EXHIBIT 4
RESTRUCTURING AGREEMENT
dated as of November 13, 2001
between
TPG WAFER HOLDINGS LLC
and
MEMC ELECTRONIC MATERIALS, INC.
ARTICLE I
DEFINITIONS
Section 1.01. Definitions....................................................2
Section 1.02. General Interpretive Principles...............................14
ARTICLE II
RESTRUCTURING
Section 2.01. Restructuring.................................................15
Section 2.02. Restructuring Closing.........................................15
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.01. Organization; Powers..........................................17
Section 3.02. Authorization; Enforceability.................................17
Section 3.03. Governmental Approvals; No Conflicts..........................18
Section 3.04. Financial Condition; No Material Adverse Change...............18
Section 3.05. Properties....................................................20
Section 3.06. Litigation and Environmental Matters..........................20
Section 3.07. Compliance with Law and Agreements............................21
Section 3.08. Taxes.........................................................21
Section 3.09. ERISA.........................................................21
Section 3.10. Disclosure....................................................22
Section 3.11. Subsidiaries..................................................22
Section 3.12. Insurance.....................................................23
Section 3.13. Labor Matters.................................................23
Section 3.14. Capitalization; Securities....................................23
Section 3.15. Dividends, Stock Repurchases, Etc.............................24
Section 3.16. No Rights Plan................................................24
Section 3.17. Exemption from Registration...................................24
Section 3.18. Financial Advisors and Brokers; Fairness Opinion..............24
Section 3.19. Material Contracts............................................25
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
Section 4.01. Organization..................................................25
Section 4.02. Authorization; Enforceability.................................25
Section 4.03. Governmental Approvals; No Conflicts..........................26
Section 4.04. Financial Advisors and Brokers................................26
Section 4.05. Purpose of Investment.........................................26
Section 4.06. Holdings......................................................26
Section 4.07. Financial Ability to Make Loans...............................27
ARTICLE V
GOVERNANCE
Section 5.01. Board Size....................................................27
Section 5.02. Board Representation..........................................27
Section 5.03. Meetings......................................................28
ARTICLE VI
PRE-CLOSING COVENANTS
Section 6.01. Taking of Necessary Action....................................28
Section 6.02. Conduct of Business...........................................29
Section 6.03. Notifications.................................................31
ARTICLE VII
DDITIONAL COVENANTS
Section 7.01. Financial and Other Information...............................31
Section 7.02. Restricted Payments; Certain Payments of Indebtedness.........32
Section 7.03. Restrictive Agreements........................................32
Section 7.04. Publicity.....................................................32
Section 7.05. Status of Dividends...........................................33
Section 7.06. Director and Officer Indemnification..........................33
Section 7.07. Listing; Reservation..........................................33
Section 7.08. Legend........................................................33
Section 7.09. Approval for Issuance of Shares...............................34
Section 7.10. Transactions with Affiliates..................................35
Section 7.11. Equity Issuances..............................................35
Section 7.12. Fundamental Changes...........................................37
Section 7.13. Short-Form Merger.............................................37
Section 7.14. Tax Sharing Agreement.........................................37
Section 7.15. Holdings Loans................................................37
ARTICLE VIII
CONDITIONS
Section 8.01. Conditions to the Investor's
Obligations with Respect to the Restructuring.................38
Section 8.02. Conditions of the Company's Obligations with
Respect to the Restructuring..................................41
ARTICLE IX
TERMINATION
Section 9.01. Termination of Agreement......................................42
Section 9.02. Effect of Termination.........................................42
ARTICLE X
MISCELLANEOUS
Section 10.01. Fees and Expenses.............................................43
Section 10.02. Survival of Representations and Warranties....................43
Section 10.03. Specific Performance..........................................43
Section 10.04. Indemnification...............................................43
Section 10.05. Notices.......................................................46
Section 10.06. Entire Agreement..............................................47
Section 10.07. Amendment.....................................................47
Section 10.08. Counterparts..................................................47
Section 10.09. Governing Law.................................................47
Section 10.10. Successors and Assigns........................................48
Section 10.11. No Third-Party Beneficiaries..................................49
Section 10.12. Schedules.....................................................49
SCHEDULE 1 Loans to be Exchanged for Notes and Warrants S-1
SCHEDULE 2 Loans held by Holdings S-2
SCHEDULE 5.02(d) Board Nominees S-5
Company Disclosure
Schedule CD-1
EXHIBIT A Form of Series A Certificate of Designations A-1
EXHIBIT B Form of Credit Agreement B-1
EXHIBIT C Form of Indenture C-1
EXHIBIT D Form of Warrant Certificate D-1
EXHIBIT E Form of Registration Rights Agreement E-1
EXHIBIT F Term Sheet for Italian Credit Agreement Amendment F-1
EXHIBIT G Form of Merger Agreement G-1
EXHIBIT H Form of Counsel to Company Opinion H-1
EXHIBIT I Form of Counsel to Investor Opinion I-1
EXHIBIT J Certificate of Incorporation of Holdings J-1
EXHIBIT K Form of Employment Resolutions K-1
EXHIBIT L Form of Tax Sharing Agreement L-1
RESTRUCTURING AGREEMENT
THIS RESTRUCTURING AGREEMENT (the "Agreement"), dated as of November 13,
2001, by and between TPG Wafer Holdings LLC, a Delaware limited liability
company (the "Investor"), and MEMC Electronic Materials, Inc., a Delaware
corporation (the "Company").
W I T N E S S E T H:
-------------------
WHEREAS, each of the Company and the Investor has determined to enter into
this Agreement pursuant to which (i) the Investor has agreed to exchange all of
the then outstanding Holdings Class A Common Stock (as defined herein) of MEMC
Holdings Corporation, a Delaware corporation ("Holdings"), held by the Investor
in return for the issuance by the Company to the Investor of 260,000 shares of
the Company's Series A Cumulative Convertible Preferred Stock, par value $0.01
per share (the "Series A Preferred Stock"), having the rights, preferences,
privileges and restrictions set forth in the form of Certificate of Designations
substantially in the form attached hereto as Exhibit A (the "Series A
Certificate of Designations"), each share of which shall be convertible at the
option of the holder at any time following the Closing into shares (the
"Conversion Shares") of common stock, par value $0.01 per share (the "Common
Stock"), of the Company, (ii) the Credit Agreement Lenders (as defined herein)
and the Company have agreed to enter into an agreement setting forth the terms
and conditions of a revolving credit facility substantially in the form attached
hereto as Exhibit B (the "Credit Agreement"), (iii) the Investor has agreed to
cause the Notes Designees (as defined herein) to deliver the Loans (as defined
herein) set forth on Schedule 1 in return for the issuance by the Company to
such Notes Designees, as specified by the Investor, of (A) $50,000,000 in
principal amount of Senior Subordinated Secured Notes Due 2007 of the Company
(the "Notes") pursuant to, and having the terms and conditions set forth in, the
form of indenture substantially in the form attached hereto as Exhibit C (the
"Indenture") and (B) 16,666,667 detachable warrants (the "Warrants") having the
terms set forth in the form of warrant certificate substantially in the form
attached hereto as Exhibit D (the "Warrant Certificate"), (iv) the Investor has
agreed to enter into, and the Company has agreed to enter into, and to cause the
Guarantors (as defined herein) to enter into, a registration rights agreement
with the terms and conditions set forth in the form of registration rights
agreement substantially in the form attached hereto as Exhibit E (the
"Registration Rights Agreement"), (v) the Company has agreed to execute and
deliver, and to cause MEMC Electronic Materials S.p.A (the "Italian Subsidiary")
to execute and deliver, and the Investor has agreed to execute and deliver, and
to cause the Italian Credit Agreement Lenders (as defined herein) to execute and
deliver, in each case as applicable, an amendment to the Italian Credit
Agreement (as defined herein) pursuant to a definitive amendment to the Italian
Credit Agreement consistent with the terms and conditions set forth in the term
sheet attached hereto as Exhibit F and with such other terms and conditions as
the Investor and the Company may reasonably agree (the "Italian Credit Agreement
Amendment") and (vi) the Company and the Investor have agreed to enter into an
Agreement and Plan of Merger with the terms and conditions set forth in the form
of merger agreement substantially in the form attached hereto as Exhibit G (the
"Merger Agreement");
WHEREAS, the Company and the Investor desire to make certain
representations, warranties, covenants and agreements in connection with the
transactions contemplated herein;
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Affiliate" has the meaning set forth in Rule 12b-2 under the Exchange Act
as in effect on the date hereof. The term "Affiliated" has a correlative
meaning. Notwithstanding the foregoing, for all purposes hereof, neither the
Company nor any of its Subsidiaries shall be deemed an "Affiliate" of any TPG
Person. Notwithstanding the foregoing, for all purposes hereof, (a) the Investor
and each Person Controlled by, Controlling or under common Control with the
Investor (each, a "TPG Person") shall not be deemed an "Affiliate" of any
Designated Purchaser Person (as defined below), and no Designated Purchaser, and
no Person Controlled by, Controlling or under common Control with such
Designated Purchaser (each, a "Designated Purchaser Person"), shall be deemed an
"Affiliate" of any TPG Person or any other Designated Purchaser Person, in any
such case solely as a consequence of this Agreement or the transactions
contemplated hereby and (b) neither the Company nor any of its Subsidiaries
shall be deemed a TPG Person or an "Affiliate" of any TPG Person.
"Agreement" has the meaning set forth in the preamble hereto.
"Beneficially Own" with respect to any securities means having "beneficial
ownership" of such securities (as determined pursuant to Rule 13d-3 under the
Exchange Act as in effect on the date hereof, except that a Person shall be
deemed to Beneficially Own all such securities that such Person has the right to
acquire whether such right is exercisable immediately or after the passage of
time). The terms "Beneficial Ownership" and "Beneficial Owner" have correlative
meanings. Notwithstanding the foregoing, for all purposes hereof, no TPG Person
shall be deemed to Beneficially Own any securities that are held by any
Designated Purchaser Person, and no Designated Purchaser Person shall be deemed
to Beneficially Own any securities that are held by any TPG Person or any other
Designated Purchaser Person, in any such case solely as a consequence of this
Agreement or the transactions contemplated hereby.
"Board Nominees" has the meaning set forth in Section 5.02(a).
"Board of Directors" means the board of directors of the Company.
"Business Day" means any day, other than a Saturday, Sunday or a day on
which banking institutions in the State of New York are authorized or obligated
by law or executive order to close.
"By-laws" means the By-laws of the Company, as amended from time to time.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
lease obligations on a balance sheet of such Person under GAAP, and the amount
of such obligations shall be the capitalized amount thereof determined in
accordance with GAAP.
"Certificate of Incorporation" means the Restated Certificate of
Incorporation of the Company, as amended from time to time.
"Change in Control" means: (a) the failure by TPG Persons to own (and
retain the right to vote), directly or indirectly, beneficially and of record,
Equity Interests in the Company representing greater than 15% of each of the
aggregate ordinary Voting Power and aggregate value represented by the issued
and outstanding Equity Interests in the Company; (b) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any Person or
Group, of Equity Interests representing a greater percentage of either the
aggregate ordinary Voting Power or the aggregate value represented by the issued
and outstanding Equity Interests in the Company then owned, directly or
indirectly, beneficially and of record, by TPG Persons; or (c) occupation of a
majority of the seats (other than vacant seats) on the Board of Directors by
Persons who were neither (i) nominated by the Board of Directors nor (ii)
appointed by directors so nominated.
"Claim" has the meaning set forth in Section 10.04(c).
"Class I" means the class of directors of the Board of Directors whose
initial term expired at the annual meeting of stockholders of the Company in
1996 and has expired or will expire at every third annual meeting thereafter.
"Class II" means the class of directors of the Board of Directors whose
initial term expired at the annual meeting of stockholders of the Company in
1997 and has expired or will expire at every third annual meeting thereafter.
"Class III" means the class of directors of the Board of Directors whose
initial term expired at the annual meeting of stockholders of the Company in
1998 and has expired or will expire at every third annual meeting thereafter.
"Closing" has the meaning set forth in Section 2.02.
"Closing Date" has the meaning set forth in Section 2.02.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commission" means the U.S. Securities and Exchange Commission.
"Common Stock" has the meaning set forth in the recitals hereto.
"Company" has the meaning set forth in the preamble hereto.
"Company Benefit Plans" means each employee or director benefit or
compensation plan, arrangement or agreement, including pension, savings,
welfare, medical or life insurance, severance, fringe benefit, executive
compensation, deferred compensation, incentive, bonus and long-term performance
option and other equity-based compensation plans, arrangements or agreements,
including any "employee benefit plans" as defined in Section 3(3) of ERISA,
whether or not subject to ERISA, and each employment, retention, consulting,
change in control, termination or severance plan, program, arrangement or
agreement that was entered into or is maintained by or to which the Company or
any of its Subsidiaries contribute or is obligated to contribute or with respect
to which the Company or any of its Subsidiaries has any liability, direct or
indirect, contingent or otherwise, or otherwise providing benefits to any
current or former employee, officer or director of the Company or any of its
Subsidiaries.
"Company Documents" means each document, instrument or certificate, other
than this Agreement, to be executed and delivered by the Company and/or any of
its Subsidiaries in connection with the consummation of the transactions
contemplated by this Agreement, including the Series A Certificate of
Designations, the Indenture, the Indenture Ancillary Documents, the Notes, the
Warrant Certificates, the Registration Rights Agreement, the Credit Agreement,
the Credit Agreement Ancillary Documents, the Italian Credit Agreement
Amendment, the Italian Ancillary Documents and the Merger Agreement.
"Consolidated Backlog" for any calendar month means, as of any measurement
date, the sum total of wafers (as measured in millions of square inches) which
has been shipped in respect of bona fide sales to third party customers during
such month to (and including) such measurement date and remaining shipments
which are reasonably expected by the Company to be made in respect of bona fide
sales to third party customers from (but excluding) such measurement date
through the last calendar day of the month by the Company and its consolidated
Subsidiaries. Amounts expected to be shipped shall be evidenced by third party
customer orders including purchase orders, purchase order releases pursuant to
blanket purchase orders and/or customer buy plans communicated by electronic
data interchange communications, e-mail messages or via telephone to a customer
service representative or salesperson of the Company or a Subsidiary.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. The
terms "Controlling" and "Controlled" have meanings correlative thereto.
"Conversion Shares" has the meaning set forth in the recitals hereto.
"Covered Securities" has the meaning set forth in Section 7.11(b) hereof.
"Credit Agreement" has the meaning set forth in the recitals hereto.
"Credit Agreement Ancillary Documents" means the ancillary documents
contemplated by the Credit Agreement to be executed and delivered in connection
with the execution and delivery of the Credit Agreement.
"Credit Agreement Lenders" means the "Lenders" as such term is defined in
the Credit Agreement.
"Derivative Securities" means any subscriptions, options, conversion
rights, warrants, or other agreements, securities or commitments of any kind
obligating the Company or any Person to issue, grant, deliver or sell, or cause
to be issued, granted, delivered or sold, any Equity Interests of the Company or
any of its Subsidiaries.
"Designated Purchaser" has the meaning set forth in Section 10.10(b)
hereof.
"Designated Purchaser Person" has the meaning set forth in the definition
of "Affiliate."
"DGCL" means the Delaware General Corporation Law.
"Disclosure Schedule" means the Disclosure Schedule of the Company that is
attached hereto.
"Environmental Laws" means any Law relating in any way to the environment;
the protection, preservation or restoration of natural resources; the management
(including generation, use, handling, transportation, storage, treatment and
disposal) of Hazardous Materials; the Release or threatened Release of any
Hazardous Materials into the environment or health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any costs, obligations, expenses, losses or other liability in
connection with personal injury, strict liability, damages, diminution of value,
investigation, monitoring, remediation, administrative oversight costs, fines,
penalties or indemnities) of the Company or any Subsidiary directly or
indirectly arising or resulting from or based upon (a) violation of any
Environmental Law, (b) the management, including generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the Release or threatened Release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is retained, assumed or
imposed with respect to any of the foregoing.
"E.ON Purchase Agreement" means the Purchase Agreement dated as of
September 30, ▇▇▇▇ ▇▇▇▇▇ ▇.▇▇ ▇▇, ▇.▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc., E.ON International
Finance B.V., ▇▇▇▇▇▇▇ Corporation, VEBA Zweite Verwaltungsgesellchaft mbH, TPG
Partners III, L.P., T3 Partners, L.P., T3 Partners II, L.P. and the Investor.
"Equity Interests" means, as to any Person, shares of capital stock,
partnership interests, membership interests in a limited liability company,
beneficial interests in a trust or other interests of such Person that are
denominated, or have substantially the characteristics of, equity interests.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means, at any time, each trade or business (whether or
not incorporated) that would, at the time, be treated together with Company or
any of its Subsidiaries as a single employer under Title IV or Section 302 of
ERISA or Section 412 of the Code.
"ERISA Event" means (a) any "reportable event" described in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than a
"reportable event" not subject to the provision for 30-day notice to the PBGC);
(b) the existence with respect to any Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived or the filing of an application pursuant to Section 412(e)
of the Code or Section 304 of ERISA for any extension of an amortization period;
(c) the provision or filing of a notice of intent to terminate a Plan other than
a standard termination within the meaning of Section 4041 of ERISA or the
treatment of a Plan amendment as a distress termination under Section 4041 of
ERISA; (d) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (e) the incurrence by the Company or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (f) the receipt by the Company or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan under
Section 4042 of ERISA or the occurrence or existence of any other event or
condition which might reasonably be expected to constitute grounds for the
termination of, the appointment of a trustee to administer, any Plan other than
in a standard termination within the meaning of Section 4041 of ERISA or the
imposition of any lien on the assets of the Company or any of its Subsidiaries
or ERISA Affiliates under ERISA, including as a result of the operation of
Section 4069 of ERISA; (g) the incurrence by the Company, any of its
Subsidiaries or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan or with
respect to the withdrawal from a Multiple Employer Plan during a plan year in
which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA
or by reason of the provisions of Section 4064 of ERISA upon the termination of
a Multiple Employer Plan; or (h) the receipt by the Company or any ERISA
Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Company or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder from time to time.
"Foreign Company Benefit Plans" means each Company Benefit Plan maintained
for the benefit of the employees of the Company or any of its Subsidiaries
located outside the United States.
"GAAP" means generally accepted accounting principles in the United States
of America consistently applied.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body (including
the NYSE), court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.
"Group" has the same meaning as is used with respect to that term in Rule
13d-5 under the Exchange Act as in effect on the date hereof.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation, provided that the term "Guarantee" shall not include endorsements
for collection or deposit in the ordinary course of business.
"Guarantor" has the meaning set forth in the Registration Rights Agreement.
"Hazardous Materials" means any substance, pollutant, contaminant, chemical
or other material (including petroleum or any fraction thereof, asbestos or
asbestos-containing-material, polychlorinated biphenyls, urea formaldehyde foam
insulation) or waste that is classified or regulated under any Environmental
Law.
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
"Holdings" has the meaning set forth in the recitals hereto.
"Holdings Class A Common Stock" shall have the meaning set forth in Section
4.06(b).
"Holdings Class B Common Stock" shall have the meaning set forth in Section
4.06(b).
"Holdings Common Stock" has the meaning set forth in Section 4.06(b).
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended, and the regulations promulgated thereunder.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid, (d)
all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), (f) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person
of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
Notwithstanding anything to the contrary in this paragraph, the term
"Indebtedness" shall not include (a) obligations under Hedging Agreements or (b)
agreements providing for indemnification, purchase price adjustments or similar
obligations incurred or assumed in connection with the acquisition or
disposition of assets or stock.
