the valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.
(d) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation of the Transactions do
not and will not (i) conflict with or violate any provision of the Company's or
any Subsidiary's certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing a Company
or Subsidiary debt or otherwise) or other understanding to which the Company or
any Subsidiary is a party or by which any property or asset of the Company or
any Subsidiary is bound or affected (except for such conflicts, defaults, rights
or violations as would not have a Material Adverse Effect), or (iii) result in a
violation of any Law.
(e) Filings, Consents and Approvals. Neither the Company nor any
Subsidiary is required to obtain any consent, waiver, authorization or order of,
give any notice to, or make any filing or registration with, any Governmental
Authority or other Person in connection with the execution or delivery by the
Company of the Transaction Documents or the consummation of the Transactions,
other
9
than (i) approval of the Proposal by the stockholders of the Company; (ii) the
filing of the Series A Certificate of Designations pursuant to Section
2.2(a)(ii); (iii) the filing with the Commission and the effectiveness of the
registration statement pursuant to the Registration Rights Agreement, the
Exchange Offer Registration Statement and the Rights Offering Registration
Statement; (iv) applicable Blue Sky filings; (v) such filings as may be required
under the HSR Act and the expiration or early termination of the waiting period
under the HSR Act; and (vi) the consents, amendments and acknowledgements
contemplated by Sections 5.1(i) through (l), as applicable.
(f) Issuance of the Securities. The Securities are duly
authorized and, when issued and paid for in accordance with the Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free
and clear of all Liens and not subject to preemptive rights or similar rights of
stockholders. The Company has authorized and has reserved, and covenants to
continue to reserve, 22,500,000 shares of Common Stock (i.e., the number of
shares of Common Stock that are not currently issued or reserved for issuance);
provided, however, that upon the Company filing an amendment to its Restated
Certificate of Incorporation, the Company shall authorize and reserve, and
continue to reserve, a number of shares of Common Stock equal to at least the
number of shares of Common Shares issuable upon conversion of the Shares and in
satisfaction of any other obligation or right of the Company to issue Common
Shares pursuant to the Transaction Documents, and in each case, any securities
issued or issuable in exchange for or in respect of such securities (the
"Underlying Shares"). The issuance of the Securities to the Purchasers will not
subject the Purchasers to any liability or obligation of any kind in respect of
or relating to the operation of the business of the Company.
(g) Capitalization. The number of shares and type of all
authorized, issued and outstanding capital stock of the Company is set forth in
Schedule 3.1(g)(1). Except as set forth in Schedule 3.1(g)(2) no securities of
the Company are entitled to preemptive or similar rights, and no Person has any
right of first refusal, preemptive right, right of participation, or any similar
right to participate in the Transactions. All outstanding shares of capital
stock of the Company have been duly authorized, validly issued, fully paid and
are nonassessable and, except as would not have a Material Adverse Effect, have
been issued in compliance with all applicable federal and state securities and
corporate laws. Except as a result of the purchase and sale of the Securities
and except as disclosed in Schedule 3.1(g)(3), there are no outstanding Common
Share Equivalents, or contracts, commitments, understandings or arrangements by
which the Company or any Subsidiary is or may become bound to issue additional
Common Shares or Common Share Equivalents. Except as set forth in Schedule
3.1(g)(4), the issue and sale of the Shares will not obligate the Company to
issue Common Shares, Common Share Equivalents or other securities to any Person
(other than the Purchasers) and will not result in a right of any holder of
Company securities to adjust the exercise, conversion, exchange or reset price
under such securities, or to take any other action punitive to the Company or
any Subsidiary.
(h) SEC Reports; Press Releases; Financial Statements. The
Company has filed all reports required to be filed by it under the Securities
Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two (2) years preceding the date hereof (the foregoing materials being
collectively referred to herein as the "SEC Reports" and, together with this
Agreement and the Schedules hereto, the "Disclosure Materials") on a timely
basis. The Company has delivered to the Purchasers a copy of all SEC Reports
filed within the ten (10) days preceding the date hereof. As of their respective
dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the
rules and regulations of the Commission with respect thereto as in effect at the
time
10
of filing. Such financial statements have been prepared in accordance with GAAP
and fairly present in all material respects the financial position of the
Company and its consolidated Subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then ended, subject, in
the case of unaudited statements, to normal, immaterial, year-end audit
adjustments. All material agreements to which the Company or any Subsidiary is a
party or to which the property or assets of the Company or any Subsidiary are
subject are included as part of or specifically identified in the SEC Reports.
Each press release disseminated by the Company during the twelve (12) months
prior to the Closing Date did not at the time of release contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Neither the
Company nor any Subsidiary has any liabilities or obligations, whether accrued,
absolute, contingent, asserted, unasserted or otherwise, except liabilities or
obligations (i) stated or adequately reserved against in the Company's most
recent balance sheet included within the SEC Reports (the "Base Balance Sheet"),
(ii) incurred as a result of or arising out of the Transactions, (iii) incurred
in the ordinary course of business consistent with prior operating history since
the date of the Base Balance Sheet or (iv) as set forth in Schedule 3.1(h). The
Company does not have pending before the Commission any request for confidential
treatment of information. The Company is in compliance with applicable
requirements of the Xxxxxxxx-Xxxxx Act of 2002 and applicable rules and
regulations promulgated by the Commission thereunder in effect as of the date of
this Agreement, except where such noncompliance would not have a Material
Adverse Effect.
(i) Taxes. Except as set forth in Schedule 3.1(i)(1), the Company
and the Subsidiaries have prepared and timely filed all income tax returns and
other material tax returns that are required to be filed, and have paid, or made
provision in accordance with GAAP for the payment of, all taxes that have or may
have become due pursuant to said returns or pursuant to any assessments that
have been received by the Company or the Subsidiaries. All tax returns are true
and correct in all material respects. All taxes shown to be due and payable by
the Company or the Subsidiaries have been paid or will be paid prior to the time
they become delinquent. The Company has withheld and collected all amounts
required by applicable Law to be withheld or collected and has remitted all such
amounts to the appropriate Governmental Authority within the time prescribed
under applicable Law. To the Company's knowledge there is no liability for any
tax to be imposed upon its or any of its Subsidiaries' properties or assets as
of the date of this Agreement for which adequate provision has not been made.
Except as set forth in Schedule 3.1(i)(2), there is no open audit of material
tax returns of the Company by the applicable Governmental Authority with which
they were filed, and to the Company's knowledge, no deficiency assessment or
proposed adjustment of the Company's or the Subsidiaries material taxes is
pending.
(j) Material Changes. Since the date of the Base Balance Sheet,
except as specifically disclosed in the SEC Reports or as described in Schedule
3.1(j), there has been no Material Adverse Effect, and neither the Company nor
any of its Subsidiaries has (i) incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the Company's financial statements pursuant to
GAAP or required to be disclosed in filings made with the Commission, (ii)
altered its method of accounting or the identity of its auditors, (iii) declared
or made any dividend or distribution of cash or other property to its
stockholders or purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock or (iv) issued any equity securities to any
officer, director or Affiliate, except pursuant to existing Equity Plans
described in Schedule 3.1(g)(3).
(k) Litigation. There is no Proceeding pending or, to the
knowledge of the Company, threatened against or affecting the Company, any
Subsidiary or any of their respective properties which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction
Documents, the Transactions or the Securities or (ii) except as disclosed in
Schedule 3.1(k), would, if there were an unfavorable decision, individually or
in the aggregate, have or result in a Material
11
Adverse Effect. Neither the Company nor any Subsidiary, nor, to the Company's
knowledge, any director or officer thereof (in his or her capacity as such), is
or has been the subject of any Proceeding involving a claim of violation of or
liability under federal or state securities laws or a claim of breach of
fiduciary duty. There has not been, and to the knowledge of the Company, there
is not pending or contemplated, any investigation of any type by the Commission
or any other Governmental Authority involving the Company or any current or
former director or officer of the Company (in his or her capacity as such). No
registration statement filed by the Company or any Subsidiary under the Exchange
Act or the Securities Act is currently the subject of any stop order or other
order of the Commission suspending the effectiveness of any such registration
statement.
(l) Labor Relations. The Company and the Subsidiaries (i) are in
material compliance with all terms and conditions of employment and all
Employment Laws including, pay equity, wages and hours of work, occupational
health and safety, and (ii) except where such practices or complaints could not,
individually or in the aggregate, have a Material Adverse Effect, have not and
are not engaged in any unfair labor practice and no unfair labor practice
complaint, grievance or arbitration proceeding is pending or, to the knowledge
of the Company, threatened against the Company or any Subsidiary. Except as set
forth in Schedule 3.1(l), no collective bargaining agreement is currently in
force or is currently being negotiated by the Company, any Subsidiary or any
other Person in respect of the business of the Company or any Subsidiary or any
of the Employees. No trade union, council of trade unions, employee bargaining
agency or affiliated bargaining agent holds bargaining rights with respect to
any of the Employees by way of certification, interim certification, voluntary
recognition, or succession rights, or has applied or, to the knowledge of the
Company, threatened to apply to be certified as the bargaining agent of the
Employees. To the knowledge of the Company, there are no threatened or pending
union organizing activities involving any of the Employees. There is no labor
strike, dispute, work slowdown or stoppage pending or involving or, to the
knowledge of the Company threatened against the Company or any Subsidiary. There
are no charges pending under applicable Occupational Health and Safety
legislation in respect of the Company or any Subsidiary, and the Company and the
Subsidiaries have complied in all material respects with any orders issued under
such legislation and there are no appeals of any orders under such legislation
currently outstanding.
(m) Employee Benefit Plans.
(i) Except as set forth in Schedule 3.1(m)(i), there are no
employee benefit or compensation plans, agreements, arrangements or commitments
(including "employee benefit plans," as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (together with the rules and
regulations thereunder, "ERISA")) or any other plans, policies, trust funds or
arrangements (whether written or unwritten, insured or self-insured, domestic or
foreign) established, maintained, sponsored or contributed to (or with respect
to any obligation that has been undertaken) by the Company, any Subsidiary or
any entity that would be treated as a single employer with the Company under
Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA (an "ERISA
Affiliate") for any Employee, officer, director, consultant or stockholder of
the Company or any Subsidiary or their beneficiaries or with respect to which
the Company or any Subsidiary has liability (each an "Employee Plan").
(ii) Except as set forth in Schedule 3.1(m)(ii)(A) and
except for medical reimbursement spending accounts under Code Section 125, each
Employee Plan that is an "employee welfare benefit plan" as defined under
Section 3(l) of ERISA is funded through an insurance company contract. Each
Employee Plan complies in form and has been administered, maintained and funded
in material compliance with its terms and all applicable Laws, and all required
filings, if any, with respect to such Employee Plan have been timely made.
Except as set forth in Schedule 3.1(m)(ii)(B), neither the Company, any
Subsidiary nor any ERISA Affiliate has at any time maintained, contributed to or
been
12
required to contribute to or has (or has had directly or indirectly) any
liability with respect to, any plan subject to Section 412 of the Code, Section
302 of ERISA or Title IV of ERISA, including, without limitation, any
"multiemployer plan" (within the meaning of Sections 3(37) or 4001(a)(3) of
ERISA or Section 414(f) of the Code) or any single employer pension plan (within
the meaning of Section 4001(a)(15) of ERISA) which is subject to Sections 4063,
4064 and 4069 of ERISA. The Company's various non-qualified deferred
compensation plans for U.S. employees and officers deferred compensation plans
satisfy the requirements of Section 201(2) of ERISA. Except as set forth in
Schedules 3.1(m)(ii)(C) and 3.1(m)(ii)(D), the events contemplated by this
Agreement (either alone or together with any other event) will not (A) entitle
any Employee, director or stockholder of the Company or any Subsidiary (whether
current, former or retired) or their beneficiaries to severance pay,
unemployment compensation, or other similar payments under any Employee Plan or
Employment Law, (B) accelerate the time of payment or vesting or increase the
amount of benefits due under any Employee Plan or compensation to any Employees
or (C) result in any payments (including any payment that could be characterized
as an "excess parachute payment" (as defined in Section 280G(b)(1) of the Code))
under any Employee Plan or Employment Laws becoming due to any Employee,
director or stockholder of the Company or any Subsidiary (whether current,
former or retired) or their beneficiaries. Except as set forth in Schedule
3.1(m)(ii)(E), no amount payable under any Employee Plan would fail to be
deductible under Code Section 162(m).
(iii) Except as set forth in Schedule 3.1(m)(iii), with
respect to each of the Employee Plans: (A) each Employee Plan that is intended
to be qualified under Section 401(a) of the Code has received a determination
letter from the Internal Revenue Service upon which the Company may rely
regarding its qualified status under the Code covering all statutory and
regulatory changes with regard to Plan qualified requirements for which the
Internal Revenue Service will issue such a letter, and nothing has occurred,
whether by action or by failure to act, that caused or could cause the loss of
such qualification or the imposition of any penalty or tax liability; (B) all
payments required by the Employee Plans, any collective bargaining agreement or
other agreement, or by applicable Law (including, without limitation, all
contributions, insurance premiums or intercompany charges) with respect to all
periods through the Closing Date shall have been made prior to the Closing Date
(on a pro rata basis where such payments are otherwise discretionary at year
end) or provided for by the Company, or accrued on the Company's financial
statements, as applicable, in accordance with the provisions of each of the
Employee Plans, applicable Law and GAAP; (C) no action has been instituted or
commenced or, to the knowledge of the Company, has been threatened or is
anticipated against any of the Employee Plans (other than non-material routine
claims for benefits and appeals of such claims), any trustee or fiduciaries
thereof, the Company, any Subsidiary or any ERISA Affiliate, any director,
officer or employee thereof, or any of the assets of any trust of any of the
Employee Plans; (D) no Employee Plan is or is expected to be under audit or
investigation by the Internal Revenue Service, Department of Labor or any other
Governmental Authority and no such completed audit, if any, has resulted in the
imposition of any tax or penalty; and (E) no Employee Plan provides
post-retirement welfare benefits (other than as acquired pursuant to Section 601
of ERISA).
(iv) With respect to the single-employer, defined benefit
pension plan set forth on Schedule 3.1(m)(ii): (A) there does not now exist, nor
do any circumstances exist that could reasonably be expected to result in any
accumulated funding deficiency (as defined under applicable Law) or any material
liability under Section 4971 of the Code; (B) the fair market value of the
assets of any such plan equals or exceeds the actuarial present value of all
accrued benefits under such plan (whether or not vested, each as determined
under the assumptions and valuation method of the latest actuarial valuation of
such plan) and, except as set forth on Schedule 3.1(m)(iv), no amendments or
other modifications to such plan or actuarial assumptions have been adopted
since the last valuation; (C) no "reportable event" within the meaning of
Section 4043(c) of ERISA for which the 30-day notice requirement has not been
waived has occurred, or is reasonably expected to occur, and the consummation
13
of the transactions contemplated by this Agreement will not result in the
occurrence of any such reportable event; (D) no material liability, whether
direct or contingent, under Title IV of ERISA has been or is reasonably expected
to be incurred by the Company, any of its Subsidiaries or any ERISA Affiliate;
and (E) the Company took all actions necessary and appropriate to cease benefit
accruals under any such plan in accordance with the Code, ERISA and other
applicable Laws (including timely delivery of all required notices).
(v) Except as set forth on Schedule 3.1(m)(v), with respect
to each Employee Plan that is not subject to United States Law (each, a "Foreign
Benefit Plan"): (A) the fair market value of the assets of each funded Foreign
Benefit Plan, the liability of each insurer for any Foreign Benefit Plan funded
through insurance or the book reserve established for any Foreign Benefit Plan,
together with any accrued contributions, is sufficient to procure or provide for
the accrued benefit obligations, as of the Closing Date, with respect to all
current and former participants in such plan according to the actuarial
assumptions and valuations most recently used to determine employer
contributions to such Foreign Benefit Plan and no transaction contemplated by
this Agreement shall cause such assets or insurance obligations to be less than
such benefit obligations; and (B) each Foreign Benefit Plan required to be
registered has been registered and has been maintained in good standing with
applicable regulatory authorities, and if intended to qualify for special tax
treatment, meets all requirements for such treatment.
(vi) Each stock option granted under any Equity Plan has an
exercise price at least equal to the fair market value of the Common Stock of
the Company on a date no earlier than the date of the corporate action
authorizing the grant and no stock option granted under any Equity Plan has had
its exercise date or grant date delayed or "back-dated."
(n) Compliance. Except as set forth on Schedule 3.1(n), neither
the Company nor any Subsidiary (i) is in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by the Company or any Subsidiary under),
nor has the Company or any Subsidiary received written notice of a claim that it
is in default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or
violation has been waived) except as would not have a Material Adverse Effect,
(ii) is in material violation of any order of any Governmental Authority, or
(iii) is or has been in material violation of any Law. Since December 31, 2001,
neither the Company, any Subsidiary nor, to the Company's knowledge, any
Employee has violated the U.S. Foreign Corrupt Practices Act, as amended. To the
Company's Knowledge, no director, officer, Employee or agent of the Company or
of a Subsidiary, acting directly or indirectly for the benefit of the Company,
has, directly or indirectly, made or agreed to make, any unlawful or illegal
payment, gift or political contribution to, or taken any other unlawful or
illegal action, for the benefit of any customer, supplier, governmental employee
or other Person who is or may be in a position to assist or hinder the business
of the Company or a Subsidiary.
(o) Regulatory Permits. The Company and the Subsidiaries possess
and are in compliance in all material respects with the terms and conditions of
all Permits (including all certificates, authorizations, approvals and permits
required under applicable Laws) and neither the Company nor any Subsidiary has
received any notice of Proceedings relating to the revocation or modification of
any Permit. The Company and its Subsidiaries are in compliance in all material
respects with all Laws with respect to manufacturing, research and development,
marketing and sale of all of their products. There are no pending or, to the
knowledge of the Company, threatened Proceedings by any Governmental Authority
which would prohibit or impede the sale of any product currently manufactured or
sold by the Company or any of its Subsidiaries into any market.
14
(p) Patents and Trademarks. Except as set forth in Schedule
3.1(p)(1), the Company and the Subsidiaries own, or possesses a valid and
enforceable written license to use the Company Intellectual Property Rights that
are material to the business of the Company or the Subsidiaries. To the
Company's knowledge, (i) the operation of the business of the Company and the
Subsidiaries, and the products or services in development or which are marketed
or sold (or proposed to be marketed or sold) by the Company or any Subsidiary,
do not violate any license or infringe any Intellectual Property rights of any
party and (ii) there is no unauthorized use, infringement or misappropriation of
any Company Intellectual Property Rights by any third party. Except as set forth
in Schedule 3.1(p)(2), (i) other than with respect to commercially available
software products which the Company or the Subsidiaries license under standard
end-user object code license agreements, there are no outstanding material
options, licenses, agreements, claims, encumbrances or shared ownership
interests of any kind relating to any of the Company Intellectual Property
Rights insofar as they relate to the Company's use of such Company Intellectual
Property Rights, (ii) neither the Company nor any of the Subsidiaries (A) is
obligated to make to any third party any payments related to the Company
Intellectual Property Rights or (B) has agreed to indemnify any third party with
respect to any Intellectual Property, other than standard terms and conditions
with the Company's or any of the Subsidiaries' customers. To the Company's
knowledge, no third party has made a claim that the Company or any Subsidiary
has violated or, by conducting their business, would violate any Intellectual
Property rights of any other person or entity and no such claim has been
threatened. Except as set forth in Schedule 3.1(p)(3), each Employee, former
employee, contract worker, agent, consultant other service provider and
contractor who has contributed to or participated in the conception or
development of the Company Intellectual Property Rights owned by the Company or
its Subsidiaries has assigned to the Company or the Subsidiaries all
Intellectual Property rights he or she owns that are related to the respective
businesses of the Company and the Subsidiaries as now conducted or as now
proposed to be conducted. All registrations or applications for registrations of
the Company Intellectual Property Rights which are registered or have been filed
for registration by the Company or its Subsidiaries with any Governmental
Authority or Internet registrant are in good standing and all of the fees and
filings due with respect thereto have been duly made. No Proceedings or, to the
Company's knowledge, investigations challenging or threatening the validity,
enforceability, effectiveness or ownership by the Company or any of its
Subsidiaries of any Company Intellectual Property Rights have been made or are
outstanding. No open source or public library software, including any version of
any software licensed pursuant to any public license, is, in whole or in part,
embodied or incorporated in the Company Intellectual Property Rights owned by
the Company or its Subsidiaries or, to the Company's knowledge, embodied or
incorporated in the Company Intellectual Property Rights not owned by the
Company or its Subsidiaries, and neither the Company nor any of its Subsidiaries
are otherwise bound by any terms thereof. Except as set forth in Schedule
3.1(p)(4), neither the Company nor any of its Subsidiaries is or, as a result of
the execution or delivery of the Transaction Documents, or the performance of
the Company's obligations thereunder, will be in violation of any license,
sublicense, agreement or instrument involving Intellectual Property to which the
Company or any of its Subsidiaries is a party or otherwise bound, nor will the
execution or delivery of the Transaction Documents or the consummation of the
Transactions, cause the diminution, license, transfer, termination or forfeiture
of the Company's or any of its Subsidiaries' rights in any Company Intellectual
Property Rights. Each of the Company and the Subsidiaries has taken commercially
reasonable measures to protect the proprietary nature of the Company
Intellectual Property Rights and to maintain in confidence all trade secrets and
confidential information owned or used by the Company or any of its
Subsidiaries. The source code and system documentation relating to any software
programs included in or developed for inclusion in the Company's or any of its
Subsidiaries' products (including all software programs embedded or incorporated
in the Company's or any of its Subsidiaries' products) (w) have at all times
been maintained in confidence, (x) have been disclosed by the Company and its
Subsidiaries only to Employees or third parties who are bound by appropriate
nondisclosure obligations, (y) have not been licensed, sold or disclosed to any
third party, and (z) are not the subject of any escrow or similar agreement or
arrangement
15
giving any third party rights in or to such source code or system documentation
upon the occurrence of certain events.
(q) Insurance. Schedule 3.1(q)(1) sets forth a list of the
material insurance policies held by, or for the benefit of, the Company and its
Subsidiaries as of the date of this Agreement, including the underwriter of such
policies and the amount of coverage thereunder. Neither the Company nor any
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business on terms consistent with the market for the Company's and such
Subsidiaries' respective lines of business. Except as set forth in Schedule
3.1(q)(2), there are currently no Proceedings pending against the Company or any
Subsidiary under any insurance policies currently in effect and covering the
property, business or employees of the Company and the Subsidiaries, all
premiums due and payable with respect to the insurance policies maintained by
the Company and the Subsidiaries have been paid to date, and there are no
retrospective premiums on any such policies.
(r) Transactions With Affiliates and Employees. Except as set
forth in Schedule 3.1(r), none of the officers or directors or other Affiliates
of the Company or any Subsidiary, including any Person who was any of the
foregoing within the past two (2) years, and, to the knowledge of the Company,
none of the Employees, is presently a party to any transaction with the Company
or any Subsidiary (other than for services as Employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director, Affiliate or such Employee or, to the knowledge of the Company, any
entity in which any officer, director, Affiliate or any such Employee has a
substantial interest or is an officer, director, trustee or partner.
(s) Certain Fees. Except as provided in Section 6.3 and as set
forth in Schedule 3.1(s), no brokerage or finder's fees or commissions are or
will be payable by the Company based on arrangements made by the Company or any
of its Affiliates or any Person on behalf of any of them to any broker,
financial advisor or consultant, finder, placement agent, investment banker,
bank or other Person with respect to the Transactions. Neither Purchaser shall
have any obligation based on any arrangements made by the Company or any of its
Affiliates or any Person on behalf of any of them for fees or claimed fees of a
type contemplated in this Section 3.1(s) that may be due in connection with the
Transactions. The Company shall indemnify and hold harmless each Purchaser, its
respective employees, officers, directors, agents, and partners, and their
respective Affiliates, from and against all claims, Losses, damages, costs
(including the costs of preparation and attorney's fees) and expenses suffered
in respect of any claimed or existing fees that are based on arrangements made
by the Company or any of its Affiliates or any Person on behalf of any of them,
as such fees and expenses are incurred.
(t) Private Placement. Neither the Company nor any Person acting
on the Company's behalf has sold or offered to sell or solicited any offer to
buy the Securities by means of any form of general solicitation or advertising.
Neither the Company nor any of its Affiliates nor any Person acting on the
Company's behalf has, directly or indirectly, at any time within the past six
(6) months, made any offer or sale of any security or solicitation of any offer
to buy any security under circumstances that would (i) eliminate the
availability of the exemption from registration under Regulation D under the
Securities Act in connection with the offer and sale of the Securities as
contemplated hereby, or (ii) cause the offering of the Securities pursuant to
the Transaction Documents to be integrated with prior offerings by the Company
for purposes of any applicable Law or stockholder approval provisions,
including, without limitation, under the rules and regulations of the Trading
Market.
(u) Omitted.
16
(v) Registration Rights. Except as described in Schedule 3.1(v),
the Company has not granted or agreed to grant to any Person any rights
(including "piggy back" registration rights) to have any securities of the
Company registered with the Commission or any other governmental authority that
have not been satisfied.
(w) Application of Takeover Protections. The Company and Board
have taken all necessary action, if any, in order to render inapplicable any
control share acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar anti-takeover provision
under the Company's Restated Certificate of Incorporation (or similar charter
documents) or the laws of its state of incorporation that is or could become
applicable to any Purchaser as a result of the Purchasers and the Company
fulfilling their obligations or exercising their rights under the Transaction
Documents, including, without limitation, the Company's issuance of the
Securities and the Purchasers' ownership of the Securities.
(x) Investment Company; FIRPTA. The Company is not required to
register as an "investment company" within the meaning of the Investment Company
Act of 1940, as amended. The Company is not a U.S. real property holding
corporation within the meaning of the Foreign Investment in Real Property Tax
Act of 1980.
(y) Material Contracts. Each Material Contract is in full force
and effect and is a legal, valid and binding obligation of the Company and/or
any Subsidiary, as applicable. Neither the Company nor any Subsidiary is and, to
the knowledge of the Company, no other party is, in default (and, to the
knowledge of the Company, no condition exists that, with notice or lapse of time
or both, would constitute a default by the Company or any Subsidiary) in the
performance, observance or fulfillment of any obligation, covenant or condition
contained in any such Material Contract, which default would give the other
party the right to terminate or modify in any material respect such Material
Contract or would accelerate any payment or material obligation by the Company
or any Subsidiary, nor, to knowledge of the Company, is any other party to any
Material Contract in default thereunder (or, does any condition exist that, with
notice or lapse of time or both, would constitute a default by any such party),
except such defaults which, individually or in the aggregate, could not be
expected to result in a Material Adverse Effect. The validity, effectiveness and
continuation of each of the Material Contracts will not be adversely affected by
the Transactions. To the knowledge of the Company, no party to any of the
Material Contracts has exercised, or plans to exercise, any option granted to it
to cancel, terminate or shorten the term of its Material Contract. The Company
has provided to each Purchaser a true and correct copy of each Material
Contract.
(z) Suppliers and Customers. Schedule 3.1(z) sets forth the ten
(10) largest suppliers and ten (10) largest customers of the Company and the
Subsidiaries as of January 1, 2007, based on the dollar amount of sales for the
period from January 1, 2006 through such date, each of which shall remain a
supplier or customer of the firm, as applicable, as of the date hereof and at
the Closing.
(aa) Product Warranty; Product Liability. Each product
manufactured, sold or delivered since December 31, 2001 by the Company or any of
the Subsidiaries and, to the knowledge of the Company, each other product
manufactured, sold or delivered by the Company or any of its Subsidiaries, has
been so manufactured, sold or delivered in conformity in all material respects
with all product specifications and all express warranties, except where such
nonconformity has not resulted in, or would not reasonably be expected to result
in, a material liability which has not been discharged or reserved against on
the Base Balance Sheet. Each product manufactured, sold or delivered by the
Company or any of the Subsidiaries has been so manufactured, sold or delivered
in conformity in all material respects with all implied warranties, except where
such nonconformity has not had resulted in, or would not reasonably be expected
to result in, a material liability which has not been discharged or
17
reserved against on the Base Balance Sheet. Neither the Company nor any of the
Subsidiaries has any liability for replacement or repair of any such products or
other damages in connection therewith or any other customer or product
obligations not reserved against on the Base Balance Sheet.
(bb) Environmental Matters. Each of the representations and
warranties in this Section 3.1(bb) is qualified in its entirety by any matter
specifically and to the extent disclosed in any report relating to environmental
matters that has been prepared by any third party consultant engaged by any of
the Purchasers.
(i) Except as set forth in Schedule 3.1(bb)(i), all of the
current and past operations of the Company, the Subsidiaries and any Real
Property comply in all material respects and have at all times that the Company
or any of its Subsidiaries owned, operated used or leased such Real Property
complied in all material respects with all applicable Environmental Laws. All
real property formerly owned, operated, used or leased by the Company, any
Subsidiary or any predecessor in interest (the "Former Real Property") complied
at all times during the term of the Company's or such Subsidiary's ownership,
operation, use or lease thereof with all applicable Environmental Laws.
(ii) Except as set forth in Schedule 3.1(bb)(ii), (A) The
Company has no knowledge of any claim, and neither it nor any Subsidiary has
received notice of a complaint, loss order, directive, claim, request for
information, violation or citation, and no proceeding has been instituted, nor
to the Company's knowledge, threatened, raising a claim against the Company or
any Subsidiary or any predecessor thereto or any of their respective Real
Property, Former Real Property or other assets indicating or alleging any damage
to the environment or any liability or obligation under or violation of any
Environmental Law, (B) neither the Company nor any Subsidiary is subject to any
order, decree, injunction or other directive of any Governmental Authority
relating to Environmental Laws and (C) to the Company's knowledge, there are no
actions, activities, circumstances, conditions, events or incidents that are
reasonably likely to form the basis of any such liability or obligation under
Environmental Law.
(iii) Except as set forth in Schedules 3.1(bb)(ii) and
(iii), (A) neither the Company nor any Subsidiary has used and, to the Company's
knowledge, no other Person has used any portion of any Real Property or Former
Real Property during the term of the Company's or any Subsidiary's ownership,
operation, use or lease thereof for the generation, handling, processing,
treatment, storage or disposal of any Hazardous Materials except in accordance
in all material respects with applicable Environmental Laws; (B) neither the
Company nor any Subsidiary owns or operates any underground storage tank and
there are no underground storage tanks, other underground storage receptacles,
asbestos-containing materials or other Hazardous Materials located in any
portion of any Real Property and (C) neither the Company nor any Subsidiary nor,
to the Company's knowledge, any other Person, has caused or suffered to occur
any releases or threatened releases of Hazardous Materials on, at, in, under,
above, to, from or about any Real Property or Former Real Property during the
term of the Company's or any Subsidiary's ownership, operation, use or lease
thereof, except where such release has not had resulted in, or would not
reasonably be expected to result in, a material liability which has not been
discharged or reserved against on the Base Balance Sheet.
(iv) Except as set forth in Schedules 3.1(bb)(iii) and (iv),
the Company has not contractually, by operation of law or otherwise assumed or
succeeded to any liabilities of any predecessors or any other person or entity
under Environmental Law.
(v) The Company has provided to the Purchasers all material
environmental reports, assessments, audits, studies, inspections,
investigations, data and other written environmental information in their
custody, possession or control concerning the Company or any Subsidiary's
operations, the Real Property or the Former Real Property.
18
(vi) Except as set forth in Schedule 3.1(bb)(vi), the
execution, delivery and performance of this Agreement and the other Transaction
Documents and the consummation of the Transactions will not require any
notification, registration, filing, reporting, disclosure, investigation,
remediation or cleanup obligations pursuant to any requirements of Governmental
Authority or any other Environmental Law.
(vii) None of the matters set forth in Schedule 3.1(bb)(i)
through Schedule 3.1(bb)(vi), individually or in the aggregate, is reasonably
likely to have a Material Adverse Effect.
(cc) Export Controls. None of the Company, any Subsidiary or, to
the Company's knowledge, the Employees have violated any law pertaining to
export controls, technology transfer or industrial security including, without
limitation, the Export Administration Act, as amended, the International
Emergency Economic Powers Act, as amended, the Arms Export Control Act, as
amended, the National Industrial Security Program Operating Manual, as amended,
or any regulation, order, license or other legal requirement issued pursuant to
the foregoing (including, without limitation, the Export Administration
Regulations and the International Traffic in Arms Regulations). Neither the
Company, any Subsidiary nor, to the Company's knowledge, any Employee is the
subject of a Proceeding by a Governmental Authority that restricts such person's
ability to engage in export transactions.
(dd) Disclosure. The Company has provided all information
requested by any Purchaser or their respective representatives to each Purchaser
and has not knowingly omitted to provide any materials relating to any such
request.
3.2 Disclaimer of Other Representations and Warranties.
THE COMPANY HAS NOT MADE ANY REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, OF ANY NATURE WHATSOEVER RELATING TO THE COMPANY OR ANY OF
ITS SUBSIDIARIES OR THE BUSINESS OF THE COMPANY OR ANY OF ITS SUBSIDIARIES OR
OTHERWISE IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY, OTHER THAN
THOSE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT AND
THE OTHER TRANSACTION DOCUMENTS.
3.3 Representations and Warranties of the Purchasers. Each Purchaser
hereby, as to itself only and for no other Purchaser, represents and warrants to
the Company as of the date hereof and the Closing Date as follows:
(a) Organization; Authority. Such Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization with the requisite power and authority to enter
into and to consummate the Transactions and otherwise to carry out its
obligations thereunder. The execution, delivery and performance by such
Purchaser of the Transaction Documents to which it is a party have been duly
authorized by all necessary action on the part of such Purchaser and no further
consent or action is required by such Purchaser in connection with such
execution and delivery. Each of the Transaction Documents to which such
Purchaser is a party has been duly executed by such Purchaser and, when
delivered by such Purchaser in accordance with terms hereof will constitute the
valid and legally binding obligation of such Purchaser, enforceable against it
in accordance with its terms.
(b) No Conflicts. The execution, delivery and performance of the
Transaction Documents by such Purchaser and the consummation of the Transactions
do not and will not conflict with
19
or violate any provision of such Purchaser's certificate or articles of
incorporation, bylaws or other organizational or charter documents.
(c) Filings, Consents and Approvals. Such Purchaser is not
required to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any Governmental Authority
or other Person in connection with the execution or delivery by such Purchaser
of the Transaction Documents to which it is a party or the consummation of the
Transactions, other than such filings as may be required under the HSR Act and
the expiration of the waiting period under the HSR Act.
(d) Investment Intent. Such Purchaser is acquiring the Securities
as principal for its own account for investment purposes and not with a view to
distributing or reselling such Securities or any part thereof in violation of
applicable securities laws, without prejudice, however, to such Purchaser's
right at all times to sell or otherwise dispose of all or any part of such
Securities in compliance with applicable federal and state securities laws.
Nothing contained herein shall be deemed a representation or warranty by such
Purchaser to hold the Securities for any period of time. Such Purchaser
understands that the Securities have not been registered under the Securities
Act, and therefore the Securities may not be sold, assigned or transferred in
the U.S. other than pursuant to (i) an effective registration statement under
the Securities Act, or (ii) an exemption from such registration requirements.
Such Purchaser acknowledges that it is able to bear the financial risks
associated with an investment in the Shares and that it has received such
information as it has deemed necessary or appropriate to conduct its due
diligence investigation and has sufficient knowledge and experience in investing
in companies similar to the Company so as to be able to evaluate the risks and
merits of its investment in the Company.
(e) Certain Fees. Except as provided in Section 6.3 or as set
forth in Schedule 3.3(e), no brokerage or finder's fees or commissions are or
will be payable by such Purchaser based on any arrangements made by such
Purchaser or any of its Affiliates or any Person on behalf of any of them to any
broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the Transactions. The Company shall
not have any obligation based on any arrangements made by such Purchaser or any
of its Affiliates or any Person on behalf of any of them for fees or claimed
fees of a type contemplated in this Section 3.3(e) that may be due in connection
with the Transactions. Such Purchaser shall indemnify and hold harmless the
Company, its employees, officers, directors, agents, and partners, and their
respective Affiliates, from and against all claims, Losses, damages, costs
(including the costs of preparation and attorney's fees) and expenses suffered
in respect of any claimed or existing fees based on any arrangement made by such
Purchaser or any of its Affiliates or any Person on behalf of any of them, as
such fees and expenses are incurred.
(f) Purchaser Status. Such Purchaser is an "accredited investor"
within the meaning of Rule 501(a) of Regulation D under the Securities Act.
(g) General Solicitation. Such Purchaser is not purchasing the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.
(h) Investment Company. Such Purchaser either is not required to
register or has registered as an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(i) Reliance on Exemptions. Such Purchaser understands that the
Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of U.S.
20
federal and state securities Laws and that the Company is relying in part upon
the truth and accuracy of, and such Purchaser's representations and warranties
set forth herein in order to determine the availability of such exemptions and
the eligibility of such Purchaser to acquire the Securities.
(j) Trading Activities. Neither such Purchaser nor any of its
controlled Affiliates has an open short position in the Common Stock.
(k) Rule 14f-1 Information. Such Purchaser has provided to the
Company all information requested by the Company for inclusion in the
Information Statement with respect to such Purchaser or any Purchaser Designee
designated by such Purchaser for election to the Board pursuant to Section
4.11(a) and all such information is accurate and complete in all material
respects.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
4.1 Transfer Restrictions.
(a) Securities may only be disposed of pursuant to an effective
registration statement under the Securities Act or pursuant to an available
exemption from the registration requirements of the Securities Act, and in
compliance with any applicable state securities laws. In connection with any
transfer of Securities other than pursuant to an effective registration
statement or to the Company or pursuant to Rule 144(k), except as otherwise set
forth herein, the Company may require the transferor to provide to the Company
an opinion of counsel selected by the transferor, the form and substance of
which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration under the Securities Act.
Notwithstanding the foregoing, the Company hereby consents to and agrees to
register on the books of the Company and with its transfer agent, without any
such legal opinion, any transfer of Securities by a Purchaser to an Affiliate of
such Purchaser.
(b) Each Purchaser agrees to the imprinting on any certificate
evidencing Securities, except as otherwise permitted by Section 4.1(c), of a
restrictive legend in substantially the form as follows, together with any
additional legend required by (i) any applicable state securities laws and (ii)
any Trading Market upon which such Securities may be listed:
"THESE SECURITIES AND THE SECURITIES INTO WHICH THESE SECURITIES
ARE CONVERTIBLE HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE
WITH APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS.
NOTWITHSTANDING THE FOREGOING, THESE SECURITIES AND THE
SECURITIES ISSUABLE UPON CONVERSION OF THESE SECURITIES MAY BE
PLEDGED TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
501(A) UNDER THE SECURITIES ACT IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT SECURED BY SUCH SECURITIES."
(c) Certificates evidencing Securities shall not be required to
contain such legend or any other legend (i) while a registration statement
covering the resale of such Securities is effective under
21
the Securities Act, and (ii) following any sale of such Securities pursuant to
Rule 144, or (iii) if such legend is not required under applicable requirements
of the Securities Act (including judicial interpretations and pronouncements
issued by the staff of the Commission). Following the Effectiveness Date (as
such term is defined in the Registration Rights Agreement) or at such earlier
time as a legend is no longer required for certain Securities, the Company will,
no later than three (3) Trading Days following the delivery by a Purchaser to
the Company or the Company's transfer agent of a legended certificate
representing such Securities, deliver or cause to be delivered to such Purchaser
a certificate representing such Securities that is free from all restrictive and
other legends. Except as may be required to comply with a change in law, the
Company may not make any notation on its records or give instructions to any
transfer agent of the Company that enlarge the restrictions on transfer set
forth in this Section 4.1(c).
(d) The Company acknowledges and agrees that any Purchaser may
from time to time pledge or grant a security interest in some or all of the
Securities in connection with a bona fide margin agreement or other loan or
financing arrangement secured by the Securities and, if required under the terms
of such agreement, loan or arrangement, such Purchaser may transfer pledged or
secured Securities to the pledgees or secured parties. Such a pledge or transfer
would not be subject to approval of the Company and no legal opinion of the
pledgee, secured party or pledgor shall be required in connection therewith.
Further, no notice shall be required of such pledge. From and after the
Effectiveness Date, at the appropriate Purchaser's expense, the Company will
execute and deliver such reasonable documentation as a pledgee or secured party
of Securities may reasonably request in connection with a pledge or transfer of
the Securities, including the preparation and filing of any required prospectus
supplement under Rule 424(b)(3) of the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of "Selling
Stockholders" thereunder.
4.2 Furnishing of Information. The Company covenants that it will take
such action as any holder of Securities may reasonably request, all to the
extent required from time to time to enable such Person to sell such Securities
without registration under the Securities Act, within the limitations of the
exemptions provided by Rule 144.
4.3 Integration. The Company shall not, and shall use its best efforts
to ensure that no Affiliate of the Company shall, sell, offer for sale or
solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities to the Purchasers, or
that would be integrated with the offer or sale of the Securities for purposes
of the rules and regulations of the Trading Market.
4.4 Reservation of Securities. The Company shall maintain a reserve
from its duly authorized Common Shares for issuance pursuant to the Transaction
Documents in such amount as may be required to fulfill its obligations in full
under the Transaction Documents, provided that prior to stockholder approval of
the Proposal the Company shall maintain all of its authorized but unissued
shares of Common Stock in satisfaction of such obligation, other than any such
shares reserved for issuance contemplated as of the date hereof.
4.5 Access. In addition to any other rights provided by Law or set
forth herein, from and after the date of this Agreement and for so long as any
of the Shares remain outstanding, the Company shall, and shall cause each of the
Subsidiaries to (a) give each Purchaser and its representatives, at the request
of such Purchaser, access, subject to any contractual limitations or limitation
of applicable Law, during reasonable business hours, to all properties, assets,
books, contracts, commitments, reports, records relating to the Company and the
Subsidiaries, and (b) to use commercially reasonable efforts to give each
Purchaser and its representatives, at the request of such Purchaser, access,
during reasonable business
22
hours, to the management, accountants, lenders, customers and suppliers of the
Company and the Subsidiaries.
4.6 Use of Proceeds. The Company shall use substantially all of the
net proceeds from the sale of the Securities and the Rights Offering
contemplated hereunder for working capital, general corporate purposes and
reduction of net debt, including, without limitation, open market purchases,
call or repayment at maturity of outstanding Indebtedness.
4.7 D & O Insurance; Board. So long as any Purchaser Designee is on
the Board, the Company shall maintain directors' and officers' liability
insurance providing coverage in such amounts and on such terms as is customary
for a publicly traded company of similar size to the Company but in no event in
an amount less than the amount in the aggregate of coverage under the policies
in effect as of the date hereof, as reflected on Schedule 3.1(q)(1). Such
insurance shall include coverage for all directors of the Company, including any
Purchaser Designee. The Company shall use its reasonable best efforts to ensure
that meetings of its Board are held at least four (4) times each year and at
least once each quarter. The Company shall provide adequate advance notice of
such meetings to all members of the Board as provided in the Company's by-laws.
4.8 Properties; Business Insurance. Except as expressly provided in
Section 4.7 above, the Company shall obtain and maintain and cause each of its
Subsidiaries to maintain as to their respective properties and business, with
financially sound and reputable insurers, insurance against such casualties,
contingencies and other risks and hazards and of such types and in such amounts
as is customary for companies similarly situated.
4.9 Indemnification. (a) To the fullest extent lawful, subject to the
limitations in Section 4.9(b), the Company shall indemnify and hold harmless
each Purchaser and Related Persons from and against any and all Losses, as
incurred, directly or indirectly arising out of, based upon or relating to (i)
any breach by the Company of any of the representations, warranties, covenants
or other agreements made by the Company in any of the Transaction Documents, or
any allegation by a third party that, if true, would constitute such a breach,
or (ii) any Proceeding brought by or against any Person, directly or indirectly,
in connection with or as a result of any of the Transactions. The
indemnification and expense reimbursement obligations of the Company under this
paragraph shall be in addition to any liability that the Company may otherwise
have and shall be binding upon and inure to the benefit of any of the respective
successors, assigns, heirs and personal representatives of each Purchaser and
any such Related Persons. If the Company breaches its obligations under any
Transaction Document, then, in addition to any other liabilities the Company may
have under any Transaction Document or applicable Law, the Company shall pay or
reimburse each Purchaser on demand for all costs of collection and enforcement
incurred by such Purchaser (including reasonable attorneys fees and expenses).
Without limiting the generality of the foregoing, the Company specifically
agrees to reimburse each Purchaser on demand for all costs of such Purchaser
incurred (i) in enforcing the indemnification obligations in this Section 4.9,
and (ii) in connection with the amendment, modification or supplementation of
any Transaction Document.
(b) The Company shall not be required to indemnify any Purchaser
or any Related Persons for any Persons pursuant to Section 4.9(a)(i) for Losses
arising from breaches of representations, warranties, covenants or other
agreements made by the Company (i) unless the aggregate of all Losses for which
the Company would, but for this Section 4.9(b)(i), be liable exceeds $500,000 on
a cumulative basis (and then from the first dollar); and (ii) to the extent such
Losses are in excess of the aggregate proceeds to the Company paid by the
Purchasers under all of the provisions of this Agreement. The amount of any
Losses incurred by any Purchaser or any Related Person shall be reduced by the
net amount such Purchaser or Related Party receives (after deducting all
reasonably attorneys' fees, expenses
23
and other costs of recovery) from any insurer of the Company pursuant to a
policy held by the Company or other party liable for such Losses.
4.10 Approvals; Taking of Actions. The Company shall use its
commercially reasonable best efforts to (a) take or cause to be taken all
actions, and to do or cause to be done all other things, necessary, proper or
advisable to consummate the Transactions as promptly as practicable, and (b)
obtain in a timely manner all necessary waivers, consents and approvals,
including, without limitation, those set forth in Section 3.1(e) and effect all
necessary registrations and filings, including, without limitation, the
preparation, mailing and filing of an information statement pursuant to Section
14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder (the
"Information Statement"). Each Purchaser and the Company shall cooperate with
each other in connection with the making of all such filings, including
providing copies of all such documents to the non-filing party and its advisors
prior to filing. Each Purchaser and the Company shall use their respective
commercially reasonable efforts to furnish to each other all information
required for any application or other filing to be made pursuant to any
applicable Law in connection with the Transactions, including, without
limitation, all information requested by the Company from such Purchaser that is
required to be disclosed in the Information Statement. The Company shall give
any notices to third parties, and use its commercially reasonable efforts to
obtain any third party consents related to or required in connection with or to
consummate the Transactions. Prior to the Closing, the Company shall enter into
each of the Consulting Agreement and the Separation Agreement attached hereto as
Exhibits E-1 and E-2, respectively, with Xxxxxx X. Xxxxxxx, Xx., and neither the
Company nor any of its Affiliates nor anyone acting on any of their respective
behalf shall enter into any other agreement or arrangement with Xxxxxx X.
Xxxxxxx, Xx., or agree to do the foregoing, and the Company acknowledges that
any breach of any of the obligations set forth in this sentence shall be deemed
a material failure to fulfill a condition under this Agreement.
4.11 Purchaser Directors.
(a) Subject to Section 4.11(b), the Company agrees that:
(i) the Purchasers shall have the right to designate an
aggregate of four (4) nominees, to be elected to the Board initially by the
three (3) remaining Board members (each such designee, and any other person
later designated by the Purchasers for election to the Board to replace such
initial four (4) nominees designated by the Purchasers, as specified in the
Information Statement, or their replacements, a "Purchaser Designee").
(ii) the Board shall consist of not more than seven (7)
members.
(iii) the Company agrees to take all actions within its
authority (i) to cause each Purchaser Designee to be appointed to the Board,
(ii) thereafter to cause the nomination of each Purchaser Designee in connection
with any subsequent proxy statement or information statement pursuant to which
the Company intends to solicit stockholders with respect to the election of
directors, (iii) to recommend in connection with any such subsequent proxy
statement or information statement that stockholders of the Company vote for the
election of each of the Purchaser Designees, (iv) to elect each Purchaser
Designee to all committees of the Board, provided that such Purchaser Designees
meet the applicable membership requirements of the Commission and the Trading
Market, (v) to provide the same compensation (except as provided in the
Management Agreement) and rights and benefits of indemnity to the Purchaser
Designees once they become a director as are provided to other non-Employee
directors, and (vi) use its commercially reasonable efforts to ensure that at
least four (4) Purchaser Designees remain on the Board at all times.
24
If, prior to the end of the term of any member of the Board that is a Purchaser
Designee, a vacancy in the office of such director shall occur by reason of
death, resignation, removal or disability, or for any other cause, such vacancy
shall be filled by another designee of the Purchasers. The Purchasers shall have
the right to replace any Purchaser Designee on the Board at any time with or
without cause.
(b) The provisions of Section 4.11(a) shall apply only for so
long as all of the following are satisfied: (i) the Purchasers beneficially own,
directly or indirectly and on an as-converted basis, in the aggregate at least
50% of the Shares purchased at the Closing or Common Shares issued upon
conversion thereof, subject to proportional adjustments to reflect stock splits,
combinations, subdivisions, or other similar recapitalizations or events, and
(ii) the Series A Preferred Stock is subject to any limitation on voting under
Section 11(d) of the Series A Certificate of Designations.
4.12 Registered Exchange Offer.
(a) The Company shall prepare and file with the Commission the
Exchange Offer Registration Statement with respect to the Registered Exchange
Offer as soon as reasonably practicable after the Closing Date. The Company
shall use its reasonable best efforts to cause the Exchange Offer Registration
Statement to become effective under the Securities Act as soon as reasonably
practicable after the Closing Date.
(b) Upon the effectiveness of the Exchange Offer Registration
Statement, the Company shall promptly commence the Registered Exchange Offer.
(c) In connection with the Registered Exchange Offer, the Company
shall:
(i) mail or cause to be mailed to each 7.375% Holder a copy
of the prospectus forming part of the Exchange Offer Registration Statement,
together with an appropriate letter of transmittal and other related documents;
(ii) keep the Registered Exchange Offer open for not less
than twenty (20) Business Days after the date notice thereof is delivered to the
7.375% Holders (or longer if required by applicable Law);
(iii) use its reasonable best efforts to keep the Exchange
Offer Registration Statement continuously effective under the Securities Act,
supplemented and amended as required, under the Securities Act to ensure that it
is available for sales of Exchange Notes during the Exchange Offer Registration
Period;
(iv) solicit, and use its commercially reasonable efforts to
obtain the consent of holders of the 7.375% Notes, to the replacement, as of the
consummation of the Registered Exchange Offer, of the covenants contained in the
indenture relating to the 7.375% Notes substantially identical to those
applicable to the Exchange Notes;
(v) utilize the services of a depositary for the Registered
Exchange Offer, which may be the Trustee or an Affiliate thereof; and
(vi) comply in all material respects with all applicable
Laws.
(d) As soon as practicable after the close of the Registered
Exchange Offer, the Company shall:
25
(i) accept for exchange all 7.375% Notes properly tendered
and not validly withdrawn pursuant to the Registered Exchange Offer on or prior
to its expiration;
(ii) deliver or cause to be delivered to the Trustee for
cancellation all 7.375% Notes so accepted for exchange; and
(iii) cause the Trustee promptly to authenticate and deliver
to each 7.375% Holder so accepted for exchange a principal amount of Exchange
Notes equal to the principal amount of the 7.375% Notes of such holder so
accepted for exchange.
(e) Each 7.375% Holder participating in the Registered Exchange
Offer shall be required to represent to the Company that, at the time of the
consummation of the Registered Exchange Offer:
(i) any Exchange Notes received by such 7.375% Holder will
be acquired in the ordinary course of business; and
(ii) such 7.375% Holder will have no arrangement or
understanding with any Person to participate in the further distribution of the
Exchange Notes within the meaning of the Securities Act.
(f) If the Company does not receive the requisite consents of
holders of the 7.375% Notes for the action described in Section 4.12(c)(iv) and
is unable to refinance its current credit facility or obtain a new credit
facility, then, at the Company's option, exercised by not later than three (3)
months after the close of the Registered Exchange Offer, the Purchasers shall
offer to directly or indirectly provide and, if such offer is accepted by the
Company, shall provide a $25,000,000 (or such lesser amount as the Company may
request) off-balance sheet metals consignment credit facility to the Company at
an annual rate of three (3)-month LIBOR plus a margin of 500 basis points, on
terms reasonably satisfactory to the Company and each Purchaser; provided that
this Section 4.12(f) shall not restrict the Company in such event from seeking
or obtaining similar financing from third parties on more favorable terms.
(g) Each Purchaser hereby consents that in the event the Company
receives the requisite consents of holders of the 7.375% Notes for the action
described in Section 4.12(c)(iv), then the Company may, in its sole discretion,
seek to refinance the Amended and Restated Credit Agreement among the Company
and its U.S. subsidiaries, the lenders named therein and Wachovia Bank, National
Assocation, as administrative agent, as amended as of December 15, 2006.
(h) The Purchasers shall cause 100% of the 7.375% Notes owned by
the Purchasers to be tendered into the Registered Exchange Offer and in no event
less than $25,000,000 face amount of 7.375% Notes to be tendered into the
Registered Exchange Offer.
4.13 Rights Offering; Standby.
(a) As soon as practicable after the Closing, the Company shall
conduct a rights offering (the "Rights Offering") under which the then existing
holders of Common Shares, not including the Purchasers, if applicable, will be
offered the right to purchase up to $51,100,000 of Common Shares to be issued by
the Company at a price per share equal to the Conversion Price of the Series A
Preferred Stock (as defined in and in accordance with the Series A Certificate
of Designations). Pursuant to the Rights Offering, each such holder of Common
Shares shall have the right to purchase from the Company such number of Common
Shares (rounded up or down (with .5 being rounded up) to the nearest whole
26
number which could be zero or as otherwise required by the rules of the Trading
Market) equal to the product of (i) a fraction, the numerator of which is the
number of Common Shares then held by such holder and the denominator of which is
the total number of Common Shares then outstanding but excluding the Shares, any
Underlying Shares and any Common Shares otherwise held by the Purchasers not
acquired in respect of the Transactions, multiplied by (ii) a fraction, the
numerator of which is $51,100,000 and the denominator of which is equal to the
Conversion Price of the Series A Preferred Stock. Within forty-five (45) days
following the consummation of the Rights Offering (the "Standby Period"), each
Purchaser shall be obligated to purchase a number of additional shares of Series
A Preferred Stock (the "Standby Shares"), at a per share price of $1,000,
representing its pro-rata share (as set forth in Schedule 4.13(a)) of an amount
not to exceed $25,000,000 minus the gross proceeds to the Company (up to
$25,000,000) for the Common Shares purchased in the Rights Offering. If at any
time the Purchasers in the aggregate own such number of shares of Series A
Preferred Stock (taking into account the Standby Shares actually purchased, if
applicable) representing less than 55% of the outstanding capital stock of the
Company on an as-converted, fully diluted basis (the "Minimum Ownership
Percentage"), then each Purchaser shall have the right to purchase in cash, in
its sole discretion, a number of additional shares of Series A Preferred Stock,
at a per share price of $1,000, equal to its pro-rata share (based on its
portion of the Aggregate Purchase Price) of the number of shares which would
cause the Purchasers in the aggregate to reach the Minimum Ownership Percentage
(the "Option Shares"); provided that such right will expire ninety (90) days
after the consummation of the Rights Offering and provided, further, that for 30
additional days after the expiration of such right, any Purchaser that has
purchased its full portion of the Option Shares shall have the right on the
terms above to purchase any portion of the Option Shares not purchased by the
other Purchaser in such initial ninety (90)-day period.