"Indemnified Company Parties" has the meaning set forth in Section
10.04(b).
"Indemnified Investor Parties" has the meaning set forth in Section
10.04(a).
"Indemnified Party" has the meaning set forth in Section 10.04(c).
"Indenture" has the meaning set forth in the recitals hereto.
"Indenture Ancillary Documents" means the ancillary documents contemplated
by the Indenture to be executed and delivered in connection with the execution
and delivery of the Indenture.
"Insolvency Event" means (a) the Company or any of its Subsidiaries
commences a voluntary case concerning itself under Title 11 of the United States
Code as now or hereafter in effect, or under any state insolvency, liquidation,
rehabilitation or similar statute or any successor statutes thereto ("Insolvency
Statutes"); (b) an involuntary case is commenced against the Company or any of
its Subsidiaries under an Insolvency Statute; (c) a custodian is appointed under
any applicable Insolvency Statute for, or takes charge of, all or any
substantial part of the property of the Company or any of its Subsidiaries; (d)
any other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution or similar law of any jurisdiction, whether now
or hereafter in effect, relating to the Company or any of its Subsidiaries is
commenced (i) by the Company or any of its Subsidiaries or (ii) by any other
Person; (e) the Company or any of its Subsidiaries is adjudicated insolvent or
bankrupt; (f) any order of relief or other order approving any such case or
proceeding is entered; (g) the Company or any of its Subsidiaries makes a
general assignment for the benefit of creditors; or (h) the Company or any of
its Subsidiaries shall state in writing that it is unable to pay, or shall be
unable to pay, its debts, generally as they become due.
"Insolvency Statutes" has the meaning set forth in the definition of
"Insolvency Event."
"Investor" has the meaning set forth in the preamble hereto.
"Investor Documents" means each document, instrument or certificate, other
than this Agreement, to be executed and delivered by the Investor in connection
with the consummation of the transactions contemplated by this Agreement,
including the Registration Rights Agreement.
"Investor Group" means, collectively, the Investor, the Designated
Purchasers (if any), the Notes Designees and the respective Affiliates of such
Persons.
"Investor Information" has the meaning set forth in Section 7.09(b).
"Italian Ancillary Documents" means the ancillary documents contemplated by
the Italian Credit Agreement Amendment to be executed and delivered in
connection with the execution and delivery of the Italian Credit Agreement
Amendment, including, without limitation, any amendments to the Company's
guarantee of the Italian Credit Agreement.
"Italian Closing" has the meaning set forth in Section 2.02.
"Italian Closing Date" has the meaning set forth in Section 2.02.
"Italian Credit Agreement" means the euro 55,000,000 Amended and Restated
Credit Agreement dated as of September 22, 2001 between the Italian Subsidiary
and E.ON International Finance B.V., as amended from time to time.
"Italian Credit Agreement Amendment" has the meaning set forth in the
recitals hereto.
"Italian Credit Agreement Lenders" means the "Lenders" as such term is
defined in the Italian Credit Agreement Amendment.
"Italian Subsidiary" has the meaning set forth in the recitals hereto.
"Law" means any law, treaty, statute, ordinance, code, rule, regulation,
judgment, decree, order, writ, award, injunction, directives or determination of
any Governmental Authority.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"Loans" has the meaning set forth in the E.ON Purchase Agreement.
"Losses" has the meaning set forth in Section 10.04(a).
"Material Adverse Effect" means any event, change, circumstance or effect
that is or is reasonably likely to be materially adverse to (a) the business,
assets, operations, properties, financial condition or contingent liabilities of
the Company and the Subsidiaries, taken as a whole, (b) the ability of the
Company or any of its Subsidiaries to perform their obligations under the
Company Documents or (c) any rights of or benefits available to the Investor,
the Notes Designees, the Credit Agreement Lenders or the Designated Purchasers
under the Company Documents.
"Merger Agreement" has the meaning set forth in the recitals hereto.
"Mortgage" means a mortgage, deed of trust, assignment of leases and rents,
leasehold mortgage or other security document granting a Lien on any Mortgaged
Property to secure the loans made under the Credit Agreement or the Notes.
"Mortgaged Property" means, initially, each parcel of real property and the
improvements thereto owned by the Company or a Subsidiary Loan Party (as defined
in the Credit Agreement) and identified on Section 1.01(A) of the Disclosure
Schedule, and includes each other parcel of real property and improvements
thereto with respect to which a Mortgage is granted in connection with the
Credit Agreement or the Indenture.
"Multiple Employer Plan" means an employee benefit plan described in
Section 4063 of ERISA.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Notes" has the meaning set forth in the recitals hereto.
"Notes Designees" means those Persons designated by the Investor to
participate in the Notes Exchange.
"Notes Exchange" has the meaning set forth in Section 2.01.
"NYSE" has the meaning set forth in Section 3.03(b).
"NYSE Rules" has the meaning set forth in Section 3.03(b).
"Offer to Purchase" has the meaning set forth in Section 7.11(b).
"Option Plan" means the Company's Equity Incentive Plan, as amended from
time to time.
"Original Number of Combined Shares" means the Original number of
Conversion Shares plus the Original Number of Warrant Shares.
"Original Number of Conversion Shares" means the number of Conversion
Shares as of the Closing (assuming that all conditions precedent to receipt of
Conversion Shares in respect of the then-outstanding shares of Series A
Preferred Stock have occurred, including conversion of the Series A Preferred
Stock and receipt by the Company of the Shareholder Approval), which number
shall be adjusted in accordance with any adjustment made to the number of
Conversion Shares issuable upon conversion of the Series A Preferred Stock
pursuant to the Series A Certificate of Designations. For the purposes of
determining the percentage of the Original Number of Conversion Shares that is
Beneficially Owned by the Investor, any Designated Purchaser or any of their
respective Affiliates, such calculation shall be made assuming all conditions
precedent to receipt of Conversion Shares in respect of the then-outstanding
shares of Series A Preferred Stock have occurred or been satisfied, including
receipt by the Company of the Shareholder Approval and conversion of the Series
A Preferred Stock in accordance with the terms thereof.
"Original Number of Series A Shares" means the number of shares of Series A
Preferred Stock outstanding as of the Closing.
"Original Number of Warrant Shares" means the number of Warrant Shares as
of the Closing (assuming that all conditions precedent to receipt of Warrant
Shares in respect of the then-outstanding Warrants have occurred, including
exercise of the Warrants and receipt by the Company of the Shareholder
Approval), which number shall be adjusted in accordance with any adjustment made
to the number of Warrant Shares issuable upon exercise of the Warrants pursuant
to the Warrant Certificate. For the purposes of determining the percentage of
the Original Number of Warrant Shares that is Beneficially Owned by Note
Designees, TPG Persons or any of their respective Affiliates, such calculation
shall be made assuming all conditions precedent to receipt of Warrant Shares in
respect of the then-outstanding Warrants have occurred or been satisfied,
including receipt by the Company of the Shareholder Approval and exercise of the
Warrants in accordance with the terms thereof.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Company, any of its
Subsidiaries or any ERISA Affiliate is an "employer" as defined in Section 3(5)
of ERISA.
"Proceeding" means any claim, suit, action, proceeding, arbitration or
investigation by or before any Governmental Authority.
"Proxy Statement" means a proxy statement prepared, filed with the
Commission and used by the Company in connection with a Shareholder Meeting.
"Purchase Agreement" means a legal, valid and binding agreement of a Person
or Persons (each, a "Purchaser") pursuant to which such Purchaser or Purchasers
agrees to purchased Covered Securities, which agreement is enforceable against
such Purchaser or Purchasers in accordance with its terms (subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally
and to general principles of equity).
"Registration Rights Agreement" has the meaning set forth in the recitals
hereto.
"Regulatory Approvals" means (a) any and all certificates, permits,
licenses, franchises, concessions, grants, consents, approvals, orders,
registrations, authorizations, waivers, variances or clearances from, or filings
or registrations with, Governmental Authority, and (b) any and all waiting
periods imposed by applicable laws.
"Release" means any release, spill, emission, leaking, dumping, injection,
pouring, deposit, disposal, discharge, dispersal, leaching or migration of any
Hazardous Material in, on, onto or into the environment (including ambient air,
surface water, groundwater, land surface or subsurface strata) or within any
building, structure, facility or fixture.
"Representatives" means, with respect to any Person, any of such Person's
officers, directors, employees, agents, attorneys, accountants, consultants,
equity financing partners or financial advisors or other Person associated with,
or acting on behalf of, such Person.
"Required Regulatory Approval" means any of the following Regulatory
Approvals: (i) those regulatory approvals necessary under the HSR Act or
required under the Securities Act, the Exchange Act or the securities laws of
the several states of the United States, for or in connection with the
consummation by the parties hereto of the transactions contemplated by this
Agreement; (ii) the filing by the Company of the Series A Certificate of
Designations with the Secretary of State of the State of Delaware; or (iii)
those Regulatory Approvals set forth in Section 1.01(B) of the Disclosure
Schedule.
"Restricted Payment" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any Equity Interests in the
Company or any Subsidiary, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any Equity Interests in the Company or any Subsidiary or any option, warrant or
other right to acquire any such Equity Interests in the Company or any
Subsidiary.
"Restructuring" has the meaning set forth in Section 2.01.
"Restructuring Agreement" has the meaning set forth in the recitals hereto.
"SEC Reports" means (i) the Company's Annual Report on Form 10-K for each
of the fiscal years ended December 31, 2000, 1999 and 1998; (ii) the Company's
Quarterly Report on Form 10-Q for each of the periods ended June 30, 2001 and
March 31, 2001; and (iii) each registration statement, report on Form 8-K, proxy
statement, information statement or other report or statement filed by the
Company with the Commission on or since January 1, 1998 and prior to the date
hereof, in each case in the form (including exhibits and any amendments or
supplements thereto) filed with the Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder from time to time.
"Series A Certificate of Designations" has the meaning set forth in the
recitals hereto.
"Series A Preferred Stock" has the meaning set forth in the recitals
hereto.
"Shareholder Approval" means (i) any necessary approval by the stockholders
of the Company relating to the Series A Preferred Stock, the Conversion Shares,
the Warrants and the Warrant Shares under the rules and regulations of the NYSE,
(ii) the approval by the stockholders of the Company of the plan of merger
contained in the Merger Agreement in accordance with the DGCL and (iii) the
approval by the stockholders of the Company of a one-for-two reverse split of
the Common Stock.
"Shareholder Approval Proposal" means a proposal made by the Board of
Directors to the stockholders of the Company in accordance with the DGCL to
consider and vote on the Shareholder Approval.
"Shareholder Meeting" has the meaning set forth in Section 7.09(a).
"Solicitation Date" means, with respect to any Covered Securities, the
earlier of (i) the eleventh day following the day on which an Offer to Purchase
with respect to such Covered Securities is given and (ii) the date on which the
Investor shall have, or shall be deemed to have, declined to purchase such
Covered Securities, in each case pursuant to Section 7.11(b) hereof.
"Special Committee" means a committee of the Board of Directors consisting
of directors who are not Representatives of (a) E.ON AG, E.ON North America,
Inc., E.ON International Finance B.V., ▇▇▇▇▇▇▇ Corporation, VEBA Zweite
Verwaltungsgesellchaft mbH or their Affiliates or (b) a TPG Person.
"Special Committee Approval" means the approval by the Special Committee of
the Restructuring, the Company's issuance of the Series A Preferred Stock, the
Company's issuance of the Notes, including the Company's issuance of the
Warrants and, in each case, of the terms thereof.
"Stated Value" means the stated value of the Series A Preferred Stock, as
set forth in the Series A Certificate of Designation.
"Subsequent Reports" has the meaning set forth in Section 3.04(e).
"subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Company.
"Taxes" means any and all current or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
"Third Party Claim" has the meaning set forth in Section 10.04(c).
"TPG Person" has the meaning set forth in the definition of "Affiliate."
"U.S. Company Benefit Plans" means each Company Benefit Plan maintained for
the benefit of the employees of the Company of any of its Subsidiaries located
in the United States.
"Voting Power" means, with respect to any Voting Securities, the aggregate
number of votes attributable to such Voting Securities that could generally be
cast by the holders thereof for the election of directors at the time of
determination (assuming such election were then being held).
"Voting Securities" means, (a) with respect to the Company, the Equity
Interests of the Company entitled to vote generally for the election of
directors of the Company, and (b) with respect to any other Person, any
securities of or interests in such Person entitled to vote generally for the
election of directors or any similar managing person of such Person.
"Warrants" has the meaning set forth in the recitals hereto. References to
a number of Warrants shall refer to the number of Warrant Shares issuable upon
exercise of such Warrants.
"Warrant Certificate" has the meaning set forth in the recitals hereto.
"Warrant Shares" means the shares of Common Stock issued, or issuable upon,
exercise of the Warrants.
"Wholly Owned Subsidiary" means, as to any Person, a Subsidiary of such
Person of which 100% of the Equity Interests (other than directors' qualifying
shares or similar shares) is owned, directly or indirectly, by such Person.
"Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
Section 1.02. General Interpretive Principles. Whenever used in this
Agreement, except as otherwise expressly provided or unless the context
otherwise requires, any noun or pronoun shall be deemed to include the plural as
well as the singular and to cover all genders. The name assigned this Agreement
and the Section captions used herein are for convenience of reference only and
shall not be construed to affect the meaning, construction or effect hereof.
Unless otherwise specified, the terms "hereof," "herein" and similar terms refer
to this Agreement as a whole (including the exhibits and schedules hereto), and
references herein to Articles or Sections refer to Articles or Sections of this
Agreement. Words of inclusion shall not be construed as terms of limitation
herein, so that references to "include", "includes" and "including" shall not be
limiting and shall be regarded as references to non-exclusive and
non-characterizing illustrations. Any agreement, certificate or other document
defined in this Agreement shall also include, in each case, any amendment or
restatement thereof or any supplement thereto.
ARTICLE II
RESTRUCTURING
Section 2.01. Restructuring. Upon the terms and subject to the conditions
set forth in this Agreement, and in reliance upon the representations and
warranties hereinafter set forth, (i) the Investor will exchange the then
outstanding Holdings Class A Common Stock held by the Investor, free and clear
of all Liens, in return for the issuance by the Company to the Investor of
260,000 shares of Series A Preferred Stock, free and clear of all Liens, (ii)
the Investor will cause the Credit Agreement Lenders to execute and deliver, and
the Company will execute and deliver or cause its Subsidiaries to execute and
deliver, as applicable, the Credit Agreement and the Credit Agreement Ancillary
Documents, (iii) the Investor will cause the Notes Designees to deliver the
Loans set forth on Schedule 1 in exchange for (A) the issuance by the Company to
the Notes Designees, as specified by the Investor, of $50,000,000 in principal
amount of the Notes and (B) Warrant Certificates evidencing 16,666,667 Warrants
(the "Notes Exchange"), (iv) the Investor will execute and deliver, and the
Company will execute and deliver, and cause the Guarantors to execute and
deliver, the Registration Rights Agreement, (v) the Company will execute and
deliver, and cause the Italian Subsidiary to execute and deliver, and the
Investor will execute and deliver, and cause the Italian Credit Agreement
Lenders to execute and deliver, in each case as applicable, the Italian Credit
Agreement Amendment and the Italian Ancillary Documents, and (vi) each of the
Investor and the Company will execute and deliver the Merger Agreement (all such
actions, collectively, the "Restructuring").
Section 2.02. Restructuring Closing. (a) The closing of the transactions
described in Section 2.01 (other than the Italian Closing, as defined herein)
(the "Closing") shall take place at the offices of Cleary, Gottlieb, ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, Washington, D.C., at 10:00 a.m., Eastern Standard Time, on November 8,
2001, following satisfaction or, if permissible, waiver, of the conditions set
forth in Sections 8.01 and 8.02 hereof, or at such other time and place as the
parties may agree (the date on which the Closing occurs, the "Closing Date").
The closing of the Italian Credit Agreement Amendment (the "Italian Closing")
shall take place at the offices of Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
Washington, D.C., at 10:00 a.m., Eastern Standard Time, on such date after the
Closing as the parties may agree, but in no event later than 10 Business Days
after the Closing, or at such other time and place as the parties may agree (the
date on which the Italian Closing occurs, the "Italian Closing Date").
(b) At the Closing:
(i) The Company shall, as applicable, deliver or cause to be delivered
to the Investor (A) certificates representing the shares of Series A
Preferred Stock to be issued to the Investor pursuant to Section 2.01
(registered in the names and in the denominations designated by the
Investor at least two Business Days prior to the Closing Date), (B) the
Credit Agreement and the Credit Agreement Ancillary Documents, executed as
applicable by the Company and its Subsidiaries, (C) the Indenture and the
Indenture Ancillary Documents, executed as applicable by the Company and
its Subsidiaries, (D) certificates representing (1) the Notes to be issued
pursuant to Section 2.01 to the Notes Designees, as specified by the
Investor, and (2) the Warrants to be issued pursuant to Section 2.01 to the
Notes Designees, as specified by the Investor (in each case, registered in
the names and in the denominations designated by the Investor at least two
Business Days prior to the Closing Date), in each case after executing such
Notes and Warrants and causing such Notes to be authenticated by the
trustee under the Indenture, (E) the Registration Rights Agreement executed
by the Company, and (F) the Merger Agreement executed by the Company,
together with the other documents, certificates and opinions to be
delivered pursuant to Section 8.01; and
(ii) the Investor shall, as applicable, deliver or cause to be
delivered (A) in full payment for the shares of Series A Preferred Stock to
be acquired by, and issued to, the Investor pursuant to Section 2.01, the
then outstanding Holdings Class A Common Stock, (B) the Credit Agreement,
executed by the Credit Agreement Lenders, (C) in full payment for the Notes
and Warrants to be issued to the Notes Designees pursuant to Section 2.01,
the Loans set forth on Schedule 1 duly endorsed in blank, or accompanied by
appropriate bond powers, in proper form for transfer, and an instrument
assigning all of the holders' right, title and interest in such Loans and
any related security agreements to the Company, (D) the Registration Rights
Agreement executed by the Investor, and (E) the Merger Agreement executed
by the Investor, together with the other documents, certificates and
opinions to be delivered pursuant to Section 8.02. Promptly following the
Closing, the Company shall cancel the Loans delivered or caused to be
delivered by the Investor pursuant to this Section 2.02(b) and take all
other necessary action to effect such cancellation.
(c) At the Italian Closing:
(i) The Company shall, as applicable, deliver or cause to be delivered
to the Investor the Italian Credit Agreement Amendment and the Italian
Ancillary Documents, executed by the Company and the Italian Subsidiary, as
applicable.
(ii) The Investor shall, as applicable, deliver or cause to be
delivered to the Company the Italian Credit Agreement Amendment and the
Italian Ancillary Documents, executed by the Investor and the Italian
Credit Agreement Lenders, as applicable.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to, and agrees with, the
Investor as of the date hereof and as of the Closing Date as follows:
Section 3.01. Organization; Powers. The Company and each of its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
Section 3.02. Authorization; Enforceability . (a) This Agreement and
Company Documents entered into or to be entered into by the Company or any of
its Subsidiaries are within the corporate power of the Company or its
Subsidiaries, as the case may be, and have been duly authorized by all necessary
action (except as contemplated by this Agreement with respect to the Shareholder
Approval). This Agreement has been duly executed and delivered by the Company
and constitutes, and each Company Document, when executed and delivered by the
Company or its Subsidiaries, as the case may be, will constitute, a legal, valid
and binding obligation of the Company or such Subsidiaries, as the case may be,
enforceable against the Company or such Subsidiaries, as the case may be, in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law. The Board of Directors, acting through the
Special Committee, has approved the execution and delivery of this Agreement by
the Company and has approved the consummation of the transactions contemplated
by this Agreement and the Company Documents. The Company has delivered to the
Investor true and correct copies of (i) resolutions adopted by the Special
Committee to the foregoing effects and (ii) resolutions adopted by the Board of
Directors delegating authority to the Special Committee with respect to this
Agreement and the consummation of the transactions contemplated by this
Agreement and the Company Documents. As of the Italian Closing Date, the board
of directors of the Italian Subsidiary shall have approved the execution and
delivery of the Italian Credit Agreement Amendment and the Italian Ancillary
Documents and the Company shall have delivered to the Investor true and correct
copies of resolutions of such board of directors to the foregoing effect.