(b) The Company shall, as promptly as practicable following the
Closing, prepare and file with the Commission a registration statement,
including a prospectus (the "Rights Offering Registration Statement"), in
connection with the registration under the Securities Act of the Rights
Offering, including the Common Shares, including, without limitation, Common
Shares issuable upon conversion of the Standby Shares and the Option Shares, in
each case issuable pursuant to the Rights Offering. The Company will provide
each Purchaser and Purchaser Counsel with a reasonable opportunity to review and
comment on the Rights Offering Registration Statement (including the prospectus
contained therein) or any amendment or supplement thereto prior to the filing
thereof with the Commission. The Company and each Purchaser shall consult and
cooperate with each other in the preparation and filing of the Rights Offering
Registration Statement (including the prospectus contained therein) and the
Company will provide each Purchaser and Purchaser Counsel with a copy of all
such filings with the Commission. The Company shall, as promptly as practicable
after the receipt thereof, provide to each Purchaser and Purchaser Counsel
copies of any written comments, and advise the Purchasers of any oral comments,
with respect to the Rights Offering Registration Statement received from the
staff of the Commission. The Company shall use commercially reasonable efforts
to cause the Rights Offering Registration Statement to be declared effective as
promptly as practicable after filing with the Commission, including, without
limitation, using commercially reasonable efforts to cause its accountants to
deliver necessary or required instruments, such as opinions, consents and
certificates, and will take any other action required or necessary to be taken
under applicable Laws.
4.14 Stockholder Approval.
(a) The Company shall seek, and use its best efforts to obtain as
soon as possible, but in no event later than June 30, 2007, or 240 days after
the Closing in the event the proxy materials shall be reviewed by the
Commission, stockholder approval of an increase in the number of authorized
Common Shares under the Company's Restated Certificate of Incorporation from
40,000,000 shares to at least 175,000,000 or such greater amount as may be
authorized by the Board at the time the proxy
27
materials are prepared to be mailed to the Company's stockholders (the
"Proposal"). Each Purchaser shall vote any shares of Common Stock and Series A
Preferred Stock held by it at the applicable time in favor of the Proposal to
the greatest extent such shares may be voted by it.
(b) As soon as practicable following the date of this Agreement,
but in no event later than sixty (60) days following the date of this Agreement,
the Company shall prepare and file with the Commission preliminary proxy
materials in connection with the sooner of the next annual or special meeting
(the "Meeting") of its stockholders, seeking approval of the Proposal. The
Company shall use its reasonable best efforts to cause such proxy materials to
reach the "no further comment" stage as soon as possible (the date such stage is
reached, the "Clearance Date") and to hold the Meeting as soon as possible
following the Clearance Date, but in no event later than sixty (60) days
following the Clearance Date.
(c) The Board shall recommend approval of the Proposal by the
Company's stockholders provided that such recommendation does not, as a result
of events occurring after the date hereof, in the sole determination of the
Board, constitute a breach of a director's fiduciary duties to the Company or
its stockholders. The Company shall mail and distribute its proxy materials for
the Meeting to its stockholders at least 30 days prior to the date of the
Meeting and shall actively solicit proxies to vote for the Proposal, subject to
the proviso to the immediately preceding sentence. The Company shall provide
each Purchaser and Purchaser Counsel an opportunity to review and comment on
such proxy materials by providing copies of such proxy materials and any revised
version of such materials to each Purchaser and Purchase Counsel at least three
(3) days prior to its filing with the Commission. The Company shall provide each
Purchaser and Purchaser Counsel with excerpts of all correspondence from or to
the Commission or its staff concerning the Proposal promptly after the same is
sent or received by the Company and summaries of any comments of the
Commission's staff concerning the Proposal which the Company receives orally
promptly after receiving such oral comments. The Company shall (i) furnish to
each Purchaser and Purchaser Counsel a copy of its definitive proxy materials
for the Meeting and any amendments or supplements thereto promptly after the
same are first mailed to stockholders or filed with the Commission, (ii) inform
each Purchaser of the progress of solicitation of proxies for such meeting and
(iii) inform each Purchaser of any adjournment of the Meeting and report the
result of the vote of stockholders on the Proposal at the conclusion of the
Meeting.
(d) If for any reason the Proposal is not approved at the
Meeting, the Company will, at the request of the Purchasers, either (i) if its
Common Shares are then listed on the New York Stock Exchange, take all actions
necessary to delist its Common Shares from the New York Stock Exchange or (ii)
take such additional acts or actions as are necessary to hold an additional
annual meeting or special meeting of its stockholders to consider the Proposal
and in conjunction therewith shall hire a nationally recognized proxy
solicitation firm, selected by mutual agreement of the Purchasers which is
reasonably satisfactory to the Company, to assist the Company in obtaining the
necessary stockholder votes to approve the Proposal. In addition, the Company
shall take all actions within its power reasonably requested by the Purchasers
to authorize sufficient shares of Common Stock to allow for full conversion of
the Shares as promptly as practicable. The Company shall bear all costs and
expenses of the preparation and filing of any and all proxy materials and
additional meetings contemplated by this Section 4.14, including but not limited
to the costs and expenses of the proxy solicitation firm if needed.
4.15 Certain Activities. From the date hereof until the expiration of
the period of ten (10) Trading Days following the public announcement of the
transactions contemplated by this Agreement, (i) each Purchaser shall not, and
shall not permit any of its Affiliates or any Person acting on behalf of any of
them to, sell any shares of Common Stock or cause or induce any other Person to
sell any shares of Common Stock or take any other action (except as required by
Law) that would reasonably be expected to depress the price of the Common Stock
on the Trading Market below the price that would otherwise
28
prevail, and (ii) the Company shall not, and shall not permit any of its
Affiliates or any Person acting on behalf of any of them to, purchase any shares
of Common Stock or cause or induce any other Person to purchase any shares of
Common Stock or take any other action (except as required by Law) that would
reasonably be expected to elevate the price of the Common Stock on the Trading
Market above the price that would otherwise prevail.
4.16 Limitations on Conversion. Each Purchaser agrees that, until the
Proposal has been approved by the stockholders of the Company and the related
Certificate of Amendment to the Company's Restated Certificate of Incorporation
has been filed with the Secretary of State of the State of Delaware, (i)
notwithstanding anything to the contrary in any Transaction Document, it shall
not seek to convert any Shares into a number of Common Shares that exceeds the
number of Common Shares that are then authorized but not issued or reserved for
other purposes, and (ii) it shall not transfer any Shares to any Person unless
such Person enters onto an agreement with the Company containing restrictions on
conversion and transfer substantially similar to those contained in this Section
4.16.
ARTICLE V
CONDITIONS
5.1 Conditions Precedent to the Obligations of the Purchasers. The
obligation of each Purchaser to acquire Shares at the Closing is subject to the
satisfaction by the Company or waiver by such Purchaser, at or before the
Closing, of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of the Company contained in the Transaction Documents shall be true
and correct in all material respects (without giving effect to any
qualifications as to materiality herein or therein) as of the date when made and
as of the Closing as though made on and as of such time;
(b) Performance. The Company shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied
with by it at or prior to the Closing, including, without limitation, delivering
or causing the delivery of those items required to be delivered pursuant to
Section 2.2(a);
(c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any Governmental Authority of competent jurisdiction that prohibits
the consummation of any of the Transactions;
(d) Certificate of Designations. The Series A Certificate of
Designations shall have been duly adopted and executed and filed with the
Secretary of State of the State of Delaware. The Company shall not have adopted
or filed any other document designating terms, relative rights or preferences of
the Shares. The Series A Certificate of Designations shall be in full force and
effect as of the Closing under the laws of the State of Delaware and shall not
have been amended or modified, and a copy of the Series A Certificate of
Designations certified by the Secretary of State of the State of Delaware shall
have been delivered to Purchaser Counsel;
(e) Adverse Changes. Since the date of this Agreement, there
shall have been no Material Adverse Effect in the reasonable determination of
such Purchaser;
(f) No Suspensions of Trading in Common Shares. Trading in the
Common Stock shall not have been suspended by the Commission (except for any
suspensions of trading of not more than one (1) Trading Day solely to permit
dissemination of material information regarding the Company) at any time since
the date of this Agreement.
29
(g) Information Statement. At least ten (10) days shall have
elapsed since the Company filed the Information Statement with the Commission
and transmitted the Information Statement to all holders of record of Common
Stock as of the date of transmission;
(h) Directors. The Company shall have delivered evidence
reasonably satisfactory to the Purchasers that subject to and effective
immediately prior to the Closing (i) at least five (5) of the then current
members of the Board shall have resigned, (ii) the number of authorized members
of the Board shall have been reduced to seven (7), and (iii) the four (4)
vacancies on the Board shall have been filled by the Purchaser Designees, in
accordance with Section 4.11;
(i) Consents. The Company shall have delivered evidence
reasonably satisfactory to the Purchasers that the Company has obtained a waiver
from Wachovia Bank, National Association ("Wachovia") (and any other parties
necessary in order to give such waiver) of certain provisions of the Amended and
Restated Receivables Purchase Agreement and the Receivables Sales Agreement
among the Company, Wachovia and the other parties thereto, each as amended as of
December 15, 2006 (collectively, the " Receivables Credit Facilities") relating
to a change in control of the Company;
(j) Amendments. The Company shall have delivered evidence
reasonably satisfactory to the Purchasers that the Company has obtained
amendments to the financial covenants contained in the Amended and Restated
Credit Agreement among the Company and its U.S. subsidiaries, the lenders named
therein and Wachovia, as administrative agent, as amended as of December 15,
2006 (the "Revolving Credit Facility") and the Receivables Credit Facilities, in
each case on terms reasonably satisfactory to the Purchasers;
(k) Golden Dragon. Golden Dragon Precise Copper Tube Group, Inc.
("Golden Dragon") shall have executed a written acknowledgment in the form
attached hereto as Exhibit F and a copy of such acknowledgement shall have been
provided to the Purchasers; and
(l) Chief Executive Officer. The Company and Xxxxxx X. Xxxxxxx,
Xx. shall each have executed and delivered the Consulting Agreement and the
Separation Agreement in the forms attached hereto as Exhibits E-1 and E-2
respectively.
5.2 Conditions Precedent to the Obligations of the Company. The
obligation of the Company to sell Shares to each Purchaser at the Closing is
subject to the satisfaction by such Purchaser or waiver by the Company, at or
before the Closing, of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of such Purchaser contained herein and the other Transaction
Documents shall be true and correct in all material respects as of the date when
made and as of the Closing as though made on and as of such time;
(b) Performance. Such Purchaser shall have performed, satisfied
and complied in all material respects with all covenants, agreements and
conditions required by the Transaction Documents to be performed, satisfied or
complied with by such Purchaser at or prior to the Closing, including, without
limitation, delivering or causing the delivery of those items required to be
delivered pursuant to Section 2.2(b); and
(c) No Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any Governmental Authority of competent jurisdiction that prohibits
the consummation of any of the Transactions.
30
ARTICLE VI
MISCELLANEOUS
6.1 Exclusive Dealing. Unless and until this Agreement is terminated
as provided herein prior to the consummation of the Closing, the Registered
Exchange Offering and the Rights Offering, the Company shall not (and shall
cause each of its shareholders, officers, directors, employees or agents
(collectively, "Company Related Persons") not to) either:
(a) solicit bids or offers or initiate discussions or
negotiations with; or
(b) on an unsolicited basis furnish or cause to be furnished any
information concerning the Company to,
any Person (other than the Purchasers and any Related Person and, if and to the
extent required by Law, any Governmental Authority) relating to any proposal
with respect to any merger or consolidation of the Company with any other
Person, the acquisition of any securities or any significant portion of the
assets and properties of the Company, or any liquidation, dissolution,
restructuring or recapitalization of the Company (each an "Alternative
Restructuring"). Notwithstanding anything herein to the contrary, if the Board
shall, at any time, determine that an Alternative Restructuring is superior to
the Transactions proposed herein, and if the Board shall determine in the
exercise of its fiduciary duties it is required to pursue such Alternative
Restructuring, then the Company and the Company Related Persons shall be
released from any obligation under this Section 6.1 to the extent, and only to
the extent, necessary to pursue such Alternative Restructuring consistent with
the exercise of such fiduciary duties. If the Company receives, or if any of the
Company Related Persons receive, any inquiry or proposal of an Alternative
Restructuring, then the Company shall (and it shall cause the Company Related
Persons to) promptly notify the Purchasers of the existence, material terms and
status of any such inquiry or proposal.
6.2 Termination.
(a) This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing Date:
(i) by the mutual consent of the Company and each Purchaser;
provided that the Company shall be required to represent to each Purchaser at
the time of such termination that the Company is not in material breach of any
of the provisions of this Agreement;
(ii) by any Purchaser if (x) the Closing has not been
consummated by February 28, 2007; or (y) the Company is in material breach of
its obligations under this Agreement; or
(iii) by the Company, if necessary to pursue an Alternative
Restructuring in accordance with Section 6.1.
(b) In the event that:
(i) any Purchaser terminates this Agreement pursuant to
Section 6.2(a)(ii)(y) because the Company has breached its obligations under
Section 6.1;
(ii) any Purchaser terminates this Agreement pursuant to
Section 6.2(a)(ii), (unless the failure to close by the date set forth in clause
(x) of such section is due solely to a breach of this Agreement by such
Purchaser) and within one (1) year after any such termination, the Company
consummates an Alternative Restructuring; or
31
(iii) the Company terminates this Agreement pursuant to
Section 6.2(a)(iii);
then, in any such event, the Company shall pay the Purchasers, as the
Purchasers' liquidated damages (and not as a penalty) incurred by the Purchasers
in connection with this Agreement and the Transactions, the aggregate sum of
$4,000,000 (subject to reduction pursuant to Section 6.3(b)), to be divided
among the Purchasers pro rata according to their respective portions of the
Aggregate Purchase Price. Such $4,000,000 (subject to reduction pursuant to
Section 6.3(b)) shall be paid by wire transfer of immediately available funds,
in the case of clause (i) above, within two (2) business days after such
termination, in the case of clause (ii) above, simultaneously with the
consummation of such Alternative Restructuring and in the case of clause (iii)
above, in no event later than the 30th day after such termination.
(c) No termination of this Agreement shall affect the right of
any party to xxx for any breach by the other party (or parties).
6.3 Fees and Expenses. The Company shall pay to each Purchaser upon
the Closing or earlier termination of this Agreement pursuant to Section 6.2 the
legal, accounting, consulting, travel and all other out-of-pocket expenses
incurred by such Purchaser and Purchaser Counsel in connection with due
diligence and the preparation and negotiation of the Transaction Documents and
otherwise in connection with the Transactions (the "Fees and Expenses");
provided that (a) such reimbursement obligation with respect to such Fees and
Expenses shall not exceed $1,250,000, and (b) the termination fee contemplated
in Section 6.2 shall be subject to reduction in the amount of such Fees and
Expenses to the extent paid. For the avoidance of doubt, the Fees and Expenses
payable under this Agreement shall not include and are in addition to (x) any
compensation payable to Imperial Capital, LLC pursuant to that certain
engagement letter dated September 15, 2006 between Imperial Capital, LLC and
Plainfield Special Situations Master Fund Limited, as amended December 11, 2006,
and/or (y) the fees payable or contemplated to be paid to the Purchasers or
their respective Affiliates by that certain Letter of Intent dated as of
November 7, 2006 between the Company, Alpine and Plainfield and by that certain
Letter Agreement dated September 15, 2006 between the Company, Alpine and
Plainfield pursuant to the respective terms thereof), which compensation and
fees shall be paid in accordance with such agreements. Except as expressly set
forth in this Section 6.3 or the Transaction Documents, each party shall pay the
fees and expenses of its advisers, counsel, accountants and other experts, if
any, and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of the Transaction Documents.
The Company shall pay all transfer agent fees, stamp taxes and other taxes and
duties levied in connection with the issuance of any Securities.
6.4 HSR Act Filings. As promptly as practicable after the date hereof,
if and to the extent the parties reasonably determine that the purchase of the
Standby Shares and/or the Option Shares will cause a filing under the HSR Act to
be necessary, the Company and each Purchaser will prepare and will make (or each
will cause its "ultimate parent entity" to prepare and make) the filings
required to be made with the FTC and the DOJ under the HSR Act in connection
with the Transactions. If the FTC or the DOJ requires any additional information
with respect to the Transactions, the Company and the Purchasers shall
reasonably cooperate with each other in obtaining and preparing such information
and delivering it to the FTC and the DOJ as promptly as reasonably practicable.
Prior to furnishing any written materials or presentations to the FTC or the DOJ
in connection with the transactions provided for by this Agreement, the
Purchasers shall furnish the Company with a copy thereof and the Company shall
furnish the Purchasers with a copy thereof, as applicable, and the party to whom
such materials or presentations are furnished shall have a reasonable
opportunity to provide comments thereon. The Company and each Purchaser shall
provide to the other parties hereto prompt written notice if it receives any
notice or other communication from the FTC or the DOJ in connection with the
transactions provided for by this Agreement and, in the case of any such notice
or communication that is in writing, shall promptly furnish
32
such other parties with a copy thereof. Any fees and expenses incurred in
respect of, or in connection with, any filings under the HSR Act in connection
with the Transactions shall be borne by the Company.
6.5 Entire Agreement. The Transaction Documents, together with the
exhibits and schedules thereto and the other agreements referenced herein or
therein, contain the entire understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings,
oral or written, with respect to such matters, which the parties acknowledge
have been merged into such documents, exhibits and schedules. At or after the
Closing, and without further consideration, each Party will execute and deliver
to each other Party such further documents as may be reasonably requested in
order to give practical effect to the intention of the parties under the
Transaction Documents. Each Party acknowledges that no other Party has made any
representations, warranties, promises or commitments other than as set forth in
the Transaction Documents, including any promises or commitments for any
additional investment by any such Party.
6.6 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified in this Section 6.6 prior to 5:00 p.m. (New York City time) on a
Trading Day, (ii) the Trading Day after the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile number specified in
this Agreement later than 5:00 p.m. (New York City time) on any date and earlier
than 11:59 p.m. (New York City time) on such date, (iii) the Trading Day
following the date of sending, if sent by nationally recognized overnight
courier service, specifying next business day delivery, or (iv) upon actual
receipt by the party to whom such notice is required to be given if delivered by
hand. The address for such notices and communications shall be as follows:
If to the Company: WOLVERINE TUBE, INC.
000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
With a copy (which shall not constitute notice) LeBoeuf, Lamb, Xxxxxx & XxxXxx LLP
to: 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxxxx, Esq.
Xxxxxxx X. Xxxxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
If to a Purchaser: To
the address set
forth under such
Purchaser's name on
the signature pages
attached hereto.
In each case, with a copy (which shall not Proskauer Rose LLP
constitute notice) to each other Purchaser and to: 0000 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Facsimile No.: (000) 000-0000
Attn: Xxxxxx X. Xxxx, Esq. and
Xxxx X. Xxxxxxx, Esq.
33
or such other address as may be designated in writing hereafter, in the same
manner, by such Person by two (2) Trading Days' prior notice to the other party
in accordance with this Section 6.6.
6.7 Amendments; Waivers. No provision of this Agreement may be waived
or amended except in a written instrument signed, in the case of an amendment,
by the Company and each Purchaser, or, in the case of a waiver, by each
Purchaser whose rights under this Agreement are affected thereby. Any waiver
executed by such Purchaser(s) shall be binding on the Company and all holders of
Securities. No waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of either party
to exercise any right hereunder in any manner impair the exercise of any such
right.
6.8 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the Parties to express their mutual intent, and no
rules of strict construction will be applied against any Party. The
representations and warranties in this Agreement are the product of negotiations
among the Parties and are for the sole benefit of the Parties. Any inaccuracies
in such representations and warranties are subject to waiver by the Parties in
accordance with this Agreement without notice or liability to any other Person.
In some instances, the representations and warranties in this Agreement may
represent an allocation among the Parties of risks associated with particular
matters regardless of the knowledge of any of the Parties. Consequently, except
as expressly provided in Section 4.9, Persons other than the Parties may not
rely upon the representations and warranties in this Agreement as
characterizations of actual facts or circumstances as of the date of this
Agreement or as of any other date.
6.9 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser. Any Purchaser may from time
to time assign its rights under this Agreement to any Person or Persons to whom
such Purchaser assigns or transfers any Securities; provided such transferee
agrees in writing to be bound, with respect to the transferred Securities, by
the provisions hereof and of the applicable Transaction Documents that apply to
the "Purchasers."
6.10 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except that each Related Person is an intended third party
beneficiary of Section 4.9 and (in each case) may enforce the provisions thereof
directly against the parties with obligations thereunder.
6.11 Governing Law; Venue; Waiver of Jury Trial. All questions
concerning the construction, validity, enforcement and interpretation of the
Transaction Documents shall be governed by and construed and enforced in
accordance with the internal laws of the State of New York. Each party agrees
that all Proceedings concerning the interpretations, enforcement and defense of
the Transactions (whether brought against a party hereto or its respective
affiliates, directors, officers, stockholders, employees or agents) shall be
commenced exclusively in the state and U.S. federal courts sitting in the City
of New York, Borough of Manhattan. Each party hereto hereby irrevocably submits
to the exclusive jurisdiction of the state and U.S. federal courts sitting in
the City of New York, Borough of Manhattan for the adjudication of any dispute
hereunder or in connection herewith or with any of the Transactions (including
with respect to the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any Proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, or that such
Proceeding is improper. Each party hereto hereby irrevocably
34
waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by applicable Law. Each party hereto
hereby irrevocably waives, to the fullest extent permitted by applicable Law,
any and all right to trial by jury in any Proceeding arising out of or relating
to any of the Transaction Documents or the Transactions. If any party shall
commence a Proceeding to enforce any provisions of any Transaction Document,
then the prevailing party in such Proceeding shall be reimbursed by the other
party for its reasonable attorneys fees and other reasonable costs and expenses
incurred with the investigation, preparation and prosecution of such Proceeding.
6.12 Survival. The representations, warranties, agreements and
covenants contained herein shall survive the Closing and the delivery, exercise
and/or conversion of the Securities, as applicable.
6.13 Execution. This Agreement may be executed in two (2) or more
counterparts, all of which when taken together shall be considered one (1) and
the same agreement and shall become effective when counterparts have been signed
by each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
page were an original thereof.
6.14 Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt in good faith to agree
upon a valid and enforceable provision that is a reasonable substitute therefor,
and upon so agreeing, shall incorporate such substitute provision in this
Agreement.
6.15 Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) any of
the Transaction Documents, whenever any Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does not timely
perform its related obligations within the periods therein provided, then such
Purchaser may rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company, any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights.
6.16 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by Law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agree to waive in any
Proceeding for specific performance of any such obligation the defense that a
remedy at law would be adequate.
6.17 Adjustments in Share Numbers and Prices. In the event of any
stock split, subdivision, dividend or distribution payable in Common Shares or
Common Share Equivalents, combination or other similar recapitalization or event
occurring after the date hereof, each reference in this Agreement to a number of
shares or a price per share shall be amended to appropriately account for such
event.
6.18 Signature by the Company. Notwithstanding anything in this
Agreement to the contrary, this Agreement shall not become effective and shall
have no legal or binding force or effect unless duly
35
executed and delivered to the Purchasers by the Company at or prior to 4:00 p.m.
(New York City time) on Wednesday, January 31, 2007.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOLLOW]
36
IN WITNESS WHEREOF, the parties hereto have caused this Preferred
Stock Purchase Agreement to be duly executed and delivered by their respective
authorized signatories as of the date first indicated above.
WOLVERINE TUBE, INC.
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
----------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title:
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES OF PURCHASERS FOLLOW.]
PURCHASERS:
THE ALPINE GROUP, INC.
By:
By: /s/ X. Xxxxxxxx Posner
----------------------------------------
Name: X. Xxxxxxxx Posner
Title: Executive Vice President
Address for Notice:
Xxx Xxxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, Xxx Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx
PURCHASERS:
PLAINFIELD SPECIAL SITUATIONS MASTER
FUND LIMITED
By:
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Authorized Individual
Address for Notice:
c/o Plainfield Asset Management LLC.
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx
Schedule 2.1
------------
Purchaser: Number of Shares:
The Alpine Group, Inc. 10,000
Plainfield Special Situations Master Fund Limited 40,000
EXHIBIT A
---------
WOLVERINE TUBE, INC.
---------------
CERTIFICATE OF DESIGNATIONS
OF
SERIES A CONVERTIBLE PREFERRED STOCK
(Pursuant to Section 151 of the Delaware General Corporation Law)
---------------
Wolverine Tube, Inc., a Delaware corporation (the "Corporation"), in
accordance with the provisions of Section 103 of the Delaware General
Corporation Law (the "DGCL") does hereby certify that, in accordance with
Section 141(c) of the DGCL, the following resolution was duly adopted by the
Board of Directors of the Corporation as of January 31, 2007:
RESOLVED, that the Board of Directors (the "Board") of the Corporation
pursuant to authority expressly vested in it by the provisions of the Restated
Certificate of Incorporation of the Corporation, hereby authorizes the issuance
of a series of preferred stock designated as the Series A Convertible Preferred
Stock, par value $1.00 per share, of the Corporation and hereby fixes the
designation, number of shares, powers, preferences, rights, qualifications,
limitations and restrictions thereof (in addition to any provisions set forth in
the Restated Certificate of Incorporation of the Corporation which are
applicable to the Preferred Stock of all classes and series) as follows:
SERIES A CONVERTIBLE PREFERRED STOCK
1. Designation, Amount and Par Value. There is hereby designated a
series of the Corporation's preferred stock as Series A Convertible Preferred
Stock (the "Series A Preferred Stock"), and the number of shares so designated
shall be 76,500. Each share of Series A Preferred Stock shall have a par value
of $1.00 per share. The "Stated Value" for each share of Series A Preferred
Stock shall equal $1,000.00.
2. Definitions. In addition to the terms defined elsewhere in this
Certificate of Designations the following terms have the meanings indicated:
"Bankruptcy Event" means any of the following events: (a)
the Corporation or a Subsidiary of the Corporation commences a case or
other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction relating to the
Corporation or any Subsidiary thereof; (b) there is commenced against
the Corporation or any Subsidiary any such case or proceeding that is
not dismissed within 60 days after commencement; (c) the Corporation
or any Subsidiary is adjudicated insolvent or bankrupt or any order of
relief or other order approving any such case or proceeding is
entered; (d) the Corporation or any Subsidiary suffers any appointment
of any custodian or the like for it or any substantial part of its
property that is not discharged or stayed within 60 days; (e) the
Corporation or any Subsidiary makes a general assignment for the
benefit of creditors; (f) the Corporation or any
Subsidiary fails to pay, or states that it is unable to pay or is
unable to pay, its debts generally as they become due; (g) the
Corporation or any Subsidiary calls a meeting of its creditors with a
view to arranging a composition, adjustment or restructuring of its
debts; or (h) the Corporation or any Subsidiary, by any act or failure
to act, expressly indicates its consent to, approval of or
acquiescence in any of the foregoing or takes any corporate or other
action for the purpose of effecting any of the foregoing.
"Business Day" means any day except Saturday, Sunday and any
day on which banking institutions in New York City are authorized or
required by law or other governmental action to close.
"Cash End Availability" means all cash and financing
available to the Corporation for the payment of dividends, including
without limitation resulting from any accounts receivable financing or
securitization, proceeds from the issuance of Series A Preferred Stock
and any other capital stock or other securities issued by the
Corporation for cash.
"Commission" means the United States Securities and Exchange
Commission.
"Common Stock" means the common stock of the Corporation,
par value $0.01 per share, and any securities into which such common
stock may hereafter be reclassified.
"Continuing Director" means (i) any individual who is a
member of the Board on the date of execution of the Purchase Agreement
and (ii) any individual who is appointed to the Board or nominated for
election to the Board by other Continuing Directors.
"Conversion Price" shall equal $[ ](1), as adjusted for
stock dividends, stock splits, stock combinations or other similar
events and as adjusted pursuant to the terms of this Certificate of
Designations.
"Equity Conditions" means, with respect to all shares of
Common Stock issuable upon conversion of the Series A Preferred Stock,
that each of the following conditions is satisfied: (i) the number of
authorized but unissued and otherwise unreserved shares of Common
Stock is sufficient for such issuance; and (ii) such shares of Common
Stock are registered for resale by the Holders and may be sold by the
Holders pursuant to an effective registration statement under the
Securities Act or all such shares may be sold without volume
restrictions pursuant to Rule 144(k) under the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Stock" means (a) any Common Stock or Common Share
Equivalents, restricted stock, stock options or stock appreciation
rights issued or issuable to employees, consultants or directors of
the Corporation pursuant to a stock option plan, stock purchase plan,
stock bonus plan, deferred compensation plan, employee benefit plan or
management grant ("Incentives"), in each case as in effect on the date
of the Purchase Agreement or as approved by the Board (including the
Series A Directors) after the date of the Purchase Agreement, and
shares of Common Stock issued or issuable upon the exercise of any of
the
------------------------
(1) Equal to the lower of (x) $1.10 and (y) the arithmetic average of the
closing prices of the Common Stock on the Trading Market for the ten (10)
consecutive Trading Days immediately following the public announcement of the
transaction pursuant to which the Series A Preferred Stock will be issued.
2
foregoing Incentives and (b) Common Stock or Common Share Equivalents
issued or issuable in connection with a bona fide business acquisition
by the Corporation of another company or entity, not principally for
the purpose of acquiring cash.
"Fundamental Transaction" means the occurrence of any of the
following in one or a series of related transactions: (i) an
acquisition after the date of the Purchase Agreement by an individual
or legal entity or "group" (as described in Rule 13d-5(b)(1) under the
Exchange Act) of fifty percent or more of the voting rights or voting
equity interests in the Corporation; (ii) Continuing Directors cease
to constitute more than one-half of the members of the Board; (iii) a
merger or consolidation of the Corporation or any Subsidiary or a sale
of all or substantially all of the assets of the Corporation or any
Subsidiary in one or a series of related transactions, unless
following such transaction or series of transactions, the holders of
the Corporation's securities prior to the first such transaction
continue to hold at least one-half of the voting rights or voting
equity interests in of the surviving entity or acquirer of such
assets; (iv) a recapitalization, reorganization or other transaction
involving the Corporation or any Subsidiary that constitutes or
results in a transfer of more than one-half of the voting rights or
voting equity interests in the Corporation; (v) consummation of a
"Rule 13e-3 transaction" as defined in Rule 13e-3 under the Exchange
Act with respect to the Corporation; (vi) any tender offer or exchange
offer (whether by the Corporation or another Person) is completed
pursuant to which holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property and as a
result of which the Persons who own Common Stock immediately prior to
the launch of such tender offer or exchange offer do not own a
majority of the outstanding equity interests of the Company, directly
or indirectly, immediately after the consummation thereof; (vii) the
Corporation effects any reclassification of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or
property; or (viii) the execution by the Corporation of an agreement
directly or indirectly providing for any of the foregoing events.
"Holder" means any holder of Series A Preferred Stock.
"Indebtedness" of any Person means (a) all indebtedness
representing money borrowed which is created, assumed, incurred or
guaranteed in any manner by such Person or for which such Person is
responsible or liable (whether by guarantee of such indebtedness,
agreement to purchase indebtedness of, or to supply funds to or invest
in, others or otherwise), (b) any direct or contingent obligations of
such Person arising under any letter of credit (including standby and
commercial), bankers acceptances, bank guaranties, surety bonds and
similar instruments, and (c) all indebtedness pursuant to clauses (a)
and (b) above of another entity secured by any lien existing on
property or assets owned by such Person.
"Involuntary Change of Control" means any Fundamental
Transaction not approved by at least five (5) members of the Board.
"Junior Securities" means the Common Stock and all other
equity or equity equivalent securities of the Corporation.
"Liquidation Event" means any liquidation, dissolution or
winding up of the Corporation, either voluntary or involuntary.
3
"Original Issue Date" means the date of the first issuance
of any shares of the Series A Preferred Stock, regardless of the
number of transfers of any particular shares of Series A Preferred
Stock and regardless of the number of certificates that may be issued
to evidence shares of Series A Preferred Stock.
"Person" means any individual or corporation, partnership,
trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.
"Purchase Agreement" means the Preferred Stock Purchase
Agreement, dated as of January 31, 2007, among the Corporation and the
purchasers of the Series A Preferred Stock, as amended from time to
time.
"Registration Rights Agreement" means the Registration
Rights Agreement, dated as of the date of the Purchase Agreement,
among the Corporation and the Holders.
"Rule 144" means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as
amended.
"Subsidiary" means any significant subsidiary of the
Corporation as defined in Rule 1-02(w) of Regulation S-X promulgated
by the Commission.
"Trading Day" means (a) any day on which the Common Stock is
listed or quoted and traded on a Trading Market, or (b) if the Common
Stock is not then listed or quoted and traded on a Trading Market,
then any Business Day.
"Trading Market" means the New York Stock Exchange or, at
any time the Common Stock is not listed for trading on the New York
Stock Exchange, any other national securities exchange, other trading
market or quotation system, if the Common Stock is then listed or
quoted on such exchange, market or system.
"Transaction Documents" means the Purchase Agreement, the
Registration Rights Agreement, this Certificate of Designations and
any other documents or agreements executed or delivered in connection
with the transactions contemplated under the Purchase Agreement and
thereunder.
"Underlying Shares" means the shares of Common Stock
issuable upon conversion of the shares of Series A Preferred Stock and
in satisfaction of any other obligation of the Corporation to issue
shares of Common Stock pursuant to the Transaction Documents.
3. Registration of Issuance and Ownership of Series A Preferred Stock.
The Corporation shall register the issuance and ownership of shares of the
Series A Preferred Stock, upon records to be maintained by the Corporation for
that purpose (the "Series A Preferred Stock Register"), in the name of the
record Holders thereof from time to time. The Corporation may deem and treat the
registered Holder of shares of Series A Preferred Stock as the absolute owner
thereof for
4
the purpose of any conversion hereof or any distribution to such Holder, and for
all other purposes, absent actual notice to the contrary.
4. Registration of Transfers. The Corporation shall register the
transfer of any shares of Series A Preferred Stock in the Series A Preferred
Stock Register, upon surrender of certificates evidencing such shares to the
Corporation at its address specified herein. Upon any such registration or
transfer, a new certificate evidencing the shares of Series A Preferred Stock so
transferred shall be issued to the transferee and a new certificate evidencing
the remaining portion of the shares not so transferred, if any, shall be issued
to the transferring Holder.
5. Dividends.
(a) Each Holder shall be entitled to receive, and the Corporation
shall pay, cumulative dividends on the Series A Preferred Stock at the rate per
share (as a percentage of the Stated Value per share, plus any accumulated and
unpaid dividends per share) of 8.00% per annum (subject to adjustment pursuant
to Sections 5(b) and 5(g) below), compounded quarterly and payable quarterly in
arrears commencing on April 30, 2007 and thereafter on each July 31, October 31,
January 31 and April 30, except if such date is not a Trading Day, in which case
such dividend shall be payable on the next succeeding Trading Day (each, a
"Dividend Payment Date"). Dividends on the Series A Preferred Stock shall be
calculated on the basis of a 360-day year that has been divided into four 90-day
quarters, shall accrue daily commencing on the Original Issue Date for such
Series A Preferred Stock, and shall be deemed to accrue from such date whether
or not earned or declared and whether or not there are profits, surplus or other
funds of the Corporation legally available for the payment of dividends.
(b) Subject to the conditions and limitations in Section 5(c)
below, the Corporation may elect, by written notice to the holders of Series A
Preferred Stock, to defer the payment of dividends otherwise payable on any
Dividend Payment Date. In the event of any dividend deferral, or if any accrued
dividends remain unpaid, the amount of the dividends payable per share of Series
A Preferred Stock on such Dividend Payment Date on which the dividends would
otherwise have been paid, or any subsequent Dividend Payment Date until such
deferred dividends have been paid, shall be: (i) determined based upon the
dividends on the Series A Preferred Stock having accumulated during the
preceding quarter (or other measurement period) at the rate per share (as a
percentage of the Stated Value per share plus all previously accrued and unpaid
dividends on such share) of (x) 10.00% per annum for any Dividend Payment Date
occurring prior to January 31, 2012 (or, if such date is not a Trading Day, the
next succeeding Trading Day), and (y) 12.00% per annum for any Dividend Payment
Date occurring subsequent to January 31, 2012 (or, if such date is not a Trading
Day, the next succeeding Trading Day); and (ii) compounded as of such quarterly
Dividend Payment Date and remain accrued and unpaid until the subsequent payment
thereof by the Corporation.
(c) The Corporation may elect to defer a dividend payment
otherwise payable on a Dividend Payment Date only if and to the extent the Cash
End Availability is less than the amount of the dividend payable on the Dividend
Payment Date, as determined in good faith by a majority of the members of the
Board other than any director affiliated with or nominated by any Holder.
(d) On each Dividend Payment Date, to the extent that there is
Cash End Availability, the Corporation shall pay, pro rata among the holders of
Series A Preferred Stock, any accrued and unpaid dividends, with the dividends
that have remained unpaid longest being paid first,
5
until all accrued and unpaid dividends have been paid. In addition, all accrued
and unpaid dividends on each share of Series A Preferred Stock shall be paid
upon the earlier to occur of (i) a Liquidation Event, or (ii) conversion of such
share of Series A Preferred Stock.
(e) So long as any shares of Series A Preferred Stock are
outstanding: (i) neither the Corporation nor any Subsidiary shall, directly or
indirectly, redeem, purchase or otherwise acquire any Junior Securities or set
aside any monies for such a redemption, purchase or other acquisition, and (ii)
the Corporation shall not pay or declare any dividend or make any distribution
on any Junior Securities, except pro rata stock dividends on the Common Stock
payable in additional shares of Common Stock and dividends due and paid in the
ordinary course on the Series A Preferred Stock.
(f) No dividends shall be paid on the Series A Preferred Stock as
a separate class other than the dividends provided in this Section 5.
(g) Notwithstanding anything to the contrary, in the event that
at any time after the 120th day from the date of the first issuance of a share
of Series A Preferred Stock, the Equity Conditions are not satisfied (or waived
in writing by the applicable Holder) on each Trading Day within a given quarter
preceding a Dividend Payment Date with respect to all of the Underlying Shares
then issuable upon conversion in full of all outstanding Series A Preferred
Stock, the dividend rate at that Dividend Payment Date shall be deemed to have
been increased by 50 basis points for the dividend period preceding that
quarter, up to a maximum aggregate increase pursuant to this Section 5(g) of 200
basis points. Following such adjustment(s) and upon satisfaction of the Equity
Conditions (or waiver in writing by the applicable Holder) with respect to all
of the Underlying Shares then issuable upon conversion in full of all
outstanding Series A Preferred Stock, the dividend rate shall be returned to the
rate in effect before giving effect to adjustments under this Section 5(g)
(until any subsequent failure).
6. Liquidation.
(a) Upon the occurrence of any Liquidation Event, the Holders
shall be entitled to receive, prior and in preference to any distribution of any
of the assets or funds of the Corporation to the holders of Junior Securities by
reason of their ownership thereof, an amount per share in cash equal to the
greater of (i) the Stated Value for each share of Series A Preferred Stock then
held by them (as adjusted for any stock split, stock dividend, stock combination
or other similar transactions with respect to the Series A Preferred Stock),
plus all accrued but unpaid dividends on such Series A Preferred Stock as of the
date of such event, and (ii) the amount per share that would be payable to a
Holder (including without limitation the payment of all accrued but unpaid
dividends) had all shares of Series A Preferred Stock been converted to
Underlying Shares immediately prior to such Liquidation Event (the "Series A
Preferred Stock Liquidation Preference"). If, upon the occurrence of a
Liquidation Event, the assets and funds thus distributed among the Holders shall
be insufficient to permit the payment to such Holders of the full Series A
Preferred Stock Liquidation Preference, then the entire assets and funds of the
Corporation legally available for distribution shall be distributed ratably
among the Holders in proportion to the aggregate Series A Preferred Stock
Liquidation Preference that would otherwise be payable to each of such Holders.
(b) Upon the occurrence of a Liquidation Event, following
completion of the distributions required by the first sentence of Section 6(a),
if assets or surplus funds remain in the
6
Corporation, the holders of the Common Stock and other Junior Securities shall
share in all remaining assets of the Corporation.
(c) The Corporation shall provide written notice of any
Liquidation Event or Fundamental Transaction to each record Holder not less than
45 days prior to the payment date or effective date thereof. Unless a Holder
otherwise notifies the Corporation, which notice must be delivered prior to the
effective date of a Fundamental Transaction (or, if later, within five (5)
Trading Days after such Holder receives notice of such Fundamental Transaction
from the Corporation), such Fundamental Transaction will be treated as a
Liquidation Event with respect to such Holder for the purposes of this Section
6.
(d) In the event that, immediately prior to the closing of a
Liquidation Event that is not a Fundamental Transaction, the cash distributions
required by Section 6(a) have not been made, the Corporation shall forthwith
either: (i) cause such closing to be postponed until such time as such cash
distributions have been made; or (ii) cancel such transaction, in which event
the rights, preferences and privileges of the Holders shall revert to and be the
same as such rights, preferences and privileges existing immediately prior to
the date of the first notice by the Corporation required under Section 6(c).
(e) For so long as 25,000 shares of Series A Preferred Stock
remain outstanding, in the event that, immediately prior to the closing of a
Liquidation Event that is a Fundamental Transaction, the cash distributions
required by Section 6(a) have not been made, the Corporation shall forthwith
either: (i) cause such closing to be postponed until such time as such cash
distributions have been made; or (ii) cancel such transaction, in which event
the rights, preferences and privileges of the Holders shall revert to and be the
same as such rights, preferences and privileges existing immediately prior to
the date of the first notice by the Corporation required under Section 6(c).
7. Conversion. At the option of any Holder, any shares of Series A
Preferred Stock held by that Holder may be converted into Common Stock based on
the Conversion Price then in effect for the Series A Preferred Stock. A Holder
may convert shares of Series A Preferred Stock into Common Stock pursuant to
this paragraph at any time and from time to time after the Original Issue Date,
by delivering to the Corporation a conversion notice (the "Conversion Notice"),
in the form attached hereto as Exhibit A, appropriately completed and duly
signed, and the date any such Conversion Notice is delivered to the Corporation
(as determined in accordance with the notice provisions hereof) is a "Conversion
Date."
8. Mechanics of Conversion.
(a) The number of Underlying Shares issuable upon any conversion
of shares of Series A Preferred Stock hereunder shall equal the Stated Value of
such shares of Series A Preferred Stock to be converted divided by the
Conversion Price on the Conversion Date.
(b) Upon conversion of any shares of Series A Preferred Stock,
the Corporation shall promptly (but in no event later than three (3) Trading
Days after the Conversion Date) issue or cause to be issued and cause to be
delivered to the Holder, or upon the written order of the Holder and in such
name or names as the Holder may designate, a certificate or certificates for the
Underlying Shares issuable upon such conversion, free of restrictive legends
unless such Underlying Shares are still required to bear a restrictive legend.
The Holder, or any Person so designated by the
7
Holder to receive Underlying Shares, shall be deemed to have become holder of
record of such Underlying Shares as of the Conversion Date. If the shares are
then not required to bear a restrictive legend, the Corporation shall, upon
request of the Holder, deliver Underlying Shares hereunder electronically
through The Depository Trust Corporation or another established clearing
corporation performing similar functions, and shall credit the number of shares
of Common Stock to which the Holder shall be entitled to the Holder's or its
designee's balance account with The Depository Trust Corporation through its
Deposit Withdrawal Agent Commission System.
(c) A Holder shall deliver the original certificate(s) evidencing
the Series A Preferred Stock being converted (or an affidavit of lost
certificate and any indemnity or bond required by the Corporation's transfer
agent) together with a duly completed Conversion Notice in proper form in order
to effect a conversion of such Series A Preferred Stock. Upon surrender of a
certificate following one or more partial conversions, the Corporation shall
promptly deliver to the Holder a new certificate representing the remaining
shares of Series A Preferred Stock.
(d) The Corporation's obligations to issue and deliver Underlying
Shares upon conversion of Series A Preferred Stock in accordance with the terms
hereof are absolute and unconditional, irrespective of any action or inaction by
any Holder to enforce the same, any waiver or consent with respect to any
provision hereof, the recovery of any judgment against any Person or any action
to enforce the same, or any setoff, counterclaim, recoupment, limitation or
termination, or any breach or alleged breach by any Holder or any other Person
of any obligation to the Corporation or any violation or alleged violation of
law by any Holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Corporation to
any Holder in connection with the issuance of such Underlying Shares.
9. Redemption.
(a) On the earlier to occur of (x) an Involuntary Change of
Control and (y) January 31, 2017 (the date of such earlier event, the "Mandatory
Redemption Date"), the Corporation shall redeem all of the then outstanding
Series A Preferred Stock at a price equal to 100% of the Stated Value of such
shares of Series A Preferred Stock, plus all accrued but unpaid dividends
thereon to the date of payment, in cash (the "Redemption Price"). The
Corporation shall provide each Holder not less than 60 days prior written notice
of the Mandatory Redemption Date. The terms of this section may be waived by a
Holder with respect to the shares of Series A Preferred Stock held by that
Holder in the event of a Mandatory Redemption Date in respect of clause (x)
above but not in respect of clause (y).
(b) If the funds of the Corporation legally available to redeem
shares of Series A Preferred Stock on the Mandatory Redemption Date are
insufficient to redeem the total number of such shares required to be redeemed
on such date or the Corporation is otherwise prohibited from redeeming the total
number of such shares, the Corporation shall (i) take any action necessary or
appropriate, to the extent reasonably within its control, to remove promptly any
impediments to its ability to redeem the total number of shares of Series A
Preferred Stock required to be so redeemed, including to the extent permissible
under applicable law, reducing the stated capital of the Corporation or causing
a revaluation of the assets of the Corporation under Section 154 of the DGCL to
create sufficient surplus to make such redemption, and (ii) in any event, use
any funds legally available to redeem the maximum possible number of such shares
from the holders of such shares to be redeemed in proportion to the respective
number of such shares that otherwise would have been redeemed if all such shares
had been redeemed in full. At any time thereafter when additional funds
8
of the Corporation are legally available to redeem such shares of Series A
Preferred Stock, the Corporation shall immediately use such funds to redeem the
balance of the shares that the Corporation becomes obligated to redeem on the
Mandatory Redemption Date (but that it has not yet redeemed) at the Redemption
Price. In the event that shares of Series A Preferred Stock required to be
redeemed are not redeemed and continue to be outstanding, such shares shall
continue to be entitled to dividends thereon as provided in Section 5 until the
date on which the Corporation actually redeems such shares.
(c) Until the aggregate Redemption Price has been paid for all
shares of Series A Preferred Stock being redeemed: (A) no dividend whatsoever
shall be paid or declared, and no distribution shall be made, on any capital
stock of the Corporation (other than dividends payable solely in Common Stock
and the continued accrual of dividends as provided in this Certificate of
Designations); and (B) no shares of capital stock of the Corporation (other than
the Series A Preferred Stock in accordance with this Section 9) shall be
purchased, redeemed or acquired by the Corporation and no monies shall be paid
into or set aside or made available for a sinking fund for the purchase,
redemption or acquisition thereof.
(d) If any shares of Series A Preferred Stock are not redeemed on
the Mandatory Redemption Date for any reason, all such unredeemed shares shall
remain outstanding and entitled to all the rights and preferences provided
herein, and the Corporation shall pay interest on the Redemption Price and any
dividend accruing after the Mandatory Redemption Date applicable to such
unredeemed shares at an aggregate per annum rate equal to eighteen percent (18%)
(increased by 1% at the end of each three (3) month period thereafter until the
Redemption Price, and any interest thereon, is paid in full), with such interest
to accrue daily in arrears and to be compounded quarterly; provided, that in no
event shall such interest exceed the maximum permitted rate of interest under
applicable law, and provided further that the Corporation shall make all filings
necessary to raise such rate to the maximum permitted rate of interest under
applicable law (the "Maximum Permitted Rate"). In the event that fulfillment of
any provision hereof results in such rate of interest being in excess of the
Maximum Permitted Rate, the amount of interest required to be paid hereunder
shall automatically be reduced to eliminate such excess; provided, that any
subsequent increase in the Maximum Permitted Rate shall be retroactively
effective to the applicable Mandatory Redemption Date to the extent permitted by
law.
(e) If any shares of Series A Preferred Stock are not redeemed on
the Mandatory Redemption Date for any reason, the number of directors
constituting the Board shall automatically be increased by a number equal to the
number of directors then constituting the Board, plus one (1), and the holders
of outstanding shares of Series A Preferred Stock shall be entitled, voting as a
single class (to the exclusion of the holders of all other securities and
classes of capital stock of the Corporation), to elect such additional
directors. For the avoidance of doubt, such additional directors shall
constitute a majority of the Board. The period beginning on the Mandatory
Redemption Date and ending on the date upon which all shares of Series A
Preferred Stock required to be redeemed are so redeemed is referred to herein as
the "Voting Period." As soon as practicable after the commencement of the Voting
Period, the Corporation shall call a special meeting of the Holders to be held
not more than twenty (20) days after the date of mailing of notice of such
meeting. If the Corporation fails to send a notice, any such Holder may call the
meeting on like notice. The record date for determining the Holders entitled to
notice of and to vote at such special meeting shall be the close of business on
the fifth (5th) business day preceding the day on which such notice is mailed.
At any such special meeting and at each meeting of Holders held during a Voting
Period at which directors are to be elected (or with respect to any action by
written consent in lieu of a meeting of
9
stockholders), such Holders, voting together as a single class to the exclusion
of the holders of all other securities and classes of capital stock of the
Corporation, shall be entitled to elect the number of directors prescribed in
this Section 9(e), and each share of Series A Preferred Stock shall be entitled
to one (1) vote (whether voted in person by the holder thereof or by proxy or
pursuant to a stockholders' consent). The terms of office of all persons who are
incumbent directors of the Corporation at the time of a special meeting of the
Holders to elect such additional directors shall continue, notwithstanding the
election at such meeting of the additional directors that such Holders are
entitled to elect, and the additional directors so elected by such Holders,
together with such incumbent directors, shall constitute the duly elected
directors of the Corporation. Simultaneously with the termination of a Voting
Period, the terms of office of the additional directors elected by the Holders
under this Section 9(e) shall terminate, such incumbent directors shall
constitute the directors of the Corporation and the rights of the Holders to
elect additional directors pursuant to this Section 9(e) shall cease.
10. Call Right.
(a) Subject to the provisions of this Section 10, the Corporation
shall have the right (the "Call Right") at any time on or after January 31, 2014
to repurchase all (but not less than all) of the then outstanding shares of
Series A Preferred Stock at a price equal to the Redemption Price. The
Corporation must deliver a written notice of the exercise of the Call Right to
each Holder at least 30 days prior the date on which the shares of Series A
Preferred Stock are to be repurchased (the "Call Repurchase Date"), which notice
shall state the Call Repurchase Date and the Redemption Price. Not less than
five (5) Trading Days prior to the Call Repurchase Date, the Corporation shall
deposit the entire Redemption Price for all shares of Series A Preferred Stock
into an account with a commercial bank having not less than $500,000,000 in
assets, such funds to be held exclusively for the purpose of paying the
Redemption Price to the Holders. Upon receipt of payment of the Redemption Price
by the Holders, each such Holder will deliver the certificate(s) evidencing the
Series A Preferred Stock redeemed by the Corporation, unless such Holder is
awaiting receipt of a new certificate evidencing such shares from the
Corporation pursuant to another provision hereof. At any time on or prior to the
Call Repurchase Date, a Holder may convert any or all of the shares of Series A
Preferred Stock held by it, and the Corporation shall honor any such conversions
in accordance with the terms hereof.
(b) Notwithstanding Section 10(a) above, the Corporation may not
exercise its Call Right or redeem shares of Series A Preferred Stock on the Call
Repurchase Date pursuant to this Section 10, and any notice delivered under
Section 10(a) will be void, unless (A) from the period commencing on the
Corporation's delivery of the irrevocable written notice electing an exercise of
the Call Right through the Call Repurchase Date, the Equity Conditions are
satisfied (or waived in writing by the applicable Holder) on each Trading Day
with respect to all of the Underlying Shares then issuable upon conversion in
full of all outstanding Series A Preferred Stock and (B) the exercise of the
Call Right was approved by a majority of the Board other than any other director
who is nominated by or an affiliate of a Holder.
11. Voting Rights; Board of Directors.
(a) Except as otherwise provided herein or as required by
applicable law, the Holders shall be entitled to vote on all matters on which
holders of Common Stock are entitled to vote, including, without limitation, the
election of directors. For such purposes, each Holder shall be entitled to a
number of votes in respect of the shares of Series A Preferred Stock owned by it
equal to
10
the number of shares of Common Stock into which such shares of Series A
Preferred Stock are convertible by the Holders as of the record date for the
determination of stockholders entitled to vote on such matter, or if no record
date is established, at the date such vote is taken or any written consent of
stockholders is solicited. Except as otherwise provided herein, in any relevant
agreement or as required by applicable law, the Holders and the holders of
Common Stock shall vote together as a single class on all matters submitted to a
vote or consent of stockholders.