(b) The Board of Directors, acting through the Special Committee, has,
prior to the date hereof, taken all action necessary to exempt the Investor and
its Affiliates from the application of Section 203 of the DGCL in respect of the
ownership by the Investor and/or its Affiliates of interests in the Company.
(c) The Board of Directors, acting through the Special Committee, has, in
accordance with Section 251 of the DGCL, adopted a resolution approving the
Merger Agreement, declaring its advisability and recommending that the Merger
Agreement be submitted to the Company's stockholders.
Section 3.03. Governmental Approvals; No Conflicts. (a) The execution,
delivery and performance of this Agreement and the Company Documents and the
consummation of the transactions contemplated thereby (i) do not require any
consent or approval of, registration or filing with, or any other action by or
before, any Governmental Authority, except for the Required Regulatory Approvals
and such as have been obtained or made and are in full force and effect and
except filings necessary to perfect Liens created in connection with the
Indenture or the Credit Agreement, (ii) will not violate any applicable Law,
including any applicable business combination, control share and any other
similar anti-takeover statutes, or the charter, by-laws or other organizational
documents of the Company or any of the Subsidiaries or any order of any
Governmental Authority, (iii) except as set forth in Section 3.03(a) of the
Disclosure Schedule, will not violate or result in a default under any material
indenture, agreement or other instrument binding upon the Company or any of the
Subsidiaries or any of their assets, or give rise to a right thereunder to
require any payment to be made by the Company or any of the Subsidiaries, (iv)
will not result in the creation or imposition of any Lien on any asset of the
Company or any of the Subsidiaries, except Liens created in connection with the
Indenture and the Credit Agreement, and (v) will not give rise to any preemptive
rights, rights of first refusal or other similar rights on behalf of any Person
under any applicable Law or any provision of the charter by-laws or other
organizational documents or any agreement or instrument applicable to the
Company of any of its Subsidiaries.
(b) Other than the Shareholder Approval, no consent or approval of the
Company's stockholders is required by Law, the Certificate of Incorporation, the
By-laws, the rules (the "NYSE Rules") of the New York Stock Exchange, Inc.
("NYSE") relating to the listing or trading of the Conversion Shares or Warrant
Shares on the NYSE, or otherwise, for the execution, delivery and performance by
the Company or its Subsidiaries of this Agreement and the Company Documents and
the consummation of the transactions contemplated thereby.
(c) Except as set forth in Section 3.03(c) of the Disclosure Schedule, the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and thereby will not constitute a "Change in
Control" or "Change of Control" (or similar concept) as such term (or concept)
is defined in any material contract, agreement, indenture, mortgage, note, lease
or other instrument to which the Company of any of its Subsidiaries is a party
or by which the Company or any such Subsidiary is bound or to which the
properties of the Company or any such Subsidiary is subject.
Section 3.04. Financial Condition; No Material Adverse Change. (a) As of
their respective dates, each of the SEC Reports and each registration statement,
report, proxy statement, information statement or other statement filed by the
Company with the Commission after the date hereof and before the Closing Date
(collectively, the "Subsequent Reports") (i) was, or will be, as the case may
be, timely filed with the Commission; (ii) complied, or will comply, as the case
may be, in all material respects, with the applicable requirements of the
Exchange Act and the Securities Act, as the case may be, and (iii) did not, or
will not, as the case may be, 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. The Company has heretofore furnished to the
Investor its unaudited consolidated balance sheet as of September 30, 2001 and
the related consolidated statements of income and cash flow for the nine months
then ended. Each of (x) the Company's unaudited consolidated balance sheet as of
September 30, 2001 and (y) the consolidated balance sheets (including the
related notes and schedules) included in or incorporated by reference into the
SEC Reports or any Subsequent Reports fairly presents, or will fairly present,
as the case may be, in all material respects, the consolidated financial
position of the entities to which it applies as of the date thereof, and each of
(i) the Company's unaudited consolidated statements of income and cash flow for
the nine months ended September 30, 2001 and (ii) the consolidated statements of
income (or statements of results of operations), stockholders' equity and cash
flows (including the related notes and schedules) included in or incorporated by
reference into the SEC Reports or any Subsequent Reports, fairly presents or
will fairly present, as the case may be, in all material respects, the results
of operations, retained earnings and cash flows, as the case may be, of the
entities to which it applies (on a consolidated basis) for the periods or as of
the dates, as the case may be, set forth therein, in each case in accordance
with GAAP applied on a consistent basis throughout the periods covered (except
as stated therein or in the notes thereto) and in compliance with the rules and
regulations of the Commission.
(b) Except as set forth in Section 3.04(b) of the Disclosure Schedule, none
of the Company or its Subsidiaries has any material liabilities or obligations
of any nature (whether accrued, absolute, fixed, contingent, liquidated,
unliquidated or otherwise and whether due or to become due) required by GAAP to
be set forth on the Balance Sheet (as defined below) of the Company except as
reflected or reserved against on the unaudited consolidated balance sheet of the
Company at June 30, 2001 as set forth in the SEC Reports (the "Balance Sheet")
or in the notes thereto. Except as set forth in Section 3.04(b) of the
Disclosure Schedule, since June 30, 2001, the Company has not incurred any
liabilities or obligations except such as would not, individually or in the
aggregate, have a Material Adverse Effect.
(c) Since September 30, 2001, there has been no material adverse change in
the business, assets, operations, properties, financial condition, contingent
liabilities or prospects of the Company or the Company and its Subsidiaries,
taken as a whole.
(d) Except as heretofore communicated to the Investor, its Affiliates or
their respective directors, officers, employees, agents or advisors by the
Company in writing or as otherwise reflected in the customer specific revenue
and volume information communicated in writing to the Investor, its Affiliates
or their respective directors, officers, employees, agents or advisors, since
December 31, 2000, none of the 20 largest customers of the Company and its
Subsidiaries (as of December 31, 2000 or September 30, 2001) has indicated
orally or in writing its intention or desire to materially alter or discontinue,
in whole or in material part, its relationship with the Company and its
Subsidiaries.
(e) Since September 30, 2001, other than the amalgamation of MEMC
Partecipazioni S.r.l. with and into the Italian Subsidiary, there has not been
any issuance or sale, or any direct or indirect purchase, redemption or other
acquisition of any shares of the Company's or any Subsidiary's Equity Interests
or any Derivative Securities by the Company or any of its Subsidiaries, other
than pursuant to or as contemplated by this Agreement or the Option Plan.
(f) The Company has heretofore furnished to the Investor, its Affiliates or
their respective directors, officers, employees, agents or advisors daily
reports of Consolidated Backlog from October 11, 2001 through the Closing Date.
Each such report as of its date was complete and accurate in all material
respects.
Section 3.05. Properties. (a) Except as set forth on Section 3.05(a) of the
Disclosure Schedule, the Company and each of the Subsidiaries has good title to,
or valid leasehold interests in, all its real and personal property material to
its business, except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes and subject to Liens permitted under
Section 6.02 of the Credit Agreement.
(b) The Company and each of the Subsidiaries owns, or is licensed to use,
all trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and to the Company's knowledge after due inquiry the
use thereof by the Company and the Subsidiaries does not infringe upon the
rights of any other Person, except for any such infringements that, individually
or in the aggregate, would not reasonably be expected to result in a Material
Adverse Effect.
(c) Section 3.05(c) of the Disclosure Schedule sets forth the address of
each real property that is owned or leased by the Company or any of the
Subsidiaries.
(d) Neither the Company or any of the Subsidiaries has received notice of,
or has knowledge of, any material pending or contemplated condemnation
proceeding affecting any Mortgaged Property or any sale or disposition thereof
in lieu of condemnation. Except as set forth on Section 3.05(d) of the
Disclosure Schedule, none of the Mortgaged Property or any interest therein is
subject to any right of first refusal, option or other contractual right to
purchase any such Mortgaged Property or interest therein.
Section 3.06. Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitration or Governmental
Authority pending against or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, would, individually or in the aggregate, result in a
Material Adverse Effect (other than as set forth in Section 3.06(a) of the
Disclosure Schedule) or (ii) that involve this Agreement or the Company
Documents, or the transactions contemplated thereby.
(b) Except as set forth in Section 3.06(b) of the Disclosure Schedule and
except with respect to any matters that, individually or in the aggregate, would
not result in a Material Adverse Effect, neither the Company or any of its
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability or has
received any request for information from a Governmental Authority under any
Environmental Law, (iii) has received notice of any claim with respect to any
Environmental Liability, (iv) knows of any past or present facts or
circumstances that are reasonably likely to result in Environmental Liability,
or (v) knows of any investigation or threatened investigation or judicial or
administrative proceeding with respect to any of the foregoing.
(c) Except as set forth on Section 3.06(c) of the Disclosure Schedule, none
of the property currently owned, leased or operated by the Company or by its
Subsidiaries is, or as a result of this transaction and the other transactions
contemplated by the E.ON Purchase Agreement would be, subject to (i) any state
or local Environmental Laws which would impose restrictions on the use of such
property or require notice, disclosure or advance approval prior to such
transactions, or (ii) any liens under any Environmental Laws.
Section 3.07. Compliance with Law and Agreements. Except as set forth in
Sections 3.06(b) and (c) of the Disclosure Schedule, each of the Company and its
Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, would not result in a
Material Adverse Effect. No Default (as defined in the Credit Agreement) has
occurred and is continuing.
Section 3.08. Taxes. The Company and each of its Subsidiaries has timely
filed or caused to be filed all Tax returns and reports required to have been
filed and has paid or caused to be paid all Taxes required to have been paid by
it, except (a) any Taxes that are being contested in good faith by appropriate
proceedings and for which the Company or such Subsidiary, as applicable, has set
aside on its books adequate reserves or (b) to the extent that the failure to do
so would not result in a Material Adverse Effect.
Section 3.09. ERISA. No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, would result in a Material Adverse
Effect. Neither the Company nor any ERISA Affiliate has engaged in a transaction
with respect to any employee benefit plan that would reasonably be expected to
result in any material liability to the Company or any ERISA Affiliate pursuant
to Section 4069 of ERISA.
Section 3.09 of the Disclosure Schedule sets forth a complete list of the
U.S. Company Benefit Plans meeting the criteria set forth on Section 3.09 of the
Disclosure Schedule. The Company shall provide a complete list of Foreign
Company Benefit Plans meeting the criteria set forth on Section 3.09 of the
Disclosure Schedule as soon as reasonably practicable following the date hereof.
The Company has heretofore made available to the Investor, its Affiliates or
their respective directors, officers, employees, agents or advisors, either
directly or through its public Commission filings, true and complete copies of
each U.S. Company Benefit Plan and any amendments thereto except as otherwise
set forth on Section 3.09 of the Disclosure Schedule and the following related
documents: (i) the actuarial report and Form 5500 for such U.S. Company Benefit
Plan (if applicable) for each of the last two years, (ii) the most recent
determination letter from the Internal Revenue Service (if applicable) for such
U.S. Company Benefit Plan and (iii) the most recent summary plan description for
such U.S. Company Benefit Plan and any material modifications thereto (if any).
Except as set forth in Section 3.09 of the Disclosure Schedule, there is no
formal arrangement or commitment, whether legally binding or not, to create any
additional Company Benefit Plan or to amend, modify or change any existing
Company Benefit Plan.
Except as set forth in Section 3.09 of the Disclosure Schedule and except
as would not, individually or in the aggregate, have a Material Adverse Effect,
with respect to the Company Benefit Plans (i) each Company Benefit Plan has been
operated and administered substantially in accordance with its terms and
applicable laws including, but not limited to ERISA and the Code, (ii) each
Company Benefit Plan intended to be "qualified" within the meaning of Section
401(a) of the Code has received a favorable determination letter from the
Internal Revenue Service stating that it is so qualified, and, to the Company's
knowledge, there are no existing circumstances or any events that have occurred
that would reasonably be expected to adversely affect the qualified status of
such Company Benefit Plan, (iii) no liability under Title IV has been incurred
by the Company, its Subsidiaries or any ERISA Affiliate that has not been
satisfied in full, and no condition exists that presents a risk to the Company,
its Subsidiaries or any ERISA Affiliate of incurring a liability thereunder
(other than liability for benefits or premiums payable to the PBGC) arising in
the ordinary course that are not yet due), (iv) no Company Benefit Plan provides
benefits, including, without limitation, death or medical benefits (whether or
not insured), with respect to current or former employees or directors of the
Company or its Subsidiaries beyond their retirement or other termination of
service, other than (A) coverage mandated by applicable law, (B) death benefits
or retirement benefits under any "employee pension plan" (as defined in Section
3(2) of ERISA), (C) deferred compensation benefits accrued as liabilities on the
books of the Company or its Subsidiaries, (D) benefits the full cost of which
are borne by the current or former employee or director (or his or her
beneficiary), (E) certain retiree medical benefit plans, (F) benefits under
certain disability plans or (G) benefits under certain life insurance plans,
each of (E), (F) and (G) designated as such on Section 3.09 of the Disclosure
Schedule, (v) no Company Benefit Plan is a "multiemployer pension plan" (as
defined in Section 3(37) of ERISA), (vi) all contributions or other amounts
payable by the Company or its Subsidiaries as of the date of this Agreement with
respect to each Company Benefit Plan in respect of current or prior plan years
have been paid or accrued in accordance with GAAP and Section 412 of the Code,
(vii) no "prohibited transaction" within the meaning of Section 4975 of the Code
or Section 406 of ERISA has occurred with respect to which the Company may incur
material liability or may be otherwise materially damaged, and (viii) to the
Company's knowledge, there are no pending, threatened or anticipated claims
(other than routine claims for benefits) by, on behalf of or against any of the
Company Benefit Plan or any trusts related thereto.
Section 3.10. Disclosure. The Company has disclosed to the Investor, its
Affiliates or their respective directors, officers, employees, agents or
advisors all agreements, instruments and corporate or other restrictions to
which the Company or any of the Subsidiaries is subject, and all other matters
known to any of them (other than matters of a general economic nature), that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. The reports, financial statements, certificates or
other information furnished by or on behalf of the Company to the Investor, its
Affiliates or their respective directors, officers, employees, agents or
advisors in connection with the negotiation of this Agreement (as modified or
supplemented by other information so furnished), taken as a whole, do not
contain any material misstatement of fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, provided that with respect to
projected financial information, the Company represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time. The Investor acknowledges that actual results during any
period or periods covered by such projected financial information may differ
therefrom and such differences may be material.
Section 3.11. Subsidiaries. Section 3.11 of the Disclosure Schedule sets
forth the name of, and the ownership interest of the Company in, each
Subsidiary.
Section 3.12. Insurance. Section 3.12 of the Disclosure Schedule sets forth
a description of all insurance maintained by or on behalf of the Company and its
Subsidiaries. All premiums in respect of such insurance that are required to
have been paid have been paid. The Company believes that the insurance
maintained by or on behalf of the Company and its Subsidiaries is adequate in
all material respects.
Section 3.13. Labor Matters. There are no material strikes, lockouts or
slowdowns against the Company or any Subsidiary pending or, to the knowledge of
the Company, threatened. Except as would not result in a Material Adverse
Effect, (a) the hours worked by and payments made to employees of the Company
and the Subsidiaries have not been in violation of the Fair Labor Standards Act
or any other applicable Federal, state, local or foreign law dealing with such
matters and (b) the consummation of the transactions contemplated by this
Agreement and the Company Documents will not give rise to any right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which the Company or any Subsidiary is bound.
Except as set forth in Section 3.13 of the Disclosure Schedule, (i) no current
or former employee, officer, director, or consultant of the Company or any of
its Subsidiaries is entitled to any benefit, payment, forgiveness of
indebtedness or accelerated vesting of any bonus, retirement, severance, change
in control, job security or similar benefit or any other enhanced benefit as a
result of this Agreement or the transactions contemplated by the E.ON Purchase
Agreement, whether alone or in connection with any other event and (ii) the
Company is not a party to any agreement, whether written or oral, (A) that would
result in any payments that may be considered to be "parachute payments" under
Section 280G of the Code, whether or not such compensation would be deemed to be
reasonable compensation for services rendered or (B) that would require the
Company or any of its Subsidiaries to make any payments that would fail to be
deductible under Section 162(m) or any other provision of the Code.
Section 3.14. Capitalization; Securities. (a) As of the date hereof, the
authorized capital stock of the Company consists of (i) 200,000,000 shares of
Common Stock, of which 69,612,900 shares are outstanding and 3,079,510 shares
are reserved for issuance under the Option Plan and an additional 3,600,000
shares have been properly authorized for issuance under the Option Plan but not
formally reserved, and (ii) 50,000,000 shares of preferred stock, $0.01 par
value, of which no shares are outstanding, no shares have been designated and no
shares are reserved for issuance. All of such outstanding shares of Common Stock
were duly authorized and validly issued and are fully paid and non-assessable.
(b) Except for the options and purchase rights granted pursuant to the
Option Plan and except as contemplated by this Agreement, there are no
authorized or outstanding (or any obligations to authorize or issue) Derivative
Securities.
(c) Subject to the filing of the Series A Certificate of Designations with
the Secretary of State of the State of Delaware, the shares of Series A
Preferred Stock to be issued pursuant to this Agreement have been duly and
validly authorized and, when issued as contemplated by this Agreement, will have
been validly issued and will be fully paid and non-assessable. The Conversion
Shares and the Warrant Shares have been duly and validly authorized and validly
reserved for issuance, and when issued upon the conversion of Series A Preferred
Stock and the exercise of the Warrants, respectively, will have been validly
issued and will be fully paid and non-assessable. Prior to the issuance thereof,
the Notes will have been duly and validly authorized by the Company and, upon
execution and delivery thereof, will constitute legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, subject to applicable bankruptcy, insolvency reorganization,
moratorium or other laws affecting creditors' rights generally and subject to
general principles of equity regardless of whether considered in a proceeding in
equity or at law. Except as set forth in Section 3.14 of the Disclosure
Schedule, the registration of the Series A Preferred Stock, the Conversion
Shares, the Warrants, the Warrant Shares and the Notes pursuant to the
Registration Rights Agreement will not give rise to any registration rights on
behalf of any Person under any agreement or instrument applicable to the Company
(other than the Registration Rights Agreement). Other than pursuant to the
Registration Rights Agreement or as set forth in Section 3.14(c) of the
Disclosure Schedule, no Person has any right to require the Company to register
securities of the Company under the Securities Act, and there are no shareholder
or similar agreements to which the Company is a party.
(d) The Company is eligible to register securities for resale on Form S-3
under the Securities Act.