(b) Notwithstanding anything to the contrary, for so long as at
least 25,000 shares of Series A Preferred Stock remain outstanding, the
Corporation shall not, without the affirmative vote of the holders of a majority
of the shares of Series A Preferred Stock then outstanding:
(i) amend or propose to amend the Restated
Certificate of Incorporation or by-laws or other comparable
governing instruments of the Corporation or any of the
Subsidiaries, or this Certificate of Designations (whether by
amendment, amalgamation, merger or otherwise);
(ii) issue or authorize the issuance of any equity
of the Corporation with rights on liquidation. as to dividends,
on redemption, as to voting, or otherwise, senior to or pari
passu with the Series A Preferred Stock, or authorize or issue
any shares of Series A Preferred Stock;
(iii) dissolve or liquidate the Corporation;
(iv) purchase, redeem (other than pursuant to any
equity plan outstanding as of the date of the Purchase Agreement
giving the Corporation the right to repurchase stock or other
securities of the Corporation at cost upon the termination of an
employee's or director's services and approved by the Continuing
Directors) or set aside any sums for the purchase or redemption
of, or declare or pay any dividend (including a dividend payable
in securities of the Corporation) or declare or pay any dividends
or make any distributions of cash, property or securities of the
Corporation in respect of any Common Stock or any other class of
Junior Securities or any other Common Share Equivalents;
(v) acquire any other corporation or business
concern, whether by acquisition of assets, capital stock, merger
or otherwise, and whether by payment of cash, the issuance of
capital stock or otherwise, other than acquisitions of up to
$5,000,000 per annum, not exceeding $15,000,000 in the aggregate;
(vi) enter into (A) a merger or consolidation of
the Corporation with or into another entity (with respect to
which less than a majority of the outstanding voting power of the
surviving or consolidated company immediately following such
event is held by Persons who were stockholders of the Corporation
immediately prior to such event), (B) the sale, disposition,
license or transfer, directly or indirectly, of any assets or
property with a value equal to or greater than $1,000,000 or that
are otherwise material to the Corporation or its business;
(vii) be acquired by any Person (or group of
affiliated or associated Persons) of beneficial ownership of a
majority of the equity of the Corporation (whether or not
newly-issued shares) in a single transaction or a series of
related
11
transactions, redeem or repurchase shares representing a majority of the voting
power of the outstanding shares of capital stock of the Corporation, or undergo
any other change of control of 50% or more of the outstanding voting power of
the Corporation;
(viii) fail to maintain its corporate existence,
or change the nature of the Corporation's principal business to
any business which is fundamentally and materially distinct and
separate from the business currently conducted by the
Corporation;
(ix) create, incur, assume or suffer to exist any
Indebtedness, other than Indebtedness outstanding as of the date
hereof or any extensions, refinancing or renewals thereof (which
extensions, refinancings or renewals, other than any such
extension refinancing or renewal specifically contemplated in the
Purchase Agreement, shall be on terms no less favorable to the
Company than the current terms of such Indebtedness), in excess
of $15,000,000 in the aggregate, other than (A) trade
Indebtedness incurred to finance the purchase of equipment,
components and other similar property and operating assets, in
each case, in the ordinary course of business consistent with
past practice, and any extensions, refinancings and renewals of
any of the foregoing; provided that such extensions, refinancings
or renewals do not or will not impose more burdensome terms,
conditions or obligations upon the Corporation or any Subsidiary
or increase the commitments or loan amounts thereunder, and (B)
inter-company Indebtedness between the Corporation and any
wholly-owned Subsidiary incurred in the ordinary course of
business and consistent with past practice; or
(x) enter into any agreement to do any of the
foregoing or cause or permit any Subsidiary of the Corporation
directly or indirectly to take any actions described in clauses
(i) through (ix) above.
(c) The holders of outstanding shares of Series A Preferred Stock
shall be entitled to vote in the election of all directors of the Corporation
together with holders of all other shares of the Corporation's outstanding
capital stock entitled to vote thereon, voting as a single class, with each
outstanding share of Series A Preferred Stock entitled to the number of votes
specified in Section 11(a).
(d) Notwithstanding anything herein to the contrary, for so long
as any of the Corporation's 10.5% Senior Notes due 2009 remain outstanding, no
Holder shall have or may exercise voting rights in respect of a number of shares
of Common Stock issuable upon conversion of the Series A Preferred Stock,
together with any other shares of Common Stock as to which such Holder, together
with any other Person with whom such Holder would be considered a "person" (as
defined in Section 13(d) and 14(d) under the Exchange Act) in relation to such
Common Stock or Series A Preferred Stock, is the direct or indirect "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act (and
including all shares of Common Stock that such Holder and any such other Person
has the right to acquire, whether such right is exercisable immediately or only
after the passage of time)), directly or indirectly representing more than 49%
of the then outstanding Common Stock.
12
12. Charges, Taxes and Expenses. Issuance of certificates for shares
of Series A Preferred Stock and for Underlying Shares issued on conversion of
(or otherwise in respect of) the Series A Preferred Stock shall be made without
charge to the Holders for any issue tax, withholding tax, transfer agent fee or
other incidental tax or expense in respect of the issuance of such certificates,
all of which taxes and expenses shall be paid by the Corporation. The Holder
shall be responsible for all transfer tax and other tax liability that may arise
as a result of holding or transferring the Series A Preferred Stock or receiving
Underlying Shares in respect of the Series A Preferred Stock.
13. Replacement Certificates. If any certificate evidencing Series A
Preferred Stock or Underlying Shares is mutilated, lost, stolen or destroyed, or
a Holder fails to deliver such certificate as may otherwise be provided herein,
the Corporation shall issue or cause to be issued in exchange and substitution
for and upon cancellation thereof, or in lieu of and substitution for such
certificate, a new certificate, but only upon receipt of evidence reasonably
satisfactory to the Corporation of such loss, theft or destruction (in such
case) and, in each case, customary and reasonable indemnity, if requested.
Applicants for a new certificate under such circumstances shall also comply with
such other reasonable regulations and procedures and pay such other reasonable
third-party costs as the Corporation may prescribe.
14. Reservation of Underlying Shares. The Corporation shall, at all
times reserve and keep available out of the aggregate of its authorized but
unissued and otherwise unreserved Common Stock, solely for the purpose of
enabling it to issue Underlying Shares as required hereunder, the number of
Underlying Shares which are then issuable and deliverable upon the conversion of
(and otherwise in respect of) all outstanding Series A Preferred Stock (taking
into account the adjustments of Section 15), free from preemptive rights or any
other contingent purchase rights of Persons other than the Holders; provided
that prior to the date that the Corporation's Restated Certificate of
Incorporation is amended to increase the number of authorized shares of Common
Stock to 175,000,000 (or such greater amount as may be authorized by the Board
at the time the proxy materials relating to the vote on such amendment are
prepared for mailing to the Company's stockholders), the Corporation shall take
the action above to the full extent of all of its then authorized but unissued
and otherwise unreserved shares of Common Stock, other than shares reserved for
issuance on the date hereof in satisfaction of the obligations above. All
Underlying Shares so issuable and deliverable shall, upon issuance in accordance
with the terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable. The Corporation covenants that it shall use its reasonable best
efforts to satisfy each of the Equity Conditions.
15. Certain Adjustments. The Conversion Price is subject to adjustment
from time to time as set forth in this Section 15.
(a) Stock Dividends and Splits. If the Corporation, at any time
while Series A Preferred Stock is outstanding, (i) pays a stock dividend on its
Common Stock or otherwise makes a distribution on any class of capital stock
that is payable in shares of Common Stock, (ii) subdivides outstanding shares of
Common Stock into a larger number of shares, or (iii) combines outstanding
shares of Common Stock into a smaller number of shares, then in each such case
the applicable Conversion Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding immediately
before such event and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event. Any adjustment made
pursuant to clause (i) of this paragraph shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such dividend or distribution, and
13
any adjustment pursuant to clause (ii) or
(iii) of this paragraph shall become effective immediately after the effective
date of such subdivision or combination.
(b) Pro Rata Distributions. If the Corporation, at any time while
Series A Preferred Stock is outstanding, distributes or pays as a dividend to
holders of Common Stock (other than the Rights Offering to be conducted as
provided in the Purchase Agreement) (i) evidences of its Indebtedness, (ii) any
security (other than a distribution of Common Stock covered by the preceding
paragraph), (iii) rights or warrants to subscribe for or purchase any security,
or (iv) any other asset (including, without limitation, cash) (in each case,
"Distributed Property"), then in each such case the Corporation shall
simultaneously deliver to each Holder the Distributed Property that each such
Holder would have been entitled to receive in respect the number of Underlying
Shares then issuable pursuant to Section 8(a) above had the Holder been the
record holder of such Underlying Shares immediately prior to the applicable
record or payment date.
(c) Fundamental Transactions. If the Corporation, at any time
while Series A Preferred Stock is outstanding, effects any Fundamental
Transaction, then upon any subsequent conversion of Series A Preferred Stock,
each Holder shall have the right to receive, for each Underlying Share that
would have been issuable upon such conversion absent such Fundamental
Transaction, the same kind and amount of securities, cash or property as it
could have been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental Transaction,
the holder of one share of Common Stock (the "Alternate Consideration"). For
purposes of any such conversion, the determination of the Conversion Price shall
be appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Corporation shall apportion the
Conversion Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then
each Holder shall be given the same choice as to the Alternate Consideration it
receives upon any conversion of Series A Preferred Stock following such
Fundamental Transaction. To the extent necessary to effectuate the foregoing
provisions, any successor to the Corporation or surviving entity in such
Fundamental Transaction shall issue to the Holder a new series of preferred
stock consistent with the foregoing provisions and evidencing the Holders' right
to convert such preferred stock into Alternate Consideration. The terms of any
agreement pursuant to which a Fundamental Transaction is effected shall include
terms requiring any such successor or surviving entity to comply with the
provisions of this Section 15(c) and insuring that the Series A Preferred Stock
(or any such replacement security) will be similarly adjusted upon any
subsequent transaction analogous to a Fundamental Transaction.
(d) Subsequent Equity Sales. If at any time while any shares of
Series A Preferred Stock remain outstanding the Corporation or any Subsidiary
issues additional shares of Common Stock or rights, warrants, options or other
securities or debt convertible, exercisable or exchangeable for Common Stock or
otherwise entitling any Person to acquire Common Stock (collectively, "Common
Share Equivalents") at a purchase price per share of Common Stock (the
"Effective Price") less than the Conversion Price (as adjusted hereunder to such
date), then the Conversion Price shall be adjusted to a Conversion Price
determined by multiplying the Conversion Price then in effect by a fraction, (i)
the numerator of which shall be the sum of (x) the number of shares of Common
Stock outstanding on the date of such issuance and (y) the number of additional
shares Common Stock which the aggregate offering price of the total number
shares of Common Stock so issued (or the sum of the aggregate offering price of
the total number of Common Share
14
Equivalents so issued and the aggregate amount of cash due upon exercise,
exchange or conversion of such Common Share Equivalents) would purchase at the
Conversion Price then in effect, and (ii) the denominator of which shall be the
sum of (x) the number of shares of Common Stock outstanding on the date of such
issuance and (y) the number of additional shares of Common Stock issued (or the
number of shares of Common Stock for which or into which the Common Share
Equivalents so offered are exercisable, exchangeable or convertible at the
Effective Price). For purposes of this paragraph, in connection with any
issuance of any Common Share Equivalents, (A) the maximum number of shares of
Common Stock potentially issuable at any time upon conversion, exercise or
exchange of such Common Share Equivalents (the "Deemed Number") shall be deemed
to be outstanding upon issuance of such Common Share Equivalents, (B) the
Effective Price applicable to such Common Shares shall equal the minimum dollar
value of consideration payable to the Corporation to purchase such Common Share
Equivalents and to convert, exercise or exchange them into shares of Common
Stock, divided by the Deemed Number, (C) no further adjustment shall be made to
the Conversion Price upon the actual issuance of Common Shares upon conversion,
exercise or exchange of such Common Share Equivalents, and (D) to the extent
that any such Common Share Equivalents expire before fully converted, exercised
or exchanged, the Conversion Price will be readjusted to reflect such
expiration. If, at any time while any shares of Series A Preferred Stock are
outstanding, the Corporation or any Subsidiary directly or indirectly issues
Common Share Equivalents with an Effective Price or a number of underlying
shares that floats or resets or otherwise varies or is subject to adjustment
based (directly or indirectly) on market prices of the Common Stock (a "Floating
Price Security"), then for purposes of applying this Section 15(d) in connection
with any subsequent conversion, the Effective Price will be determined
separately on each Conversion Date and will be deemed to equal the lowest
Effective Price at which any holder of such Floating Price Security is entitled
to acquire Common Shares on such Conversion Date (regardless of whether any such
holder actually acquires any shares on such date). Notwithstanding the
foregoing, no adjustment will be made under this paragraph (d) in respect of any
issuances of Common Stock and Common Share Equivalents made pursuant to the
definition of Excluded Stock.
(e) Calculations. All calculations under this Section 15 shall be
made to the nearest cent or the nearest 1/100th of a share, as applicable. The
number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Corporation, and the
disposition of any such shares shall be considered an issue or sale of Common
Stock.
(f) Notice of Adjustments. Upon the occurrence of each adjustment
pursuant to this Section 15, the Corporation at its expense will promptly
compute such adjustment in accordance with the terms hereof and prepare a
certificate describing in reasonable detail such adjustment and the transactions
giving rise thereto, including all facts upon which such adjustment is based.
Upon written request, the Corporation will promptly deliver a copy of each such
certificate to each Holder and to the Corporation's transfer agent.
(g) Notice of Corporate Events. If the Corporation (i) declares a
dividend (other than a dividend pursuant to Section 5 above) or any other
distribution of cash, securities or other property in respect of its Common
Stock, including, without limitation, any granting of rights or warrants to
subscribe for or purchase any capital stock of the Corporation or any
Subsidiary, (ii) authorizes or approves, enters into any agreement contemplating
or solicits stockholder approval for any Fundamental Transaction or (iii)
authorizes the voluntary dissolution, liquidation or winding up of the affairs
of the Corporation, then the Corporation shall deliver to each Holder a notice
describing the material terms and conditions of such transaction, at least 20
calendar days prior to the applicable
15
record or effective date on which a Person would need to hold Common Stock in
order to participate in or vote with respect to such transaction.
16. Fractional Shares. The Corporation shall not be required to issue
or cause to be issued fractional Underlying Shares on conversion of Series A
Preferred Stock. If any fraction of an Underlying Share would, except for the
provisions of this Section 16, be issuable upon conversion of Series A Preferred
Stock, the number of Underlying Shares to be issued will be rounded up to the
nearest whole share.
17. Notices. Any and all notices or other communications or deliveries
hereunder (including without limitation any Conversion Notice) shall be in
writing and shall be deemed given and effective on the earliest of (i) the date
of transmission, if such notice or communication is delivered via facsimile at
the facsimile number specified in this Section prior to 4:30 p.m. (New York City
time) on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading Day or
later than 4:30 p.m. (New York City time) on any Trading Day, (iii) the Trading
Day following the date of mailing, if sent by nationally recognized overnight
courier service, or (iv) upon actual receipt by the party to whom such notice is
required to be given. The addresses for such communications shall be: (i) if to
the Corporation, to 000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 0000, Xxxxxxxxxx, Xxxxxxx
00000, facsimile: (000) 000-0000, Attention: Xxxxx X. Xxxxxx, or (ii) if to a
Holder, to the address or facsimile number appearing on the Corporation's
stockholder records or such other address or facsimile number as such Holder may
provide to the Corporation in accordance with this Section 17.
18. Miscellaneous.
(a) The headings herein are for convenience only, do not
constitute a part of this Certificate of Designations and shall not be deemed to
limit or affect any of the provisions hereof.
(b) No provision of this Certificate of Designations may be
amended, except in a written instrument signed by the Corporation and holders of
at least two-thirds of the shares of Series A Preferred Stock then outstanding.
Any of the rights of the Holders set forth herein, including any Equity
Conditions or any other similar conditions for the Holders' benefit, may be
waived by the affirmative vote of holders of at least two-thirds of the shares
of Series A Preferred Stock then outstanding, except that each Holder may waive
its own rights as provided in this Certificate of Designations. No waiver of any
default with respect to any provision, condition or requirement of this
Certificate of Designations shall be deemed to be a continuing waiver in the
future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of either party
to exercise any right hereunder in any manner impair the exercise of any such
right.
16
IN WITNESS WHEREOF, Wolverine Tube, Inc. has caused this Certificate of
Designations to be duly executed as of this __ day of __________, 200_.
WOLVERINE TUBE, INC.
By: __________________________
Name:
Title:
EXHIBIT A
FORM OF CONVERSION NOTICE
(To be executed by the registered Holder
in order to convert shares of Series A Preferred Stock)
The undersigned hereby elects to convert the number of shares of Series A
Convertible Preferred Stock indicated below into shares of Common Stock of
Wolverine Tube, Inc., according to the conditions hereof, as of the date written
below.
----------------------------------------------------------------------
Date to Effect Conversion
----------------------------------------------------------------------
Number of shares of Series A Preferred Stock owned prior to Conversion
----------------------------------------------------------------------
Number of shares of Series A Preferred Stock to be Converted
----------------------------------------------------------------------
Stated Value of shares of Series A Preferred Stock to be Converted
----------------------------------------------------------------------
Number of shares of Common Stock to be Issued
----------------------------------------------------------------------
Applicable Conversion Price
----------------------------------------------------------------------
Number of shares of Series A Preferred Stock subsequent to Conversion
----------------------------------------------------------------------
Name of Holder
By:
-------------------------------------------------------------------
Name:
-----------------------------------------------------------------
Title:
----------------------------------------------------------------
A-1
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of ___________ __, 2007, among WOLVERINE TUBE, INC., a Delaware
corporation (the "Company"), and the investors signatory hereto (each such
investor is a "Purchaser" and all such investors are, collectively, the
"Purchasers").
RECITALS
WHEREAS, the parties have agreed to enter into this Agreement in
connection with, and as a condition to the Closing under, the Preferred Stock
Purchase Agreement, dated as of January 31, 2007, among the Company and the
Purchasers (the "Purchase Agreement"); and
WHEREAS, pursuant to the Purchase Agreement and concurrently with the
execution of this Agreement, the Purchasers are acquiring from the Company
shares of the Company's Series A Convertible Preferred Stock, par value $1.00
per share (the "Preferred Stock"); and
WHEREAS, in consideration of the Purchasers' entry into the Purchase
Agreement, the Company has agreed to execute and deliver this Agreement.
AGREEMENT
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and the Purchasers agree
as follows:
1. Definitions. In addition to the terms defined elsewhere in this
Agreement, (a) capitalized terms that are not otherwise defined herein have the
meanings given to such terms in the Purchase Agreement, and (b) the following
terms have the meanings indicated:
"Demand Registration Statement" means any Registration Statement
filed or to be filed pursuant to a written Purchaser Request pursuant to
either Section 2 or Section 3.
"Holder" means any holder, from time to time, of Registrable
Securities.
"Piggy-Back Registration Statement" means a Registration Statement
filed or to be filed pursuant to which the Company has received one (1) or
more written requests to participate pursuant to Section 4.
"Primary Registration Statement" means (i) the initial Registration
Statement to be filed within forty-five (45) days of the Closing pursuant
to Section 2, (ii) any Demand Registration Statement or (ii) any other
Registration Statement filed pursuant to this Agreement other than a
Piggy-Back Registration Statement.
"Prospectus" means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rules 430A, 430B or 430C
promulgated under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by a
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference in such
Prospectus.
"Purchaser Request" means a request to register Registrable Securities
with an aggregate value of at least ten million dollars ($10,000,000),
calculated using the closing price of the Company's Common Shares on the
Trading Market on the date preceding the date of the Purchaser Request)
pursuant to requests from Purchasers under this Agreement.
"Registrable Securities" means any Preferred Stock or Common Stock
(including Underlying Shares) issued or issuable pursuant to the
Transaction Documents, together with any securities issued or issuable upon
any stock split, dividend or other distribution, recapitalization or
similar event with respect to the foregoing; provided, however, that any
Registrable Securities shall cease to be Registrable Securities when (i)
they have been sold pursuant to a registration statement under the
Securities Act, or (ii) they have been sold pursuant to Rule 144.
"Registration Statement" shall mean any registration statement to be
filed under the Exchange Act, which covers any of the Registrable
Securities pursuant to the provisions of this Agreement, including the
Prospectus included therein, all amendments and supplements to such
Registration Statement, including pre-effective and post-effective
amendments, all exhibits and all material incorporated by reference or
deemed to be incorporated by reference, if any, in such Registration
Statement.
"Rule 144," "Rule 415," "Rule 424" and "Rule 461" means Rule 144, Rule
415, Rule 424 and Rule 461, respectively, promulgated by the Commission
pursuant to the Securities Act, as such Rules may be amended from time to
time, or any similar rule or regulation hereafter adopted by the Commission
having substantially the same effect as such Rule.
"Shelf Registration Statement" means a Registration Statement filed or
to be filed with the Commission pursuant to Section 2 hereof on an
appropriate form under the Exchange Act, which covers the re-sale of some
or all of the Registrable Securities by a Holder or Holders pursuant to
Rule 415 under the Securities Act, or any similar rule that may be adopted
by the Commission, amendment and supplements to such Registration
Statement, including post- effective amendments, in each case including the
prospectus contained therein, all exhibits thereto and all material
incorporated by reference therein.
2. Primary Registration Statement. Upon:
(a) the Closing (as defined in the Purchase Agreement); or
(b) the receipt by the Company of a written Purchaser Request under
this Section y2 that the Company file a Registration Statement,
2
the Company shall prepare and file (as expeditiously as practicable, and in any
event within forty-five (45) days after the Closing or thirty (30) days after
receipt any Purchaser Request, as applicable but subject to any applicable
Blackout Periods) with the Commission a Shelf Registration Statement covering
the resale of all Registrable Securities for an offering to be made on a
continuous basis pursuant to Rule 415. Such Registration Statement shall be on
Form S-3 (except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance herewith) and shall contain (except if
otherwise directed by the Holders) the "Plan of Distribution" attached hereto as
Annex A. The Company shall, subject to any applicable Blackout Periods, use its
best efforts to cause such Registration Statement to be declared effective under
the Securities Act as promptly as possible after the filing thereof (the date of
such declaration being the "Effectiveness Date"), and in any event within one
hundred twenty (120) days of the Closing or ninety (90) days after receipt of
the Purchaser Request, as applicable, and shall use its best efforts to keep
such Registration Statement continuously effective under the Securities Act
until the earlier of (i) the fifth anniversary of the Effectiveness Date and
(ii) when all Registrable Securities covered by such Registration Statement have
been sold (the "Effectiveness Period"). The Company shall notify each Holder in
writing promptly (and in any event within one Trading Day) after receiving
notification from the Commission that a Registration Statement has been declared
effective.
3. Demand Registration.
(a) If at any time the Company shall receive a written Purchaser
Request that the Company file a registration statement under the Securities Act,
then the Company shall, within ten (10) days of the receipt thereof, give
written notice of such Purchaser Request to all Holders and, subject to the
limitations of Section 5 below, shall file (as expeditiously as practicable, and
in any event within thirty (30) days of the receipt of such request) and use its
commercially reasonable best efforts to have declared effective, a registration
statement under the Securities Act with respect to all Registrable Securities
which the Holders request to be registered within fifteen (15) days of the
mailing of such notice by the Company in accordance with Section 10(g) below.
(b) If the Holders making the Purchaser Request intend to distribute
the Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
this Section y3 and the Company shall include such information in the written
notice referred to in Section 3(a). In such event, the right of any Holder to
include such Holder's Registrable Securities in such registration shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting (unless
otherwise mutually agreed by a majority in interest of the Holders participating
in the underwriting and such Holder) to the extent provided herein. A majority
in interest of the Holders of Registrable Securities participating in the
underwriting, with the consent of the Company, which consent shall not be
unreasonably withheld, shall select the managing underwriter or underwriters in
such underwriting. All Holders proposing to distribute their securities through
such underwriting shall (together with the Company as provided in Section 6(l))
enter into an underwriting agreement in customary form with the underwriter or
underwriters so selected for such underwriting by a majority in interest of such
Holders; provided, however, that no Holder (or any
3
of their assignees) shall be required to make any representations, warranties or
indemnities except as they relate to such Holder's ownership of shares and
authority to enter into the underwriting agreement and to such Holder's intended
method of distribution, and the liability of such Holder shall be limited to an
amount equal to the net proceeds from the offering received by such Holder.
Notwithstanding any other provision of this Section y3, if the underwriter
advises a Holder that marketing factors require a limitation of the number of
shares to be underwritten, then the Holder shall so advise the Company and the
Company shall so advise all Holders of Registrable Securities which would
otherwise be underwritten pursuant hereto, and the number of shares of
Registrable Securities that may be included in the underwriting shall be
allocated as follows: (i) first, among holders of Registrable Securities that
have elected to participate in such underwritten offering, in proportion (as
nearly as practicable) to the aggregate amount of Registrable Securities held by
all such holders, until such holders have included in the underwriting all
shares requested by such holders to be included, and (ii) thereafter, among the
Company and all other holders of Common Stock, if any, that have the right and
have elected to participate in such underwritten offering, in proportion (as
nearly as practicable) to the number of shares of Common Stock the Company and
such holders seek to include in such underwriting. Without the consent of a
majority in interest of the Holders of Registrable Securities participating in a
registration referred to in Section 3(a), no securities other than Registrable
Securities shall be covered by such registration if the inclusion of such other
securities would result in a reduction of the number of Registrable Securities
covered by such registration or included in any underwriting or if, in the
opinion of the managing underwriter, the inclusion of such other securities
would adversely impact the marketing of such offering.
(c) The Company shall be obligated to effect only one (1) registration
(and only if such registration would include Registrable Securities with an
aggregate value of at least ten million dollars ($10,000,000), calculated using
the closing price of the Company's Common Shares on the Trading Market on the
date preceding the date of the Purchaser Request) pursuant to Purchaser Requests
under this Section 3 (an offering which is not consummated shall not be counted
for this purpose).
4. Piggy-Back Registrations.
(a) If (but without any obligation to do so) the Company proposes to
register (including for this purpose a registration effected by the Company for
stockholders other than the Purchasers) any of its Common Shares under the
Securities Act in connection with the public offering of such securities solely
for cash (other than a registration on Form S-8 (or similar or successor form)
relating solely to the sale of securities to participants in a Company stock
plan or to other compensatory arrangements to the extent includable on Form S-8
(or similar or successor form), or a registration on Form S-4 (or similar or
successor form)), the Company shall, at such time, promptly give each Holder
written notice of such registration. Upon the written request of each Holder
received by the Company within twenty (20) Trading Days after mailing of such
notice by the Company in accordance with Section 10(g), the Company shall use
its best efforts to cause to be registered under the Securities Act all of the
Registrable Securities that each such Holder (the "Electing Holders") has
requested to be registered. The Company shall have no obligation under this
Section 4 to make any offering of its securities, or to complete an offering of
its securities that it proposes to make.
4
(b) If the Common Shares to be registered in a registration to which
this Section 4 applies are to be sold in an underwritten offering, the right of
any Electing Holder to include such Electing Holder's Registrable Securities in
a registration pursuant to this Section 4 shall be conditioned upon such
Electing Holder's participation in such underwriting and the inclusion of such
Holder's Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Holders participating in the
underwriting and such Holder) to the extent provided herein. The Company or any
other stockholders (not including the Holders) from whom the Company proposes to
effect a registration of Common Shares pursuant to this Section 4 ("Other
Stockholders"), as the Company and such Other Stockholders shall determine,
shall select the managing underwriter or underwriters in such underwriting. All
Holders proposing to distribute their Registrable Securities through such
underwriting shall (together with the Company and the Other Stockholders as
provided in Section 6(l)) enter into an underwriting agreement in customary form
with the underwriter or underwriters so selected for such underwriting;
provided, however, that no Holder (or any of their assignees) shall be required
to make any representations, warranties or indemnities except as they relate to
such Holder's ownership of shares and authority to enter into the underwriting
agreement and to such Holder's intended method of distribution, and the
liability of such Holder shall be limited to an amount equal to the net proceeds
from the offering received by such Holder. Notwithstanding any other provision
of this Section 4, if the underwriter advises the Company that market factors
require a limitation of the number of shares to be underwritten, then the
Company shall so advise all Holders of Registrable Securities which would
otherwise be underwritten pursuant hereto, and the number of shares of
Registrable Securities that may be included in the underwriting shall be
allocated as follows: (i) first, among the Company and the Other Stockholders,
as they shall determine, until the Company and such Other Stockholders have
included in the underwriting all shares they desire to be included, and (ii)
thereafter, among all other Electing Holders that have elected to participate in
such underwritten offering, in proportion (as nearly as practicable) to the
amount of Registrable Securities each proposes to include in such underwritten
offering.
5. Blackout Period.
(a) Subject to the provisions of this Section 5(a) and a good faith
determination by a majority of the independent members of the Board of Directors
of the Company that it is in the best interests of the Company to suspend the
use of the Registration Statement, prior to the filing of a Registration
Statement or following the effectiveness of a Registration Statement (and the
filings with any international, federal or state securities commissions), the
Company, by written notice to the managing underwriter (if any) and the
Purchasers, may suspend its obligation to file the Registration Statement with
the Commission or direct the Purchasers to suspend sales of the Registrable
Securities pursuant to a Registration Statement, as the case may be, for such
times as the Company reasonably may determine is necessary and advisable (but in
no event for more than (x) an aggregate of ninety (90) days in any rolling
twelve (12)- month period commencing on the Closing Date or (y) more than sixty
(60) days in any rolling ninety (90)-day period), if any of the following events
shall occur: (1) the representative of the underwriters of an underwritten
offering of primary shares by the Company has advised the Company that the sale
of Registrable Securities pursuant to the Registration Statement would have a
material adverse effect on the Company's primary offering; (2) the majority of
the independent members of the Board of Directors of the Company shall have
determined in good faith that (A)(x)the offer or sale of any Registrable
Securities would materially impede, delay or
6
interfere with any proposed financing, offer or sale of securities, acquisition,
amalgamation, merger, tender offer, business combination, corporate
reorganization or other similar significant transaction involving the Company or
(y) after obtaining the advice of counsel, the sale of Registrable Securities
pursuant to the Registration Statement would require disclosure of non-public
material information not otherwise required to be disclosed under applicable
law, and (B) (x) the Company has a bona fide business purpose for preserving the
confidentiality of the proposed transaction, (y) disclosure would have a
material adverse effect on the Company or the Company's ability to consummate
the proposed transaction, or (z) the proposed transaction renders the Company
unable to comply with Commission requirements, in each case under circumstances
that would make it impractical or inadvisable to cause the Registration
Statement (or such filings) to become effective or to promptly amend or
supplement the Registration Statement on a post-effective basis, as applicable;
or (3) the majority of the independent members of the Board of Directors of the
Company shall have determined in good faith, after obtaining the advice of
counsel, that the Company is required by law, rule or regulation or that it is
in the best interests of the Company to supplement the Registration Statement or
file a post-effective amendment to the Registration Statement in order to
incorporate information into the Registration Statement for the purpose of (A)
including in the Registration Statement any prospectus required under Section
10(a)(3) of the Securities Act; (B) reflecting in the prospectus included in the
Registration Statement any facts or events arising after the effective date of
the Registration Statement (or of the most recent post-effective amendment)
that, individually or in the aggregate, represent a fundamental change in the
information set forth therein; or (C) including in the prospectus included in
the Registration Statement any material information with respect to the plan of
distribution not disclosed in the Registration Statement or any material change
to such information. Any period in which the Company's obligation to file the
Registration Statement or the use of the Registration Statement has been
suspended in accordance with this Section 5(a) is sometimes referred to herein
as a "Blackout Period." Upon the occurrence of any such suspension, the Company
shall use its commercially reasonable best efforts to file the Registration
Statement, to cause the Registration Statement to become effective or to
promptly amend or supplement the Registration Statement on a post-effective
basis or to take such action as is necessary to make resumed use of the
Registration Statement compatible with the Company's best interests, as
applicable, so as to permit the Purchasers to resume sales of the Registrable
Securities as soon as possible.
(b) In the case of an event that causes the Company to suspend the use
of a Registration Statement (a "Suspension Event"), the Company shall give
written notice (a "Suspension Notice") to the managing underwriter (if any) and
the Purchasers to suspend sales of the Registrable Securities and such notice
shall state generally the basis for the notice and that such suspension shall
continue only for so long as the Suspension Event or its effect is continuing
(but in no event longer than the periods specified in Section 5(a)) and the
Company is using its commercially reasonable best efforts and taking all
reasonable steps to file the Registration Statement or to terminate suspension
of the use of the Registration Statement as promptly as possible. The Purchasers
shall not effect any sales of the Registrable Securities pursuant to such
Registration Statement (or such filings) at any time after it has received a
Suspension Notice from the Company and prior to receipt of an End of Suspension
Notice (as defined below). If so directed by the Company, the Purchasers will
deliver to the Company (at the expense of the Company) all copies (other than
permanent file copies) then in the Purchasers' possession of the Prospectus
covering the Registrable Securities at the time of receipt of the
7
Suspension Notice. The Purchasers may recommence effecting sales of the
Registrable Securities pursuant to the Registration Statement (or such filings)
following further notice to such effect (an "End of Suspension Notice") from the
Company, which End of Suspension Notice shall be given by the Company to the
Purchasers and the managing underwriter in the manner described above promptly
following the conclusion of any Suspension Event and its effect.
(c) Notwithstanding any provision herein to the contrary, if the
Company shall give a Suspension Notice pursuant to this Section 5(c), the
Company agrees that it shall extend the period of time during which the
applicable Registration Statement shall be maintained effective pursuant to this
Agreement by the number of days during the period from the date of receipt by
the Purchasers of the Suspension Notice to and including the date of receipt by
the Purchasers of the End of Suspension Notice and copies of the supplemented or
amended Prospectus necessary to resume sales.
6. Primary Registration Procedures. In connection with the Company's
registration obligations hereunder with respect to a Primary Registration
Statement, the Company shall:
(a) Not less than three (3) Trading Days prior to the filing of each
Primary Registration Statement or any related Prospectus or any amendment or
supplement thereto (including any document that would be incorporated or deemed
to be incorporated therein by reference), the Company shall (i) furnish to the
Holders and Purchaser Counsel copies of all such documents proposed to be filed
(other than those incorporated or deemed to be incorporated by reference), which
documents will be subject to the review of such Holders and Purchaser Counsel,
and (ii) cause its officers and directors, counsel and independent certified
public accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of respective counsel, to conduct a reasonable investigation
within the meaning of the Securities Act. The Company shall not file such
Primary Registration Statement or any related Prospectus, amendments or
supplements thereto to which the Holders of a majority of the Registrable
Securities and Purchaser Counsel shall reasonably object.
(b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to each Primary Registration Statement and
the Prospectus used in connection therewith as may be necessary to keep such
Primary Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period in the case of a Shelf
Registration Statement, and until the end of the related offering in the case of
any other Primary Registration Statement, and prepare and file with the
Commission such additional Registration Statements in order to register for
resale under the Securities Act all of the Registrable Securities; (ii) cause
the related Prospectus to be amended or supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule 424;
(iii) respond as promptly as reasonably possible, and in any event within ten
(10) Trading Days, to any comments received from the Commission with respect to
any Registration Statement or any amendment thereto and as promptly as
reasonably possible provide the Holders and Purchaser Counsel true and complete
copies of all correspondence from and to the Commission relating to a
Registration Statement; and (iv) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all
7
Registrable Securities covered by a Primary Registration Statement during the
applicable period in accordance with the intended methods of disposition by the
Holders thereof set forth in the applicable Primary Registration Statement as so
amended or in such Prospectus as so supplemented.
(c) Notify the Holders of Registrable Securities to be sold pursuant
to a Primary Registration Statement and Purchaser Counsel as promptly as
reasonably possible, and (if requested by any such Person) confirm such notice
in writing no later than one (1) Trading Day thereafter, of any of the following
events: (i) the Commission notifies the Company whether there will be a "review"
of any Primary Registration Statement; (ii) the Commission comments in writing
on any Primary Registration Statement (in which case the Company shall deliver
to each Holder a copy of such comments and of all written responses thereto);
(iii) any Primary Registration Statement or any post-effective amendment thereto
is declared effective; (iv) the Commission or any other federal or state
governmental authority requests any amendment or supplement to a Primary
Registration Statement or Prospectus or requests additional information related
thereto; (v) the Commission issues any stop order suspending the effectiveness
of any Primary Registration Statement or initiates any Proceedings for that
purpose; (vi) the Company receives notice of any suspension of the qualification
or exemption from qualification of any Registrable Securities for sale in any
jurisdiction, or the initiation or threat of any Proceeding for such purpose; or
(vii) the financial statements included in any Primary Registration Statement
become ineligible for inclusion therein or any statement made in any Primary
Registration Statement or related Prospectus or any document incorporated or
deemed to be incorporated therein by reference is untrue in any material respect
or any revision to a Primary Registration Statement, related Prospectus or other
document is required so that it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(d) Use commercially reasonable best efforts to avoid the issuance of
or, if issued, obtain the withdrawal of (i) any order suspending the
effectiveness of any Primary Registration Statement or (ii) any suspension of
the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.
(e) Furnish to each Holder and Purchaser Counsel, without charge, at
least one conformed copy of each Primary Registration Statement and each
amendment thereto, including financial statements and schedules, and all
exhibits to the extent requested by such Person (excluding those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the Commission.
(f) Promptly deliver to each Holder and Purchaser Counsel, without
charge, as many copies of the Prospectus or Prospectuses (including each form of
prospectus) related to a Primary Registration Statement and each amendment or
supplement thereto as such Persons may reasonably request. The Company hereby
consents to the use of such Prospectus and each amendment or supplement thereto
by each of the selling Holders in connection with the offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or
supplement thereto.
8
(g) In the time and manner required by each Trading Market, if at all,
prepare and file with such Trading Market an additional shares listing
application covering all of the Registrable Securities; (ii) take all steps
necessary and use its reasonable best efforts to cause such Registrable
Securities to be approved for listing on each Trading Market as soon as
reasonably practicable thereafter; (iii) to the extent available to the Company,
provide to the Purchasers evidence of any such listing; and (iv) maintain the
listing of such Registrable Securities on each such Trading Market.
(h) Prior to any public offering of Registrable Securities pursuant to
a Primary Registration Statement, to register or qualify or cooperate with the
selling Holders and Purchaser Counsel in connection with the registration or
qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any Holder requests in
writing, keep each such registration or qualification (or exemption therefrom)
effective during the Effectiveness Period in the case of a Shelf Registration
Statement, and until the offering is completed in the case of any other Primary
Registration Statement, and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by a Primary Registration Statement; provided, however, that
the Company shall not be required to (i) take any action which would subject it
to taxation in any jurisdiction where it is not then subject to taxation, or
(ii) qualify to do business in any jurisdiction or (iii) consent to service of
process in any jurisdiction.
(i) Cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be delivered
to a transferee pursuant to a Primary Registration Statement, which certificates
shall be free, to the extent permitted by the Purchase Agreement, of all
restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Holders may request.
(j) Upon the occurrence of any event described in Section 6(c)(vii),
as promptly as reasonably possible, prepare a supplement or amendment, including
a post-effective amendment, to such a Primary Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither such Primary Registration Statement nor
its related Prospectus will contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(k) Cooperate with any due diligence investigation undertaken by the
Holders in connection with the sale of Registrable Securities pursuant to a
Primary Registration Statement, including without limitation by making available
documents and information.
(l) If Holders of a majority of the Registrable Securities being
offered pursuant to a Primary Registration Statement select underwriters for the
offering, enter into and perform its obligations under an underwriting agreement
with such underwriters, in usual and customary form, including, without
limitation, by providing customary legal opinions, comfort letters and
indemnification and contribution obligations.
9
(m) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering.
(n) Comply with all applicable rules and regulations of the
Commission.
(o) The Company shall not be required to deliver any document pursuant
to any provision of this Section 6 to any Holder that is not selling Registrable
Securities under the applicable Primary Registration Statement.
7. Piggy-Back Registration Procedures. In connection with the
Company's registration obligations hereunder with respect to a Piggy-Back
Registration Statement, the Company shall:
(a) Not less than three (3) Trading Days prior to the filing of each
Piggy-Back Registration Statement or any related Prospectus or any amendment or
supplement thereto (i) furnish to the Electing Holders and Purchaser Counsel
copies of all such documents proposed to be filed, and (ii) cause its officers
and directors, counsel and independent certified public accountants to respond
to such inquiries as shall be necessary, in the reasonable opinion of respective
counsel, to conduct a reasonable investigation within the meaning of the
Securities Act.
(b) (i) Cause the related Prospectus to be amended or supplemented by
any required Prospectus supplement, and as so supplemented or amended to be
filed pursuant to Rule 424; (ii) as promptly as reasonably possible provide the
Electing Holders and Purchaser Counsel true and complete copies of all
correspondence from and to the Commission relating to a Piggy-Back Registration
Statement; and (iii) comply in all material respects with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by a Piggy-Back Registration Statement during the
offering.
(c) Notify the Electing Holders and Purchaser Counsel as promptly as
reasonably possible, and (if requested by any such Person) confirm such notice
in writing no later than one (1) Trading Day thereafter, of any of the following
events: (i) the Commission notifies the Company whether there will be a "review"
of any Piggy-Back Registration Statement; (ii) the Commission comments in
writing on any Piggy-Back Registration Statement (in which case the Company
shall deliver to each Electing Holder a copy of such comments and of all written
responses thereto); (iii) any Piggy-Back Registration Statement or any
post-effective amendment is declared effective; (iv) the Commission or any other
federal or state governmental authority requests any amendment or supplement to
a Piggy-Back Registration Statement or related Prospectus or requests additional
information related thereto; (v) the Commission issues any stop order suspending
the effectiveness of any Piggy-Back Registration Statement or initiates any
Proceedings for that purpose; (vi) the Company receives notice of any suspension
of the qualification or exemption from qualification of any Registrable
Securities for sale in any jurisdiction, or the initiation or threat of any
Proceeding for such purpose; or (vii) the financial statements included in any
Piggy-Back Registration Statement become ineligible for inclusion therein or any
statement made in any Piggy-Back Registration Statement or related Prospectus or
any document incorporated or deemed to be incorporated therein by reference is
10
untrue in any material respect or any revision to a Piggy-Back Registration
Statement, related Prospectus or other document is required so that it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(d) Furnish to each Electing Holder and Purchaser Counsel, without
charge, at least one (1) conformed copy of each Piggy-Back Registration
Statement and each amendment thereto, including financial statements and
schedules, and all exhibits to the extent requested by such Person (excluding
those previously furnished or incorporated by reference) promptly after the
filing of such documents with the Commission.
(e) Promptly deliver to each Electing Holder and Purchaser Counsel,
without charge, as many copies of the Prospectus or Prospectuses (including each
form of prospectus) and each amendment or supplement thereto as such Persons may
reasonably request. The Company hereby consents to the use of such Prospectus
and each amendment or supplement thereto by each of the selling Electing Holders
in connection with the offering and sale of the Registrable Securities covered
by such Prospectus and any amendment or supplement thereto.
(f) Cooperate with the Electing Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be delivered to a transferee pursuant to a Piggy-Back Registration Statement,
which certificates shall be free, to the extent permitted by the Purchase
Agreement, of all restrictive legends, and to enable such Registrable Securities
to be in such denominations and registered in such names as any such Electing
Holders may request.
(g) Comply with all applicable rules and regulations of the
Commission.
(h) The Company shall not be required to deliver any document pursuant
to any provision of this Section 7, other than Section 7(e), to any Electing
Holder that proposes to sell Registrable Securities with less than $50,000 in
aggregate offering price to the public under the Piggy-Back Registration
Statement (based on the last sale price per Common Share on the Trading Market
on the Trading Day preceding the date of the written request sent by such
Electing Holder under Section 4).
(i) Upon the occurrence of any event described in Section 6(c)(vii),
as promptly as reasonably possible, prepare a supplement or amendment, including
a post-effective amendment, to such a Piggy-Back Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither such Piggy-Back Registration Statement
nor its related Prospectus will contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
8. Registration Expenses. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by the Company whether or not any Registrable Securities are sold pursuant to a
Registration Statement. The fees and
12
expenses referred to in the foregoing sentence shall include, without
limitation, (a) all registration and filing fees (including, without limitation,
fees and expenses (i) with respect to filings required to be made with any
Trading Market, and (ii) in compliance with applicable state securities or Blue
Sky laws (including, without limitation, fees and disbursements of counsel for
the Company in connection with Blue Sky qualifications or exemptions of the
Registrable Securities and determination of the eligibility of the Registrable
Securities for investment under the laws of such jurisdictions as requested by
the Holders )), (b) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities and of printing prospectuses
requested by the Holders), (c) messenger, telephone and delivery expenses, (d)
reasonable fees and disbursements of counsel for the Company and fees and
expenses of Purchaser Counsel, and (e) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. Notwithstanding the foregoing, the Holders of
such Registrable Securities shall be responsible for any brokerage or
underwriting commissions (including without limitation, transfer tax) with
respect to any disposition, sale, or transfer of Registrable Securities.
9. Indemnification
(a) Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, partners, members, agents, brokers (including brokers who
offer and sell Registrable Securities as principal as a result of a pledge or
any failure to perform under a margin call of Common Stock), investment advisors
and employees of each of them, each Person who controls any such Holder (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) and the officers, directors, partners, members, agents and employees of
each such controlling Person, to the fullest extent permitted by applicable law,
from and against any and all Losses, as incurred, arising out of or related to
any untrue or alleged untrue statement of a material fact contained in a
Registration Statement, any Prospectus, or any form of prospectus, or in any
amendment or supplement thereto, or in any preliminary prospectus, or arising
out of or related to any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein (in
the case of any Prospectus or form of prospectus or supplement thereto, in light
of the circumstances under which they were made) not misleading, except to the
extent that (i) such untrue statements or omissions are based solely upon
information regarding such Holder furnished in writing to the Company by such
Holder expressly for use therein, or to the extent that such information relates
to such Holder or such Holder's proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in a Registration Statement, such Prospectus or such form of
Prospectus or in any amendment or supplement thereto or (ii) in the case of an
occurrence of an event of the type specified in Sections 6(c)(v)-(vii), the use
by such Holder of an outdated or defective Prospectus after the Company has
notified such Holder in writing that the Prospectus is outdated or defective and
prior to the receipt by such Holder of the Advice contemplated in Section 10(f).
The Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding of which the Company is aware in connection with the
transactions contemplated by this Agreement.
(b) Indemnification by Holders. Each Holder shall, notwithstanding the
termination of this Agreement, severally and not jointly, indemnify and hold
harmless the
12
Company, its directors, officers, agents and employees, each Person who controls
the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents or employees of
such controlling Persons, to the fullest extent permitted by applicable law,
from and against all Losses (as determined by a court of competent jurisdiction
in a final judgment not subject to appeal or review) arising out of any untrue
or alleged untrue statement of a material fact contained in any Registration
Statement, any Prospectus, or any form of prospectus, or in any amendment or
supplement thereto, or in any preliminary prospectus or arising solely out of
any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein (in the case of any
Prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading to the extent, but only
to the extent, that such untrue statement or omission is contained in any
information so furnished in writing by such Holder to the Company specifically
for inclusion in such Registration Statement or such Prospectus. In no event
shall the liability of any selling Holder hereunder be greater in amount than
the dollar amount of the net proceeds received by such Holder upon the sale of
the Registrable Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall have the right to assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party and
the payment of all fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination is
not subject to appeal or further review) that such failure shall have
proximately and materially adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
or Parties unless: (i) the Indemnifying Party has agreed in writing to pay such
fees and expenses; or (ii) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (iii) the
named parties to any such Proceeding (including any impleaded parties) include
both such Indemnified Party and the Indemnifying Party, and such Indemnified
Party shall have been advised by counsel that a conflict of interest is likely
to exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an
13
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.
All fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten (10)
Trading Days of written notice thereof to the Indemnifying Party (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).
(d) Contribution. If a claim for indemnification under Section 9(a) or
9(b) is unavailable to an Indemnified Party (by reason of public policy or
otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 9(c), any reasonable attorneys' or other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 9(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 9(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of 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.
The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
14
10. Miscellaneous
(a) Remedies. In the event of a breach by the Company or by a Holder
of any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and each Holder holding more than 5,000,000 shares of Common Stock (as adjusted
for any stock split, stock dividend or other distribution, recapitalization or
similar event affecting the Common Stock) on an as-converted basis assuming
conversion of the Preferred Stock held by such Holder.
(c) No Inconsistent Agreements. Neither the Company nor any of its
Subsidiaries has entered, as of the date hereof, nor shall the Company or any of
its subsidiaries, on or after the date of this Agreement, enter into any
agreement with respect to its securities that would have the effect of impairing
the rights granted to the Holders in this Agreement or otherwise conflicts with
the provisions hereof. Except as and to the extent specified in the applicable
schedule to the Purchase Agreement, neither the Company nor any Subsidiary has
previously entered into any agreement granting any registration rights with
respect to any of its securities to any Person that have not been satisfied in
full.
(d) No Piggy-back on Registrations. Except as and to the extent
specified in Schedule 3.1(g) to the Purchase Agreement, neither the Company nor
any of its security holders (other than the Holders in such capacity pursuant
hereto) may include securities of the Company in a Primary Registration
Statement other than the Registrable Securities.
(e) Compliance. Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable to
it in connection with sales of Registrable Securities pursuant to a Registration
Statement.
(f) Discontinued Disposition. Each Holder agrees by its acquisition of
such Registrable Securities that, upon receipt of a notice from the Company of
the occurrence of any event of the kind described in Sections 6(c)(v), 6(c)(vi),
or 6(c)(vii), or Sections 7(c)(v), 7(c)(vi), or 7(c)(vii), as applicable, such
Holder will forthwith destroy all copies of the Prospectus in its possession and
discontinue disposition of such Registrable Securities under a Registration
Statement until such Holder's receipt of the copies of any supplemented
Prospectus and/or amended Registration Statement (if required pursuant to
Section 6(j) or 7(i)), or until it is advised in writing (the "Advice") by the
Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that
15
are incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph.
(g) Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section prior to 4:30 p.m. (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Agreement on a day that is not a Trading Day
or later than 4:30 p.m. (New York City time) and earlier than 11:59 p.m. (New
York City time) on any Trading Day, (c) the Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or (d)
upon actual receipt by the party to whom such notice is required to be given.
The address for such notices and communications shall be as set forth in the
Purchase Agreement.
(h) This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof. There are no restrictions,
promises, warranties or undertakings, other than those expressly set forth or
referred to herein. This Agreement supersedes all prior agreements and
undertaking among the parties hereto with respect to the subject matter hereof.
(i) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Holder. The Company may not
assign its rights or obligations hereunder without the prior written consent of
each Holder. Each Holder may assign its rights and obligations hereunder in the
manner and to the extent permitted under the Purchase Agreement.
(j) Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.
(K) GOVERNING LAW; VENUE; WAIVER OF JURY TRAIL. ALL QUESTIONS
CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK. EACH PARTY AGREES THAT ALL LEGAL
PROCEEDINGS CONCERNING THE INTERPRETATIONS, ENFORCEMENT AND DEFENSE OF THE
TRANSACTIONS CONTEMPLATED BY ANY OF THE TRANSACTION DOCUMENTS (WHETHER BROUGHT
AGAINST A PARTY HERETO OR ITS RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS,
STOCKHOLDERS, EMPLOYEES OR AGENTS) SHALL BE COMMENCED EXCLUSIVELY IN THE STATE
AND U.S. FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN.
EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE
16
EXCLUSIVE JURISDICTION OF THE STATE AND U.S. FEDERAL COURTS SITTING IN THE CITY
OF NEW YORK, BOROUGH OF MANHATTAN FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR
DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THIS
AGREEMENT), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT,
ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF
PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR
PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR
OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN
EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL
CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING
CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS
IN ANY MANNER PERMITTED BY LAW. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OF THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
IF EITHER PARTY SHALL COMMENCE AN ACTION OR PROCEEDING TO ENFORCE ANY PROVISIONS
OF THIS AGREEMENT OR ANY TRANSACTION DOCUMENT, THEN THE PREVAILING PARTY IN SUCH
ACTION OR PROCEEDING SHALL BE REIMBURSED BY THE OTHER PARTY FOR ITS REASONABLE
ATTORNEYS FEES AND OTHER REASONABLE COSTS AND EXPENSES INCURRED WITH THE
INVESTIGATION, PREPARATION AND PROSECUTION OF SUCH ACTION OR PROCEEDING.
(l) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
(m) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(n) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
17
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES TO FOLLOW]
18
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
WOLVERINE TUBE, INC.
By:
---------------------------------
Name:
-------------------------------
Title: -----------------------------------
Address for Notice:
c/o Wolverine Tube, Inc.
000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxxx
with a copy (which shall not constitute
notice) to the Company) to:
LeBoeuf, Lamb, Xxxxxx & XxxXxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxxxx X. Xxxxxx, Esq. and
Xxxxxxx X. Xxxxxxxxx, Esq.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES OF PURCHASERS TO FOLLOW]
THE ALPINE GROUP, INC.
By:________________________
Name:
Title:
Address for Notice:
c/o The Alpine Group, Inc.
Xxx Xxxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, Xxx Xxxxxx
Phone: 000-000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx
With a copy (which shall not
constitute notice) to each other
Holder and to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Facsimile No.: (000) 000-0000
Attn: Xxx X. Xxxx, Esq. and
Xxxx X. Xxxxxxx, Esq.
PLAINFIELD SPECIAL SITUATIONS MASTER
FUND LIMITED
By:________________________
Name:
Title:
c/o Plainfield Asset Management LLC
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx
With a copy (which shall not
constitute notice) to each other
Holder and to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Facsimile No.: (000) 000-0000
Attn: Xxx X. Xxxx, Esq. and
Xxxx X. Xxxxxxx, Esq.
Annex A
Plan of Distribution
The selling stockholders may, from time to time, sell any or all of
their shares of common stock on any stock exchange, market or trading facility
on which the shares are traded or in private transactions. These sales may be at
fixed or negotiated prices. The selling stockholders may use any one or more of
the following methods when selling shares:
o ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
o an exchange distribution in accordance with the rules of the applicable
exchange;
o privately negotiated transactions;
o short sales;
o broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
The selling stockholders may also engage in short sales against the
box, puts and calls and other transactions in our securities or derivatives of
our securities and may sell or deliver shares in connection with these trades.
Broker-dealers engaged by the selling stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved. Any
profits on the resale of shares of common stock by a broker-dealer acting as
principal might be deemed to be underwriting discounts or commissions under the
Securities Act. Discounts, concessions, commissions and similar selling
expenses, if any, attributable to the sale of shares will be borne by a selling
stockholder. The selling stockholders may agree to indemnify any
agent, dealer or broker-dealer that participates in transactions involving sales
of the shares if liabilities are imposed on that person under the Securities
Act.
The selling stockholders may from time to time pledge or grant a
security interest in some or all of the shares of common stock owned by them
and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares of common stock from
time to time under this prospectus after we have filed an amendment to this
prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act of 1933 amending the list of selling stockholders to include the pledgee,
transferee or other successors in interest as selling stockholders under this
prospectus.
The selling stockholders also may transfer the shares of common stock
in other circumstances, in which case the transferees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus and may sell the shares of common stock from time to time under
this prospectus after we have filed an amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933 amending
the list of selling stockholders to include the pledgee, transferee or other
successors in interest as selling stockholders under this prospectus.
The selling stockholders and any broker-dealers or agents that are
involved in selling the shares of common stock may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such
sales. In such event, any commissions received by such broker-dealers or agents
and any profit on the resale of the shares of common stock purchased by them may
be deemed to be underwriting commissions or discounts under the Securities Act.