Section 3.15. Dividends, Stock Repurchases, Etc. Other than pursuant to
this Agreement, the Series A Certificate of Designations, the Indenture or the
Credit Agreement, or as restricted or limited by applicable Law, or as set forth
in Section 3.15 of the Disclosure Schedule, there are no contractual or other
restrictions or limitations on the ability of the Company or any of its
Subsidiaries to pay any dividends or make any other distributions on, or to
purchase, redeem or otherwise acquire, any of its Equity Interests.
Section 3.16. No Rights Plan. The Company has not issued any rights or
warrants to holders of Common Stock entitling the holders thereof to subscribe
for or purchase Common Stock, which rights or warrants (i) are deemed to be
transferred with such shares of Common Stock, (ii) are not exercisable and (iii)
are also issued in respect of future issuances of Common Stock, in each case in
clauses (i) through (iii) until the occurrence of a specified event or events.
Section 3.17. Exemption from Registration. Assuming the representations and
warranties of the Investor set forth in Article IV are true and correct in all
material respects, the issuance and delivery of the Series A Preferred Stock,
the Notes and the Warrants pursuant to this Agreement, the acquisition of the
Conversion Shares upon conversion of the Series A Preferred Stock and the
acquisition of the Warrant Shares upon the exercise of the Warrants will be in
compliance with the Securities Act and any applicable state securities laws and
will be exempt from the registration requirements of the Securities Act and such
state securities laws.
Section 3.18. Financial Advisors and Brokers; Fairness Opinion. (a) Except
for ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, no Person has acted, directly or indirectly,
as a broker, finder or financial advisor of the Company in connection with this
Agreement or the transactions contemplated thereby, and no Person is entitled to
receive any broker's, finder's or similar fee or commission in respect thereof
based in any way on any agreement, arrangement or understanding made by or on
behalf of the Company, any of its Subsidiaries or any of their respective
directors, officers or employees. True and correct copies of all agreements
between the Company, on the one hand, and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ (or any
of its Affiliates), on the other, have been delivered to the Investor.
(b) The Special Committee has received an opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
& ▇▇▇▇▇ to the effect that the Restructuring and the transactions contemplated
thereby are fair, from a financial point of view, to the holders of the Common
Stock of the Company other than E.ON North America, Inc., VEBA Zweite
Verwaltungsgesellschaft mbH and their Affiliates, and such opinion has not been
withdrawn or adversely modified.
Section 3.19. Material Contracts. Except for this Agreement and those
agreements and other documents filed as exhibits to the SEC Reports and except
as set forth in Section 3.19 of the Disclosure Schedule, as of the date of this
Agreement: (i) neither the Company nor any of its Subsidiaries is a party to or
bound by any "material contract" within the meaning of Item 601(b)(10) of the
SEC's Regulation S-K or any non-competition agreement or other agreement or
arrangement that materially restricts it or any of its Subsidiaries from
competing in any line of business; (ii) neither the Company nor any of its
Subsidiaries has entered into any amendment of any such "material contract" or
waived any of its material rights under any such "material contract"; and (iii)
no such "material contract" has been terminated. Each such "material contract"
constitutes a legal, valid and binding obligation of the Company or such
Subsidiaries, as the case may be, enforceable in accordance with its terms
against the Company or such Subsidiary as the case may be, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law. Except as
set forth in Section 3.19 of the Disclosure Schedule, neither the Company nor
any of its Subsidiaries is in default under any such "material contract", and
there has not occurred any event that, with the lapse of time or the giving of
notice or both, would constitute such a default, except for such defaults that,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on the Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
The Investor represents and warrants to and agrees with, the Company as of
the date hereof and as of the Closing Date as follows:
Section 4.01. Organization. The Investor is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite power and authority to carry on its
business as now conducted.
Section 4.02. Authorization; Enforceability. This Agreement and Investor
Documents entered into or to be entered into by the Investor are within the
Investor's powers and have been duly authorized by all necessary action. This
Agreement has been duly executed and delivered by the Investor and constitutes,
and each Investor Document, when executed and delivered by the Investor, will
constitute, a legal, valid and binding obligation of the Investor, enforceable
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.
Section 4.03. Governmental Approvals; No Conflicts. The execution, delivery
and performance of this Agreement and the Investor Documents entered into or to
be entered into by the Investor and the consummation of the transactions
contemplated thereby (i) do not require any consent or approval of, registration
or filing with, or any other action by or before, any Governmental Authority,
except for the Required Regulatory Approvals and such as have been obtained or
made and are in full force and effect and except where the failure to obtain
such consent or approval or make such registration or filing, individually or in
the aggregate, would not result in a Material Adverse Effect, (ii) will not
violate any applicable Law or the charter, by-laws or other organizational
documents of the Investor or any order of any Governmental Authority and (iii)
will not violate or result in a default under any material indenture, agreement
or other instrument binding upon the Investor or any of its assets, or give rise
to a right thereunder to require any payment to be made by the Investor.
Section 4.04. Financial Advisors and Brokers. Except for ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Inc., no Person has acted directly or indirectly as a broker, finder or
financial advisor of the Investor in connection with this Agreement, the
Investor Documents or the transactions contemplated thereby, and no Person is
entitled to receive any broker's, finder's or similar fee or commission in
respect thereof based in any way on any agreement, arrangement or understanding
made by or on behalf of the Investor or any of its directors, officers or
employees.
Section 4.05. Purpose of Investment . Except as permitted pursuant to
Section 10.10(b), the Investor is acquiring the Series A Preferred Stock under
this Agreement for its own accounts solely for the purpose of investment and not
with a view to, or for sale in connection with, any distribution thereof in
violation of the Securities Act. The Investor acknowledges that the Series A
Preferred Stock, the Conversion Shares, the Notes, the Warrants and the Warrant
Shares have not been registered under the Securities Act and may be sold or
disposed of in the absence of such registration only pursuant to an exemption
from the registration requirements of the Securities Act.
Section 4.06. Holdings. (a) Holdings is, or by the Closing Date will be,
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, with all requisite power and authority to
carry on its business as it will be conducted and, except where the failure to
do so, individually or in the aggregate, would not result in a material adverse
effect on its business, assets operations or properties, qualified to do
business in, and will be in good standing in, every jurisdiction where such
qualification is required. A true and correct copy of the certificate of
incorporation of Holdings is attached hereto as Exhibit J.
(b) (i) The authorized capital stock of Holdings consists, or as of the
Closing Date will consist, of (A) 9,000 shares of Class A Common Stock, par
value $0.01 (the "Holdings Class A Common Stock"), of which 9,000 shares will be
outstanding immediately preceding the Closing and (B) 1 share of Class B Common
Stock, par value $0.01 (the "Holdings Class B Common Stock"), of which 1 share
will be outstanding immediately preceding the Closing and, in each case, which
will then be owned by the Investor (such shares, collectively, the "Holdings
Common Stock"). As of the Closing, the Investor will be the lawful record and
beneficial owner of all of the Holdings Common Stock, the Investor will have
valid title thereto, free and clear of all Liens, and the Holdings Common Stock
will be duly authorized and validly issued, fully paid and non-assessable.
(ii) As of the Closing Date there will be no authorized or outstanding (or
any obligations to authorize or issue) Derivative Securities of Holdings.
(c) As of the Closing Date, Holdings will have all right, title and
interest in the Loans set forth on Schedule 2 and will have no other debts or
liabilities whatsoever. Holdings was incorporated solely for the purpose of
holding such Loans and has not otherwise engaged in any business or operations.
Section 4.07. Financial Ability to Make Loans. The Credit Agreement Lenders
have adequate funds available to them to make the loans contemplated by the
Credit Agreement.
ARTICLE V
GOVERNANCE
Section 5.01. Board Size. For so long as the Investor is entitled to
designate any Board Nominee for election to the Board of Directors, the Board of
Directors shall consist of no more than 11, nor less than 5, directors.
Section 5.02. Board Representation. (a) The Board of Directors shall, prior
to the Closing, elect a total of four nominees designated in writing by the
Investor (such persons, or replacements designated by the Investor, the "Board
Nominees"), to the Board of Directors, to be allocated to Class I, Class II or
Class III as specified by the Investor. Commencing with the annual meeting of
stockholders of the Company the record date for which next follows the Closing
Date, and at each annual meeting of stockholders of the Company thereafter, the
Investor shall be entitled to present to the Board of Directors or the
nominating committee thereof a number of nominees for election to the class of
directors up for election to the Board of Directors at such annual meeting equal
to the number of Board Nominees in such class immediately prior to such election
and the Company shall use its best efforts to cause the election to the Board of
Directors of such Board Nominees. If the Board of Directors shall cease to be a
classified board, the Investor shall be entitled to present to the Board of
Directors or the nominating committee thereof two nominees for election to the
Board of Directors at each annual meeting of stockholders of the Company. In the
event of the death, disability, resignation or removal of a Board Nominee, the
Investor shall designate a replacement for such director, which replacement the
Company shall cause to be elected to the Board of Directors.
(b) The Company shall cause each Board Nominee designated for election to
the Board of Directors pursuant to Section 5.02(a) to be included in the slate
of nominees recommended by the Board of Directors to the stockholders of the
Company for election as directors at the relevant annual meeting of the
stockholders, and shall use its best efforts to cause the election of each such
Board Nominee, including soliciting proxies in favor of the election of such
person.
(c) Notwithstanding the foregoing provisions of this Section 5.02, the
Investor shall not be entitled to designate Board Nominees for election to the
Board of Directors in the event that (i) less than $130,000,000 in Stated Value
of the Series A Preferred Stock is outstanding or (ii) the Investor and its
Affiliates do not Beneficially Own, in the aggregate, more than 50% of the then
outstanding shares of Series A Preferred Stock. In the event that the Investor
shall not be entitled to designate Board Nominees for election to the Board of
Directors, the Board Nominees shall resign from the Board of Directors no later
than the thirtieth day after the day on which the Investor becomes aware that
the aggregate Beneficial Ownership of it and its Affiliates is reduced below the
threshold ownership level of Original Number of Series A Shares specified in
this Section 5.02(c). If a Board Nominee does not resign on or prior to such
thirtieth day as required pursuant to the immediately preceding sentence, a
majority of the Board of Directors (excluding any Board Nominees) shall have the
right to remove such Board Nominee from the Board of Directors.
(d) If the Board of Directors shall determine in good faith in the exercise
of its fiduciary duties, that nomination of any person designated by the
Investor for election to the Board of Directors would be contrary to the best
interests of the Company, then the Company shall promptly notify the Investor of
such determination (either in person, if such determination shall be made at a
Board of Directors meeting at which a Board Nominee is present or by telephone
(promptly confirmed in writing), if such determination shall be made at a Board
of Directors meeting at which a Board Nominee is not present) and thereafter the
Investor shall have a period of no less than five Business Days to designate a
new person for nomination for election to the Board of Directors as a Board
Nominee. The Board of Directors has approved the executives of the Investor set
forth on Schedule 5.02(d) as Board Nominees for all purposes hereof as the date
hereof.
Section 5.03. Meetings. From and after the Closing Date, for so long as a
Board Nominee serves as a member of the Board of Directors, each Board Nominee
shall be invited to attend all regular and special meetings of the Board of
Directors. The Company shall notify each Board Nominee of any such meeting no
later than the time at which it notifies any other member of the Board of
Directors of such meeting.
ARTICLE VI
PRE-CLOSING COVENANTS
Section 6.01. Taking of Necessary Action. Each of the parties hereto agrees
to use its best efforts promptly to take or cause to be taken all actions and
promptly to do or cause to be done all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement in accordance with the terms of the
Agreement. Without limiting the foregoing, (i) the Company will use its best
efforts to file the Series A Certificate of Designations with the Secretary of
State of the State of Delaware, (ii) the Company will use its best effort to
enter into or cause its Subsidiaries to enter into, as applicable, the Company
Documents and (iii) the Investor and the Company will use their best efforts to
make all filings with respect to, and to obtain, all Required Regulatory
Approvals and other Regulatory Approvals necessary or, in the opinion of the
Investor or the Company, advisable, in order to permit the consummation of the
transactions contemplated hereby.
Section 6.02. Conduct of Business. From the date hereof until the Closing
Date, except as set forth on Section 6.02 of the Disclosure Schedule, the
Company shall conduct its business and shall cause its Subsidiaries to conduct
their respective businesses in, and only in, the ordinary course and shall use,
and shall cause its Subsidiaries to use, their best efforts to preserve intact
their respective present business organizations, operations, goodwill and
relationships with third parties (including customers and vendors) and to keep
available the services of the present directors, officers and key employees.
Without limiting the generality of the foregoing, from the date hereof until the
Closing Date, without the prior written consent of the Investor (except as
expressly permitted or required by this Agreement):
(a) the Company shall not, and shall cause each of its Subsidiaries not to,
other than in the ordinary course of business, sell any of the assets of the
Company or its Subsidiaries (or the securities of entities holding the same) to
any Person, other than the Company or a Wholly Owned Subsidiary of the Company,
in one transaction or a series of related transactions, in which the fair value
of the assets being sold, or the total consideration (in the form of cash or
property and including any contingent consideration and any Indebtedness or
other obligations assumed) to be received by the Company and its Subsidiaries,
exceeds $50,000;
(b) other than in the ordinary course of business consistent with past
practice, the Company shall not, and shall cause each of its Subsidiaries not
to, acquire any assets, in one transaction or series of related transactions, in
which the total consideration (in the form of cash or property and including any
contingent consideration and any Indebtedness or other obligations assumed) to
be paid by the Company and its Subsidiaries exceeds $50,000;
(c) the Company shall not, and shall cause each of its Subsidiaries, as the
case may be, not to take any of the actions or enter into any of the agreements,
commitments or transactions described below:
(i) any change or amendment to the Certificate of Incorporation or
By-laws or the certificate or articles of incorporation, bylaws or other
organizational documents of any Subsidiaries of the Company;
(ii) any issuance or sale, or any direct or indirect purchase,
redemption or other acquisition of any shares of their respective Equity
Interests or Derivative Securities, other than pursuant to this Agreement
or transactions contemplated hereby or the Option Plan;
(iii) any dividend or other distribution declared, set aside, paid or
made with respect to Equity Interests by the Company or any of its
Subsidiaries, except (x) dividends or other distributions made to the
Company or to any Subsidiary of the Company and (y) dividends and
distributions declared, set aside, paid or made by any joint venture in
which the Company or any Subsidiary owns an equity interest, which
dividends and distributions were declared, set aside, paid or made in
accordance with the organizational documents or related service agreements
of such joint venture as in effect on the date of such payment;
(iv) any increase in excess of $50,000 in the Indebtedness of the
Company and its Subsidiaries, taken as a whole, other than increases due to
borrowings under existing lines of credit;
(v) any amendment of any mortgage, Lien, lease, Regulatory Approval,
loan agreement, indenture or other agreement, instrument or document, which
amendment is material to the Company and its Subsidiaries, taken as a
whole;
(vi) any default, event of default or breach (or any event which, with
notice or the passage of time or both, would constitute a default, event of
default or breach) by the Company or any of its Subsidiaries of any credit,
financing or other agreement or instrument relating to any Indebtedness,
which default, event of default or breach is material to the Company and
its Subsidiaries, taken as a whole;
(vii) any commitment, agreement or transaction entered into, amended,
or terminated (or any waiver of any rights or remedies under any of the
foregoing) by the Company or any of its Subsidiaries (including any
agreement with respect to any ongoing or threatened litigation) that is
material to the Company and its Subsidiaries, taken as a whole, other than
in the ordinary course of business;
(viii) any entry into or amendment of any material employment,
severance, compensation, consulting, retention, change of control or
similar agreement with, or any material increase in the compensation or
benefits payable or to become payable by the Company or any of its
Subsidiaries to, any employee of the Company or any of its Subsidiaries
(other than agreements terminable without penalty or similar payment by the
Company or such Subsidiary, as the case may be, on not more than 30 days'
notice and increases in compensation payable or to become payable to
employees (other than directors or officers) in the ordinary course of
business consistent with past practice);
(ix) any change in the financial accounting methods, principles or
practices of the Company and its Subsidiaries for financial accounting
purposes, except as required by GAAP or applicable Law;
(x) other than the amalgamation of MEMC Partecipazioni S.r.l with and
into the Italian Subsidiary, any adoption of any agreement or understanding
with respect to any Change in Control, merger, consolidation or other
reorganization with respect to the Company or any of its Subsidiaries, or
any adoption of any plan, agreement or arrangement with respect to, or
resolutions providing for, the liquidation or dissolution of the Company or
any of its Subsidiaries; or
(xi) any settlement or compromise of any Proceeding other than those
in which the amount paid (to the extent not reimbursed with the proceeds of
any insurance policy) does not exceed $50,000.
(d) the Company shall not, and shall cause each of its Subsidiaries not to,
take any action that it knows or has reason to believe would cause a
representation or warranty of the Company set forth herein to be untrue in any
material respect if made at such time, or a covenant of the Company set forth in
Article VII to fail to be satisfied as of the Closing Date; and
(e) the Company shall not, and shall cause each of its Subsidiaries not to,
commit or agree to do any of the foregoing.
Section 6.03. Notifications. At all times prior to the Closing Date, the
Investor shall promptly notify the Company and the Company shall promptly notify
the Investor in writing of any fact, change, condition, circumstance or
occurrence or nonoccurrence of any event which will or is reasonably likely to
result in the failure to satisfy the conditions to be complied with or satisfied
by it hereunder; provided, however, that the delivery of any notice pursuant to
this Section 6.03 shall not limit or otherwise affect the remedies available
hereunder to any party receiving such notice.
ARTICLE VII
ADDITIONAL COVENANTS
Section 7.01. Financial and Other Information. (a) So long as TPG Persons
Beneficially Own, in the aggregate, at least 25% of the Original Number of
Combined Shares, the Company shall (and shall cause each of its Subsidiaries to)
afford to the TPG Persons that then Beneficially Own Conversion Shares and their
Representatives reasonable access, upon reasonable notice and in such manner as
will not unreasonably interfere with the conduct of the Company's (or such
Subsidiary's) business, to their respective properties, books, contracts,
commitments and records (including information regarding any pending or
threatened Proceeding to which the Company or any of its Subsidiaries is, or
reasonably expects to be, a party) and to discuss the business, affairs,
finances, regulatory status and other matters related to the purchase and
Beneficial Ownership of the Series A Preferred Stock, Conversion Shares,
Warrants or Warrant Shares with Representatives of the Company; provided,
however, that neither the Company nor any Subsidiary shall be required to
disclose any such information pursuant to this Section 7.01 to the extent that
such disclosure (i) would result in the breach or violation of the
confidentiality or non-disclosure provisions of any license or agreement to
which the Company or any of its Subsidiaries is a party or (ii) in the opinion
of outside legal counsel to the Company, would result in the Company's inability
to assert the attorney-client privilege with respect to such information or
require premature public disclosure thereof in accordance with applicable rules
and regulations of the Commission promulgated under the Exchange Act.
(b) Upon the written request of the Company, each TPG Person shall inform
the Company of the number of Conversion Shares, Original Number of Conversion
Shares, Warrants Shares or Original Number of Warrant Shares, as applicable,
then Beneficially Owned by such TPG Person. Such information shall be delivered
to the Company within five Business Days of the delivery of such request to such
TPG Person. To the extent such information is not available to the public, the
Company shall keep such information confidential.
Section 7.02. Restricted Payments; Certain Payments of Indebtedness. From
and after the Closing, so long as TPG Persons Beneficially Own, in the
aggregate, at least 25% of the Original Number of Combined Shares, without the
prior written approval of the Investor:
(a) The Company will not, and will not permit any Subsidiary to,
declare or make, or agree to pay or make, directly or indirectly, any
Restricted Payment, except that (i) the Company may declare and pay
dividends with respect to its capital stock payable solely in additional
shares of its capital stock, (ii) the Company or any Subsidiary may pay
dividends or other distributions with respect to any shares of their
capital stock or the Series A Preferred Stock in accordance with the Series
A Certificate of Designations, (iii) Subsidiaries may declare and pay
dividends ratably with respect to their capital stock and (iv) the Company
may make Restricted Payments, not exceeding $200,000 during any fiscal
year, pursuant to and in accordance with stock option plans or other
benefit plans for directors, management or employees of the Company and the
Subsidiaries, including the redemption or purchase of capital stock of the
Company held by former directors, management or employees of the Company or
any Subsidiary following termination of their employment.
(b) The Company will not, and will not permit any Subsidiary to, make
or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash, securities or other property) of or in
respect of principal of or interest on any Indebtedness, or any payment or
other distribution (whether in cash, securities or other property),
including any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of any
Indebtedness, except (i) payment of Indebtedness permitted under the Credit
Agreement, (ii) pursuant to the Restructuring, and (iii) payment of
Indebtedness permitted under the Indenture.
Section 7.03. Restrictive Agreements. From and after the Closing, so long
as TPG Persons Beneficially Own, in the aggregate, at least 25% of the Original
Number of Combined Shares, without the prior written approval of the Investor,
the Company will not, and will not permit any Subsidiary to, directly or
indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon (a) the
ability of the Company or any Subsidiary to create, incur or permit to exist any
Lien upon any of its property or assets, or (b) the ability of any Subsidiary to
pay dividends or other distributions on, or to purchase, redeem or otherwise
acquire to any shares of its capital stock or to make or repay loans or advances
to the Company or any other Subsidiary or to Guarantee Indebtedness of the
Company or any other Subsidiary, provided that (i) the foregoing shall not apply
to restrictions and conditions imposed by Law or permitted under Section 6.10 of
the Credit Agreement, (ii) the foregoing shall not apply to restrictions and
conditions permitted by the Indenture and (iii) the foregoing shall not apply to
restrictions and conditions imposed by Section 7.02.
Section 7.04. Publicity. Except as required by Law or by obligations
pursuant to any listing agreement with or requirement of any national securities
exchange or national quotation system on which the Common Stock is listed,
admitted to trading or quoted, neither the Company (nor any of its Affiliates)
nor the Investor (nor any of its Affiliates) shall, without the prior written
consent of each other party hereto, which consent shall not be unreasonably
withheld or delayed, make any public announcement or issue any press release
with respect to the transactions contemplated by this Agreement. Prior to making
any such public disclosure required by applicable Law or pursuant to any listing
agreement with or requirement of any relevant national exchange or national
quotation system, the disclosing party shall consult with the other parties
hereto, to the extent feasible, as to the content and timing of such public
announcement or press release.
Section 7.05. Status of Dividends. The Company agrees to treat the Series A
Preferred Stock as equity for all Tax purposes unless the Company determines
that there is no reasonable basis for such position. The Company shall take no
action (other than as required by Law) that would jeopardize the availability of
the dividends received deduction under Section 243(a)(1) of the Code for the
distributions on the Series A Preferred Stock that are paid out of current or
accumulated earnings and profits, if any.
Section 7.06. Director and Officer Indemnification. (a) So long as any
Board Nominee serves as a member of the Board of Directors or as an officer of
the Company, the Company shall provide to each such individual indemnification
and directors' and officers' insurance having terms and provisions no less
favorable to such individuals than the indemnification and directors' and
officers' insurance provided to other directors and officers of the Company
(including coverage for matters based in whole or in part on, or arising in
whole or in part out of, any matter existing or occurring while such Board
Nominee was a director, even though such Board Nominee may no longer be a
director at the time any claim for indemnification or coverage under insurance
is made).
(b) So long as any Board Nominee serves as a member of the Board of
Directors or as an officer of the Company, the Company shall not amend the
Certificate of Incorporation or By-laws so as to adversely affect the rights of
any such person with respect to indemnification by the Company for any Losses
incurred by such person in such person's capacity as an officer or director of
the Company.
Section 7.07. Listing; Reservation. (a) So long as any TPG Person
Beneficially Owns Conversion Shares or Warrant Shares, the Company shall use its
best efforts to ensure that the Common Stock continues to be listed for trading
on the NYSE. The Company will use its best efforts so that upon issuance all
Conversion Shares and Warrant Shares will be listed for trading on the NYSE.
(b) From and after the Closing, the Company shall at all times reserve and
keep available, out of its authorized and unissued Common Stock, solely for the
purpose of issuing Common Stock upon the conversion of the Series A Preferred
Stock and the exercise of the Warrants, such number of shares of Common Stock
free of preemptive rights as shall be sufficient to issue Common Stock upon the
conversion of all outstanding shares of Series A Preferred Stock and upon the
exercise of all outstanding Warrants.
Section 7.08. Legend. (a) The Investor agrees to the placement of a legend
(the "Private Placement Legend") substantially as set forth below on (i)
certificates representing Series A Preferred Stock issued pursuant to the terms
of this Agreement, (ii) certificates representing Conversion Shares, (iii)
certificates representing the Notes issued pursuant to the terms of this
Agreement, (iv) certificates representing Warrants issued pursuant to the terms
of this Agreement, (v) certificates representing Warrant Shares and (vi) any
certificate issued at any time in exchange or substitution for any certificate
bearing such legend. The Private Placement Legend is substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS.
(b) The Private Placement Legend shall be removed from a certificate
representing Series A Preferred Stock, Conversion Shares, Notes, Warrants or
Warrant Shares as applicable, if the securities represented thereby are sold
pursuant to an effective registration statement under the Securities Act or
there is delivered to the Company such satisfactory evidence, which may include
an opinion of independent counsel, as reasonably may be requested by the
Company, to confirm that neither such legend nor the restrictions on transfer
set forth therein are required to ensure that transfers of such securities will
not violate the registration and prospectus delivery requirements of the
Securities Act.
Section 7.09. Approval for Issuance of Shares. (a) The Company shall use
its best efforts to obtain, as promptly as possible, the Shareholder Approval
and take all action necessary to present the Shareholder Approval Proposal for a
vote at each meeting of stockholders of the Company, annual or otherwise, held
after the execution of this Agreement. Each meeting of stockholders at which the
Shareholder Approval is considered is referred to herein as a "Shareholder
Meeting." The Company shall use its best efforts to obtain the required approval
of its stockholders of the Shareholder Approval Proposal at each Shareholder
Meeting. The Company shall use its best efforts to hold a Shareholder Meeting no
later than February 28, 2002 and shall file with the Commission a Proxy
Statement with respect to such Shareholder Meeting no later than December 15,
2001.
(b) Each Proxy Statement shall contain the recommendation of the Board of
Directors that the stockholders approve the Shareholder Approval Proposal. The
Company shall notify the Investor promptly of the receipt by it of any comments
from the Commission or its staff and of any request by the Commission for
amendments or supplements to such Proxy Statement or for additional information,
and will supply the Investor with copies of all correspondence between the
Company and its representatives, on the one hand, and the Commission or the
members of its staff or of any other Governmental Authority, on the other hand,
with respect to such Proxy Statement. The Company shall give the Investor and
its counsel a reasonable opportunity to review and comment on those portions of
such Proxy Statement describing or referring to the Shareholder Approval
Proposal or any member of the Investor Group (the "Investor Information") prior
to the filing of the Proxy Statement with the Commission and shall give the
Investor and its counsel a reasonable opportunity to review and comment on all
amendments and supplements to the Investor Information and all responses to
requests for additional information and replies to comments prior to their being
filed with, or sent to, the Commission with respect to the Investor Information.
The Company shall give reasonable consideration to any comments the Investor or
its counsel may provide with respect to the Investor Information or any
amendment or supplement thereto.
(c) Notwithstanding anything to the contrary contained in this Section
7.09, the Company shall not be required to take any of the actions described in
Section 7.09(a) or (b) hereof with respect to the Shareholder Approval Proposal
if, in the opinion of outside legal counsel to the Company, the Shareholder
Approval is not required under the NYSE Rules to permit the actions described in
the definition of "Shareholder Approval".
(d) Each Proxy Statement, as of the date it is mailed to stockholders of
the Company and as of the date of the relevant Shareholder Meeting, will not
include any 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; provided,
however, that this Section 7.09(d) shall not apply to any information provided
to the Company in writing by any member of the Investor Group with respect to
such member expressly for inclusion in the Proxy Statement.
Section 7.10. Transactions with Affiliates. From and after the Closing, so
long as TPG Persons Beneficially Own, in the aggregate, at least 25% of the
Original Number of Combined Shares, the Company shall not, without the prior
written approval of the Investor, sell, lease or otherwise transfer any property
or assets to, or purchase, lease or otherwise acquire any property or assets
from, or otherwise engage in any other transactions with, any of its Affiliates,
except such transactions that are permitted under the Credit Agreement and the
Indenture.
Section 7.11. Equity Issuances. (a) From and after the Closing, so long as
TPG Persons Beneficially Own, in the aggregate, at least 25% of the Original
Number of Combined Shares, the Company and each of its Subsidiaries shall not,
without the prior written approval of the Investor, issue or sell any Equity
Interests of the Company or any Subsidiary or any Derivative Securities in a
transaction or series of related transactions (such transaction or series of
related transactions, a "10% Transaction") as a direct or indirect result of
which any Person (other than any institutionally managed, public held mutual
fund registered with the Commission) or Group would have, or have the right to
acquire, Beneficial Ownership of Equity Interests representing 10% or more of
the aggregate Voting Power of the then-outstanding Voting Securities of the
Company or any such Subsidiary; provided, however, that the Company may issue
its Equity Interests in a 10% Transaction without any such approval if (i) the
consideration to be received by the Company in such transaction is solely in the
form of cash, (ii) the transaction is completed pursuant to a Purchase
Agreement, and (iii) the Company has complied with the procedures set forth in
Section 7.11(b) hereof with respect to such transaction; and provided further,
that, notwithstanding the foregoing any transaction expressly permitted pursuant
to Section 6.02 hereof shall not constitute a 10% Transaction.
(b) (i) Prior to any offer or sale by the Company of any of its Equity
Interests (the "Covered Securities") in a 10% Transaction, the Company shall
give written notice (a "Proposed Sale Notice") to the Investor of the Company's
desire to sell the Covered Securities, which notice shall identify (A) the
number of Covered Securities, (B) the terms of the Covered Securities and (C)
any other material terms and conditions of the proposed offer or sale (other
than a proposed sale price). The date on which such Proposed Sale Notice is
given is referred to herein as the "Notice Date." On and prior to the
Solicitation Date with respect to any Covered Securities, and following the
Solicitation Date if the Company shall have delivered an Acceptance Notice with
respect to such Covered Securities, the Company shall not, shall not permit any
of its Subsidiaries or Affiliates to, and shall not authorize or permit any of
its or their Representatives to, directly or indirectly, solicit or encourage
the submission of any proposal from any Person (other than the Investor and its
Affiliates), participate in any discussion or negotiations with any Person
(other than the Investor and its Affiliates), or authorize, engage in or enter
any agreement or understanding with any Person (other than the Investor and its
Affiliates), with respect to the issuance or sale of such Covered Securities.
(ii) The Investor shall have forty days following the Notice Date (the
"Response Period") to notify the Company in writing (such notification, an
"Offer to Purchase") of its offer, or an offer by any of its Affiliates, to
purchase in cash all (but not less than all) of the Covered Securities
referred to in the relevant Proposed Sale Notice. During the Response
Period, if requested by the Investor or any of its Affiliates, the Company
shall negotiate in good faith with the Investor or such Affiliate with
respect to the terms of a proposed purchase of Covered Securities by the
Investor or such Affiliate. Any Offer to Purchase shall set forth a
proposed cash purchase price for such Covered Securities (the "Investor
Price") and the proposed closing date for the purchase and may include
other material terms and conditions of the proposed purchase. The Investor
shall not be obligated to deliver an Offer to Purchase, and if an Offer to
Purchase is not given prior to the end of the Response Period, the Investor
shall be deemed to have declined to purchase such Covered Securities.
(iii) The Company shall have ten days following the delivery of an
Offer to Purchase to accept the offer made by the Investor or its
Affiliates to purchase all (but not less than all) of the Covered
Securities on the terms and subject to the conditions set forth in the
Offer to Purchase by giving the Investor written notice to that effect (an
"Acceptance Notice"). If, in accordance with the terms of the preceding
sentence, the Company accepts the offer made by the Investor or its
Affiliates to purchase such Covered Securities on the terms and subject to
the conditions set forth in the Offer to Purchase, the closing for such
transaction shall take place at a time and place reasonably acceptable to
the Investor and the Company. If the Company does not give an Acceptance
Notice in accordance with the terms of the first sentence of this
paragraph, the Company shall be deemed to have rejected the offer set forth
in the relevant Offer to Purchase.
(iv) If the Company has complied with the foregoing provisions of this
Section 7.11(b) and shall not have given an Acceptance Notice with respect
to any Covered Securities following the Solicitation Date with respect to
such Covered Securities, the Company may enter into a Purchase Agreement
with any other Person with respect to all (but not less than all) of such
Covered Securities within 40 days following such Solicitation Date (or
within 60 days following such Solicitation Date, if such Purchase Agreement
constitutes a customary underwriting agreement (an "Underwriting
Agreement") that contemplates a bona fide offering of the Covered
Securities to the public that is registered under the Securities Act) and
sell all (but not less than all) of the Covered Securities pursuant to such
Purchase Agreement within 70 days following such Solicitation Date (or
within 100 days following such Solicitation Date if such sale is made
pursuant to an Underwriting Agreement and constitutes a bona fide offering
of the Covered Securities to the public that is registered under the
Securities Act); provided that (i) the purchase price for such Covered
Securities in such sale is at least 105% of the related Investor Price, if
any, and (ii) the terms and conditions of such sale are otherwise not
materially worse for the Company than those set forth in the related Offer
to Purchase. If the Company has not executed a Purchase Agreement with
respect to such Covered Securities within 40 days or 60 days, as the case
may be, following the relevant Solicitation Date, or has not completed a
sale of all of such Covered Securities within 70 days or 100 days, as the
case may be, following the relevant Solicitation Date, the Company shall no
longer be permitted to sell such Covered Securities without again fully
complying with all the provisions of this Section 7.11, and all the
restrictions contained in this Section 7.11 shall again be in effect with
respect to such Covered Securities.
Section 7.12. Fundamental Changes. From and after the Closing, so long as
members of the Investor Group Beneficially Own, in the aggregate, at least 25%
of the Original Number of Combined Shares, without the prior written approval of
the Investor, the Company will not, and will not permit any Subsidiary to, (a)
merge into, consolidate with or enter into any other business combination with
any other Person, or permit any other Person to merge into, consolidate with or
enter into any other business combination with it, if such merger, consolidation
or business combination would result in a Change in Control or sale of
substantially all of the Company's assets or (b) enter into or commence any
liquidation, bankruptcy, dissolution, recapitalization, reorganization,
assignment to creditors or any similar transaction.
Section 7.13. Short-Form Merger . So long as TPG Persons Control the
Company, the Investor will not, and will cause such other TPG Persons not to,
effect, or cause to be effected, a "short-form" merger pursuant to DGCL Section
253 unless (i) such merger shall have been approved by a special committee of
the Board of Directors that does not include any Representatives of a TPG Person
and (ii) such special committee shall have received an opinion from a nationally
recognized investment banking firm to the effect that the consideration to be
received by holders of Common Stock (other than TPG Persons) in such merger is
fair, from a financial point of view, to such holders of Common Stock.
Section 7.14. Tax Sharing Agreement. Upon notice from the Investor that it
has elected to be treated as a corporation for U.S. federal income tax purposes,
the Company will (i) agree, and cause its eligible U.S. Subsidiaries to agree,
to file consolidated income tax returns with the Investor and (ii) execute, and
cause its eligible U.S. Subsidiaries to execute, a tax sharing agreement
substantially in the form attached hereto as Exhibit L.
Section 7.15. Holdings Loans. The Company will take all actions necessary,
and cause its Subsidiaries (including Holdings upon the transfer by the Investor
to the Company of the Holdings Class A Common Stock pursuant to Section 2.01) to
take all actions necessary, to permit the pledges of collateral under the Credit
Agreement Ancillary Documents and the Indenture Ancillary Documents. The Company
will not enforce, and will cause its Subsidiaries (including Holdings upon the
transfer by the Investor to the Company of the Holdings Class A Common Stock
pursuant to Section 2.01) not to enforce, any negative pledge clauses under the
Loans listed in Schedule 2.
ARTICLE VIII
CONDITIONS
Section 8.01. Conditions to the Investor's Obligations with Respect to the
Restructuring. The obligation of the Investor at the Closing, to (i) deliver to
the Company the Holdings Class A Common Stock, (ii) cause the Credit Agreement
Lenders to enter into the Credit Agreement, (iii) cause the Notes Designees to
deliver the Loans to the Company, (iv) enter into the Registration Rights
Agreement, and (v) enter into the Merger Agreement, in each case pursuant to
Section 2.01, is subject to satisfaction or waiver of each of the following
conditions precedent:
(a) Representations and Warranties; Covenants. The representations and
warranties of the Company set forth in Article III qualified as to
materiality shall have been true and correct in all respects, and those not
so qualified shall have been true and correct in all material respects, on
and as of the date hereof and as of the Closing as if made on the Closing
Date (except where such representation and warranty speaks by its terms as
of a different date, in which case it shall be true and correct as of such
date, or except where such representation and warranty is not true or
correct solely as a result of actions expressly permitted by Section 6.02).
The Company shall have performed in all material respects all obligations
and complied with all agreements, undertakings, covenants and conditions
required hereunder to be performed by it at or prior to the Closing. The
Company shall have delivered to the Investor at the Closing a certificate
in form and substance reasonably satisfactory to the Investor dated the
Closing Date and signed by the chief executive officer and the chief
financial officer of the Company to the effect that the conditions set
forth in this Section 8.01(a) have been satisfied.
(b) Secretary's Certificate. The Investor shall have received a
certificate from the Company of the Company's Secretary or other duly
authorized officer of the Company and in a form reasonably acceptable to
the Investor, dated as of the Closing Date, (i) attaching the Certificate
of Incorporation and By-laws and making customary certifications with
respect thereto, (ii) certifying that the resolutions of the Board of
Directors delegating to the Special Committee authority with respect to
this Agreement and the consummation of the transactions contemplated by
this Agreement and the Company Documents were duly adopted and have not
been rescinded or amended as of the Closing Date, (iii) certifying
resolutions of the Special Committee approving the execution and delivery
of this Agreement by the Company and the consummation of the transactions
contemplated by this Agreement and the Company documents were duly adopted
and have not been rescinded or amended as of the Closing Date, and (iv)
attesting as to the incumbency and signature of each officer of the Company
who shall execute this Agreement, any Company Document or any other
instrument or document required to be executed pursuant hereto or thereto.
(c) Opinions of Counsel. The Investor shall have received at the
Closing a written opinion from ▇▇▇▇▇ ▇▇▇▇ LLP, special counsel to the
Company, dated the Closing Date, substantially in the form set forth in
Exhibit H.
(d) Compliance with Laws; No Adverse Action or Decision. Since the
date hereof, (i) no Law shall have been promulgated, enacted or entered
that restrains, enjoins, prevents, materially delays, prohibits or
otherwise makes illegal the performance of this Agreement or any of the
Investor Documents or Company Documents; (ii) no preliminary or permanent
injunction or other order by any Governmental Authority that restrains,
enjoins, prevents, delays, prohibits or otherwise makes illegal the
performance of this Agreement or any of the Investor Documents or the
Company Documents shall have been issued and remain in effect; and (iii) no
Governmental Authority shall have instituted any Proceeding that seeks to
restrain, enjoin, prevent, delay, prohibit or otherwise make illegal the
performance of this Agreement or any of the Investor Documents or Company
Documents.
(e) Consents. All Regulatory Approvals (including the Required
Regulatory Approvals) from any Governmental Authority and all consents,
waivers or approvals from any other Person required for or in connection
with the execution and delivery of this Agreement and the Investor
Documents and the Company Documents and the consummation of the
transactions contemplated thereby shall have been obtained or made on terms
reasonably satisfactory to the Investor, and all waiting periods specified
under applicable Law, the expiration of which is necessary for such
consummation, shall have expired or been terminated.
(f) Proceedings. All corporate and other proceedings to be taken by
the Company in connection with this Agreement and the Company Documents
with respect to the transactions contemplated thereby to be completed at
the Closing and documents incident thereto shall have been completed in
form and substance reasonably satisfactory to the Investor, and the
Investor shall have received all such counterpart originals or certified or
other copies of this Agreement and the Company Documents and such other
documents as it may reasonably request.
(g) No Material Adverse Effect; No Insolvency Event. No event shall
have occurred or change, circumstance or effect arisen or been discovered
that has had, or is reasonably likely to have, a Material Adverse Effect;
and no Insolvency Event shall have occurred.
(h) Board Nominees. The Board of Directors shall have elected the
Board Nominees pursuant to Section 5.02.
(i) E.ON Note Purchase. The Note Purchase (as defined in the E.ON
Purchase Agreement) shall have been consummated
(j) Establishment of Preferred Stock; Delivery of Securities. The
Company shall have filed with the Secretary of State of the State of
Delaware the Certificate of Designations containing the resolutions of the
Board of Directors of the Company creating the Series A Preferred Stock and
setting forth the terms and conditions of the Series A Preferred Stock. A
copy of each of the Certificate of Incorporation and the Series A
Certificate of Designations, certified by the State of Delaware (or, in the
case of the Series A Certificate of Designations, accompanied by evidence
of its filing reasonably satisfactory to the Investor), shall have been
delivered to the Investor and the Company shall have executed and delivered
to the Investor the shares of Series A Preferred Stock pursuant to Section
2.01.
(k) Credit Agreement. (i) The Credit Agreement, together with each
Credit Agreement Ancillary Document, each substantially in the form of
Exhibit B, shall have been executed and delivered by the Company, its
Subsidiaries, the Administrative Agent thereunder and the Collateral Agent
thereunder, in each case as applicable. (ii) The conditions to the
obligations of the Credit Agreement Lenders set forth in Section 4.01 of
the Credit Agreement to make loans under the Credit Agreement shall have
been satisfied.
(l) Indenture and Notes. (i) The Indenture, together with each
Indenture Ancillary Document, each substantially in the form of Exhibit C,
shall have been executed and delivered by the Company, its Subsidiaries,
the Trustee thereunder and the Collateral Agent thereunder, in each case as
applicable. (ii) The Investor or, as directed by the Investor, the Trustee
and/or the Collateral Agent under the Indenture shall have received such
documents and certificates as the Investor or its counsel may reasonably
request with respect to legal matters relating to the Indenture and the
Indenture Ancillary Documents, including in connection with the security
interests to be granted pursuant to the Indenture Ancillary Documents, all
in form and substance satisfactory to the Investor and its counsel. (iii)
The Company shall have executed and delivered the Notes to the Notes
Designees pursuant to Section 2.01 after having caused the Notes to be
authenticated by the Trustee under the Indenture.
(m) Warrant Certificates. The Warrant Certificates, substantially in
the form of Exhibit D, shall have been executed and delivered by the
Company to the Notes Designees pursuant to Section 2.01.
(n) Registration Rights Agreement. The Registration Rights Agreement,
substantially in the form of Exhibit E, shall have been executed and
delivered by the Company and the Guarantors.
(o) Merger Agreement. The Merger Agreement, substantially in the form
of Exhibit G, shall have been executed and delivered by the Company.
(p) Resolution of the Board of Directors of the Company Concerning
Employee Benefits. The Board of Directors or the appropriate committee
thereof that has the authority to approve the following resolution, shall
have adopted a resolution concerning employee benefit and compensation
matters substantially in the form attached hereto as Exhibit K.
(q) Employment Agreements. The Company and each employee who is
employed in the position of corporate vice president or above shall have
entered into an employment agreement, the form and substance of which are
to the reasonable satisfaction of the Investor, and which include a waiver
by the employee of any rights or entitlements to any benefits under the
MEMC Electronic Materials, Inc. Supplemental Executive Pension Plan.
Section 8.02. Conditions of the Company's Obligations with Respect to the
Restructuring. The obligation of the Company at the Closing to (i) issue to the
Investor the Series A Preferred Stock, (ii) enter and cause its Subsidiaries to
enter into the Credit Agreement and the Credit Agreement Ancillary Documents, as
applicable, (iii) enter into, and cause its Subsidiaries to enter into, the
Indenture and the Indenture Ancillary Documents, as applicable, (iv) issue the
Notes and the Warrant Certificates to the Notes Designees, (v) enter into, and
cause the Guarantors to enter into, the Registration Rights Agreement, and (vi)
enter into the Merger Agreement, in each case pursuant to Section 2.01, is
subject to satisfaction or waiver of each of the following conditions precedent:
(a) Representations and Warranties; Covenants. The representations and
warranties of the Investor set forth in Article IV qualified as to
materiality shall have been true and correct in all respects, and those not
so qualified shall have been true and correct in all material respects, on
and as of the date hereof and as of the Closing as if made on the Closing
Date (except where such representation and warranty speaks by its terms as
of a different date, in which case it shall be true and correct as of such
date). The Investor shall have performed in all material respects all
obligations and complied with all agreements, undertakings, covenants and
conditions required by it to be performed at or prior to the Closing, and
the Investor shall have delivered to the Company at the Closing a
certificate in form and substance reasonably satisfactory to the Company
dated the Closing Date and signed on behalf of a member of the Investor to
the effect that the conditions set forth in this Section 8.02(a) have been
satisfied.
(b) Opinions of Counsel. The Company shall have received at the
Closing (i) a written opinion from Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
special counsel to the Investor, and (ii) a written opinion from Morris,
Nichols, Arsht & ▇▇▇▇▇▇▇, special counsel to the Investor, each dated the
Closing Date, such opinions to cover in the aggregate the matters
substantially as set forth in Exhibit I.
(c) Compliance with Laws; No Adverse Action or Decision. Since the
date hereof, (i) no Law shall have been promulgated, enacted or entered
that restrains, enjoins, prevents, materially delays, prohibits or
otherwise makes illegal the performance of any of this Agreement or the
Investor Documents or the Company Documents with respect to the
transactions contemplated thereby to be completed at the Closing; (ii) no
preliminary or permanent injunction or other order by any Governmental
Authority that restrains, enjoins, prevents, delays, prohibits or otherwise
makes illegal the performance of any of this Agreement or the Investor
Documents or the Company Documents with respect to the transactions
contemplated thereby to be completed at the Closing shall have been issued
and remain in effect; and (iii) no Governmental Authority shall have
instituted any action, claim, suit, investigation or other proceeding that
seeks to restrain, enjoin, prevent, delay, prohibit or otherwise make
illegal the performance of any of this Agreement or the Investor Documents
or the Company Documents.
(d) Credit Agreement. The Credit Agreement and each Credit Agreement
Ancillary Document, substantially in the form of Exhibit B, shall have been
executed and delivered by the Credit Agreement Lenders, the Administrative
Agent thereunder and the Collateral Agent thereunder, in each case as
applicable.
ARTICLE IX
TERMINATION
Section 9.01. Termination of Agreement. Subject to Section 9.02, this
Agreement may be terminated by notice in writing at any time prior to the
Closing by:
(a) the Investor or the Company, if the Closing shall not have
occurred on or before November 30, 2001; provided, however, that the right
to terminate this Agreement under this Section 9.01(a) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Closing
to occur on or before such date;
(b) the Investor if there has been a material breach by the Company of
a representation, warranty, covenant or agreement set forth in this
Agreement which has not been cured within one day after written notice
thereof;
(c) the Investor or the Company, if any Governmental Authority of
competent jurisdiction shall have issued any judgment, injunction, order,
ruling or decree or taken any other action restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated by
this Agreement and such judgment, injunction, order, ruling, decree or
other action becomes final and non-appealable; provided that the party
seeking to terminate this Agreement pursuant to this clause (c) shall have
used its best efforts to have such judgment, injunction, order, ruling or
decree lifted, vacated or denied;
(d) the Investor or the Company, if the E.ON Purchase Agreement has
been terminated; or
(e) mutual written agreement of the Investor and the Company.
Section 9.02. Effect of Termination. If this Agreement is terminated in
accordance with Section 9.01 and the transactions contemplated hereby are not
consummated, this Agreement shall become null and void and of no further force
and effect except that (i) the terms and provisions of this Section 9.02,
Section 7.04 and Article X shall remain in full force and effect and (ii) any
termination of this Agreement shall not relieve any party hereto from any
liability for any breach of its obligations hereunder.
ARTICLE X
MISCELLANEOUS
Section 10.01. Fees and Expenses. (a) The Company shall be responsible for
the payment of all expenses incurred by it in connection with this Agreement and
the transactions contemplated thereby (including any Proxy Statement), including
all fees and expenses of its legal counsel and all third-party consultants
engaged by it to assist in such transactions. The Company shall be responsible
for and reimburse the Investor for all of its fees and disbursements of legal
counsel, financial advisors and other third party consultants and other
out-of-pocket expenses incurred by the Investor in connection with this
Agreement and the transactions contemplated thereby. Such reimbursements shall
be due to the Investor within three Business Days after receipt by the Company
of an invoice therefor. In addition to such fees and expenses, the Company shall
pay the Investor a $10,000,000 fee within three Business Days after receipt by
the Company of an invoice therefor. For the avoidance of doubt, no fees or
expenses due to the Investor under this Section 10.01 will be payable by the
Company if the closing is not consummated.
(b) All amounts payable under this Agreement shall be paid in immediately
available funds to an account or accounts designated by the recipient of such
amounts.
Section 10.02. Survival of Representations and Warranties. Notwithstanding
any investigation conducted or notice or knowledge obtained by or on behalf of
any party hereto, each representation or warranty in this Agreement or in the
Disclosure Schedule or certificates delivered pursuant to this Agreement shall
survive the Closing for a period of two years; provided, however, that (i) each
representation and warranty made in Sections 3.01, 3.02, 3.03, 3.14, 4.01, 4.02
and 4.03 shall survive the Closing without limitation and (ii) each
representation and warranty made in Sections 3.06(b), 3.08 and 3.09 or in any
section of the Disclosure Schedule or certificate related thereto shall survive
the Closing until the sixtieth day following the expiration of the applicable
statute of limitations with respect to any action that may be brought relating
to the matters described in such representation and warranty. Any claim for
indemnification under this Article X arising out of the inaccuracy or breach of
any representation or warranty must be made prior to the termination of the
applicable survival period.
Section 10.03. Specific Performance. The parties hereto specifically
acknowledge that monetary damages are not an adequate remedy for violations of
this Agreement, and that any party hereto may, in its sole discretion, apply to
a court of competent jurisdiction for specific performance or injunctive or such
other relief as such court may deem just and proper in order to enforce this
Agreement or prevent any violation hereof and, to the extent permitted by
applicable law and to the extent the party seeking such relief would be entitled
on the merits to obtain such relief, each party waives any objection to the
imposition of such relief.
Section 10.04. Indemnification. (a) The Company agrees to indemnify and
hold harmless the Investor, each Designated Purchaser, each Note Designee, each
member, limited partner or general partner, as the case may be, of the Investor,
each Designated Purchaser, each Note Designee, each limited or general partner
of each such member, limited partner or general partner, each of their
Affiliates and each of their Representatives (collectively, the "Indemnified
Investor Parties") from and against any and all losses, penalties, judgments,
suits, costs, claims, liabilities, damages and expenses (including reasonable
attorneys' fees and disbursements but excluding Taxes imposed as a result of
being a direct or indirect owner of the Series A Preferred Stock, Conversion
Shares, Notes, Warrants or Warrant Shares or realizing income or gain with
respect thereto) (collectively, "Losses"), incurred by, imposed upon or asserted
against any of the Indemnified Investor Parties as a result of, relating to or
arising out of, (i) the breach of any representation or warranty made by the
Company in this Agreement or any Company Document or in any certificate
delivered by the Company pursuant to this Agreement or any Company Document
(each of which shall be deemed to have been made for the benefit of all members
of the Investor Group), (ii) the breach of any agreement or covenant made by the
Company in this Agreement or any Company Document or in any certificate
delivered by the Company pursuant to any this Agreement or any Company Document
(each of which shall be deemed to have been made for the benefit of all members
of the Investor Group), or (iii) to the fullest extent permitted by law, the
transactions contemplated hereby, the negotiation, execution, delivery and
performance of this Agreement and the issuance and/or direct or indirect
ownership of the Series A Preferred Stock, Conversion Shares, Notes, Warrants or
Warrant Shares (including any litigation, suits, actions, investigations, claims
or proceedings to which an Indemnified Investor Party is made party as a result
thereof), including in connection with an Indemnified Investor Party's status as
a shareholder of the Company and any alleged violation of applicable business
combination, control share and any other similar anti-takeover statutes;
provided, however, that nothing in this clause (iii) shall require the Company
to indemnify any Indemnified Investor Party with respect to any Loss resulting
solely from (x) a decline in the market value of the Series A Preferred Stock,
Conversion Shares, Notes, Warrants or Warrant Shares or (y) a claim by a third
party that the Investor's entering into this Agreement and consummating the
transactions contemplated thereby breaches any contract or agreement by and
between the Investor and such third party.
(b) The Investor agrees to indemnify and hold harmless the Company and each
of its Representatives (collectively, the "Indemnified Company Parties") from
and against any and all Losses incurred by any of the Indemnified Company
Parties as a result of, or arising out of, (i) the breach of any representation
or warranty made by the Investor in this Agreement or any Investor Document or
in any certificate delivered by the Investor pursuant to this Agreement or any
Investor Document, or (ii) the breach of any agreement or covenant made by the
Investor in this Agreement or any Investor Document or in any certificate
delivered by the Investor pursuant to this Agreement or any Investor Document.
(c) The following provisions shall apply to any claim for Losses (a
"Claim") by an Indemnified Investor Party or Indemnified Company Party (as the
case may be, the "Indemnified Party") entitled to any indemnification under this
Section 10.04 in respect of, arising out of or involving a claim or demand made
by any Person against an Indemnified Party (a "Third Party Claim"):
(i) The Indemnified Party shall notify the indemnifying party in
writing within 10 Business Days after receipt by such Indemnified Party of
written notice of a Third Party Claim if a Claim in respect thereof is to
be made against the indemnifying party under this Section 10.04; but the
failure to so notify the indemnifying party (x) will not relieve the
indemnifying party from liability under this Section 10.04 unless and to
the extent it has been actually and materially prejudiced by such failure
and (y) will not, in any event, relieve the indemnifying party from any
obligations to any Indemnified Party other than the indemnification
obligation provided in this Section 10.04.
(ii) If a Third Party Claim is made against an Indemnified Party, the
indemnifying party shall be entitled to participate in the defense thereof
and, if it so chooses and acknowledges its obligations to indemnify the
Indemnified Party therefor, to assume the defense thereof with counsel of
the indemnifying party's choice to represent the Indemnified Party;
provided, however, that such counsel shall be reasonably satisfactory to
the Indemnified Party; provided, further, that the Indemnified Party shall
have the right to participate in the defense thereof and to employ counsel,
at its own expense, separate from the counsel employed by the indemnifying
party (except that the indemnifying party shall be liable for the fees and
expenses of counsel employed by the Indemnified Party for any period during
which the indemnifying party has failed to assume the defense of any Third
Party Claim. Notwithstanding the foregoing, the Indemnified Party shall
have the right to employ one firm or separate counsel (plus local counsel),
and the indemnifying party shall bear the reasonable fees, costs and
expenses of such separate counsel, if (w) the use of counsel chosen by the
indemnifying party to represent the Indemnified Party would present such
counsel with a conflict of interest (based upon written advice of counsel
to the Indemnified Party), (x) the actual or potential defendants in, or
targets of, any such action include both the Indemnified Party and the
indemnifying party and the Indemnified Party shall have reasonably
concluded that there may be legal defenses available to it or other
Indemnified Parties which are different from or additional to those
available to the indemnifying party, (y) the indemnifying party shall not
have employed counsel satisfactory to the Indemnified Party (in the
exercise of the Indemnified Party's reasonable judgment) to represent the
Indemnified Party within a reasonable time after notice of the Third Party
Claim or (z) the indemnifying party shall authorize in writing the
Indemnified Party to employ separate counsel at the expense of the
indemnifying party.
(iii) Whether or not the indemnifying party shall have assumed the
defense of a Third Party Claim, the indemnifying party shall not admit any
liability with respect to, or settle, compromise or discharge, any pending
or threatened Third Party Claim without the prior written consent of the
Indemnified Party (which consent shall not be unreasonably withheld). If
the indemnifying party shall have assumed the defense of a Third Party
Claim, the Indemnified Party shall agree to any settlement, compromise or
discharge of a Third Party Claim which the indemnifying party shall
recommend and which releases the Indemnified Party completely and
unconditionally from all liability in connection with such Third Party
Claim and which would not otherwise adversely affect the Indemnified Party.
(iv) Notwithstanding the foregoing, in the event the indemnifying
party fails timely, in good faith or diligently to defend, contest or
otherwise protect against any Third Party Claim (after having assumed the
defense therefor), the Indemnified Party shall have the right, but not the
obligation, to assume the defense of such Third Party Claim and take such
other action as it may elect to defend, protect against or settle such
Third Party Claim as it may determine.
(v) The indemnifying party shall be subrogated to the claims or rights
of the Indemnified Investor Parties or the Indemnified Company Parties, as
the case may be, as against any other Persons with respect to any Loss paid
by the indemnifying party under this Section 10.04(c). The Investor shall
be subrogated to the claims or rights of the Company as against the
Company's insurers, that refused to pay on the Company's applicable
directors' and officers' liability insurance policies as contemplated by
Section 10.04(b), with respect to any Loss paid by the Investor under this
Section 10.04(c). The Company shall use its best efforts to take all
necessary steps to implement the subrogation contemplated in the preceding
sentence.
(d) All payments under this Section 10.04 shall be due promptly following
the occurrence of the related Loss; provided, however, that if a final,
non-appealable judicial determination is made that an Indemnified Party is not
entitled to any such payment it will promptly repay the appropriate amounts to
the appropriate indemnifying party.
Section 10.05. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given, if delivered
personally, by facsimile or sent by overnight courier or by first class mail,
postage prepaid, as follows:
(i) If to the Company, to:
MEMC Electronic Materials, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ (City of ▇'▇▇▇▇▇▇)
▇.▇. ▇▇▇ ▇
▇▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇ ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
(ii) If to the Investor, to:
TPG Wafer Holdings LLC
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Facsimile: 212-225-3999
If to any other holder of shares of Series A Preferred Stock, Conversion
Shares, Notes, Warrants or Warrant Shares addressed to such holder at the
address of such holder in the record books of the Company; or to such other
address or addresses as shall be designated in writing. All notices shall be
effective when received.
Section 10.06. Entire Agreement. This Agreement and the documents described
herein or attached or delivered pursuant hereto set forth the entire agreement
between the parties hereto with respect to the transactions contemplated by this
Agreement.
Section 10.07. Amendment. Any provision of this Agreement may only be
amended, modified or supplemented in whole or in part at any time by an
agreement in writing among the parties hereto executed in the same manner as
this Agreement; provided, that no amendment, modification or supplement to this
Agreement shall be effective unless approved by a majority of the directors then
serving on the Board of Directors who have not previously been, are not then and
are not anticipated to be Representatives of any TPG Person. No failure on the
part of any party to exercise, and no delay in exercising, any right shall
operate as waiver thereof, nor shall any single or partial exercise by either
party of any right preclude any other or future exercise thereof or the exercise
of any other right. No investigation by the Investor of the Company prior to or
after the date hereof shall stop or prevent the Investor from exercising any
right hereunder or be deemed to be a waiver of any such right.
Section 10.08. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to constitute an original, but all
of which together shall constitute one and the same document.
Section 10.09. Governing Law. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of New York applicable to
contracts made and to be performed in that State without reference to its
conflict of laws rules. The parties hereto agree that the appropriate and
exclusive forum for any disputes arising out of this Agreement solely between
the Company and the Investor shall be the United States District Court for the
Southern District of New York located in the Borough of Manhattan, and, if such
court will not hear any such suit, the courts of the State of New York, and the
parties hereto irrevocably consent to the exclusive jurisdiction of such courts,
and agree to comply with all requirements necessary to give such courts
jurisdiction. The parties hereto further agree that the parties will not bring
suit with respect to any disputes arising out of this Agreement except as
expressly set forth below for the execution or enforcement of judgment, in any
jurisdiction other than the above specified courts. Each of the parties hereto
irrevocably consents to the service of process in any action or proceeding
hereunder by the mailing of copies thereof by registered or certified airmail,
postage prepaid, to the address specified in Section 10.05. The foregoing shall
not limit the rights of any party hereto to serve process in any other manner
permitted by the law or to obtain execution of judgment in any other
jurisdiction. The parties further agree, to the extent permitted by law, that
final and unappealable judgment against any of them in any action or proceeding
contemplated above shall be conclusive and may be enforced in any other
jurisdiction within or outside the United States by suit on the judgment, a
certified or exemplified copy of which shall be conclusive evidence of the fact
and the amount of indebtedness. The parties agree to waive any and all rights
that they may have to a jury trial with respect to disputes arising out of this
Agreement.
Section 10.10. Successors and Assigns. (a) Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the Company's successors and assigns. Except as provided in
Section 10.10(b) hereof, neither this Agreement nor any rights hereunder may be
assigned by any party hereto in whole or in part without the prior written
consent of the other party hereto; provided, however, that the Investor may
assign all or part of its interest in this Agreement and its rights hereunder to
any of its Affiliates and, thereafter, the term "Investor," as applied to the
assigning Investor, shall include any such Affiliate to the extent of such
assignment and shall mean the assigning Investor and such Affiliates taken
collectively.
(b) Notwithstanding the foregoing, prior to the Closing the Investor may
assign its rights with respect to up to 49% of the Series A Preferred Stock to
be acquired by the Investor hereunder to any Person or Persons not Affiliated
with the Investor (each such Person, a "Designated Purchaser"). The Investor
shall not assign pursuant to this Section 10.10(b) any of its rights under this
Agreement other than the right to receive Series A Preferred Stock. Except as
expressly provided in this Agreement, no Designated Purchaser shall have any
rights under this Agreement or any rights of the Investor, other than rights
that by their terms are available to all holders of Series A Preferred Stock and
Conversion Shares generally under the Series A Certificate of Designations. As a
condition to any assignment pursuant to this Section 10.10(b), each Designated
Purchaser shall deliver to the Company a letter, dated as of the Closing Date
or, if later, the date of such assignment, in form and substance reasonably
satisfactory to the Company, pursuant to which such Designated Purchaser shall
(i) make the representation set forth in Section 4.05 hereof and (ii) agree to
comply with the provisions set forth in Sections 7.01(b) and 7.04 hereof as if
it were the Investor thereunder. Any assignment to such Designated Purchaser
that does not comply with the preceding provisions of this Section 10.10(b)
shall be null and void, and if such assignment is made at or prior to the
Closing, the Investor shall acquire the Series A Preferred Stock that would have
been purchased by such Designated Purchaser at the Closing.
Section 10.11. No Third-Party Beneficiaries. This Agreement is for the sole
benefit of the parties hereto and their respective successors and permitted
assigns and nothing herein, express or implied, is intended or shall confer upon
any other Person any legal or equitable right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, except that the provisions of
Section 7.06 shall inure to the benefit of and be enforceable by the Board
Nominees and the provisions of Section 10.04 shall inure to the benefit of and
be enforceable by each Indemnified Investor Party and Indemnified Company, as
the case may be.
Section 10.12. Schedules. When a Schedule or a Section of the Disclosure
Schedule is referenced in a provision of this Agreement as setting forth
exceptions to or exclusions from a representation, warranty, definition or
statement made in such provision, the exceptions or exclusions set forth in such
Schedule or such Section of the Disclosure Schedule are exceptions and
exclusions only to such representation, warranty, definition or statement and do
not qualify or limit any other provision of this Agreement unless specifically
so stated in such other provision.
IN WITNESS WHEREOF, this Agreement has been executed on behalf of the
parties hereto by their respective duly authorized officers, all as of the date
first above written.
TPG WAFER HOLDINGS LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice president
MEMC ELECTRONIC MATERIALS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
Chief Financial Officer
EXHIBIT A
SERIES A CERTIFICATE OF DESIGNATIONS
EXHIBIT B
FORM OF CREDIT AGREEMENT
EXHIBIT C
FORM OF INDENTURE
EXHIBIT D
FORM OF WARRANT CERTIFICATE
EXHIBIT E
FORM OF REGISTRATION RIGHTS AGREEMENT
EXHIBIT F
Summary of Terms
euro55,000,000 Promissory Notes Due 2031
of MEMC Electronic Materials S.p.A.
----------------------------------------------------------
I. GENERAL
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Issuer MEMC Electronic Materials S.p.A. (the "Company").
Securities euro55,000,000 Promissory Notes due 2031 (the
"Notes") to be issued pursuant to an amendment of
the Existing Credit Agreement (as defined below).
Investor A TPG limited liability company and/or its
designated assignees.
Amendment On the closing date (i) the Investor will acquire
all rights under the Company's euro55,000,000
Amended and Restated Credit Agreement dated as of
September 22, 2001 (the "Existing Credit
Agreement") and (ii) pursuant to an amendment of
the Existing Credit Agreement, the Company will
issue the Notes to the Investor.
II. THE NOTES
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Issue Date [ ], 2001.
Maturity Date [ ], 2031.
Interest 6% per annum, which shall accrue and be added to
the principal amount of the Notes and shall only
be payable upon redemption, acceleration or
maturity of the Notes (interest will compound once
a year).
Security The Notes will be secured by all of the assets of
the Company, including without limitation (i) the
shares of MEMC Holdings B.V., (ii) real estate
owned by the Company, (iii) accounts receivable of
the Company and (iv) inventory of the Company.
Guarantees All obligations of the Company under the Notes
will be unconditionally guaranteed by MEMC
Electronic Materials, Inc. ("MEMC").
Priority The Notes will constitute senior obligations of
the Company, ranking pari passu with all of the
Company's senior indebtedness.
Mandatory Prepayment Events The Notes shall be redeemed by
the Company pro rata to the extent of (a) 100% of
the net proceeds of asset sales or other
dispositions of property by MEMC or its
subsidiaries (including the Company), (b) 75% of
the net proceeds of issuances of debt obligations
of MEMC and its subsidiaries (including the
Company) and (c) 75% of the net proceeds of
issuances of equity interests by MEMC; provided,
that the Company shall only make such redemptions
to the extent that (i) (A) the lenders under
MEMC's senior secured revolving credit facility
(the "Facility") have waived the requirement of
MEMC to make prepayments under the Facility in the
event of such assets sales, debt issuances or
equity issuances or (B) all outstanding amounts
under the Facility have been paid and (ii) (A) the
holders of MEMC's senior secured notes due 2007
(the "MEMC Notes") have waived the requirement of
MEMC to make prepayments under the MEMC Notes in
the event of such assets sales, debt issuances or
equity issuances or (B) all outstanding amounts
under the MEMC Notes have been paid.
Optional Redemption The Notes are redeemable at the
Company's option, in whole or in part, upon not
less than 30 and no more than 60 days' notice,
subject to the following terms and redemption
prices, plus accrued and unpaid interest to the
date of redemption:
o Until the tenth anniversary of the issue date:
108%
o After the tenth anniversary of the issue date
to the twentieth anniversary of the issue
date: 105%
o After the twentieth anniversary of the issue
date to the scheduled maturity: 102%
Change of Control Holders of the Notes shall be entitled
to require the Company to repurchase the Notes at
a price equal to 101% of the principal amount,
plus accrued and unpaid interest, upon a change of
control of the Company or MEMC.
Representations and
Warranties Usual for securities of this type (with
appropriate materiality thresholds, as
applicable), including, without limitation,
accuracy of financial statements, absence of
litigation, no violation of agreements or
instruments, compliance with laws, payment of
taxes, ownership of properties, regulatory
approvals and the validity, priority and
perfection of security interests in the
collateral.
Affirmative Covenants Usual for securities of this type (to be
applicable to the Company and its subsidiaries),
with appropriate materiality thresholds, as
applicable, including, without limitation,
maintenance of corporate existence and rights,
delivery of audited annual consolidated financial
statements and unaudited quarterly consolidated
financial statements, notices of default and
litigation, maintenance of properties in good
working order, compliance with laws, further
assurances and payment of taxes.
Negative Covenants Usual for securities of this type (to be
applicable to the Company and its subsidiaries),
including, without limitation, a limitation on
dividend payments and a prohibition on loans by
the Company until the entire principal amount of
the Notes is paid in full.
Events of Default Usual for securities of this type, including,
without limitation, nonpayment of principal or
interest, violation of covenants, incorrectness of
representations and warranties, cross default and
cross acceleration of debt of MEMC or its
affiliates, bankruptcy of the Company or MEMC or
its affiliates, material judgments and actual or
asserted invalidity of security.
Right To Transfer The holders of the Notes shall have the absolute
and unconditional right to transfer the Notes in
compliance with applicable law to any third
parties.
Conditions to Closing Usual for securities of this type, including,
without limitation, the closing will be
conditioned upon first-priority perfected security
interests in the collateral (free and clear of all
other liens, subject to limited exceptions to be
agreed upon).
EXHIBIT G
FORM OF MERGER AGREEMENT
EXHIBIT H
FORM OF COUNSEL TO COMPANY OPINION
November 13, 2001
TPG Wafer Holdings LLC
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▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Re: Restructuring Agreement by and between
TPG Wafer Holdings LLC and MEMC Electronic Materials, Inc.
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Ladies and Gentlemen:
We have acted as special counsel for MEMC Electronic Materials, Inc., a
Delaware corporation (the "Company"), MEMC International, Inc., a Delaware
corporation ("MEMC International"), MEMC Pasadena, Inc., a Delaware corporation
("MEMC Pasadena"), MEMC Southwest Inc., a Delaware corporation ("MEMC
Southwest"), PlasmaSil, L.L.C., a Delaware limited liability company
("PlasmaSil"), and SiBond, L.L.C., a Delaware limited liability company
("SiBond", and together with MEMC International, MEMC Pasadena, MEMC Southwest
and PlasmaSil, the "U.S. Subsidiaries"), in connection with, inter alia, the
Restructuring Agreement, by and between TPG Wafer Holdings LLC ("TPG") and the
Company dated as of November 13, 2001 (the "Restructuring Agreement"). This
letter is furnished by us as special counsel for the Company pursuant to Section
8.01(b) of the Restructuring Agreement. Undefined terms used herein shall have
the meanings assigned to them in the Restructuring Agreement.
In connection herewith, we have examined and relied without independent
investigation as to matters of fact upon such certificates of public officials,
such statements and certificates of officers of the Company and the U.S.
Subsidiaries and such other corporate records, documents, certificates and
instruments as we have deemed necessary or appropriate in order to enable us to
render the opinions expressed herein. Without limiting the foregoing, we have
examined copies of the following (items (c) through (h) sometimes collectively
referred to herein as the "Transaction Agreements"):
(a) the organizational documents of the Company and the U.S.
Subsidiaries as amended to date;
(b) the Certificate of Designations of the Company, as filed with the
Delaware Secretary of State on November [ ], 2001 (the "Certificate of
Designations");
(c) the Restructuring Agreement;
(d) the Registration Rights Agreement, dated as of November 13, 2001,
among the Company, the Company guarantors specified therein and TPG;
(e) the Indenture, dated as of November 13, 2001, between the Company
and Citibank, N.A., as trustee and Citicorp USA, Inc. collateral agent;
(f) the Indenture Ancillary Documents (as defined in the Restructuring
Agreement);
(g) the Company's Senior Subordinated Secured Notes Due 2007 issued
under the Indenture (the "Notes");
(h) the Agreement and Plan of Merger, dated as of November 13, 2001,
between the Company and TPG (the "Merger Agreement"); and
(i) the Warrant Certificates (the "Warrant Certificates"), dated as of
November 13, 2001, issued by the Company.
We have assumed the genuineness of all signatures on all documents examined
by us, the authenticity of all documents submitted to us as originals and the
conformity to authentic originals of all documents submitted to us as certified
or photostatted copies. We have also assumed the due authorization, execution
and delivery of the Transaction Agreements by the respective parties thereto
other than the Company.
Based upon the foregoing and in reliance thereon and subject to the
exceptions, limitations and qualifications stated herein, we are of the opinion
that:
(i) Each of the Company and the U.S. Subsidiaries is a corporation or
limited liability company, as the case may be, validly existing and in good
standing under the laws of its jurisdiction of organization and has all
requisite organizational power and authority to carry on its business in
all material respects as presently conducted and to own and operate or hold
under lease its properties.
(ii) Each of the Company and its U.S. Subsidiaries is qualified to do
business and is in good standing as a foreign corporation under the laws of
the jurisdictions set forth in Schedule I hereto.
(iii) Each of the Company and the U.S. Subsidiaries, to the extent
each is a party thereto, (i) has all requisite organizational power and
authority to execute and deliver the Transaction Agreements and to perform
its obligations under the Transaction Agreements, the Series A Certificate
of Designations and the Warrant Certificates, and (ii) has duly authorized
by all necessary organizational action on its part the execution and
delivery of the Transaction Agreements and the performance thereby of its
obligations under the Transaction Agreements, the Series A Certificate of
Designations and the Warrant Certificates.
(iv) Each of the Transaction Agreements and the Warrant Certificates
has been duly executed and delivered by the Company and the U.S.
Subsidiaries, to the extent each is a party thereto, and constitutes a
valid and binding obligation of the Company and the U.S. Subsidiaries, as
the case may be, enforceable against each of them, as the case may be, in
accordance with its terms under the laws of the State of New York.
(v) The shares of Series A Preferred Stock issuable to TPG pursuant to
the Restructuring Agreement have been duly and validly authorized and, when
issued and delivered against payment therefor in accordance with the terms
of the Restructuring Agreement, will be validly issued by the Company and
fully paid and non-assessable. The shares of Common Stock into which the
Series A Preferred Stock is convertible have been duly and validly
authorized and validly reserved for issuance and, when issued in accordance
with the terms of the Series A Certificate of Designations, will have been
validly issued and will be fully paid and non-assessable.
(vi) Prior to the issuance thereof, the Company's Senior Subordinated
Secured Notes Due 2007 (the "Notes"), will have been duly and validly
authorized by the Company and, when issued and delivered against payment
therefor in accordance with the terms of the Restructuring Agreement and
the Indenture, will constitute legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms.
The Warrants have been duly and validly authorized, and when issued and
delivered against payment therefor in accordance with the terms of the
Restructuring Agreement by the Company, will be fully paid and
non-assessable. The Warrant Shares to be issued upon exercise of the
Warrants have been duly and validly authorized and reserved for issuance
and, when issued in accordance with the terms of the Warrant Certificates,
will have been validly issued and will be fully paid and non-assessable.
(vii) No consent or approval of the Company's stockholders is required
by U.S. federal, state or local Law or the Certificate of Incorporation or
By-laws for the execution, delivery or performance by the Company of the
Restructuring Agreement, other than as expressly provided in the
Restructuring Agreement.
(vii) The execution and delivery of each of the Transaction Agreements
does not, and the performance by the Company and the U.S. Subsidiaries, to
the extent each is a party thereto, of their obligations as set forth in
the Transaction Agreements, the Series A Certificate of Designations and
the Warrant Certificates, and the consummation of the transactions
contemplated by the Restructuring Agreement will not, (a) violate any
provision of the Certificate of Incorporation or the By-laws of the Company
or the comparable organizational documents of any of the U.S. Subsidiaries,
(b) give rise to any pre-emptive rights, rights of first refusal or other
similar rights on behalf of any person under Delaware law or any provision
of the Certificate of Incorporation or the By-laws of the Company, or any
Material Agreements (as hereinafter defined) applicable to the Company,
other than as described in the Transaction Agreements or the Schedules
thereto, or (c) result in a breach or violation of any of the terms or
provisions of, or constitute a default (with or without notice or the
passage of time) under, or result in or give rise to a right of
termination, cancellation, acceleration or modification of any right or
obligation under, or require any consent, waiver or approval under, any
Material Agreements, other than such as has been obtained.
(viii) The execution, delivery and performance by the Company of the
Restructuring Agreement will not violate the Delaware General Corporation
Law.
As used herein, the term "Material Agreement" shall mean any agreement,
indenture, lease or other instrument or agreement that is both (i) an exhibit to
(a) the Company's Annual Report on Form 10-K for the period ended December 31,
2000, or (b) the Company's Quarterly Reports on Form 10-Q for the periods ended
March 31, 2001 and June 30, 2001, and (ii) an agreement, indenture, lease or
other instrument or agreement to which the Company or any of its U.S.
Subsidiaries is a party or by which any of their properties or assets are bound,
but shall exclude any Agreement between, on the one hand, the Company and/or any
U.S. Subsidiary and, on the other hand, E.ON AG or its affiliates, as to which
we express no opinion.
The opinions in paragraphs (iv) and (vi) above are subject to the effect of
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
receivership, moratorium, arrangement and assignment for the benefit of
creditors laws, and other similar laws. This opinion is also subject to the
effect of general principles of equity, whether applied by a court of law or
equity, including, but not limited to, principles (i) governing the availability
of specific performance, injunctive relief or other equitable remedies, (ii)
affording equitable defenses (e.g., waiver, laches and estoppel) against a party
seeking enforcement, (iii) requiring good faith and fair dealing in the
performance and enforcement of a contract by the party seeking its enforcement,
(iv) requiring reasonableness in the performance and enforcement of an agreement
by the party seeking its enforcement, (v) requiring consideration of the
materiality of a breach or the consequences of the breach to the party seeking
its enforcement, (vi) requiring consideration of the impracticability or
impossibility of performance at the time of attempted enforcement, and (vii)
affording defenses based upon the unconscionability of the enforcing party's
conduct after the parties have entered into the contract. These opinions are
also subject to the effect of generally applicable rules of law that (i) may,
where less than all of a contract may be unenforceable, limit the enforceability
of the balance of the contract to circumstances in which the unenforceable
portion is not an essential part of the agreed exchange, and (ii) govern and
afford discretion, judicial, arbital or otherwise, regarding the determination
of damages and entitlement to attorneys' fees and other costs. These opinions
are also subject to the qualification that the enforceability of any
indemnification or contribution provisions set forth in any documents or
agreements referred to herein may be limited by federal or state securities laws
or by public policy. We express no opinion as to: (i) any of the specially
regulated business activities of the company or the U.S. Subsidiaries; (ii) any
tax effect or consequences relating to the Transaction Agreements or the
transactions contemplated thereby; or (iii) the creation or perfection of any
security interests relating to the Transaction Agreements or the transactions
contemplated thereby.
This opinion is not rendered with respect to any laws other than the laws
of the State of New York, the Delaware General Corporation Law and the federal
laws of the United States.
This opinion is provided to you solely for the purpose of permitting the
Company to comply, in part, with its obligations under of the Restructuring
Agreement. Without our prior written consent, this opinion may not be quoted in
whole or in part or otherwise referred to in any report or document or furnished
to any person or entity other than to each of you. This opinion is given as of
the date hereof, and we expressly disclaim any obligation to revise or update
this opinion subsequent to the date hereof or to advise you or any other person
of any matter subsequent to the date hereof which would cause us to modify this
opinion in whole or in part.
Very truly yours,
▇▇▇▇▇ ▇▇▇▇ LLP
Schedule I
Entity Jurisdiction
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MEMC Electronic Materials, Inc. California
Massachusetts
Missouri
New Hampshire
New York
South Carolina
Texas
MEMC Pasadena, Inc. Louisiana
Texas
MEMC Southwest Inc. Texas
SiBond, LLC Missouri
PlasmaSil, LLC Connecticut
Missouri
EXHIBIT I
FORM OF COUNSEL TO INVESTOR OPINION
Opinion substantially to the effect that:
1. Investor is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware.
2. Investor has all requisite power as a limited liability company and
authority to execute, deliver and perform its obligations under this
Agreement, the Registration Rights Agreement and the Merger Agreement.
The execution, delivery and performance of the Agreement and the
Registration Rights Agreement have been duly authorized by all other
necessary action on the part of Investor.
3. Each of the Agreement, the Registration Rights Agreement and the
Merger Agreement has been duly executed and delivered by Investor and,
assuming due execution and delivery by each other party thereto, each
such agreement constitutes a valid and binding obligation of Investor
enforceable against Investor in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general principles of equity.
EXHIBIT J
CERTIFICATE OF INCORPORATION OF HOLDINGS
EXHIBIT K
FORM OF EMPLOYMENT RESOLUTION
WHEREAS, this Committee wishes to exercise its discretion under Section 14
of the MEMC Electronic Materials, Inc. 1995 Equity Incentive Plan, as amended
and restated on August 3, 2000 (the "Equity Incentive Plan") and any relevant
stock option grant agreements to provide that stock options outstanding on the
date of the closing of the transaction contemplated by the Purchase Agreement
dated as of September 30, 2001, by and among TPG Partners III, L.P., T(3)
Partners, L.P. and T(3) Partners II, L.P., TPG Wafer Holdings LLC, E.ON AG, E.ON
International Finance B.V., ▇▇▇▇▇▇▇ Corporation, VEBA Zweite
Verwaltungsgesellschaft mbH, and E.ON North America, Inc. (the "Purchase
Agreement") shall not become immediately vested and exercisable as a result of
the occurrence of such transaction.
WHEREAS, this Committee wishes to exercise its discretion under the MEMC
Electronic Materials, Inc. 2001 Annual Incentive Plan (the "Existing AIP") to
terminate the Existing AIP and to replace it with a new annual incentive plan
for 2001 (the "New AIP") with substantially similar terms as the Existing AIP
except that there shall be no provision accelerating the payment of or providing
additional benefits or payments as a result of a corporate transaction,
including without limitation the transactions contemplated pursuant to the
Purchase Agreement, and the New AIP shall provide that payment of any award, or
any portion of any award, may be made in the form of restricted stock, in the
sole discretion of the Compensation Committee.
NOW THEREFORE IT IS RESOLVED, that, effective as of the date of this
resolution, this Committee hereby exercises its discretion under Section 14 of
the Equity Incentive Plan and any relevant stock option grant agreements to
provide that stock options outstanding on the closing of the transaction
contemplated by the Purchase Agreement shall not become immediately vested and
exercisable as a result of the occurrence of such transaction.
RESOLVED FURTHER, that this Committee hereby exercises its discretion under
the Existing AIP to terminate the Existing AIP effective as of the date of this
resolution.
RESOLVED FURTHER, that this Committee hereby authorizes the Company to
replace the Existing AIP with a New AIP, which has substantially similar terms
as the Existing AIP, provided that there shall be no provision accelerating the
payment of or providing additional benefits or payments as a result of a
corporate transaction, including without limitation the transactions
contemplated pursuant to the Purchase Agreement, and the New AIP shall provide
that payment of any award, or any portion of any award, may be made in the form
of restricted stock, in the sole discretion of the Compensation Committee.
EXHIBIT L-1
FORM OF TAX SHARING AGREEMENT
TAX SHARING AGREEMENT
Tax Sharing Agreement ("Agreement") dated as of this [ ] of [ ], [ ], by
and among TPG Wafer Holdings LLC ("Wafer Holdings"), MEMC Electronic Materials,
Inc. ("MEMC"), and each of the MEMC subsidiaries listed on Schedule I hereto
(each, individually, a "Subsidiary," and collectively, the "Subsidiaries").
RECITALS
1. Wafer Holdings has elected, pursuant to Treasury Regulation Section
1.7701-3(c), to be classified as a corporation for U.S. federal tax purposes.
Wafer Holdings, MEMC and the Subsidiaries are members ("Members") of an
affiliated group (the "Affiliated Group"), as defined in Section 1504(a) of the
Internal Revenue Code of 1986 (the "Code"), for the taxable year ending December
31, [ ]. All references in this Agreement to provisions of the Code or the
Treasury Regulations promulgated thereunder, including Proposed Treasury
Regulations, shall include any corresponding successor provisions.
2. It is the intent and desire of the parties hereto that a method be
established for allocating the federal and state consolidated tax liability of
the Affiliated Group among its Members in those jurisdictions in which a
consolidated or combined return is required or permitted to be filed, for
reimbursing Wafer Holdings for payment of such tax liability, for compensating
any Member for use of its losses or tax credits, and to provide for the
allocation and payment of any refund arising from a carryback of losses or tax
credits from subsequent taxable years.
AGREEMENT
Now, therefore, in consideration of the mutual covenants and promises
contained herein, the parties hereto agree as follows:
1. Filing of Returns. A U.S. consolidated income tax return and estimated
tax returns shall be prepared and filed by Wafer Holdings for the taxable year
ending December 31, [ ], and for each subsequent taxable period in respect of
which the Affiliated Group is required or permitted to file a U.S. consolidated
income tax return. With respect to such tax return preparation, Wafer Holdings
shall act in good faith with regard to all Members included in an applicable
return and shall include within such consolidated tax return all Members
currently included within the MEMC consolidated group unless a contrary
treatment is required by law. Wafer Holdings shall have the right with respect
to any consolidated tax returns to determine in good faith (i) the manner in
which such returns, documents or statements shall be prepared and filed,
including, without limitation, the manner in which any item of income, gain,
loss, deduction or credit shall be reported, (ii) whether any extensions should
be requested, and (iii) the elections that will be made by any Member of the
Affiliated Group. In addition, Wafer Holdings shall have the right, in good
faith, to (i) contest, compromise, or settle any adjustments or deficiency
proposed, asserted or assessed as a result of any audit of any U.S. consolidated
income tax return, (ii) file, prosecute, compromise or settle any claim for
refund, and (iii) determine whether any refunds shall be received by way of
refund or credited against tax liabilities. Finally, in preparing the U.S.
consolidated income tax returns, Wafer Holdings will reasonably request
information from Members of the Affiliated Group, specifying deadlines for
receiving the requested information. The Members of the Affiliated Group will
comply with the information request within the specified deadline, unless an
alternative deadline is arranged with Wafer Holdings.
2. Allocation of Tax Liability. Wafer Holdings, MEMC and Subsidiaries agree
that, for purposes of this Agreement, the consolidated tax liability for each
year beginning with the taxable year ending December 31, [ ], determined in
accordance with Treasury Regulations Section 1.1502-2, shall be apportioned
among them in accordance with the provisions of Treasury Regulations Sections
1.1552-1(a)(2) (tax liability is allocated in proportion to separate tax
liabilities) and 1.1502-33(d)(2) (the "wait-and-see method"). Accordingly, the
tax liability shall first be allocated to the several Members on the basis of
the percentage of the total tax that the tax of such Member if computed on a
separate return would bear to the total amount of taxes for all Members so
computed pursuant to Section 1552(a)(2) of the Code and Treasury Regulations
Section 1.1552-1(a)(2). Then, under Treasury Regulations Section
1.1502-33(d)(2), if a Member had tax attributes that were absorbed by the
Affiliated Group in a prior year and that Member would have been able to use
those tax attributes in the current taxable year on a separate return basis, the
portion of that Member's tax liability for the current taxable year that would
not have arisen if such tax attributes had been available to that Member will be
reallocated to other Members as provided for under Treasury Regulations Section
1.1502-33(d)(2).
For purposes of this Agreement, the U.S. consolidated income tax liability
shall include any liability for alternative minimum tax ("AMT"). Such
consolidated AMT shall be apportioned among the Members in accordance with the
provisions of Proposed Treasury Regulations Section 1.1552-1(g). Accordingly,
the AMT liability shall be allocated to the several Members on the basis of the
percentage of the total consolidated AMT that the separate adjusted AMT of such
Member, if computed as provided in Proposed Treasury Regulations Section
1.1502-55(h)(6)(iv), would bear to the total amount of such separate adjusted
AMTs for all Members so computed.
3. Payment of Tax. MEMC and each Subsidiary shall pay to Wafer Holdings no
later than 2 business days before the date on which the Affiliated Group's U.S.
consolidated income tax return is required to be filed (taking account of any
extensions thereof) its separate return tax liability determined as provided
under Section 2 above plus its "Equitable Share" (as defined below) of any
interest or penalties shown on the return. To the extent that the interest and
penalties shown on a return are directly related to items of income, deduction,
credit, etc. of a particular Member, or such Member's delay in providing
information to Wafer Holdings as provided in Section 1 above, that Member's
Equitable Share of such interest and penalties is 100%. Each Member's Equitable
Share of any interest and penalties shown on the return that are not directly
related to the items or delay of a particular Member (and so allocated to that
particular Member) will be a ratable share of any such interest or penalties,
determined by multiplying such interest or penalties by a fraction, the
numerator of which equals the portion of the Affiliated Group's tax liability
allocated to such Member (before interest or penalties) and the denominator of
which equals the Affiliated Group's tax liability (before interest or
penalties).
4. Carryforward/Carryback of Losses and Credits. If part or all of an
unused loss or tax credit is allocated to a Member pursuant to Treasury
Regulations Sections 1.1502-21 or 1.1502-79, and it is carried back or forward
to a year in which such Member filed a separate return or a consolidated return
with another affiliated group, (i) any refund or reduction in tax liability
arising from the carryback or carryover shall be retained by such Member and
(ii) if such loss is a SRLY item and was taken into account by such Member in
determining its separate return tax liability for any year pursuant to Section 2
of this Agreement, the computation pursuant to Section 2 shall be redetermined
by excluding such SRLY item and such Member shall pay the difference between the
redetermined amount and the amount previously paid by it pursuant to Section 2
upon the earlier of the realization of any refund or reduction in tax liability
arising from the carryback, the Member becoming a Former Member, or the
expiration of the SRLY, and such amount shall be credited to the Members to
which such amount is attributable pursuant to Section 2. Notwithstanding the
foregoing, Wafer Holdings shall determine whether an election shall be made (i)
not to carry back any portion of any net operating loss arising in a U.S.
consolidated return year (including any portion allocated to a Member under
Treasury Regulations Section 1.1502-21) in accordance with Code Section
172(b)(3), and (ii) to reattribute to itself any portion of any net operating
loss or capital loss carryover attributable to MEMC or a Subsidiary, to the
extent permitted by Treasury Regulations Section 1.1502-20(g). MEMC and each
Subsidiary agrees to join with Wafer Holdings in filing any necessary elections
under Treasury Regulations Section 1.1502-20(g).
5. Estimated Tax Payments. If the Affiliated Group is required to make
estimated federal income tax payments (including payment due at the time any
extension of time is sought for the filing of the Affiliated Group's federal
income tax return), MEMC and each Subsidiary shall, if requested by Wafer
Holdings, pay to Wafer Holdings, no later than 2 business days before the date
each estimated tax payment is to be made by Wafer Holdings, that percentage of
the estimated tax payment that equals the percentage which the estimated
separate return tax liability of such Member bears to the aggregate of the
Members' estimated separate return tax liabilities for the taxable year computed
as provided under Section 2 above. Wafer Holdings shall determine, or cause MEMC
to determine, such estimates. Any estimated tax payments made by MEMC or a
Subsidiary under this Section 5 with respect to any taxable year shall be
applied to reduce the amount, if any, owed by such Member under Section 3 hereof
with respect to such year. Any excess of such estimated payments by MEMC or a
Subsidiary over the amount described in Section 3 for such year shall be repaid
by Wafer Holdings to such Member no later than 10 business days after the date
of filing of the consolidated return for such taxable year or, to the extent
such excess represents all or a part of a tax refund to be received by the
Affiliated Group, no later than 10 business days after the receipt of the
refund.
6. Adjustments to Tax Liability. If the U.S. consolidated income tax
liability is adjusted for any taxable period, whether pursuant to an amended
return, a claim for refund, a tax audit by the Internal Revenue Service or some
other reason, the liability of each Member shall be recomputed to give effect to
such adjustments, and in the case of a refund, Wafer Holdings shall make payment
to each Member for its share of the refund, determined in the same manner as in
Section 2 above, within 10 business days after the refund is received by Wafer
Holdings, and in the case of an increase in tax liability, each Member shall pay
to Wafer Holdings its allocable share of such increased tax liability (including
its Equitable Share of any interest and penalties) within 10 business days after
receiving notice of such liability from Wafer Holdings. The parties recognize
that a recomputation of the consolidated tax liability for any taxable year
under this Section 6 is not necessarily the final liability for such year, and
such liability may be recomputed more than once.
7. New Members of Affiliated Group. If during a consolidated return period
Wafer Holdings, MEMC or any Subsidiary acquires or organizes another corporation
that is required to be included in the Affiliated Group's U.S. consolidated
income tax return, then such corporation shall join in and be bound by this
Agreement.
8. Termination of Agreement. This Agreement shall apply to all taxable
periods as to which a U.S. consolidated income tax return is filed by Wafer
Holdings and any other Member unless Wafer Holdings and all the other Members
agree in writing to terminate the Agreement, except that this Agreement shall be
terminated with respect to MEMC or any Subsidiary that ceases to be included in
the Affiliated Group but continues to be a corporation subject to federal income
tax ("Former Member"). Notwithstanding any such termination, this Agreement
shall continue in effect with respect to all taxable periods prior to
termination, including any payments or refunds relating to such periods.
9. Post-Consolidated Return Period. Notwithstanding the termination of this
Agreement with respect to one or more Subsidiaries, Wafer Holdings and any
Former Member shall furnish each other with all information and assistance as
shall reasonably be requested (including, without limitation, returns,
supporting schedules, work papers, correspondence and other documents) relating
to the tax liability of the Affiliated Group or such Former Member for any
taxable year in which the Former Member was included in the Affiliated Group.
Moreover, Wafer Holdings and the Former Member shall furnish each other with
information and assistance required, and shall take all steps necessary, to
apply for and obtain the benefit of any carryback of a net operating or capital
loss or any investment, foreign tax or other credit of the Former Member to a
taxable year in which the Former Member was included in the Affiliated Group and
a U.S. consolidated income tax return was filed.
10. Audits and Refund Claims. Wafer Holdings and a Former Member shall also
consult and furnish each other with information concerning the status of any tax
audit or tax refund claim relating to a taxable year in which the Former Member
was included in the Affiliated Group and a U.S. consolidated income tax return
was filed. Wafer Holdings shall have the right to make the final determination
as to the response of the Affiliated Group to any audit and shall have the sole
right to control any contest of any change proposed and any proposed
disallowance of a refund claim by the Internal Revenue Service through the
Appeals Office of the Internal Revenue Service and the courts in connection with
any taxable year for which this Agreement is in effect. Each Member shall bear
an equitable share of the cost of any such contest (including fees and expenses
of outside accountants, lawyers or other experts).
11. Settlement of Disputes. A dispute or difference between Wafer Holdings
and a Former Member with respect to the operation or interpretation of this
Agreement shall be decided by three arbitrators. Wafer Holdings and the Former
Member shall each select one arbitrator and the arbitrators selected by the
parties shall select a third arbitrator. The decision of such arbitrators shall
be final. The fees of such arbitrators shall be borne equally by Wafer Holdings
and the Former Member.
12. Elections. Wafer Holdings shall have the sole authority to make any or
all elections available under the Code, Treasury Regulations and any applicable
state or local income tax code, law or statute.
13. State and Local Income Taxes. The principles underlying the rights and
obligations hereunder of the Members in respect of federal income taxes shall be
applied in respect of any state or local tax (however denominated) based on or
measured by all or any part of the net income or loss of the Affiliated Group or
several of its Members (a "Combined Tax"). All of the procedural and timing
requirements of this Agreement applicable to federal income taxes shall be
equally applicable to any Combined Tax, with appropriate adjustments thereto to
reflect the differences, if any, in corresponding provisions of the applicable
income tax code, law or statute governing any such Combined Tax and any
administrative provisions relating thereto. Notwithstanding the foregoing,
nothing contained herein shall require an affirmative election to file a
consolidated or combined state or local return, which election shall be made by
Wafer Holdings in its sole discretion.
14. Entire Agreement. This Agreement contains the entire understanding of
the parties hereto with respect to the subject matter contained herein. No
alteration, amendment or modification of any of the terms of this Agreement
shall be valid unless made by an instrument signed in writing by an authorized
officer of each party.
15. Binding Agreement. This Agreement shall be binding upon and inure to
the benefit of each party hereto and its respective successors and assigns.
16. Other Agreements. Notwithstanding the terms of this agreement, the tax
sharing agreement between MEMC and MEMC Southwest, Inc. dated as of June 30,
1995 shall remain in effect.
17. Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or portion of
any provision in such jurisdiction, and this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision or portion of any provision had never been contained
therein.
18. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York.
19. Counterparts. This Agreement may be executed simultaneously 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.
In witness whereof, the parties hereto have caused their names to be
subscribed and executed by their respective authorized officers as of the date
first written above.
TPG WAFER HOLDINGS LLC
By:
------------------------------------------
Name:
Title:
MEMC ELECTRONIC MATERIALS, INC.
By:
------------------------------------------
Name:
Title:
MEMC Pasadena, INC.
By:
------------------------------------------
Name:
Title:
MEMC Southwest Inc.
By:
------------------------------------------
Name:
Title:
MEMC International, Inc.
By:
------------------------------------------
Name:
Title:
[ADD SIGNATURE LINES FOR ANY OTHER
ELIGIBLE SUBSIDIARIES]
SCHEDULE I
Subsidiaries
MEMC Pasadena, Inc.
MEMC Southwest Inc.
MEMC International, Inc.