We are required to pay all fees and expenses incident to the
registration of the shares of common stock, including the fees and disbursements
of counsel to the selling stockholders. We have agreed to indemnify the selling
stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.
The selling stockholders have advised us that they have not entered
into any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their shares of common stock, nor is there
an underwriter or coordinating broker acting in connection with a proposed sale
of shares of common stock by any selling stockholder. If we are notified by any
selling stockholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares of common stock, if required, we will file
a supplement to this prospectus. If the selling stockholders use this prospectus
for any sale of the shares of common stock, they will be subject to the
prospectus delivery requirements of the Securities Act.
The anti-manipulation rules of Regulation M under the Securities
Exchange Act of 1934 may apply to sales of our common stock and activities of
the selling stockholders.
EXHIBIT C
MANAGEMENT AGREEMENT
This Management Agreement (this "Agreement") is made and entered into
as of ___________ __, 2007, by and between The Alpine Group, Inc., a Delaware
corporation ("AGI"), and Wolverine Tube, Inc., a Delaware corporation ("WTI").
RECITALS
AGI is a principal stockholder of WTI. WTI has requested that AGI
provide to it certain strategic, consulting and administrative services on the
terms provided in this Agreement.
THEREFORE, the parties hereto agree as follows:
1. Services. AGI shall provide or cause to be provided to WTI and its
subsidiaries, if, when and to the extent requested by WTI, the services
described in Exhibit A hereto which AGI will provide with its then-current
personnel and facilities and such other services as may be agreed to by the
parties (the "Services"). The Services shall include all services provided by
any employee of AGI for the benefit of WTI, unless any such person is or becomes
directly employed by WTI.
2. Fees and Charges for Services. For all Services to be performed
hereunder, WTI shall pay to AGI a management fee in the amount of $1,250,000 per
year, payable in equal monthly installments. WTI shall reimburse and pay to AGI
all reasonable and customary out-of-pocket costs and expenses incurred by AGI in
providing the Services to WTI or any of its subsidiaries; provided, however,
that in no event shall WTI be obligated to reimburse such costs and expenses
which exceed the aggregate amount of $60,000 in any given quarter without the
approval of the Board of Directors of WTI. Any third parties whose services are
necessary in connection with the Services shall be engaged directly by, and with
the approval of, WTI.
3. Payments.
(a) AGI shall from time to time submit to WTI an invoice for all costs
and expenses associated with the Services for the applicable time period. All
invoices shall describe in reasonable detail any such costs and expenses.
(b) Survival. The provisions of this Section y3 shall survive any
termination of this Agreement.
4. Performance of Services.
(a) Degree of Care. AGI shall perform the Services with the same
degree of care, skill and prudence customarily exercised by it in respect of its
own business, operations and affairs.
(b) Certain Limitations. Each party acknowledges that the
Services shall be provided only with respect to the businesses of WTI and its
subsidiaries as such businesses exist as of the date hereof or as otherwise
mutually agreed by the parties. AGI will not be obligated to provide Services
for the benefit of entities other than WTI and its subsidiaries.
(c) Certain Information. WTI shall provide, and shall cause each
of its subsidiaries to provide, any information needed or requested by AGI from
WTI or such subsidiary, as the case may be, to perform the Services pursuant
hereto. If the failure to provide such information renders the performance of
any requested Service impossible or unreasonably difficult, AGI may, upon
reasonable notice to WTI, refuse to provide such Service.
5. Limitations on Liability and Indemnification.
(a) Limitations on Liability. Neither party shall have any
liability under this Agreement (including any liability for its own negligence)
for damages, losses or expenses suffered by the other party or its subsidiaries
as a result of the performance or non-performance of such party's obligations
hereunder, unless such damages, losses or expenses are caused by or arise out of
the willful misconduct or gross negligence of such party or a breach by such
party of any of the express provisions hereof. In no event shall either party
have any liability to the other party for indirect, incidental or consequential
damages that such other party or its subsidiaries or any third party may incur
or experience on account of the performance or non-performance of such party's
obligations hereunder, and in no event shall AGI's liability exceed the annual
fee paid to AGI hereunder.
(b) Indemnification. WTI shall indemnify, defend and hold
harmless AGI and each of its directors, employees, agents and representatives
(the "Indemnified Parties") from and against all claims, liabilities, damages,
losses and expenses (including reasonable attorneys fees and expenses) caused by
or arising out of the performance or non-performance of its obligations under
this Agreement, except to the extent arising from the willful misconduct or
gross negligence of such Indemnified Parties.
(c) Survival. The provisions of this Section y5 shall survive any
termination of this Agreement.
6. Term of Agreement. This Agreement shall become effective on the
date hereof and shall automatically terminate on the second anniversary of the
date hereof. This Agreement may be terminated by either party effective 30 days
after giving notice to the other
3
party if such other party (a) commits willful misconduct or gross negligence
with respect to any of its obligations under this Agreement or (b) is in
material breach of any term or condition of this Agreement; provided that if
such breach is susceptible to cure, the party alleged to be in material breach
may cure such breach (other than a breach of any payment obligation hereunder)
within such 30-day period.
7. Confidentiality. Each party will hold in trust and maintain
confidential and, except as required by law, not disclose to others without the
prior written approval of the other party, any information received by it from
the other party or developed or otherwise obtained by it in connection with the
performance of its obligations hereunder (the "Information"). Within 90 days
after the date of termination of this Agreement, each party will return to the
other party, or, with the written consent of the other party, destroy all
documents, data and other materials of whatever nature relating to the
businesses of the other party and its subsidiaries that it obtained in
connection with the performance of its obligations hereunder, provided that the
parties may retain any Information to the extent reasonably needed to comply
with applicable tax, accounting or financial reporting requirements or to
resolve any legal issues identified at the time of termination. The provisions
of this Section y7 shall survive any termination of this Agreement.
8. Miscellaneous.
(a) Successors and Assigns. This Agreement shall be binding upon
the parties hereto and their respective successors and permitted assigns and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns. This Agreement may not be assigned by either party hereto
to any other person without the prior consent of the other parties hereto or in
connection with the sale of such party.
(b) No Third-Party Beneficiaries. Except for the persons entitled
to indemnification pursuant to Section y5(b) hereof, each of whom is an intended
third-party beneficiary hereunder, nothing expressed or implied in this
Agreement shall be construed to give any person or entity other than the parties
hereto any legal or equitable rights hereunder.
(c) Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof.
(d) Amendment. This Agreement may not be amended except by an
instrument signed by the parties hereto.
(e) Waivers. Either party hereto may (i) extend the time for the
performance of any of the obligations or other act of the other party or (ii)
waive compliance with any of the agreements contained herein. No waiver of any
term shall be construed as a waiver of the same term, or a waiver of any other
term, of this Agreement. The failure of any party to assert any of its rights
hereunder will not constitute a waiver of any such rights.
3
(f) Severability. If any provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy, such
provision shall be deemed severable and all other provisions of this Agreement
shall nevertheless remain in full force and effect.
(g) Notices. All notices given in connection with this Agreement
shall be in writing. Service of such notices shall be deemed complete (i) if
hand delivered, on the date of delivery, (ii) if my mail, on the fourth business
day following the day of deposit in the United States mail, by certified or
registered mail, first-class postage prepaid, or (iii) if sent by FedEx or
equivalent courier service, on the next business day. Such notices shall be
addressed to the parties at the following addresses or at such other address for
a party as shall be specified by like notice (except that notices of change of
address shall be effective upon receipt):
If to AGI: The Alpine Group, Inc.
Xxx Xxxxxxxxxxx Xxxxx
Xxxxx 000
Xxxx Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
If to WTI: Wolverine Tube, Inc.
000 Xxxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
(h) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of New York, without giving
effect to the principles of conflict of laws of such State.
(i) Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which together shall constitute
but on and the same instrument.
********
IN WITNESS WHEREOF, AGI and WTI have caused this Agreement to be
executed on the date first above written.
THE ALPINE GROUP, INC.
By: ______________________________
WOLVERINE TUBE, INC.
By: ______________________________
EXHIBIT A
Services
(a) Advice and assistance with business plans and budgets
(b) Advice and assistance with respect to strategic planning and oversight
(c) Advice and assistance with respect to development and implementation
of business models
(d) Advice and assistance with respect to corporate development, including
acquisitions and divestitures
(e) Advice and assistance with respect to corporate finance, including
debt and equity financings
(f) Advice and assistance with respect to banking matters, including,
without limitation, borrowing and other credit facilities
EXHIBIT D-1
OPINION MATTERS(1) FOR LEBOEUF, LAMB, XXXXXX & XXXXXX LLP FOR
WOLVERINE TUBE, INC.
1. Wolverine Tube, Inc. (the "Company") is in good standing under the
laws of the State of Delaware.
2. Each of the Subsidiaries is in good standing under its respective
state of incorporation.
3. The Company has all requisite power and authority to execute,
deliver and perform the Agreement and each of the other Transaction Documents,
to issue, sell and deliver the Securities pursuant to the Transaction Documents,
and to carry out and perform its obligations under, and to consummate the
transactions contemplated by, the Transaction Documents.
4. All corporate action on the part of the Company, its directors and
its stockholders necessary for the authorization, execution and delivery by the
Company of the Transaction Documents, the authorization, issuance, sale and
delivery of the Securities, pursuant to the Agreement, and the consummation by
the Company of the transactions contemplated by the Transaction Documents, has
been duly taken. The Transaction Documents have been duly and validly executed
and delivered by the Company and constitute the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
their respective terms.
5. Based in part upon the representations of the Purchasers contained
in the Agreement, the Shares may be issued to the Purchasers without
registration under the Securities Act.
6. The execution, delivery and performance by the Company of, and the
compliance by the Company with the terms of, the Transaction Documents, the
issuance, sale and delivery of the Securities pursuant to the Agreement do not,
and the issuance and delivery of the Underlying Shares will not (a) conflict
with or result in a violation of any provision of law, rule or regulation known
to us to be applicable to the Company or its Subsidiaries or of the certificate
of incorporation or by-laws or other similar organizational documents of the
Company or its Subsidiaries or (b) conflict with, result in a breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or result in or permit the termination,
acceleration or modification of, any agreement, instrument, order, writ,
judgment or decree known to us to which the Company of its Subsidiaries is a
party or is subject.
7. No consent, license, permit, waiver, approval or authorization of,
or designation, declaration, registration or filing with, any court,
governmental or regulatory body or agency or self-regulatory organization is
required in connection with the valid execution,
_____________________
(1) Capitalized terms used but not defined herein shall have the respective
meanings set forth in the Preferred Stock Purchase Agreement.
delivery and performance by the Company of the Transaction Documents, or the
offer, sale, issuance or delivery of the Securities or the consummation of the
transactions contemplated by the Transaction Documents.
8. The Company is not an Investment Company within the meaning of the
Investment Company Act of 1940, as amended.
EXHIBIT D-2
OPINION MATTERS(1) FOR IN-HOUSE COUNSEL OF
WOLVERINE TUBE, INC.
1. Wolverine Tube, Inc. (the "Company") is a corporation duly
organized and validly existing under the laws of the State of Delaware. The
Company is duly qualified to conduct business and is in good standing in each
jurisdiction in which the failure to qualify could have a material adverse
effect on the Company. The Company has all requisite power and authority, and
all material governmental licenses, authorizations, consents and approvals
required to own and operate its properties and assets and to carry on its
business as now conducted.
2. Each of the Subsidiaries is a corporation duly organized under its
respective state of incorporation.
3. The execution, delivery and performance by the Company of, and the
compliance by the Company with the terms of, the Transaction Documents, the
issuance, sale and delivery of the Securities pursuant to the Agreement do not,
and the issuance and delivery of the Underlying Shares will not result in the
creation or imposition of any lien, claim or encumbrance on any of the Company's
or its Subsidiaries' assets or properties.
4. To our knowledge, since January 1, 2004, the Company has filed all
reports (the "SEC Documents") required to be filed by it under Sections 13(a)
and 15(d) of the Exchange Act. As of their respective filing dates, the SEC
Documents complied in all material respects as to form with the requirements of
the Exchange Act and the rules and regulations of the SEC promulgated
thereunder.
5. To our knowledge, there is no claim, action, suit, proceeding,
arbitration, investigation or inquiry pending or threatened, before any court,
governmental or administrative body or agency, private arbitration tribunal or
self-regulatory organization against the Company or its Subsidiaries, or any of
its officers, directors or employees (in connection with the discharge of their
duties as officers, directors and employees), or affecting any of its properties
or assets which would be required to be disclosed under the Exchange Act or in
the Schedules to the Agreement.
______________________
(1) Capitalized terms used but not defined herein shall have the respective
meanings set forth in the Preferred Stock Purchase Agreement.
EXHIBIT E-1
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement"), is made and entered into
as of the __ day of January, 2007, by and between Wolverine Tube, Inc., a
Delaware corporation ("Wolverine") and Xxxxxx X. Xxxxxxx, Xx. ("Xxxxxxx"). This
Agreement is executed on the date first written above, but shall be effective on
the effective date of the Investment, as defined below (the "Effective Date"),
and only if the Investment occurs on or before February 28, 2007.
RECITALS
WHEREAS, Plainfield Special Situations Master Fund Limited
("Plainfield") and The Alpine Group, Inc. ("Alpine") have made an investment in
Wolverine in which Plainfield and Alpine, as a group, beneficially own in excess
of 15% of the voting power of the stock of Wolverine (the "Investment"); and
WHEREAS, Xxxxxxx served as the President and Chief Executive Officer
of Wolverine until the effective date of the Investment, and entered into a
Separation Agreement with Wolverine effective as of the date hereof (the
"Separation Agreement"); and
WHEREAS, Wolverine desires to engage Xxxxxxx to provide certain
consulting services to Wolverine for a reasonable transition period following
the Investment, and Xxxxxxx is willing to provide such consulting services to
Wolverine; and
WHEREAS, the parties hereto desire to set forth their respective
rights and obligations with respect to the consulting arrangement.
NOW, THEREFORE, the parties hereto, in consideration of the mutual
promises recited herein, agree as follows:
1. Consulting Arrangement.
(a) During the term of this Agreement, at Wolverine's request, Xxxxxxx
shall provide advisory consulting services to Wolverine for up to nine (9) hours
per week, which are intended primarily to be made by telephone consultation.
However, Xxxxxxx will provide such consulting services in person from time to
time if so requested by Wolverine, provided that such travel and meeting time is
mutually agreeable to Xxxxxxx and Wolverine.
(b) Xxxxxxx'x consulting duties shall include the following specific
matters, and any other matters as may be requested by Wolverine: (a) advice and
assistance with regard to the transition of the business in connection with the
Investment, (b) promoting
relationships with Wolverine's employees, customers and constituents within the
business and financial communities, (c) continuing and developing banking
relationships and relationships with domestic and international suppliers and
customers, (d) participating in strategic planning and helping formulate
business plans; (e) assisting in efforts to arrange adequate financing to carry
out business plans; and (f) rendering consulting services to any joint venture,
subsidiary or affiliated business of Wolverine.
(c) The consulting and advisory services described in this Agreement
shall be of a type and level commensurate with the consulting and advisory
services customarily provided by senior level executives to public companies.
2. Term and Termination. The term of this Agreement shall be for a
period of fifteen (15) months commencing on the Effective Date and the services
provided by Xxxxxxx hereunder shall terminate on the 15-month anniversary of the
Effective Date, unless the term is extended by mutual agreement of the parties
or terminated earlier as provided herein.
3. Compensation and Benefits.
(a) Wolverine shall pay Xxxxxxx a fee at a monthly rate of $20,000
(the "Consulting Fee"), payable in advance on the Effective Date and on the
first day of each month thereafter during the Term of this Agreement, for a
total of fifteen (15) payments.
(b) In addition, Xxxxxxx shall earn a performance bonus of $175,000
for services rendered under this Agreement if Wolverine achieves at least 70% of
its EBITDA target applicable to the senior managers of Wolverine, including the
President and Chief Executive Officer, for the fiscal year ending December 31,
2007 (the "Performance Bonus"). If earned, such bonus shall be paid no later
than March 1, 2008.
(c) During the term of this Agreement, Wolverine shall reimburse
Xxxxxxx for reasonable travel and lodging expenses incurred at the request of
Wolverine in connection with the performance of services rendered under this
Agreement. Xxxxxxx shall submit an application for such reimbursement in a form
acceptable to Wolverine and shall provide all backup and supporting
documentation.
(d) No additional compensation or fee, other than the Consulting Fee,
the Performance Bonus or amounts payable under the Separation Agreement, shall
be payable by Wolverine to Xxxxxxx by reason of any benefit gained by Wolverine
directly or indirectly through Xxxxxxx'x efforts on Wolverine's behalf, nor
shall Wolverine be liable in any way for any additional compensation, fee,
expense reimbursement, or any other amounts unless the parties have expressly
agreed thereto in writing.
-2-
4. Independent Contractor Status.
(a) Xxxxxxx is an independent contractor and is not an agent of
Wolverine. Xxxxxxx shall not represent himself as an agent of Wolverine and may
not commit or obligate Wolverine in any way to other parties.
(b) Xxxxxxx shall have no authority, nor shall he represent himself as
having any authority, to bind Wolverine in any manner whatsoever.
(c) Federal, state and local income tax, occupational tax and/or
payroll tax of any kind shall not be withheld or paid by Wolverine on Xxxxxxx'x
behalf. Xxxxxxx shall not be treated as an employee with respect to the services
performed hereunder for federal, state and/or local tax purposes. Wolverine will
report the amounts paid to Xxxxxxx pursuant to this Agreement on IRS Form 1099
to the extent required under the Internal Revenue Code of 1986, as amended.
Xxxxxxx agrees to pay any applicable federal, state and/or local taxes required
by law due on account of the fees paid to Xxxxxxx pursuant to this Agreement.
5. Indemnification. Wolverine hereby agrees to indemnify Xxxxxxx and
hold Xxxxxxx harmless to the fullest extent permitted by applicable law against
and in respect to any and all actions, suits, proceedings, claims, demands,
judgments, costs, expenses (including reasonable attorney's fees), losses, and
damages resulting from and Xxxxxxx'x good faith performance of his duties and
obligations to Wolverine hereunder. This provision is in addition to any other
rights of indemnification Xxxxxxx may otherwise have with respect to Wolverine.
6. Confidentiality. Xxxxxxx acknowledges that he will have access to
Confidential Information (as hereinafter defined) of Wolverine. Xxxxxxx agrees
not to disclose, communicate or divulge to, or use for the direct or indirect
benefit of any person (including Xxxxxxx), firm, association or any other entity
(other than Wolverine or its affiliates) any Confidential Information other than
in the good faith performance of its duties or in response to a legal process.
"Confidential Information" includes, but is not limited to, and regardless of
whether such information has been reduced to writing or designated as
confidential, but only to the extent not generally known in the industry,
customer and vendor lists (including any prospective customers and vendors),
database, computer programs, frameworks, models, products, facilities and
methods, marketing programs, sales, financial information, marketing, training
and technical information, business methods, business policies, procedures,
techniques, research or development projects or results, trade secrets (which
includes Wolverine's customer, vendor and prospective customer and vendor
lists), systems, procedures, manuals, confidential reports, pricing policies,
business plans, computer software, intellectual property, information concerning
how Wolverine creates, develops, acquires or maintains its products and
marketing plans, targets its potential customers, and operates its businesses,
and any other information not otherwise available to the general public. If any
person (including any government agency and/or employee) requests in writing the
disclosure or release of Confidential Information, Xxxxxxx shall, to the extent
legally permissible,
-3-
immediately (a) notify Wolverine of such request so that Wolverine may pursue
any available remedies to prevent the disclosure or release of such Confidential
Information and (ii) furnish Wolverine a copy of all written materials
pertaining to such request for Confidential Information as Wolverine shall deem
appropriate.
7. Legal Fees; Costs of Enforcement. Wolverine shall reimburse
Xxxxxxx, on a current basis, for all reasonable legal fees and related expenses
incurred by Xxxxxxx in connection with this Agreement (other than the
negotiation of this Agreement), including without limitation, all such fees and
expenses, if any, incurred by Xxxxxxx in seeking to obtain or enforce any right
or benefit provided by this Agreement, regardless of whether or not Xxxxxxx'x
claim is upheld by an arbitral panel or a court of competent jurisdiction;
provided, however, Xxxxxxx shall be required to repay to Wolverine any such
amounts to the extent that an arbitral panel or a court issues a final and
non-appealable order, judgment, decree or award setting forth the determination
that the position taken by Xxxxxxx was frivolous or advanced by Xxxxxxx in bad
faith.
8. General Provisions.
(a) This Agreement shall be binding upon and inure to the benefit of
the parties and their successors and permitted assigns. Xxxxxxx'x rights and
obligations under this Agreement may not be assigned without prior written
consent of Wolverine. Wolverine may not assign its rights and obligations
hereunder without the prior written consent of Xxxxxxx, except to a successor to
all or substantially all of the assets of Wolverine and then only if such
assignee promptly delivers to Xxxxxxx a written assumption of the obligations
hereunder.
(b) All matters affecting this Agreement, including the validity
thereof, are to be governed by, and interpreted and construed in accordance
with, the laws of the State of Alabama applicable to contracts executed in and
to be performed in that State.
(c) This Agreement, together with the Separation Agreement, shall
constitute the sole agreement between the parties hereto with respect to the
subject matter hereof and shall supersede any and all prior agreements or
understandings relating to the subject matter hereof. No change or amendment to
this Agreement shall be binding unless in writing and signed by both parties.
(d) This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(e) The headings in this Agreement are for reference only, and shall
not affect the meaning or interpretation of this Agreement.
(f) In the event that any provision of this Agreement shall be
declared to be invalid, illegal or unenforceable, such provision shall survive
to the extent it is not so declared, and the validity, legality and
enforceability of the other provisions hereof shall
-4-
not in any way be affected or impaired thereby, unless such action would
substantially impair the benefits to any party of the remaining provisions of
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be signed as of the date first written above.
WOLVERINE TUBE, INC.
By:____________________
CONSULTANT
_______________________
Xxxxxx X. Xxxxxxx, Xx.
-5-
EXHIBIT E-2
-----------
SEPARATION AGREEMENT BETWEEN
WOLVERINE TUBE, INC. AND XXXXXX X. XXXXXXX, XX.
This Separation Agreement (this "Agreement") between Wolverine Tube,
Inc. ("Wolverine") and Xxxxxx X. Xxxxxxx, Xx. ("Xxxxxxx") controls the terms of
the severance of the relationship between the two parties and their respective
rights and obligations to each other. This Agreement is executed on the dates
shown by the signatures below, but shall be effective on the effective date of
the Investment, as defined below (the "Effective Date"), and only if the
Investment occurs on or before February 28, 2007.
Recitals
WHEREAS, Plainfield Special Situations Master Fund Limited
("Plainfield") and The Alpine Group, Inc. ("Alpine") have agreed to make an
investment in Wolverine in which Plainfield and Alpine, as a group, would
beneficially own in excess of 15% of the voting power of the stock of Wolverine
(the "Investment"); and
WHEREAS, in connection with and contingent upon the closing of the
Investment, Xxxxxxx and Wolverine wish to sever the employee-employer
relationship between the two parties on amicable terms and in a manner
beneficial to and respectful to the desires of both parties; and
WHEREAS, Xxxxxxx and Wolverine previously have entered into a 2002
Change in Control, Severance and Non-Competition Agreement, effective as of July
12, 2002, as amended (the "2002 Change in Control Agreement"); and
WHEREAS, the Investment will constitute a Change in Control of
Wolverine for purposes of the 2002 Change in Control Agreement; and
WHEREAS, in order to avoid any dispute that could arise under the 2002
Change in Control Agreement in connection with the Investment and the
transactions contemplated thereby, the parties have agreed to replace and
supersede certain provisions of the 2002 Change in Control Agreement, contingent
upon closing of the Investment; and
WHEREAS, on or about the date of the closing of the Investment,
Xxxxxxx shall enter into a Consulting Agreement with Wolverine to provide
consulting services for fifteen (15) months (the "Consulting Agreement");
NOW, THEREFORE, in consideration of the recitals and mutual covenants
and agreements set forth below, the parties, each intending to be legally bound,
agree as follows:
1. Resignation of Employment. Xxxxxxx hereby voluntarily resigns his
employment with Wolverine and all its subsidiaries effective immediately
following the closing of the Investment (the "Resignation Date"). If for any
reason the Investment does not occur by February 28, 2007, this Agreement shall
be null and void, Xxxxxxx'x resignation shall be deemed not to have been
tendered, and the 2002 Change in Control Agreement shall continue in full force
as in effect on the date immediately prior to the execution of this Agreement.
2. Compensation, Benefits, and Other Consideration. The parties agree
that, immediately upon the closing of the Investment, and subject to Section 5
of this Agreement, Section 1 of the 2002 Change in Control Agreement (entitled
"Termination of Employment") shall be superseded and will have no further force
or effect, and the parties will have no further rights and/or obligations
thereunder. In exchange for the Release provided to Wolverine by Xxxxxxx as
referenced in Section 8 of this Agreement, Wolverine hereby agrees to provide
Xxxxxxx with consideration consisting of the following:
(a) All stock options, restricted stock and other equity awards
granted by Wolverine and held by Xxxxxxx as of the Resignation Date, to the
extent not already vested by their terms, shall become immediately vested and
exercisable as of the Resignation Date. The value, if any, attributable to the
acceleration of vesting of such equity awards that constitutes a parachute
payment to Xxxxxxx under Sections 280G or 4999 of the Internal Revenue Code of
1986, as amended ("Code"), as determined under Section 3 of this Agreement is
referred to herein as the "Equity Parachute Value."
(b) On or before the Resignation Date, Wolverine shall deposit into a
rabbi trust for the benefit of Xxxxxxx, a lump sum cash severance payment (the
"Severance Payment") equal to (i) $1,480,000, minus (ii) the Equity Parachute
Value. Provided that Xxxxxxx shall have signed the Release attached hereto as
Appendix A and not revoked such Release during the seven-day revocation period,
the Severance Payment shall be paid to Xxxxxxx out of the rabbi trust on the day
following the six (6) month anniversary of the Resignation Date.
(c) For a period of three (3) years after the Resignation Date,
Wolverine shall make available to Xxxxxxx medical and disability benefits
substantially similar to those that Xxxxxxx was receiving or entitled to receive
immediately prior to the Resignation Date, and no less favorable than those in
which the senior executive management team of Wolverine shall be eligible to
participate during such period, and if Xxxxxxx shall choose to participate in
such benefit programs, he shall pay the full "phantom cost" (i.e., the employee
and employer portion of the costs) of his participation in such programs as
determined by Wolverine's employee benefits firm for the period of his
participation. Beginning at the end of such three-year period, Xxxxxxx shall
have rights to continue medical insurance coverage under the Consolidated
Omnibus Budget Reconciliation Act of 1985 ("COBRA").
2
(d) For a period of six (6) years after the Resignation Date, Xxxxxxx
shall be entitled to director and officer insurance coverage for his acts and
omissions while serving as an officer and director of Wolverine on a basis no
less favorable to him than the coverage provided over such six-year period to
the then-current officers and directors of Wolverine.
(e) Wolverine shall continue to satisfy in full any currently existing
or hereafter arising indemnification obligations to Xxxxxxx (whether arising by
law, Wolverine's bylaws or pursuant to any separate indemnification agreement
between Wolverine and Xxxxxxx).
(f) Wolverine shall honor and pay any and all bonus and success share
monies achieved on account of 2006 performance of Wolverine to Xxxxxxx that have
not already been paid, consistent with and at the same time as amounts are
awarded to other participants of these programs, up to a maximum of $55,000.
Nothing in this Agreement affects any vested rights Xxxxxxx has in any
retirement, welfare or benefit plans, programs or policies of Wolverine as of
the Resignation Date.
Xxxxxxx agrees and acknowledges that the aggregate amount of cash
payable pursuant to this Agreement and the Consulting Agreement shall not exceed
$3,085,000 (the "Aggregate Amount"). The Aggregate Amount does not apply to (i)
vested rights Xxxxxxx has in any retirement, welfare or benefit plan, (ii)
director and officer insurance coverage (or amounts payable thereunder), (iii)
Wolverine's indemnification obligations, (iv) legal fees or (v) reimbursement of
travel-related expenses incurred at Wolverine's request, in each case to the
extent such amounts or rights are provided for in the Separation Agreement or
the Consulting Agreement. Notwithstanding the foregoing, the Aggregate Amount
shall not apply if the provisions of the 2002 Change of Control Agreement are
reinstated in accordance with Section 5 of this Agreement.
3. Golden Parachute Considerations. In the event it shall be
determined that any payments and/or benefits would be subject to the excise tax
imposed by Section 4999 of Code or to any similar tax imposed by federal, state
or local law, or any other revenue system to which Xxxxxxx may be subject, or
any interest or penalties with respect to that tax (that tax or those taxes,
together with any interest and penalties, may be hereafter referred to as the
"Excise Tax"), then, Xxxxxxx shall be solely responsible for paying such Excise
Tax and Wolverine shall have no liability to Xxxxxxx for such Excise Tax.
4. Secrecy, Non-Solicitation and Non-Competition. Following the
Resignation Date, Xxxxxxx agrees to adhere to the secrecy, non-solicitation and
non-competition restrictions and equitable relief provisions contained in
Section 2 of the 2002 Change in Control Agreement, which are hereby incorporated
into this Agreement by reference (other than Section 2(d)(i)). Notwithstanding
the foregoing, the parties agree that Section 2(d)(i) of the 2002 Change in
Control Agreement is hereby deleted in its entirety. In consideration of
Xxxxxxx'x promises under this Section 4, Wolverine shall
3
pay to Xxxxxxx a non-compete and non-solicitation fee equal to $1,035,000 (the
"Non-compete and Non-solicitation Fee"). On or before the Resignation Date,
Wolverine shall pay the Non-compete and Non-solicitation Fee into a rabbi trust
for the benefit of Xxxxxxx. The Non-compete and Non-solicitation Fee shall be
paid to Xxxxxxx out of the rabbi trust on the day following the six (6) month
anniversary of the Resignation Date.
5. Termination of 2002 Change in Control Agreement. The parties hereto
agree that, except for Xxxxxxx'x obligation to adhere to the secrecy,
non-solicitation and non-competition and equitable relief provisions under
Section 4 above, and except as provided in the following sentence, the 2002
Change in Control Agreement shall be terminated as of the Resignation Date and
Xxxxxxx shall not be due any payments or benefits under the 2002 Change in
Control Agreement. Notwithstanding the foregoing, if after the Resignation Date,
Wolverine defaults in the timely payment or provision to Xxxxxxx of any amount
or benefit under this Agreement, after notice by Xxxxxxx and failure by
Wolverine to cure such default within three (3) business days of such notice by
Xxxxxxx, this Agreement (other than Section 9(b) hereof) shall be null and void
and the provisions of the 2002 Change in Control Agreement shall be reinstated
in full force and effect, retroactive to the date immediately prior to the
Resignation Date, such that Xxxxxxx shall be deemed to have voluntarily resigned
following a Change in Control under Section 1(b) of the 2002 Change in Control
Agreement; provided, however, that the reinstatement of the 2002 Change in
Control Agreement shall not result in any duplication of benefits under this
Agreement.
6. Cooperation Regarding Disclosure of Termination. The parties hereto
agree that they shall cooperate in good faith to reach mutual agreement with
respect to any disclosures regarding Xxxxxxx'x termination of employment,
including (i) the timing of any internal announcement, and (ii) the content of
any press release or required SEC filing.
7. Non-disparagement. Subject to the obligation required by law to
provide truthful testimony in governmental inquires or proceedings and the
obligation to provide truthful testimony in legal proceedings, (a) the officers,
directors and senior management of Wolverine shall not do or say anything that
criticizes or disparages Xxxxxxx, personally or professionally or in any other
respect, and (b) Xxxxxxx agrees not to do or say anything that (i) criticizes or
disparages the management, practices or products of Wolverine or any of its
affiliates, or (ii) disrupts or impairs the normal, ongoing business operations
of Wolverine or any of its affiliates.
8. Release of Claims. On the Effective Date, the parties hereto shall
sign the Mutual Release of Claims in the form attached hereto as Appendix B.
9. Legal Fees; Costs of Enforcement.
(a) In addition, Wolverine shall reimburse Xxxxxxx, on a current
basis, for all reasonable legal fees and related expenses incurred by Xxxxxxx in
connection with this Agreement from and after the Resignation Date, including
without limitation, all such
4
fees and expenses, if any, incurred by Xxxxxxx in seeking to obtain or enforce
any right or benefit provided by this Agreement, in each case, regardless of
whether or not Xxxxxxx'x claim is upheld by an arbitral panel or a court of
competent jurisdiction; provided, however, Xxxxxxx shall be required to repay to
Wolverine any such amounts to the extent that an arbitral panel or a court
issues a final and non-appealable order, judgment, decree or award setting forth
the determination that the position taken by Xxxxxxx was frivolous or advanced
by Xxxxxxx in bad faith.
(b) In the event that the 2002 Change in Control Agreement shall be
reinstated pursuant to Section 5 of this Agreement, Wolverine shall reimburse
Xxxxxxx, on a current basis, for all reasonable legal fees and related expenses,
if any, incurred by Xxxxxxx in seeking to obtain or enforce any right or benefit
provided by the 2002 Change in Control Agreement, in each case, regardless of
whether or not Xxxxxxx'x claim is upheld by an arbitral panel or a court of
competent jurisdiction; provided, however, Xxxxxxx shall be required to repay to
Wolverine any such amounts to the extent that an arbitral panel or a court
issues a final and non-appealable order, judgment, decree or award setting forth
the determination that the position taken by Xxxxxxx was frivolous or advanced
by Xxxxxxx in bad faith.
10. Withholding. Payments to Xxxxxxx of all compensation contemplated
under this Agreement shall be subject to all applicable legal requirements with
respect to the withholding of taxes and similar deductions.
11. Notices. Any notice hereunder by either party to the other shall
be given in writing by personal delivery or certified mail, return receipt
requested. If addressed to Xxxxxxx, the notice shall be delivered or mailed to
Xxxxxxx at the address first set forth below, or if addressed to Wolverine, the
notice shall be delivered or mailed to 000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 0000,
Xxxxxxxxxx, Xxxxxxx 00000, or such address as Wolverine or Xxxxxxx may designate
by written notice at any time or from time to time to the other party. A notice
shall be deemed given, if by personal delivery, on the date of such delivery or,
if by certified mail, on the date shown on the applicable return receipt.
12. No Waiver. Wolverine and Xxxxxxx agree that any failure of one
party to demand rigid adherence to one or more of the provisions of this
Agreement, on one or more occasions, shall not be construed as a waiver,
estoppel, or release, nor shall any such failure ever deprive either party of
the right to insist upon strict compliance.
13. Code Section 409A. Wolverine and Xxxxxxx intend for all payments
and benefits under this Agreement to be either outside the scope of Section 409A
of the Code or to comply with its requirements as to timing of payments.
Accordingly, to the extent applicable, this Agreement shall at all times be
operated in accordance with the requirements of Section 409A of the Code, as
amended, and the regulations and rulings thereunder, including any applicable
transition rules. Wolverine and Xxxxxxx shall take action, or refrain from
taking any action, with respect to the payments and benefits under this
Agreement that is reasonably necessary to comply with Section 409A.
Notwithstanding any provision in this Agreement to the contrary, if the payment
of any
5
compensation or benefit hereunder would be subject to additional taxes and
interest under Section 409A of the Code because the timing of such payment is
not delayed as provided in Section 409A(a)(2)(B) of the Code, then any such
payment or benefit that Xxxxxxx would otherwise be entitled to during the first
six (6) months following the date of Xxxxxxx'x termination of employment shall
be accumulated and paid or provided, as applicable, on the date that is six (6)
months and one day after the date of Xxxxxxx'x termination of employment (or if
such date does not fall on a business day of Wolverine, the next following
business day of Wolverine), or such earlier date upon which such amount can be
paid or provided under Section 409A of the Code without being subject to such
additional taxes and interest. The preceding sentence shall apply only to the
extent required to avoid Xxxxxxx'x incurrence of any additional tax or interest
under Section 409A of the Code or the regulations or Treasury guidance
promulgated thereunder. 14. Severability. In the event that any provision of
this Agreement shall be declared to be invalid, illegal or unenforceable, such
provision shall survive to the extent it is not so declared, and the validity,
legality and enforceability of the other provisions hereof shall not in any way
be affected or impaired thereby, unless such action would substantially impair
the benefits to any party of the remaining provisions of this Agreement.
15. Modification. No modification, amendment, or waiver of any of the
provisions of this Agreement shall be effective unless made in writing
specifically referring to this Agreement and signed by each of the parties.
16. Governing Law. All matters affecting this Agreement, including the
validity thereof, are to be governed by, and interpreted and construed in
accordance with, the laws of the State of Alabama applicable to contracts
executed in and to be performed in that State. Nothing in this agreement shall
affect the rights of either party under state or federal laws affecting
employment.
17. Entire Agreement. This instrument, and the Consulting Agreement,
constitutes the entire agreement between the parties with respect to the subject
matter hereof. Except as specifically referenced herein, all prior agreements,
representations, and promises between the parties with respect to the subject
matter hereof are superseded by this Agreement.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6
IN WITNESS WHEREOF, Xxxxxxx and Wolverine have caused this Agreement
to be executed on this the ___ day of _________, 200_, both intending to be
fully and legally bound.
WOLVERINE TUBE, INC.
By: ________________________________
Its: _______________________________
____________________________________
XXXXXX X. XXXXXXX, XX.
Address for Notice:
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Plainfield Special Situations Master Fund Limited and The Alpine
Group, Inc. have caused this Agreement to be executed on this the ___ day of
________, 2007, indicating their acknowledgement of and concurrence with the
terms hereof, as substantial shareholders of Wolverine from and after the
Investment.
PLAINFIELD SPECIAL SITUATIONS MASTER
FUND LIMITED
By: ________________________________
Its: _______________________________
THE ALPINE GROUP, INC.
By: ________________________________
Its: _______________________________
7
Appendix A
----------
Mutual Release of Claims
This Release is granted effective as of the ____ day of February,
2007, by Wolverine Tube, Inc. ("Wolverine") and Xxxxxx X. Xxxxxxx, Xx.
("Xxxxxxx"). This is the Release referred to that certain Separation Agreement
dated as of _____________, 200_ by and between Wolverine and Xxxxxxx (the
"Separation Agreement"). Each of the parties gives this Release in consideration
of the other's promises and covenants as recited in the Separation Agreement,
with respect to which this Release is an integral part.
(a) Release of Wolverine. Xxxxxxx, for himself, his successors,
assigns, attorneys, and all those entitled to assert his rights, now and forever
hereby releases and discharges Wolverine and its respective officers, directors,
stockholders, trustees, employees, agents, parent corporations, subsidiaries,
affiliates, estates, successors, assigns and attorneys (the "Released Parties"),
from any and all claims, actions, causes of action, sums of money due, suits,
debts, liens, covenants, contracts, obligations, costs, expenses, damages,
judgments, agreements, promises, demands, claims for attorney's fees and costs,
or liabilities whatsoever, in law or in equity, which Xxxxxxx ever had or now
has against the Released Parties, relating to or arising out of Xxxxxxx'x
employment, or termination of employment, or service as a director, with
Wolverine, whether known or unknown, including but not limited to claims for
employment discrimination under federal or state law, except as provided in
paragraph (b) of this Release; claims arising under Title VII of the Civil
Rights Act, 42 U.S.C. ss. 2000(e), et seq. or the Americans With Disabilities
Act, 42 U.S.C. ss. 12101 et seq.; claims for statutory or common law wrongful
discharge, including any claims arising under the Fair Labor Standards Act, 29
U.S.C. ss. 201 et seq.; claims for attorney's fees, expenses and costs; claims
for defamation; claims for wages or vacation pay; claims for benefits, including
any claims arising under the Employee Retirement Income Security Act, 29 U.S.C.
ss. 1001, et seq. Notwithstanding the foregoing, nothing herein shall release
(i) Wolverine of its obligations to Xxxxxxx under the Separation Agreement or
the Consulting Agreement, (ii) any indemnification obligations to Xxxxxxx under
Wolverine's bylaws, articles of incorporation, Alabama law or otherwise,
including the indemnification obligations described in the Separation Agreement,
(iii) any rights or claims that Xxxxxxx may have in his capacity as a
stockholder of Wolverine or as a trustee under any employee benefit plan of
Wolverine, or (iv) any rights that Xxxxxxx may have under Wolverine's benefit
plans and programs.
(b) Release of Claims Under Age Discrimination in Employment Act.
Without limiting the generality of the foregoing, Xxxxxxx agrees that by
executing this Release, he has released and waived any and all claims he has or
may have as of the date of this Release for age discrimination under the Age
Discrimination in Employment Act, 29 U.S.C. ss. 621, et seq. It is understood
that Xxxxxxx is advised to consult with an attorney prior to executing this
Release; that he in fact has consulted a knowledgeable, competent attorney
regarding this Release; that he may, before executing this Release, consider
this Release for a period of twenty-one (21) calendar days; and that the
consideration he receives for this Release is in addition to amounts to which he
was already entitled. It is further understood that this Release is not
effective until seven (7) calendar days after the execution of this Release and
that Xxxxxxx may revoke this Release within seven (7) calendar days from the
date of execution hereof.
Xxxxxxx agrees that he has carefully read this Release and is signing
it voluntarily. Xxxxxxx acknowledges that he has had twenty-one (21) days from
receipt of this Release to review it prior to signing or that, if Xxxxxxx is
signing this Release prior to the expiration of such 21-day period, Xxxxxxx is
waiving his right to review the Agreement for such full 21-day period prior to
signing it. Xxxxxxx has the right to revoke this Release within seven (7) days
following the date of its execution by him. However, if Xxxxxxx revokes this
Release within such seven (7) day period, no severance benefits will be payable
to him under Section 2 of the Separation Agreement and he shall return to
Wolverine any such payment received prior to that date.
XXXXXXX HAS CAREFULLY READ THIS RELEASE AND ACKNOWLEDGES THAT IT
CONSTITUTES A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS AGAINST WOLVERINE
UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT. XXXXXXX ACKNOWLEDGES THAT HE HAS
HAD A FULL OPPORTUNITY TO CONSULT WITH AN ATTORNEY OR OTHER ADVISOR OF HIS
CHOOSING CONCERNING HIS EXECUTION OF THIS RELEASE AND THAT HE IS SIGNING THIS
RELEASE VOLUNTARILY AND WITH THE FULL INTENT OF RELEASING WOLVERINE FROM ALL
SUCH CLAIMS.
(c) Release of Xxxxxxx. Wolverine, for itself and its parent
corporations, subsidiaries, successors and assigns, and all those entitled to
assert its rights, now and forever hereby releases and discharges Xxxxxxx from
any and all claims, actions, causes of action, sums of money due, suits, debts,
liens, covenants, contracts, obligations, costs, expenses, damages, judgments,
agreements, promises, demands, claims for attorney's fees and costs, or
liabilities whatsoever, in law or in equity, which Wolverine ever had or now has
against Xxxxxxx relating to or arising out of Xxxxxxx'x employment, or
termination of employment, or service as director, with Wolverine, whether known
or unknown, except with respect to intentional violation of law. Notwithstanding
the foregoing, nothing herein shall release Xxxxxxx of (i) his obligations to
Wolverine or its successors or affiliates under this Release, or (ii) any other
contractual obligations between Xxxxxxx and Wolverine or its successors or
affiliates, subject to the terms thereof; provided, however, that nothing in
this Agreement shall prevent Wolverine from bringing a claim: (A) that arises
from any intentional misconduct engaged in by Xxxxxxx as an employee, officer or
director of Wolverine, including, but not limited to, misappropriation, theft or
fraud; (B) for material breach of fiduciary duty as an employee, officer, or
director of Wolverine; or (C) that arises for repayment under Section 304 of the
Xxxxxxxx-Xxxxx Act of 2002.
(d) Right to Defend Actions. The parties hereto acknowledge and agree
that no waiver or release contained in this Release shall impair any party's
rights to defend itself or himself from any allegations or charges in the event
that any claim or action is
initiated by the other party; provided that, a party's right to assert
counterclaims and cross-claims relating to matters otherwise waived or released
pursuant to this Release shall be limited to the subject matter of such
allegation or charge brought by the other party.
This Release is final and binding and may not be changed or modified.
Date: ______________________ WOLVERINE TUBE, INC.
By: _________________________________
Its: ________________________________
Date: ______________________ _____________________________________
XXXXXX X. XXXXXXX, XX.
EXHIBIT F
---------
WOLVERINE TUBE, INC.
000 XXXXXXX XXXXXX XXXX, XXXXX 0000
XXXXXXXXXX, XXXXXXX 00000
[_____________], 2007
Golden Dragon Precise Copper Tube Group, Inc.
00 Xxxxx, Xxxxxxxx X
Xxxxxx Xxxxx Xxxxxxx
1518 Minsheng Road
Pudong New Area, Shanghai
PR China 200135
Attn: Xx. Xxx Xxxxxx
Ladies and Gentlemen:
This letter is being delivered to you in connection with the Preferred
Stock Purchase Agreement, dated January 31 2007, among Wolverine Tube, Inc. (the
"Company") and the other parties named therein, and the transactions
contemplated thereby (as described therein, the "Transactions"). This is to
confirm that the Transactions do not and would not constitute a change in
control of the Company for purposes of triggering a right to terminate the
Extended Cooperative Supply Agreement, dated December 18, 2006, between you and
the Company.
Kindly sign this letter in the space provided below and return a copy
to the Company.
Very truly yours,
WOLVERINE TUBE, INC.
By:
---------------------------------
Name:
Title:
Acknowledged and agreed to:
GOLDEN DRAGON PRECISE COPPER TUBE GROUP, INC.
By: -------------------------------------
Name:
Title:
EXHIBIT G
WOLVERINE TUBE, INC.
VOTING AGREEMENT
This Voting Agreement (the "Agreement") is made as of ___________ __,
2007 (the "Effective Date"), by and among Wolverine Tube, Inc., a Delaware
corporation (the "Company") and the holders of shares of the Company's Series A
Convertible Preferred Stock, par value $1.00 per share (the "Series A Preferred
Stock") listed on Exhibit A (each such holder of Series A Preferred Stock is
hereinafter referred to as an "Investor").
RECITALS
WHEREAS, the Company and the Investors have entered into a Series A
Preferred Stock Purchase Agreement (the "Purchase Agreement") dated as of
January __, 2007 pursuant to which the Company has agreed to issue and sell to
the Investors and the Investors have agreed to purchase from the Company shares
of Series A Preferred Stock;
WHEREAS, the Certificate of Designations of the Series A Preferred
Stock provides that each holder of Series A Preferred Stock will be entitled to
vote on all matters on which holders of the Company's common stock, par value
$0.01 per share (the "Common Stock"), are entitled to vote, and will be entitled
to a number of votes in respect of the shares of Series A Preferred Stock owned
by it equal to the number of shares of Common Stock into which such shares of
Series A Preferred Stock are convertible as of the record date for determination
of stockholders entitled to vote on such matter; and
WHEREAS, in connection with the transactions contemplated by the
Purchase Agreement, the Company and the Investors desire to enter into this
Agreement for the purpose of setting forth the terms and conditions pursuant to
which the Investors shall vote their shares of the Company's voting stock;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto hereby agree as follows:
1. Series A Preferred Stock Class Voting.
1.1 Until the earlier of April 1, 2009 (the "Maturity Date") or
the redemption and cancellation of the 10.5% Senior Notes issued by the Company
(the "10.5% Notes"), no Investor (taken together with any other Investor with
whom such Investor could be considered a "person" (as such term is used in
Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended))
shall be entitled to cast, and shall not cast, any Votes in respect of Voting
Securities owned by it in excess of 49% of the Total Voting Power. Any reduction
in the number of Votes that the Investors may cast shall be applied to each
Investor pro rata in proportion to the number of Votes such Investor would be
entitled to cast in the absence of such restriction.
(a) For purposes of this Agreement:
(i) "Voting Securities" means Common Stock, Series A
Preferred Stock and all other securities of the Company that entitle the holders
thereof to vote on all matters on which holders of Common Stock are entitled to
vote;
(ii) "Votes" shall mean votes entitled to be cast in the
election of directors of the Company or other matters on which holders of Common
Stock are entitled to vote; and
(iii) "Total Voting Power" shall mean, calculated at a
particular point in time, the aggregate Votes represented by all then
outstanding Voting Securities.
1.2 Omitted.
1.3 Upon demand by the Company at any time after the record date
for determination of stockholders entitled to vote on any matter, each Investor
shall certify to the Company in writing the number of shares of Common Stock
(including any shares of Common Stock acquired upon conversion of the Series A
Preferred Stock), the number of shares of Series A Preferred Stock and the
number of other Voting Securities owned by such Investor on such record date. No
later than 3 days following such certification, but in any event prior to the
applicable stockholder vote, the Company shall advise each Investor of the
maximum number of Votes that such Investor may cast in such stockholder vote.
2. Transfer and Encumbrance.
2.1 Each Investor agrees that, until the earlier of the Maturity
Date or the redemption and cancellation of the 10.5% Notes, it will not, without
the prior written consent of the Company, voluntarily transfer, sell, offer,
pledge or otherwise dispose of (including by way of merger or otherwise) or
encumber ("Transfer"), in any one transaction or series of transactions to a
single transferee or group of transferees known to such Investor to be
affiliated, Voting Securities entitled to cast 10% or more of the Total Voting
Power (before application of the limitation in Section 1.1) unless each
transferee executes and delivers to the Company a joinder agreement
substantially in the form of Exhibit B hereto.
3. Miscellaneous.
3.1 No Revocation. The voting agreements contained herein may not
be revoked during the term of this Agreement except by mutual agreement of the
parties hereto.
3.2 Termination Events. This Agreement shall terminate upon the
earlier of the Maturity Date or the redemption and cancellation of all
outstanding 10.5% Notes.
3.3 Entire Agreement. This Agreement, the Purchase Agreement and
the Certificate of Designations of the Series A Preferred Stock constitute the
entire agreement between the parties hereto pertaining to the subject matter
hereof.
3.4 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the
2
parties. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.
3.5 Amendments and Waivers. Any term of this Agreement may be
amended or waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of each of the
Company and each Investor (to the extent such Investor holds Voting Securities
at the time such amendment or waiver is sought). Any amendment or waiver
effected in accordance with this Section 3.5 shall be binding upon the Company
and the Investors, and each of their respective successors and assigns.
3.6 Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section 3.6 prior to 5:00 p.m. (New York City
time) on a business day, (ii) the business day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number specified in this Agreement later than 5:00 p.m. (New York City time) on
any date and earlier than 11:59 p.m. (New York City time) on such date, (iii)
the business day following the date of sending, if sent by nationally recognized
overnight courier service, specifying next business day delivery, or (iv) upon
actual receipt by the party to whom such notice is required to be given if
delivered by hand. The address for such notices and communications shall be as
follows:
(a) For the Company:
Wolverine Tube, Inc.
000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
LeBoeuf, Lamb, Xxxxxx & XxxXxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxx, Esq.
Xxxxxxx X. Xxxxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
(b) For any Purchaser:
To the address set forth under such
Purchaser's name on the signature pages
attached hereto
3
with a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxx, Esq. and
Xxxx X. Xxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
3.7 Severability. If one or more provisions of this Agreement are
held to be unenforceable illegal or invalid under applicable law in whole or in
part for any reason, the parties agree to renegotiate such provision in good
faith. In the event that the parties cannot reach a mutually agreeable and
enforceable replacement for such provision, then (a) such provision shall be
stricken and excluded from this Agreement, (b) the balance of the Agreement
shall be interpreted as if such provision were so stricken and excluded and (c)
the balance of the Agreement shall be legal, enforceable and valid in accordance
with its terms.
3.8 Governing Law. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
New York, without giving effect to principles of conflicts of law.
3.9 Counterparts. This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument. This Agreement may be executed by
facsimile signatures or other means of electronic transmission.
3.10 Headings. The headings used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
3.11 Jury Trial Waiver. To the fullest extent permitted by law,
and as separately bargained-for-consideration, each party hereby waives any
right to trial by jury in any action, suit, proceeding or counterclaim of any
kind arising out of or relating to this Agreement.
3.12 General Interpretation. The terms of this Agreement have
been negotiated by the parties hereto and the language used in this Agreement
shall be deemed to be the language chosen by the parties hereto to express their
mutual intent. This Agreement shall be construed without regard to any
presumption or rule requiring construction against the party causing such
instrument or any portion thereof to be drafted, or in favor of the party
receiving a particular benefit under this Agreement. No rule of strict
construction will be applied against any party hereto.
3.13 Specific Performance. In addition to any and all other
remedies that may be available at law, in the event of any breach of this
Agreement, the Company shall be entitled to specific performance of the
agreements and obligations of the Investors and to such other injunctive or
other equitable relief as may be granted by a court of competent jurisdiction.
4
3.14 Remedies Cumulative. No remedy or election hereunder shall
be deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
3.15 Pronouns. Whenever the context may require, any pronouns
used in this Agreement shall include the corresponding masculine, feminine or
neutral forms, and the singular form of nouns and pronouns shall include the
plural, and vice versa.
[Remainder of Page Intentionally Left Blank
Signature Page Follows]
5
IN WITNESS WHEROF, the parties hereto have executed this Voting
Agreement as of the date first written above.
COMPANY:
WOLVERINE TUBE, INC.
By: ___________________________
Name:
Title:
INVESTORS:
THE ALPINE GROUP, INC.
By: ____________________________
Name:
Title:
Address for notices:
Xxx Xxxxxxxxxxx Xxxxx
Xxxx Xxxxxxxxxx, Xxx Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx
PLAINFIELD SPECIAL SITUATIONS MASTER FUND LIMITED
By: _____________________________
Name:
Title:
Address for notices:
c/o Plainfield Asset Management LLC
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx
EXHIBIT A
INVESTORS
Name/Address/Fax No. No. of Shares
EXHIBIT B
FORM OF JOINDER AGREEMENT
JOINDER AGREEMENT TO
VOTING AGREEMENT
[Date]
The undersigned proposes to acquire [Number of Shares of Voting
Securities] of Wolverine Tube, Inc. (the "Securities"). Subject to and
concurrently with the acquisition of such Securities, the undersigned agrees to
become bound by the Voting Agreement dated as of [ ], 2007 (the "Voting
Agreement") by and among Wolverine Tube, Inc. and certain other securityholders
of Wolverine Tube, Inc. named therein as an "Investor" (as defined therein) and
agrees that it shall have all of the rights and obligations of an Investor under
the Voting Agreement.
IN WITNESS WHEREOF, the parties have executed this Joinder to the
Series A Preferred Stock Purchase Agreement as of the day and year first above
written.
COMPANY:
WOLVERINE TUBE, INC.
By: ___________________________
Name:
Title:
INVESTOR:
o
By: ____________________________
Name:
Title:
