EXHIBIT 99.2
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STOCK PURCHASE AGREEMENT
By and among
HEXCEL CORPORATION,
BERKSHIRE INVESTORS LLC,
BERKSHIRE FUND V, LIMITED PARTNERSHIP
BERKSHIRE FUND VI, LIMITED PARTNERSHIP
GREENBRIAR EQUITY FUND, L.P.
and
GREENBRIAR CO-INVESTMENT PARTNERS, L.P.
____________________
Dated as of December 18, 2002
____________________
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TABLE OF CONTENTS
ARTICLE I
AUTHORIZATION AND SALE OF SHARES
Section 1.1 Authorization........................................................................2
Section 1.2 Issuance and Sale of Shares..........................................................2
ARTICLE II
CLOSING
Section 2.1 Closing..............................................................................2
Section 2.2 Deliveries and Payments..............................................................3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 Organization; Subsidiaries...........................................................3
Section 3.2 Due Authorization....................................................................4
Section 3.3 Capitalization.......................................................................5
Section 3.4 SEC Reports..........................................................................6
Section 3.5 Financial Statements.................................................................6
Section 3.6 Consents; No Violations..............................................................7
Section 3.7 Compliance with Laws.................................................................8
Section 3.8 Absence of Certain Changes...........................................................9
Section 3.9 Litigation...........................................................................9
Section 3.10 Employee Matters; ERISA..............................................................9
Section 3.11 Section 203 of the DGCL; Takeover Statute...........................................10
Section 3.12 Real Property Holding Corporation; Investment Company; Public Utility
Holding Company.....................................................................10
Section 3.13 Brokers and Finders.................................................................11
Section 3.14 Registration and Qualification......................................................11
Section 3.15 Opinion of Financial Advisor........................................................11
Section 3.16 Negotiations with Third Parties.....................................................12
Section 3.17 Environmental Laws..................................................................12
Section 3.18 Title to Assets.....................................................................12
Section 3.19 Labor Relations.....................................................................13
Section 3.20 Intellectual Property...............................................................13
Section 3.21 Transactions with Affiliates........................................................14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Section 4.1 Organization of the Investors.......................................................14
Section 4.2 Due Authorization...................................................................14
Section 4.3 Consents; No Violations.............................................................14
Section 4.4 Ownership of Capital Stock..........................................................15
Section 4.5 Investment..........................................................................15
Section 4.6 Rule 144............................................................................15
Section 4.7 Brokers and Finders; Transaction Expenses...........................................15
Section 4.8 No Arrangements with Respect to Company Securities..................................16
Section 4.9 Sufficient Funds....................................................................16
ARTICLE V
CONDITIONS PRECEDENT
Section 5.1 Conditions to Obligations of the Investors and the Company..........................16
Section 5.2 Conditions to the Investors' Obligations............................................17
Section 5.3 Conditions to the Obligations of the Company........................................19
ARTICLE VI
COVENANTS
Section 6.1 Conduct of Business Pending the Closing.............................................20
Section 6.2 Amendment of Certificate of Incorporation and By-Laws of
the Company.........................................................................21
Section 6.3 Certain Payments....................................................................21
Section 6.4 Availability of Common Stock........................................................23
Section 6.5 Proxy Statement; Stockholder Approval...............................................23
Section 6.6 No Solicitation.....................................................................24
Section 6.7 HSR Act; Other Filings..............................................................26
Section 6.8 Consents; Approvals.................................................................26
Section 6.9 Debt Refinancing....................................................................27
Section 6.10 Listing.............................................................................27
Section 6.11 Cooperation.........................................................................27
Section 6.12 Execution and Delivery of Related Agreements........................................27
Section 6.13 Use of Proceeds.....................................................................27
Section 6.14 Investors' Access to Premises; Notices of Developments..............................27
Section 6.16 IRS Forms...........................................................................28
ARTICLE VII
TERMINATION
Section 7.1 Termination.........................................................................28
Section 7.2 Effect of Termination...............................................................30
Section 7.3 Termination Payment.................................................................30
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Survival of Representations and Warranties..........................................31
Section 8.2 Indemnification.....................................................................31
Section 8.3 Procedure for Indemnification.......................................................33
Section 8.4 Sole Remedy.........................................................................34
ARTICLE IX
MISCELLANEOUS
Section 9.1 Governing Law.......................................................................35
Section 9.2 Jurisdiction; Forum; Service of Process; Waiver of Jury Trial.......................35
Section 9.3 Successors and Assigns..............................................................35
Section 9.4 Entire Agreement; Amendment.........................................................36
Section 9.5 Notices.............................................................................36
Section 9.6 Certain Definitions.................................................................37
Section 9.7 Withholding.........................................................................40
Section 9.8 Counterparts........................................................................40
Section 9.9 Severability........................................................................40
Section 9.10 Titles and Subtitles................................................................40
Section 9.11 No Public Announcement..............................................................40
Section 9.12 Further Actions.....................................................................40
Section 9.13 Enforcement of Agreement............................................................41
INDEX OF DEFINED TERMS
Affiliate...............................................................................................40
Agreement................................................................................................1
Alternate Proposal......................................................................................27
beneficial ownership....................................................................................40
beneficially owns.......................................................................................40
Berkshire Investors......................................................................................1
Berkshire Partners......................................................................................23
Berkshire V..............................................................................................1
Berkshire VI.............................................................................................1
Board of Directors.......................................................................................5
Certificate of Incorporation.............................................................................2
Claim...................................................................................................35
Closing..................................................................................................3
Closing Date.............................................................................................3
Code....................................................................................................10
Common Stock............................................................................................40
Company..................................................................................................1
Company Charter Amendment................................................................................2
Company Disclosure Schedule..............................................................................4
Company Indemnified Person..............................................................................34
Consents................................................................................................28
Credit Agreement........................................................................................40
DGCL.....................................................................................................5
Encumbrances.............................................................................................4
Environmental Laws......................................................................................40
ERISA...................................................................................................10
ERISA Affiliate.........................................................................................10
Exchange Act............................................................................................40
Expenses................................................................................................24
Expiration Date.........................................................................................30
Fairness Opinions.......................................................................................12
GAAP.....................................................................................................7
Goldman Governance Agreement............................................................................41
Goldman Investors.......................................................................................41
Goldman Purchase Agreement..............................................................................41
Goldman Registration Rights Agreement...................................................................41
Governmental Entity.....................................................................................41
Greenbriar Co-Investment.................................................................................1
Greenbriar Equity........................................................................................1
Greenbriar Equity Group.................................................................................23
Hazardous Materials.....................................................................................41
▇▇▇▇▇▇▇▇ ▇▇▇▇▇..........................................................................................12
HSR Act.................................................................................................17
Indemnifying Party......................................................................................35
Indemnitee..............................................................................................35
Investor Indemnified Person.............................................................................33
Investor Managers.......................................................................................23
Investors................................................................................................1
Knowledge...............................................................................................41
Laws.....................................................................................................9
Licenses.................................................................................................9
Litigation...............................................................................................9
Losses..................................................................................................41
Material Adverse Effect.................................................................................42
Notice of Superior Proposal.............................................................................27
NYSE.....................................................................................................5
PCX......................................................................................................5
Permitted Transferee....................................................................................42
Person..................................................................................................42
Plans...................................................................................................10
Proceeding..............................................................................................37
Proxy Statement.........................................................................................25
Purchase Price...........................................................................................2
Registration Rights Agreement............................................................................1
Related Agreements.......................................................................................1
Restated Company By-Laws.................................................................................2
Restated Goldman Governance Agreement...................................................................19
Restated Goldman Registration Rights Agreement..........................................................19
SEC......................................................................................................6
SEC Reports..............................................................................................6
Securities Act...........................................................................................6
Selected Courts.........................................................................................37
Senior Debt Refinancing.................................................................................18
Series A Certificate of Designations.....................................................................1
Series A Preferred Shares................................................................................1
Series A Preferred Stock.................................................................................1
Series B Certificate of Designations.....................................................................1
Series B Preferred Shares................................................................................1
Series B Preferred Stock.................................................................................1
Shares...................................................................................................1
Significant Subsidiaries................................................................................42
Special Meeting.........................................................................................24
Stockholder Approval....................................................................................18
Stockholders Agreement...................................................................................1
Subsidiary..............................................................................................42
Superior Proposal.......................................................................................28
Termination Payment.....................................................................................33
Transaction Fee.........................................................................................23
Exhibits
Exhibit A -- Form of Series A Preferred Stock Certificate of Designations
Exhibit B -- Form of Series B Preferred Stock Certificate of Designations
Exhibit C -- Form of Stockholders Agreement
Exhibit D -- Form of Registration Rights Agreement
Exhibit E -- Company Charter Amendment
Exhibit F -- Restated Company By-Laws
Exhibit G -- Terms of Senior Debt Restructuring
Exhibit H -- Form of the Opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
Exhibit I -- Summary Terms of Equity Incentive Plans
Exhibit J -- Form of Press Release
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement"), is entered
into as of December 18, 2002, by and among Hexcel Corporation, a Delaware
corporation (the "Company"), Greenbriar Equity Fund, L.P., a Delaware limited
partnership ("Greenbriar Equity"), Greenbriar Co-Investment Partners, L.P., a
Delaware limited partnership ("Greenbriar Co-Investment"), Berkshire Fund V,
Limited Partnership, a Massachusetts limited partnership ("Berkshire V"),
Berkshire Fund VI, Limited Partnership, a Massachusetts limited partnership
("Berkshire VI"), and Berkshire Investors LLC, a Massachusetts limited
liability company ("Berkshire LLC" and, together with Greenbriar Equity,
Greenbriar Co-Investment, Berkshire V, Berkshire VI and the permitted
designees of Berkshire V and Berkshire VI under Section 1.2 of this Agreement,
the "Investors").
W I T N E S S E T H :
WHEREAS, on the terms and subject to the conditions hereof,
the Company desires to sell to the Investors, and the Investors desire to
purchase from the Company, (i) an aggregate of 77,875 shares (the "Series A
Preferred Shares") of Series A Convertible Preferred Stock, without par value
(the "Series A Preferred Stock"), of the Company having the terms set forth in
the Certificate of Designations of the Series A Convertible Preferred Stock
attached hereto as Exhibit A (the "Series A Certificate of Designations") and
(ii) an aggregate of 77,875 shares (the "Series B Preferred Shares" and,
together with the Series A Preferred Shares, the "Shares") of Series B
Convertible Preferred Stock, without par value (the "Series B Preferred
Stock"), of the Company having the terms set forth in the Certificate of
Designations of the Series B Convertible Preferred Stock attached hereto as
Exhibit B (the "Series B Certificate of Designations"), for an aggregate
purchase price of $77,875,000; and
WHEREAS, in connection with the transactions contemplated by
this Agreement, at the Closing (as defined in Section 2.1 below), the Company
and the Investors will enter into (A) with Berkshire Fund V Investment Corp.,
Berkshire Fund VI Investment Corp., a Stockholders Agreement in the form of
Exhibit C hereto (the "Stockholders Agreement") and (B) a Registration Rights
Agreement in the form of Exhibit D hereto (the "Registration Rights
Agreement", and, together with the Stockholders Agreement, the "Related
Agreements"); and
WHEREAS, on the terms and subject to the conditions hereof,
at the Closing, (i) the Certificate of Incorporation of the Company (as
amended from time to time, the "Certificate of Incorporation") will be amended
substantially as set forth in the form of amendment attached as Exhibit E
hereto (the "Company Charter Amendment"), and (ii) the By-Laws of the Company
will be amended and restated so as to read substantially in the form attached
hereto as Exhibit F (the "Restated Company By-Laws").
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements set forth in this
Agreement, the parties hereto agree as follows:
ARTICLE I
AUTHORIZATION AND SALE OF SHARES
Section 1.1 Authorization. Subject to obtaining the Stockholder
Approval (as defined in Section 5.1(c) below), the Company has heretofore
authorized the issuance and sale of the Shares to the Investors at the Closing
pursuant to this Agreement.
Section 1.2 Issuance and Sale of Shares. Upon the terms and subject
to the conditions set forth herein, at the Closing, in reliance on the
representations and warranties of the Investors contained herein, the Company
shall issue and sell to each Investor and, in reliance on the representations
and warranties of the Company contained herein, each such Investor shall
purchase from the Company, the number of Shares indicated on Schedule 1.2
hereto opposite such Investor's name, for an aggregate purchase price of
$77,875,000 ("Purchase Price"); provided, that each of Berkshire V and
Berkshire VI shall be entitled to assign its right to acquire the Shares to be
purchased by such Investor to its wholly-owned subsidiary by delivering
written notice of such reallocation to the Company not less than two business
days prior to the Closing so long as such assignment does not (i) change the
total number of Series A Preferred Shares and Series B Preferred Shares being
acquired hereunder or the aggregate Purchase Price or (ii) affect the accuracy
of the Investors' representations contained in Article IV hereof; provided,
further, that (A) such assignment shall not release such Investor from any of
its obligations under this Agreement and (B) that any wholly-owned subsidiary
of Berkshire V or Berkshire VI which purchases Shares pursuant to this Section
1.2 shall transfer any Shares so purchased to any of Berkshire V or Berkshire
VI within 90 days of the Closing.
ARTICLE II
CLOSING
Section 2.1 Closing. The closing (the "Closing") of the purchase and
sale of the Shares contemplated hereby shall take place on such date and at
such time as shall be mutually agreed to by the Company and the Investors, but
in no event later than two business days following the date of the Stockholder
Approval, subject to satisfaction or waiver of all of the conditions set forth
in Article V (the date of the Closing is hereinafter referred to as the
"Closing Date"). The Closing shall be held at the offices of Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, Four Times Square, New York, New York, or at such
other place as agreed to by the Company and the Investors.
Section 2.2 Deliveries and Payments.
(a) Subject to the satisfaction or waiver of each of the
conditions hereof, at the Closing, the Company shall deliver to each Investor
against payment of the Purchase Price: (i) one certificate representing the
appropriate number of Series A Preferred Shares registered in the name of such
Investor as set forth on Schedule 1.2; (ii) one certificate representing the
appropriate number of Series B Preferred Shares registered in the name of such
Investor as set forth on Schedule 1.2; (iii) each of the certificates,
instruments and agreements required to be delivered by the Company pursuant to
Article V hereof; (iv) filed copies of the Company Charter Amendment, the
Series A Certificate of Designations and the Series B Certificate of
Designations certified by the Delaware Secretary of State; (v) such other
documents as the Investors may reasonably request in connection with the
Closing; and (vi) payment of fees and expenses due each Investor at the
Closing pursuant to Section 6.3 hereof by wire transfer of immediately
available funds to an account or accounts designated by the Investors prior to
the Closing.
(b) Subject to the satisfaction or waiver of each of the
conditions hereof, at the Closing, each of the Investors shall deliver to the
Company: (i) payment of the Purchase Price, by wire transfer of immediately
available funds to an account or accounts designated by the Company prior to
the Closing, for the Shares to be purchased by such Investor; (ii) each of the
certificates, instruments and agreements required to be delivered by each of
the Investors pursuant to Article V hereof; and (iii) such other documents as
the Company may reasonably request in connection with the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Investors,
as of the date hereof and as of the Closing, as follows:
Section 3.1 Organization; Subsidiaries.
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has the requisite
corporate power and authority to carry on its business as it is now being
conducted. The Company is duly qualified and licensed as a foreign corporation
to do business, and is in good standing (and has paid all relevant franchise
or analogous taxes), in each jurisdiction where the character of its assets
owned or held under lease or the nature of its business makes such
qualification necessary, except where the failure to so qualify or be
licensed, individually or in the aggregate, has not had and would not
reasonably be expected to have a Material Adverse Effect.
(b) Each Significant Subsidiary is a corporation, limited liability
company, limited partnership or other business entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization and has the power and authority to carry on its business as it is
now being conducted except where the failure to be in good standing or to have
such power and authority, individually or in the aggregate, has not had and
would not reasonably be expected to have a Material Adverse Effect. Except as
set forth in Section 3.1(b) of the disclosure schedule delivered by the
Company to the Investors on the date hereof (the "Company Disclosure
Schedule"), (i) the Company owns, either directly or indirectly through one or
more Subsidiaries, all of the capital stock or other equity interests of the
Significant Subsidiaries free and clear of all liens, charges, claims,
security interests, restrictions, options, proxies, voting trusts or other
encumbrances ("Encumbrances") and (ii) there are no outstanding subscription
rights, options, warrants, convertible or exchangeable securities or other
rights of any character whatsoever relating to issued or unissued capital
stock or other equity interests of any Significant Subsidiary, or any
contract, agreement or other commitment of any character whatsoever relating
to issued or unissued capital stock or other equity interests of any
Significant Subsidiary or pursuant to which any Significant Subsidiary is or
may become bound to issue or grant additional shares of its capital stock or
other equity interests or related subscription rights, options, warrants,
convertible or exchangeable securities or other rights, or to grant preemptive
rights. Except for the Subsidiaries and except as set forth on Section 3.1(b)
of the Company Disclosure Schedule, the Company does not own, directly or
indirectly, any interest in any corporation, limited liability company,
partnership, business association or other Person.
Section 3.2 Due Authorization.
(a) The Company has all right, corporate power and authority to enter
into this Agreement and the Related Agreements, and, subject to obtaining the
Stockholder Approval, to consummate the transactions contemplated hereby and
thereby. The execution and delivery by the Company of this Agreement, the
Related Agreements, and the compliance by the Company with each of the
provisions of this Agreement and the Related Agreements (i) are within the
corporate power and authority of the Company, and (ii) subject to obtaining
the Stockholder Approval, have been duly authorized by all necessary corporate
action of the Company. This Agreement has been, and each of the Related
Agreements, when executed and delivered by the Company, will be, duly and
validly executed and delivered by the Company. This Agreement constitutes, and
each of the Related Agreements, when executed and delivered by the Company
will constitute, a valid and binding agreement of the Company enforceable
against the Company in accordance with its terms except as such enforcement is
limited by bankruptcy, insolvency and other similar laws affecting the
enforcement of creditors' rights generally and for limitations imposed by
general principles of equity. The Restated Company By-Laws have been duly
adopted by the Board of Directors of the Company (the "Board of Directors")
and will be effective upon the Closing.
(b) The Shares have been duly authorized by the Company and, when
issued, sold and delivered in accordance with this Agreement, the Shares will
be validly issued, fully paid and nonassessable. At the Closing, no further
approval or authority of the stockholders or the Board of Directors under the
Delaware General Corporation Law (the "DGCL"), the rules of the New York Stock
Exchange (the "NYSE") or the consent of any other party will be required for
the issuance of the Shares. The shares of Common Stock issuable upon
conversion of the Shares have been duly authorized by the Company and, when
issued upon conversion of the Shares in accordance with the Series A
Certificate of Designations or the Series B Certificate of Designations, as
appropriate, will be validly issued, fully paid and nonassessable. At the
Closing, the shares of Common Stock issuable upon conversion of the Shares at
the initial conversion price will be reserved for issuance, and no further
approval or authority of the stockholders or the Board of Directors under the
DGCL, the rules of the NYSE or the consent of any other party, other than the
approval of the NYSE and the Pacific Exchange, Inc. (the "PCX") of the listing
of such shares of Common Stock on the NYSE and PCX, will be required for such
issuance of Common Stock. No preemptive rights or other rights to subscribe
for or purchase securities exist with respect to the issuance and sale of the
Shares or the issuance of shares of Common Stock issuable upon conversion of
the Shares other than such rights held pursuant to the Goldman Governance
Agreement, the Restated Goldman Governance Agreement and the Stockholders
Agreement.
Section 3.3 Capitalization. As of the date hereof, the authorized
capital stock of the Company consists of (i) 100,000,000 shares of Common
Stock, of which as of December 13, 2002, 38,419,559 shares were issued and
outstanding excluding 1,204,358 shares of Common Stock held in the Company's
treasury as of such date, (ii) 20,000,000 shares of Preferred Stock, without
par value, of which no shares are issued and outstanding. All of the issued
and outstanding shares of Common Stock have been duly authorized and are
validly issued, fully paid and nonassessable and not subject to the preemptive
or other similar rights of the stockholders of the Company, other than such
rights held pursuant to the Goldman Governance Agreement, the Restated Goldman
Governance Agreement and the Stockholders Agreement. As of the date hereof,
there is outstanding (i) $46,935,000 in aggregate principal amount of the
Company's 7.0% Convertible Subordinated Notes due 2003, which notes are
convertible into 2,968,690 shares of Common Stock and (ii) $22,750,000 in
aggregate principal amount of the Company's 7.0% Convertible Subordinated
Debentures, due 2011, which notes are convertible into 740,559 shares of
Common Stock. Except as described in the SEC Reports (as defined below) filed
prior to the date hereof and other than pursuant to stock incentive plans
approved by the Board of Directors, the Stockholders Agreement, the Goldman
Governance Agreement and the Restated Goldman Governance Agreement, there are
no outstanding subscription rights, options, warrants, convertible or
exchangeable securities or other rights of any character whatsoever relating
to issued or unissued capital stock of the Company, or any contract or
agreement of any character whatsoever relating to issued or unissued capital
stock of the Company or pursuant to which the Company is or may become bound
to issue or grant additional shares of its capital stock or related
subscription rights, options, warrants, convertible or exchangeable securities
or other rights, or to grant preemptive rights. Other than as set forth on
Section 3.3 of the Company Disclosure Schedule, (i) the Company has no
currently existing agreement to register any securities under the Securities
Act of 1933, as amended (the "Securities Act"), or under any state securities
law and has not granted registration rights to any Person or entity which have
not expired and (ii) there are no voting trusts, stockholders agreements,
proxies or other contracts or agreements or understandings in effect to which
the Company is a party or of which it has Knowledge with respect to the voting
or transfer of any of the outstanding shares of Common Stock.
Section 3.4 SEC Reports. The Company has timely filed all proxy
statements, reports and other documents required to be filed by it with the
Securities and Exchange Commission (the "SEC") under the Exchange Act or
otherwise since January 1, 1999, and made available to the Investors complete
copies of all annual reports, proxy statements and other reports filed by the
Company with the SEC, each as filed with the SEC (collectively, the "SEC
Reports"). Each SEC Report was, on the date of its filing, in compliance in
all material respects with the requirements of its respective report form and
the applicable Law and did not, on the date of its filing, contain 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 the light of
the circumstances under which they were made, not misleading.
Section 3.5 Financial Statements. The consolidated financial
statements of the Company (including any related schedules and/or notes)
included in the SEC Reports have been prepared in accordance with United
States generally accepted accounting principles ("GAAP") consistently followed
throughout the periods involved (except as may be indicated in the notes
thereto) and fairly present in accordance with GAAP the consolidated financial
condition, results of operations, stockholders' equity, comprehensive income
and cash flows of the Company and the Subsidiaries as of the respective dates
thereof and for the respective periods then ended (except as may be indicated
in the notes thereto and except, in the case of interim statements, for the
absence of footnotes and as permitted by Form 10-Q and subject to changes
resulting from year-end adjustments, none of which are material in amount or
effect). Except as disclosed in the SEC Reports filed prior to the date
hereof, neither the Company nor any Subsidiary has any liability or obligation
(whether accrued, absolute, contingent, unliquidated or otherwise, whether
known or unknown, whether due or to become due and regardless of when
asserted), except for (i) liabilities and obligations reflected or disclosed
in the audited consolidated balance sheet of the Company and its Subsidiaries
as of December 31, 2001, or the unaudited consolidated balance sheet of the
Company and its Subsidiaries as of September 30, 2002, or the footnotes
thereto, (ii) liabilities and obligations incurred in the ordinary course of
business since September 30, 2002, or (iii) liabilities and obligations which,
individually or in the aggregate, have not had and would not reasonably be
expected to have or result in a Material Adverse Effect.
Section 3.6 Consents; No Violations(a). (a) Except as set forth in
Section 3.6(a) of the Company Disclosure Schedule, the execution, delivery or
performance by the Company of this Agreement and the Related Agreements, and
the consummation of the transactions contemplated hereby and thereby, do not
and will not (i) assuming the effectiveness of the Company Charter Amendment,
the Series A Certificate of Designations, the Series B Certificate of
Designations and the Restated Company By-Laws, conflict with, or result in a
breach or a violation of, any provision of the certificate of incorporation or
by-laws or other organizational documents of the Company or any of its
Subsidiaries, (ii) constitute, with or without notice or the passage of time
or both, a breach, violation or default, create an Encumbrance, or give rise
to any right of termination, modification, cancellation, prepayment,
suspension, limitation, revocation or acceleration, under (A) any Law or (B)
any provision of any agreement or other instrument to which the Company or any
of the Subsidiaries is a party or pursuant to which any of them or any of
their assets or properties is subject, except where such breach, violation or
default, creation of an Encumbrance, or right of termination, modification,
cancellation, prepayment, suspension, limitation, revocation or acceleration,
individually or in the aggregate, has not had and would not reasonably be
expected to have a Material Adverse Effect or (iii) except for (A) the filing
of the Company Charter Amendment, the Series A Certificate of Designations and
the Series B Certificate of Designations with the Secretary of State of the
State of Delaware, (B) the approval of the NYSE and the PCX of the listing of
the shares of Common Stock issuable upon conversion of the Shares on the NYSE
and PCX, (C) the Stockholder Approval and the filing with the SEC of the Proxy
Statement (as defined below) relating thereto, (D) any required filing under
the HSR Act and any foreign governmental and regulatory filings, notices and
approvals required to be made or obtained as contemplated by Section 5.1(e),
and (E) any filings, consents, approvals or authorizations of, notifications
to, or exemptions or waivers by any Governmental Entity or any other Person
which are not, individually or in the aggregate, material to the consummation
of the transactions contemplated hereby or thereby, require any consent,
approval or authorization of, notification to, filing with, or exemption or
waiver by, any Governmental Entity or any other Person on the part of the
Company or any of its Subsidiaries.
(b) At the date hereof and at the Closing Date, the acquisition of
shares of Common Stock by any Investor in accordance with Section 3.01(e) of
the Stockholders Agreement (i) will not conflict with, or result in a breach
or a violation of, any provision of the certificate of incorporation or bylaws
or other organizational documents of the Company or any of its Subsidiaries or
(ii) will not constitute, with or without notice or the passage of time or
both, a breach, violation or default, or create an Encumbrance, or give rise
to any right of termination, modification, cancellation, prepayment,
suspension, limitation, revocation or acceleration under any Law or any
provision of any agreement or other instrument to which the Company or any of
its Subsidiaries is a party or pursuant to which any of them or any of their
assets or properties is subject, or (iii) is not prohibited by any agreement
or instrument referenced in clause (ii).
(c) Except as set forth in the Stockholders Agreement and the Debt
Instruments (as such term is defined in the Stockholders Agreement), at the
date hereof, any acquisition of debt securities of the Company by an Investor
(i) will not conflict with, or result in a breach or a violation of, any
provision of the certificate of incorporation or bylaws or other
organizational documents of the Company or any of its Subsidiaries, as in
effect on the date hereof or (ii) will not constitute, with or without notice
or the passage of time or both, a breach, violation or default, or create an
Encumbrance, or give rise to any right of termination, modification,
cancellation, prepayment, suspension, limitation, revocation or acceleration
under any Law or any provision of any material agreement or other instrument
to which the Company or any of its Subsidiaries is a party or pursuant to
which any of them or any of their assets or properties is subject, in each
case as in effect on the date hereof, or (iii) is not prohibited by any
agreement or instrument referenced in clause (ii).
Section 3.7 Compliance with Laws. Except as disclosed in the SEC
Reports filed prior to the date hereof, the Company and its Subsidiaries are,
and since January 1, 2000, have been, in compliance in all material respects
with all foreign, federal, state, and local laws, statutes, ordinances, rules,
regulations, orders, injunctions, judgments, decrees and bodies of law
(collectively, "Laws"), and the Company and its Subsidiaries possess all
material licenses, franchise permits, consents, registrations, certificates,
and other governmental or regulatory permits, authorizations or approvals
required for the operation of the business as presently conducted and for the
ownership, lease or operation of the Company's and its Subsidiaries'
properties (collectively, "Licenses"), except where such noncompliance or
failure to possess, individually or in the aggregate, has not had and would
not reasonably be expected to have a Material Adverse Effect. All of such
Licenses are valid and in full force and effect, and the Company and its
Subsidiaries have duly performed and are in compliance in all material
respects with all of their obligations under such Licenses except where such
suspension or cancellation of such Licenses or the noncompliance with such
Licenses, individually or in the aggregate, has not had and would not
reasonably be expected to have a Material Adverse Effect. In the conduct of
its business, neither the Company nor any of its Subsidiaries nor, to the
Company's Knowledge, any director, officer, agent, employee or other Person
acting on behalf of the Company or any of its Subsidiaries, has, in any
material respect, (i) used any corporate or other funds for unlawful
contributions, payments, gifts or entertainment, or made any unlawful
expenditures relating to political activity to government officials or others
or established or maintained any unlawful or unrecorded funds in violation of
Section 30A of the Exchange Act or (ii) accepted or received any unlawful
contributions, payments, gifts or expenditures.
Section 3.8 Absence of Certain Changes. Since June 30, 2002, neither
the Company nor any of the Subsidiaries has suffered any change, event or
development or series of changes, events or developments which, individually
or in the aggregate, has had or would reasonably be expected to have a
Material Adverse Effect.
Section 3.9 Litigation.
(a) Except as set forth in Section 3.9(a) of the Company Disclosure
Schedule or as disclosed in the SEC Reports filed prior to the date hereof,
there is no claim, action, suit, investigation or proceeding ("Litigation")
pending or, to the Knowledge of the Company, threatened against the Company or
any of its Subsidiaries or involving any of their respective properties or
assets by or before any court, arbitrator or other Governmental Entity which
(i) in any manner challenges or seeks to prevent, enjoin, alter or materially
delay the transactions contemplated by this Agreement or (ii) if resolved
adversely to the Company or a Subsidiary, individually or in the aggregate,
would reasonably be expected to have a Material Adverse Effect. The statements
contained on Schedule 3.9(a) hereto are true and correct as of the date
hereof.
(b) Except as disclosed in the SEC Reports filed prior to the date
hereof, neither the Company nor any of its Subsidiaries is in default under or
in breach of any order, judgment or decree of any court, arbitrator or other
Governmental Entity, except for defaults or breaches, which, individually or
in the aggregate, have not had and would not reasonably be expected to have a
Material Adverse Effect.
Section 3.10 Employee Matters; ERISA.
(a) All (i) "employee benefit plans," as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
other than any "multiemployer plan," as defined in Section 3(37)(A) of ERISA,
maintained or contributed to by the Company or any of its Subsidiaries and
(ii) other plans, agreements or arrangements relating to compensation or
employee benefits pursuant to which the Company or any of its Subsidiaries may
have any material liability (collectively, the "Plans"), are in compliance
with all applicable provisions of ERISA and the Internal Revenue Code of 1986,
as amended (the "Code"), and the Company and its Subsidiaries do not have any
liabilities or obligations (other than liabilities and obligations for
benefits payable in the ordinary course) with respect to any Plan, whether or
not accrued, contingent or otherwise, except (a) as described in any of the
SEC Reports filed prior to the date hereof or previously disclosed in writing
to the Investors and (b) for instances of noncompliance or liabilities or
obligations that, individually or in the aggregate, have not had and would not
reasonably be expected to have a Material Adverse Effect. Except such of the
following as, individually or in the aggregate, have not had and would not
reasonably be expected to have a Material Adverse Effect, (x) neither the
Company nor any trade or business, whether or not incorporated (an "ERISA
Affiliate"), which together with the Company would be deemed a "single
employer" within the meaning of Section 414 of the Code or Section 4001(b) of
ERISA, has incurred any unsatisfied liability under Title IV of ERISA and no
conditions exist that could reasonably be expected to present a risk to the
Company or any ERISA Affiliate of incurring any such liability (other than
liability for premiums to the Pension Benefit Guaranty Corporation arising in
the ordinary course), and (y) no "employee benefit plan" maintained or
contributed to by the Company or any ERISA Affiliate, other than a
"multiemployer plan" as defined in Section 3(37)(A) of ERISA, has incurred an
"accumulated funding deficiency" (within the meaning of Section 302 of ERISA
or Section 412 of the Code) whether or not waived. As to any "multiemployer
plan" maintained or contributed to by the Company or any of its Subsidiaries
or ERISA Affiliate of the Company, neither the Company nor any ERISA Affiliate
has any Knowledge (a) that such plan is not in substantial compliance with the
applicable provisions of ERISA and the Code; or (b) that such plan has
incurred an "accumulated funding deficiency" (within the meaning of Section
302 of ERISA or Section 412 of the Code) whether or not waived.
(b) Each Plan which is intended to be qualified under Section 401(a)
of the Code is the subject of a favorable determination letter from the IRS,
and, to the Company's Knowledge, nothing has occurred which may reasonably be
expected to result in the revocation of such determination.
(c) Except as set forth on Section 3.10(c) of the Company Disclosure
Schedule, the execution and delivery of, and performance of the transactions
contemplated in, this Agreement will not (either alone or upon the occurrence
of any additional or subsequent events) (i) constitute an event under any Plan
(or related trust), trust or loan that will or may result in any material
payment (whether of severance pay or otherwise), acceleration, forgiveness of
indebtedness, vesting, distribution, increase in benefits or obligation to
fund benefits with respect to any current or former employee or director of
the Company or any subsidiary of the Company, or (ii) result in the triggering
or imposition of any material restrictions or limitations on the right of the
Company or any of its Subsidiaries to amend or terminate any Plan.
Section 3.11 Section 203 of the DGCL; Takeover Statute. The Board of
Directors has taken all actions necessary or advisable so that the
restrictions contained in Section 203 of the DGCL applicable to a "business
combination" (as defined in such Section) will not apply to the execution by
the Investors of this Agreement or the consummation of any of the transactions
contemplated by this Agreement. The execution, delivery and performance of
this Agreement will not cause to be applicable to the Company any "fair
price," "moratorium," "control share acquisition" or other similar
antitakeover statute or regulation enacted under state or federal laws.
Section 3.12 Real Property Holding Corporation; Investment Company;
Public Utility Holding Company. The Company is not, and has not been at any
time during the past five years, a "United States real property holding
corporation" within the meaning of Section 897(c)(2) of the Code. Neither the
Company nor any of its Subsidiaries is an "investment company" or a "company
controlled by an investment company" or an "affiliated person" or "promoter"
or "principal underwriter" for, an "investment company," within the meaning of
the Investment Company Act of 1940, as amended, or a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
Section 3.13 Brokers and Finders. Except as set forth in Section 3.13
of the Company Disclosure Schedule, no agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any
broker's or finder's fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement based on any
agreement, arrangement or understanding with the Company or any of its
Subsidiaries.
Section 3.14 Registration and Qualification.
(a) Assuming the accuracy of the representations and warranties made
by the Investors set forth in Article IV hereof, it is not necessary in
connection with the offer, sale and delivery of the Shares to the Investors in
the manner contemplated by this Agreement to register the Shares, or the
shares of Common Stock issuable upon conversion of the Shares, under the
Securities Act or the securities laws of any state thereof.
(b) The Company has not, directly or indirectly, offered, sold or
solicited any offer to buy and will not, directly or indirectly, offer, sell
or solicit any offer to buy, any security of a type or in a manner which would
be integrated with the sale of the Shares and require any of the Shares to be
registered under the Securities Act. None of the Company, its Subsidiaries or
any person acting on its or any of their behalf has engaged or will engage in
any form of general solicitation or general advertising (within the meaning of
Rule 502(c) under the Securities Act) in connection with the offering of the
Shares.
Section 3.15 Opinion of Financial Advisor. The Board of Directors has
received the opinions of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ Financial Advisors,
Inc. ("▇▇▇▇▇▇▇▇ ▇▇▇▇▇"), financial advisor to the Board of Directors, to the
effect that, as of the date of each such opinion, (i) the transactions
contemplated by this Agreement and the Goldman Purchase Agreement are fair,
from a financial point of view to the Company and its public stockholders,
other than the Investors and the Goldman Investors and (ii) the transactions
contemplated by this Agreement and the Goldman Purchase Agreement are fair,
from a financial standpoint to the Company and its Restricted Subsidiaries (as
such term is defined in the Indenture, dated January 21, 1999, between the
Company and The Bank of New York, as trustee, relating to the issuance of the
Company's 9-3/4% Senior Subordinated Notes due 2009) (together, the "Fairness
Opinions").
Section 3.16 Negotiations with Third Parties. Except in connection
with the transactions contemplated by this Agreement and the Goldman Purchase
Agreement and subject to Section 6.6, the Company is not as of the date
hereof, and since November 8, 2002, has not been, directly or indirectly,
negotiating, seeking to negotiate or otherwise engaging in discussions with
any Person (other than with respect to the restructuring transactions set
forth in Section 6.1 of the Company's Disclosure Schedule) relating to (a) an
acquisition of greater than 20% of the Common Stock, (b) a tender or exchange
offer for the Common Stock, (c) a merger, consolidation or other business
combination involving the Company or any of its material Subsidiaries, or (d)
an offer to acquire in any manner a greater than 20% equity interest in the
Company, or more than 20% of the assets of the Company and its Subsidiaries,
taken as a whole.
Section 3.17 Environmental Laws. Except as set forth in Section 3.17
of the Company Disclosure Schedule and except as disclosed in the SEC Reports
filed prior to the date hereof, each of the Company and its Subsidiaries is in
compliance with all Environmental Laws applicable to such entity or its
business except for such non-compliances as, individually or in the aggregate,
has not had and would not reasonably be expected to have a Material Adverse
Effect. Except as set forth in Section 3.17 of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries has received written
notice of, or is aware of, any violation or alleged violation, or any
liability or asserted liability, under any Environmental Law, with respect to
such entity or its business or its premises which, individually or in the
aggregate, has had or would reasonably be expected to have a Material Adverse
Effect. Except as set forth in Section 3.17 of the Company Disclosure
Schedule, neither the Company nor any of its Subsidiaries has any liability
for environmental clean-up, removal, remediation, or damages, except for such
environmental clean-up, removal, remediation, or damages, as, individually or
in the aggregate, has not had and would not reasonably be expected to have a
Material Adverse Effect.
Section 3.18 Title to Assets. Except for such encumbrances which,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect, each of the Company and its
Subsidiaries has good and marketable title, subject only to the encumbrances
not prohibited by the Credit Agreement, to all personal property purported to
be owned by it and to all property reflected in the most recent balance sheet
referred to in Section 3.5 (except as sold or otherwise disposed of in the
ordinary course of business as no longer used or useful in the conduct of the
business). Except as had not had and would not reasonably be expected to have
a Material Adverse Effect, each material lease of real and personal property
to which the Company or any of its Subsidiaries is a party is in full force
and effect and, except for such defaults as, individually or in the aggregate,
have not had and would not reasonably be expected to have a Material Adverse
Effect, is not subject to termination because of default or otherwise.
Section 3.19 Labor Relations. As of the date hereof, the Company
represents that, to its Knowledge, except as set forth in Section 3.19 of the
Company Disclosure Schedule, (a) except for such strikes as, individually or
in the aggregate, have not had and would not reasonably be expected to have a
Material Adverse Effect, no strikes against either the Company or its
Subsidiaries are pending or, to the Company's Knowledge, threatened, and no
other labor disputes that, individually or in the aggregate, have not had and
would reasonably be expected to have a Material Adverse Effect are pending or,
to the Company's Knowledge, threatened; (b) except as have not had and would
not reasonably be expected to have a Material Adverse Effect, hours worked by
and payment made to employees of the Company or any of its Subsidiaries comply
with the Fair Labor Standards Act and each other federal, state, local or
foreign law applicable to such matter; (c) except as have not had and would
not reasonably be expected to have a Material Adverse Effect, all payments due
from either the Company or its Subsidiaries for employee health and welfare
insurance have been paid or accrued as a liability on the books of such
entity; (d) neither the Company nor any of its Subsidiaries is a party to or
bound by any collective bargaining agreement, management agreement, consulting
agreement or any employment agreement, except for any collective bargaining
agreement, management agreement, consulting agreement or any employment
agreement as, individually or in the aggregate, have not had and would not
reasonably be expected to have a Material Adverse Effect; (e) except as has
not had and would not reasonably be expected to have a Material Adverse
Effect, there is no organizing activity involving either the Company or its
Subsidiaries pending or, to either the Company or its Subsidiaries' Knowledge,
threatened by any labor union or group of employees; (f) except as have not
had and would not reasonably be expected to have a Material Adverse Effect,
there are no representation proceedings pending or, to the Company's
Knowledge, threatened with the National Labor Relations Board, and no labor
organization or group of employees of either the Company or its Subsidiaries
has made a pending demand for recognition; and (g) there are no complaints or
charges against either the Company or its Subsidiaries pending or, to the
Knowledge of the Company, threatened to be filed with any Governmental
Authority or arbitrator based on, arising out of, in connection with, or
otherwise relating to the employment or termination of employment by either
the Company or its Subsidiaries of any individual which, individually or in
the aggregate, if adversely determined, would reasonably be expected to have a
Material Adverse Effect.
Section 3.20 Intellectual Property. Each of the Company and its
Subsidiaries owns or is licensed or otherwise possesses sufficient rights to
use and transfer such rights in all the patents, trademarks, service marks,
trade names, copyrights, know-how, franchises, software and software licenses
used in or necessary for the operation of its business as currently conducted,
except where such failure to own, license or possess the right to use and
transfer, individually or in the aggregate, has not had and would not
reasonably be expected to have a Material Adverse Effect.
Section 3.21 Transactions with Affiliates. Except as set forth in
Section 3.21 of the Company Disclosure Schedule or the SEC Reports filed prior
to the date hereof and except for events (or series of related matters) as to
which the amounts involved are not material to the Company, since the
Company's proxy statement dated April 2, 2002, no event has occurred that
would be required to be reported as a "Certain Relationship or Related
Transaction" pursuant to Item 404 of Regulation S-K promulgated by the SEC.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each Investor hereby represents and warrants to the Company,
solely as to itself, separately and not jointly, as of the date hereof and as
of the Closing, as follows:
Section 4.1 Organization of the Investors. Such Investor is duly
organized and validly existing under the laws of the jurisdiction of its
organization and has the requisite power and authority to carry on its
business as it is now being conducted.
Section 4.2 Due Authorization. Such Investor has all right, power and
authority to enter into this Agreement and the Related Agreements and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery by such Investor of this Agreement and each of the Related
Agreements, and the compliance by such Investor with each of the provisions of
this Agreement and the Related Agreements (a) are within the power and
authority of such Investor and (b) have been duly authorized by all necessary
action on the part of such Investor. This Agreement has been, and each of the
Related Agreements when executed and delivered by such Investor at the Closing
in accordance with the terms of this Agreement will be, duly and validly
executed and delivered by such Investor, and this Agreement constitutes, and
each of the Related Agreements when executed and delivered by such Investor
will constitute, a valid and binding agreement of such Investor enforceable
against such Investor in accordance with its respective terms except as such
enforcement is limited by bankruptcy, insolvency and other similar laws
affecting the enforcement of creditors' rights generally and for limitations
imposed by general principles of equity.
Section 4.3 Consents; No Violations. Neither the execution, delivery
or performance by such Investor of this Agreement and the Related Agreements
nor the consummation of the transactions contemplated hereby or thereby will
(a) conflict with, or result in a breach or a violation of, any provision of
the organizational documents of such Investor, (b) constitute, with or without
notice or the passage of time or both, a breach, violation or default, create
an Encumbrance, or give rise to any right of termination, modification,
cancellation, prepayment, suspension, limitation, revocation or acceleration,
under (i) any Law or (ii) any provision of any agreement or other instrument
to which such Investor is a party or pursuant to which such Investor or its
assets or properties is subject, or (c) except for any required filing under
the HSR Act and any foreign governmental and regulatory filings, notices and
approvals required to be made or obtained as contemplated by Section 5.1(e)
hereof, and filings, consents, approvals or authorizations of, notifications
to, or exemptions or waivers by any Governmental Entity or any other Persons
which are not, individually or in the aggregate, material to the consummation
of the transactions contemplated hereby or thereby, require any consent,
approval or authorization of, notification to, filing with, or exemption or
waiver by, any Governmental Entity or any other Person on the part of such
Investor.
Section 4.4 Ownership of Capital Stock. Neither such Investor nor any
of its respective subsidiaries, directors, officers or members beneficially
owns, directly or indirectly, any capital stock of the Company or is party to
any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any capital stock of the Company or any
security convertible into capital stock of the Company, other than this
Agreement and the Related Agreements.
Section 4.5 Investment.
(a) Such Investor is acquiring Shares for investment for its own
account, and not with a view to any distribution thereof in violation of the
securities laws. Such Investor understands that the Shares have not been
registered under the Securities Act by reason of specific exemptions therefrom
which depend upon, among other things, the bona fide nature of the investment
intent and the accuracy of the Investor's representations as expressed herein.
(b) Such Investor's financial condition and investments are such that
it is in a position to bear the economic risks of the investment and withstand
the complete loss of the investment. Such Investor has extensive knowledge and
experience in financial and business matters and has the capability to
evaluate the merits and risks of an investment in such Shares.
(c) Such Investor qualifies as an "accredited investor" as such term
is defined in Section 2(15) of the Securities Act and Regulation D promulgated
thereunder.
Section 4.6 Rule 144. Such Investor acknowledges that the Shares to
be purchased by such Investor must be held indefinitely unless subsequently
registered under the Securities Act or any applicable state securities laws or
unless exemptions from such registrations are available. Such Investor is
aware of the provisions of Rule 144 promulgated under the Securities Act that
permit limited resale of securities purchased in a private placement subject
to the satisfaction of certain conditions.
Section 4.7 Brokers and Finders; Transaction Expenses. No agent,
broker, investment banker, financial advisor or other firm or Person is or
will be entitled to any broker's or finder's fee or any other commission or
similar fee in connection with any of the transactions contemplated by this
Agreement based on any agreement, arrangement or understanding with such
Investor.
Section 4.8 No Arrangements with Respect to Company Securities.
Except for arrangements, agreements or understandings between and among the
Investors and their Affiliates, none of the Investors or any of their
respective Affiliates has any arrangement, agreement or understanding with any
other Person (other than arrangements, agreements or understandings (A) with
the Company and (B) among each other) for the purpose of acquiring, holding,
voting or disposing of beneficial ownership of securities of the Company.
Section 4.9 Sufficient Funds. Such Investor has available, or has
obtained commitments for, sufficient funds to acquire its portion of the
Shares to be purchased pursuant to this Agreement.
ARTICLE V
CONDITIONS PRECEDENT
Section 5.1 Conditions to Obligations of the Investors and the
Company. The respective obligations of each of the Investors and the Company
to consummate the transactions contemplated hereby shall be subject to the
satisfaction or waiver at or prior to the Closing of each of the following
conditions:
(a) HSR Approval. The applicable waiting period (and any extension
thereof) under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), if any, relating to the transactions contemplated by
this Agreement shall have been terminated or shall have expired.
(b) Laws. No Laws shall be in effect which prohibit the consummation
of the transactions contemplated hereby.
(c) Stockholder Approval. The approval of holders of the requisite
number of the shares of Common Stock outstanding on the record date for the
Special Meeting (as defined below) in accordance with the requirements of the
DGCL and the rules of the NYSE and PCX, as applicable, shall have been
received for (i) the issuance of the Shares and the shares of Common Stock
issuable upon conversion of the Shares, (ii) the issuance and sale of 47,125
shares of Series A Preferred Stock and 47,125 shares of Series B Preferred
Stock to the Goldman Investors pursuant to the Goldman Purchase Agreement and
(iii) the Company Charter Amendment (the "Stockholder Approval").
(d) Senior Debt Restructuring. The Company shall have consummated a
refinancing or restructuring of its Credit Agreement (the "Senior Debt
Refinancing") on terms and conditions no less favorable to the Company than
those set forth in Exhibit G hereto.
(e) Foreign Governmental and Regulatory Filings. The Company and/or
the Investors shall have made any material foreign governmental and regulatory
filings, given all material notices and obtained any material approvals that
the Company and the Investors reasonably agree are required in connection with
the consummation of the transactions contemplated by this Agreement and the
Related Agreements.
(f) NYSE and PCX Listing. The shares of Common Stock issuable upon
conversion of the Shares shall have been approved for listing on the NYSE and
PCX, subject to official notice of issuance.
(g) Receipt of Proceeds. The Company shall have received or shall
receive simultaneously with the Closing gross proceeds (before giving effect
to the payment of fees and expenses) of not less than $47,125,000 from
simultaneous issuances of its Series A Preferred Stock and Series B Preferred
Stock to parties other than the Investors on the terms provided to the
Investors on the date hereof.
Section 5.2 Conditions to the Investors' Obligations. The obligation
of each of the Investors to consummate the transactions contemplated hereby
shall be subject to the satisfaction at or prior to the Closing of each of the
following conditions:
(a) Representations and Warranties. All of the representations and
warranties of the Company set forth in this Agreement shall be true and
correct, in each case as of the date of this Agreement and as of the Closing
Date, as if made at and as of such time, except (i) to the extent expressly
made as of an earlier date, in which case as of such date, (ii) in the case of
any of the representations and warranties (other than those set forth in the
second sentence of Section 3.1(b), Sections 3.2-3.6, Sections 3.11-3.16 and
Section 3.21) where the failure to be true and correct (without giving effect
to any limitation as to "materiality" or "Material Adverse Effect" set forth
therein) would not have a Material Adverse Effect, (iii) in the case of the
representations and warranties set forth in the second sentence of Section
3.1(b), Sections 3.2-3.6, Sections 3.11-3.16 and Section 3.21, which shall be
true and correct in all material respects on each such date (except to the
extent statements in such representations and warranties are qualified by
"materiality" or "Material Adverse Effect", which statements shall be true and
correct in all respects on each such date), and (iv) for changes specifically
permitted by this Agreement.
(b) Performance of Obligations. The Company shall have performed,
satisfied and complied with, in all material respects, all covenants and
agreements set forth in this Agreement required to be performed by it under
this Agreement at or prior to the Closing.
(c) Director Resignation. A director of the Company shall have
resigned from the Board of Directors effective as of the Closing.
(d) Officer's Certificates. The Company shall have delivered to the
Investors a certificate signed by its chief executive officer, dated the
Closing Date, in form and substance reasonably satisfactory to the Investors,
to the effect that the conditions set forth in Sections 5.2(a), 5.2(b) and
5.2(c) have been satisfied.
(e) Material Adverse Effect. Since June 30, 2002, there shall not
have occurred any change, event or development or series of changes, events or
developments which, individually or in the aggregate, has had or would
reasonably be expected to have a Material Adverse Effect.
(f) Related Agreements. At or prior to the Closing, the Company shall
have delivered to each of the Investors originals of each of (i) the Related
Agreements, (ii) the Amended and Restated Governance Agreement, dated as of
the Closing Date, among the Company, the Goldman Investors and the other
parties signatory thereto (the "Restated Goldman Governance Agreement") and
(iii) the Amended and Restated Registration Rights Agreement, dated as of the
Closing Date, among the Company, the Goldman Investors and the other parties
signatory thereto (the "Restated Goldman Registration Rights Agreement"), in
each case, duly executed by the Company and each of the other parties thereto.
(g) Other Deliveries. The Company shall have made the deliveries set
forth in Section 2.2(a) hereof. Items delivered pursuant to Section 2.2(a)(v)
shall include, without limitation, (i) a resolution of the Board of Directors
affirmatively determining that no relationship has been created between the
Company and either of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. Small solely by virtue of
this Agreement and the Related Agreements which would preclude the Board of
Directors from determining that either of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. Small
is an independent director under the NYSE's proposed corporate governance
rules (in the form filed with the SEC on August 16, 2002 and without giving
effect to any subsequent amendment of such proposal or rules), and (ii) a
certificate of the Company's Chief Executive Officer and Chief Financial
Officer certifying that the transactions contemplated by this Agreement do not
violate the terms of the Senior Debt Refinancing, and as to such officers'
good faith belief, based on projections prepared by the Company using
assumptions believed to be reasonable in good faith, that the Company will be
able to satisfy the financial covenants contained in the Senior Debt
Financing, or such similar certifications as are reasonably acceptable to the
Investors.
(h) Certificates of Designations. Each of the Series A Certificate of
Designations and the Series B Certificate of Designations shall have been duly
filed with the Secretary of State of the State of Delaware, shall have become
effective and shall be in full force and effect.
(i) Legal Opinion. The Investors shall have received an opinion of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special counsel to the Company,
dated the Closing Date and addressed to each Investor, in the form attached
hereto as Exhibit H.
(j) Financing Document Amendments. The Company shall have not
amended, modified, waived, terminated or otherwise altered in any material
respect the provisions, terms or conditions of any other agreements between
the Company and any other Person with respect to an investment in shares of
Series A Preferred Stock and Series B Preferred Stock and the rights and
obligations incident thereto without the Investors' consent.
Section 5.3 Conditions to the Obligations of the Company. The
obligation of the Company to consummate the transactions contemplated hereby
shall be subject to the satisfaction at or prior to the Closing of each of the
following conditions:
(a) Representations and Warranties. All of the representations and
warranties of the Investors set forth in this Agreement shall be true and
correct in all material respects, in each case as of the date of this
Agreement and as of the Closing Date, as if made at and as of such time,
except (i) to the extent expressly made as of an earlier date, in which case
as of such date and (ii) in the case of the representations and warranties set
forth in Sections 4.1, 4.2 and 4.8, which shall be true and correct in all
respects on each such date.
(b) Performance of Obligations. The Investors shall have performed,
satisfied and complied with, in all material respects, all covenants and
agreements set forth in this Agreement required to be performed by any of them
under this Agreement at or prior to the Closing.
(c) Officers' Certificates. Each of the Investors shall have
delivered to the Company a certificate signed by an authorized signatory
thereof, dated the Closing Date, in form and substance reasonably satisfactory
to the Company, to the effect that the conditions set forth in Section 5.3(a)
and 5.3(b) have been satisfied.
(d) Related Agreements. At or prior to Closing, the Investors shall
have delivered to the Company originals of the Related Agreements duly
executed by each of the Investors.
(e) Other Deliveries. The Investors shall have made the deliveries
set forth in Section 2.2(b) hereof.
(f) Legal Opinion. The Company shall have received an opinion of
Ropes & ▇▇▇▇, special counsel to the Investors, dated the Closing Date and
addressed to the Company, in a form reasonably acceptable to the Company.
ARTICLE VI
COVENANTS
Section 6.1 Conduct of Business Pending the Closing. The Company
covenants and agrees that, during the period from the date of this Agreement
and continuing until the earlier of the termination of this Agreement or the
Closing (A) unless the Investors otherwise agree in writing, (B) except as set
forth in Section 6.1 of the Company Disclosure Schedule or (C) except for
those actions specifically set forth in Sections 2.06(i), (ii) or (iii) of the
Stockholders Agreement, in the form attached hereto as Exhibit C, which are
permitted to be taken by the Company or its Significant Subsidiaries without
the approval of a majority of the directors to be appointed by the Investors
to the Board of Directors, the Company shall, and shall cause each of its
Significant Subsidiaries to, (i) conduct its business only in the ordinary
course and consistent with past practice; (ii) use reasonable best efforts to
preserve and maintain its assets and properties and its relationships with its
customers, suppliers, advertisers, distributors, agents, officers and
employees and other persons with which it has significant business
relationships; (iii) use its reasonable best efforts to maintain all of the
material assets it owns or uses in the ordinary course of business consistent
with past practice; (iv) use its reasonable best efforts to preserve the
goodwill and ongoing operations of its business; (v) maintain its books and
records in the usual, regular and ordinary manner, on a basis consistent with
past practice; and (vi) comply in all material respects with applicable Laws.
Notwithstanding the foregoing and except as expressly contemplated by this
Agreement or as set forth on Section 6.1 of the Company Disclosure Schedule,
between the date of this Agreement and the Closing, the Company shall not, and
shall cause each of its Significant Subsidiaries not to, do any of the
following without the prior written consent of the Investors, which consent
shall not be unreasonably withheld or delayed:
(a) amend the Certificate of Incorporation or bylaws or other
organizational documents except as contemplated by this Agreement;
(b) become liable in respect of any guarantee or incur, assume or
otherwise become liable in respect of any debt, except for guarantees or
borrowings in the ordinary course of business as permitted under the Credit
Agreement;
(c) make any declaration, setting aside or payment of any dividend or
other distribution with respect to, or any repurchase, redemption, early
repayment or other acquisition of, any of its capital stock, securities
directly or indirectly convertible into capital stock, or debt instruments,
except as required by the terms thereof;
(d) take any action that is reasonably likely to result in (i) any of
the representations and warranties set forth in Article III (as modified by
any section of the Company Disclosure Schedule relating thereto) becoming
false or inaccurate in any material respect as of, or at any time prior to,
the Closing Date or (ii) any of the conditions to the obligations of the
Investors set forth in Section 5.2(a) or (b) not being satisfied;
(e) amend, modify, waive, terminate or otherwise alter in any
material respect the provisions, terms or conditions of any other agreements
between the Company and any other Person that has committed to purchase shares
of Series A Preferred Stock and Series B Preferred Stock or any agreements to
be entered into in connection therewith; or
(f) agree to take any of the actions restricted by this Section 6.1.
Notwithstanding the foregoing, nothing in this Section 6.1
shall in any way be deemed to restrict or prohibit the Company's or its
Subsidiaries' ability to (i) pay fees to the lenders under the Credit
Agreement, (ii) enter into waivers with respect to the Credit Agreement, (iii)
amend the Credit Agreement (consistent with Section 5.1(d)), or (iv) take any
other action with respect to the Credit Agreement in accordance with past
practice or in the ordinary course of business.
Section 6.2 Amendment of Certificate of Incorporation and By-Laws of
the Company. At or prior to the Closing and subject to the Stockholder
Approval, the Company shall cause the Company Charter Amendment, the Series A
Certificate of Designations and the Series B Certificate of Designations to be
filed with the Secretary of State of Delaware and shall cause the Restated
Company By-laws to become effective. The Company shall use its reasonable best
efforts to ensure that the Restated Company By-Laws will not be inconsistent,
at any time, with any of the terms and provisions contained in the
Stockholders Agreement for so long as such agreement is in effect.
Section 6.3 Certain Payments.
(a) The Company shall, on the date set forth below, pay to each of
Berkshire Partners LLC, a Massachusetts limited liability company ("Berkshire
Partners") and Greenbriar Equity Group LLC, a Delaware limited liability
company ("Greenbriar Equity Group" and together with Berkshire Partners, the
"Investor Managers"), such portion of a transaction fee equal to $1,500,000 in
the aggregate, subject to reduction pursuant to Section 6.3(a)(ii) below (the
"Transaction Fee"), as is set forth opposite the names of the Investors
affiliated with such Investor Managers as set forth on Schedule 6.3(a) hereto:
(i) at the Closing, against receipt from each Investor of the
Purchase Price payable by such Investor pursuant to Section 2.2(b) hereof; or
(ii) immediately upon termination of this Agreement; provided that if
this Agreement is terminated by (A) any of the Investors as a result of the
failure to satisfy the condition set forth in Section 5.2(e) of this Agreement
or due to any inaccuracy of a representation or warranty which inaccuracy is
due to an event occurring after the date hereof which is a Material Adverse
Effect, no Transaction Fee shall be payable, (B) the Company pursuant to
Section 7.1(c)(ii) as a result of a breach or failure to perform by any of the
Investors, no Transaction Fee shall be payable, (C) either the Company or the
Investors pursuant to Section 7.1(b)(iii), the Transaction Fee payable by the
Company to the Investor Managers shall be equal to $750,000, or (D) either the
Company or the Investors as a result of the failure to satisfy any of the
conditions set forth in Sections 5.1(a), (b), (d), (e) or (f) (provided, the
Investors' failure to fulfill any obligation under this Agreement was not the
cause of, or did not result in the failure of such condition), the Transaction
Fee payable by the Company to the Investor Managers shall be equal to
$750,000. Any payment pursuant to this Section 6.3(a)(ii) shall be paid in
immediately available funds within two (2) business days of a termination of
this Agreement.
(b) Upon the execution of this Agreement, the Company shall pay to
the Investor Managers an aggregate amount equal to (A) $550,000 (which amount
is intended to approximate the Investors' expenses incurred solely in
connection with the transactions contemplated by this Agreement through
September 11, 2002) plus (B) 50% of all reasonable, documented out-of-pocket
legal, travel and accounting expenses incurred by the Investors after
September 11, 2002 and on or prior to the date hereof solely in connection
with the transactions contemplated by this Agreement. Upon the earlier to
occur of (x) the Closing, or (y) two (2) business days following termination
of this Agreement, the Company shall pay to the Investor Managers an aggregate
amount equal to (A) 50% of all reasonable, documented out-of-pocket legal,
travel and accounting expenses incurred by the Investors after September 11,
2002 and on or prior to the date hereof solely in connection with the
transactions contemplated by this Agreement plus (B) all reasonable,
documented out-of-pocket legal, travel and accounting expenses (including,
without limitation, filing fees incurred with respect to any filing made under
the HSR Act by the Investors) incurred by the Investors solely in connection
with the transactions contemplated by this Agreement after the date hereof and
on or prior to the earlier to occur of (1) the Closing Date or (2) the date of
the termination of this Agreement (collectively, the amounts referred to in
the first two sentences of this Section 6.3(b) are referred to as the
"Expenses"); provided, however, that in the event that the Company terminates
this Agreement pursuant to Section 7.1(c)(ii) as a result of a breach or a
failure to perform by any of the Investors of this Agreement, the term
"Expenses" shall not include any expenses incurred by the Investors after the
date of this Agreement. The amounts payable by the Company to the Investor
Managers pursuant to this Section 6.3(b) shall be allocable among the Investor
Managers in proportion to the amounts set forth opposite the names of the
Investors affiliated with such Investor Managers as set forth on Schedule
6.3(a) hereto.
(c) The provisions of this Section 6.3 supercede and replace the
provisions of the expense reimbursement letter, dated October 22, 2002,
between the Company and Greenbriar Equity Group LLC.
Section 6.4 Availability of Common Stock. From and after the Closing,
the Company shall at all times authorize, reserve and keep available out of
its authorized but unissued Common Stock, for the purpose of enabling the
conversion of the Shares, the full number of shares of Common Stock then
issuable upon the conversion of the Shares. The Company will, from time to
time, in accordance with the laws of the State of Delaware, use its reasonable
efforts to increase the authorized amount of Common Stock if at any time the
number of shares of Common Stock remaining unissued and available for issuance
shall be insufficient to permit conversion of the Shares.
Section 6.5 Proxy Statement; Stockholder Approval.
(a) The Company shall, in accordance with applicable law and its
Certificate of Incorporation and By-Laws:
(i) duly call, give notice of, convene and hold a special meeting of
its stockholders (the "Special Meeting") as soon as practicable following the
mailing of the Proxy Statement (as defined below) for the purpose of obtaining
the Stockholder Approval;
(ii) prepare a form of proxy statement to be mailed to the
stockholders of the Company in connection with the Special Meeting (the "Proxy
Statement") as soon as practicable after the date hereof (provided that the
Investors and their counsel shall be given reasonable opportunity to review
and comment on the preliminary proxy statement, any amendments thereto and
related communications with stockholders prior to filing with the SEC and
provided further that the Investors shall have the right to consent to any
descriptions of or references to (i) the Investors or any of their Affiliates,
and (ii) the Series A Certificate of Designations, the Series B Certificate of
Designations and the Related Agreements and the transactions contemplated
thereby in the Proxy Statement or such communications, which consent shall not
be unreasonably withheld or delayed) and use its reasonable best efforts (x)
(1) to respond as promptly as practicable to any comments made by the SEC with
respect to the Proxy Statement and (2) to promptly supply the Investors with
copies of all correspondence between the Company or any of its
representatives, on the one hand, and the SEC or its staff, on the other hand,
with respect to the Proxy Statement, and (y) to cause the definitive Proxy
Statement to be mailed to its stockholders at the earliest practicable date
following the clearance of the Proxy Statement by the SEC and, if necessary,
after the Proxy Statement shall have been so mailed, promptly circulate
amended, supplemental or supplemented proxy material, and, if required in
connection therewith, resolicit proxies;
(iii) except to the extent the Board of Directors determines in good
faith, after consultation with outside counsel, that contrary action is
required by such Board of Directors' fiduciary duties under applicable law,
recommend, without qualification, that the stockholders of the Company vote to
adopt and approve (x) the issuance of the Shares and the shares of Common
Stock issuable upon conversion of the Shares, (y) the Company Charter
Amendment and (z) the adoption of the Hexcel Corporation 2003 Incentive Stock
Plan and amendments to certain of the Company's existing equity incentive
plans, substantially on terms set forth in Exhibit I hereto, and include in
the Proxy Statement such unqualified recommendations and take all lawful
action to solicit such approvals and acceptances.
(b) The Company will advise the Investors, promptly after it receives
notice thereof, of the time when any supplement or amendment has been filed or
of any request by the SEC for an amendment of or supplement to the Proxy
Statement or comments thereon and responses thereto or requests by the SEC for
additional information. If at any time the Company or the Investors,
respectively, discover any information relating to the Company or the
Investors, or any of their respective affiliates, officers or directors, that
should be set forth in an amendment or supplement to the Proxy Statement so
that the document will not include any misstatement of a material 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, then
the party that discovers any misleading information shall promptly notify the
other parties hereto and an appropriate amendment or supplement describing the
information shall be promptly filed with the SEC and, to the extent required
by law or regulation, disseminated to the Company's stockholders.
(c) The Company shall use reasonable efforts to ensure that the Proxy
Statement (including without limitation any SEC Reports incorporated by
reference therein) shall comply in all material respects with all applicable
federal or other securities laws, except that the Company shall have no
obligation as to information provided by any of the Investors.
Section 6.6 No Solicitation.
(a) Except as consented to by the Investors and except to satisfy the
condition set forth in Section 5.1(g) of this Agreement, the Company shall
not, and shall cause its Subsidiaries not to, and shall use its reasonable
best efforts to cause its officers, directors, employees, financial advisors,
consultants, attorneys, accountants, and other agents not to, directly or
indirectly, solicit, initiate, encourage or facilitate or take any action to
solicit, initiate, encourage or facilitate the submission or making of any
Alternate Proposal or any inquiry with respect thereto or engage in
discussions or negotiations with any Person with respect thereto, or, in
connection with any Alternate Proposal or potential Alternate Proposal,
disclose any nonpublic information relating to it or its Subsidiaries or
afford access to the properties, books or records of it or its Subsidiaries to
any Person that has made, or, to such party's knowledge, is considering
making, any Alternate Proposal; provided, however, in the event that the
Company shall receive an Alternate Proposal that could reasonably be expected
to result in a Superior Proposal that was not solicited by it after the date
hereof and which did not otherwise result from a breach of this Section 6.6,
then (i) the Company or its representatives may make such inquiries or conduct
such discussions with respect to such Alternate Proposal as the Board of
Directors, after consultation with outside legal counsel, may deem necessary
to inform itself for the purpose of exercising its fiduciary duties and (ii)
if the Board of Directors of the Company by a majority vote determines in good
faith (after receiving advice of a financial adviser of nationally recognized
reputation) that such Alternate Proposal is reasonably likely to result in a
Superior Proposal, the Company and its representatives may conduct such
additional discussions or provide such information as the Board of Directors
may determine, but only if, (i) prior to such additional discussions or such
provision of information the Board of Directors by a majority vote shall have
determined in good faith, after consultation with outside legal counsel, that
the failure to take such action would reasonably be expected to constitute a
breach by it of its fiduciary duties to its stockholders under applicable law
and (ii) prior to providing any such information, the Company shall have
received from such Person an executed agreement protecting the confidentiality
of the information to be provided.
(b) Nothing contained in this Agreement shall prevent the Board of
Directors from complying with Rule 14e-2 under the Exchange Act with regard to
an Alternate Proposal.
(c) Upon receiving any unsolicited Alternate Proposal (or any
amendment, supplement or change to any previously submitted Alternate
Proposal) or any inquiry that could reasonably be expected to lead to an
Alternate Proposal, the Company shall promptly (and in no event later than two
business days after receipt of any Alternate Proposal or amendment, supplement
or change thereto) notify the Investors of the receipt of such Alternate
Proposal or amendment, supplement or change to any previously received
Alternate Proposal or any inquiry that could reasonably be expected to lead to
an Alternate Proposal and the identity of the Person making such proposal or
submitting such amendment, supplement or change and the material terms and
conditions of such Alternate Proposal or any inquiry that could reasonably be
expected to lead to an Alternate Proposal.
(d) Except as set forth in this Section 6.6(d), the Board of
Directors shall not withdraw its recommendation of the transactions
contemplated by this Agreement or approve or recommend, or cause the Company
to enter into any agreement with respect to, any Alternate Proposal.
Notwithstanding the foregoing, if the Board of Directors by a majority vote
determines in good faith, after consultation with outside legal counsel, that
such withdrawal of recommendation or approval or recommendation of a Superior
Proposal or entering into an agreement with respect to a Superior Proposal may
reasonably be expected to be required to satisfy its fiduciary duties, the
Board of Directors may withdraw its recommendation of the transactions
contemplated hereby or approve or recommend a Superior Proposal, or cause the
Company to enter into an agreement with respect to a Superior Proposal, but in
each case only (i) after providing written notice to the Investors (a "Notice
of Superior Proposal") advising the Investors that the Board of Directors has
received a Superior Proposal, specifying the material terms and conditions of
such Superior Proposal and identifying such Person making such Superior
Proposal and (ii) if the Investors do not, within five business days of the
Investors' receipt of the Notice of Superior Proposal, make an offer which the
Board of Directors by a majority vote determines in good faith (based on the
advice of a financial advisor of nationally recognized reputation) to be as
favorable to the Company's stockholders as such Superior Proposal; provided,
however, the Company shall not be entitled to withdraw its recommendation of
the transactions contemplated hereby or enter into any agreement with respect
to a Superior Proposal unless this Agreement has been or concurrently is
terminated by its terms pursuant to Section 7.1 and the Company has paid any
amounts due to the Investors pursuant to Section 7.3.
(e) For purposes of this Agreement, "Alternate Proposal" means any
offer or proposal for, or any indication of interest in, any (i) direct or
indirect acquisition or purchase of a business or assets that constitute 20%
or more of the net revenues, net income or the assets of the Company and its
Subsidiaries, taken as a whole, (ii) direct or indirect acquisition or
purchase of 20% or more of any class of equity securities of the Company,
(iii) tender offer or exchange offer that if consummated would result in any
person beneficially owning 20% or more of any class of equity securities of
the Company, or (iv) merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving
the Company, other than the transactions contemplated by this Agreement and
the ▇▇▇▇▇▇▇ Purchase Agreement.
(f) For purposes of this Agreement, "Superior Proposal" means any
bona fide Alternate Proposal, which does not contain any due diligence
condition, on terms that the Board of Directors of the Company determines in
its good faith judgment (after consultation with a financial advisor of
nationally recognized reputation and outside counsel) to be more favorable
from a financial point of view to the Company's stockholders than the
transactions contemplated by this Agreement, taking into account any changes
to the transactions contemplated by this Agreement that have been proposed by
the Investors in response to such proposal.
Section 6.7 HSR Act; Other Filings. Each of the Investors and the
Company shall cooperate in making required filings under the HSR Act and any
foreign governmental and regulatory filings, notices and approvals required to
be made or obtained as contemplated by Section 5.1(e) hereof.
Section 6.8 Consents; Approvals. The Company shall use its
commercially reasonable efforts to obtain, as promptly as practicable, all
consents, waivers, exemptions, approvals, authorizations or orders
(collectively, "Consents") (including, without limitation (i) all Consents
required to avoid any breach, violation, default, encumbrance or right of
termination, modification, cancellation, prepayment, suspension, limitation,
revocation or acceleration of any material agreement or instrument to which
the Company is a party or its properties or assets are bound, and (ii) all
United States and foreign governmental and regulatory approvals), required in
connection with the consummation of the transactions contemplated by this
Agreement and the Related Agreements, in each case as promptly as practicable,
except where the failure to obtain such Consents, individually or in the
aggregate, has not had and would not be reasonably expected to have a Material
Adverse Effect.
Section 6.9 Debt Refinancing.(a) The Company shall use its reasonable
best efforts to consummate the Senior Debt Refinancing on substantially the
terms set forth in Exhibit G hereto.
(b) Prior to Closing, the Company shall (i) use its commercially
reasonable efforts to cause the terms of the agreements to be entered into
pursuant to the Senior Debt Refinancing, including any senior ranked revolving
credit facility, to not prohibit the acquisition of debt securities, other
than debt securities issued pursuant to the Senior Debt Refinancing, of the
Company by the Investors and (ii) not enter into any agreement, other than the
agreements referred to in clause (i), which would prohibit the acquisition of
debt securities by the Investors.
Section 6.10 Listing. The Company shall use its reasonable best
efforts to continue to have its Common Stock listed on the NYSE and PCX or
another national securities exchange for so long as the Investors own any
Shares.
Section 6.11 Cooperation. Each of the Investors, on the one hand, and
the Company, on the other, agrees to use commercially reasonable efforts to
cause, or not to impede, to the extent that such party has control or
influence over such matters, satisfaction of the conditions to the other
party's obligation to consummate the transactions contemplated by this
Agreement set forth in Section 5.2 or 5.3, as applicable.
Section 6.12 Execution and Delivery of Related Agreements. Prior to
or simultaneously with the Closing, (i) the Company shall execute and deliver
to the Investors the Related Agreements (in each case upon satisfaction or
waiver of the other conditions set forth in Sections 5.1 and 5.3 hereto), and
(ii) each of the Investors shall execute and deliver to the Company the
Related Agreements (in each case upon satisfaction or waiver of the other
conditions set forth in Sections 5.1 and 5.2 hereto).
Section 6.13 Use of Proceeds. The Company shall use the proceeds from
the sale of the Shares to repay indebtedness of the Company and for general
corporate purposes.
Section 6.14 Investors' Access to Premises; Notices of Developments.
(a) From the date of this Agreement until the Closing Date, the
Company will permit the Investors and their respective representatives to have
full access (at reasonable times and upon reasonable notice) to all officers
of the Company and its Subsidiaries and to all premises, properties, books,
records (including tax records), contracts, financial and operating data and
information and documents pertaining to the Company and its Subsidiaries and
make copies of such books, records, contracts, data, information and documents
as any Investor or their respective representatives may reasonably request.
(b) From the date of the Agreement until the Closing Date, the
Company will give the Investors prompt written notice upon becoming aware of
any development materially adversely affecting the assets, liabilities,
business, financial condition or operations of the Company or its
Subsidiaries, or any event or circumstance that could reasonably be expected
to result in a breach of, or inaccuracy in, any of the Company's
representations and warranties in this Agreement; provided, however, that no
such disclosure will be deemed to prevent or cure any such breach of, or
inaccuracy in, amend or supplement any Company Disclosure Schedule to, or
otherwise disclose any exception to, any of the representations and warranties
set forth in this Agreement.
Section 6.15 IRS Forms. Prior to or simultaneously with the payment
of the amounts due the Investor Managers pursuant to Section 6.3(b) hereof,
each of the Investors and the Investor Managers shall provide the Company, in
the manner prescribed by applicable law, validly completed and executed
Internal Revenue Service Forms W-9 or W-8BEN or other applicable W-8.
ARTICLE VII
TERMINATION
Section 7.1 Termination. Notwithstanding anything contained herein to
the contrary, this Agreement may be terminated at any time prior to the
Closing Date:
(a) by the mutual written consent of each of the Investors and the
Company;
(b) by the Investors or the Company:
(i) if the Closing has not occurred on or before May 30, 2003 (the
"Expiration Date") and this Agreement has not previously been terminated;
provided, that the right to terminate the Agreement pursuant to this Section
7.1(b)(i) shall not be available to any party whose failure to fulfill any
obligation under this Agreement was the cause of, or resulted in, the failure
of the Closing to occur on or before such date; or
(ii) if any Governmental Entity shall have issued an order, judgment,
decree or ruling or taken any other action, in each case permanently
restraining, enjoining or otherwise prohibiting the transactions contemplated
hereby and such order, judgment, decree, ruling or other action shall have
become final and non-appealable; provided, that the right to terminate this
Agreement pursuant to this Section 7.1(b)(ii) shall not be available to any
party whose failure to fulfill any obligation under this Agreement was the
cause of, or resulted in the issuance of such order, judgment, decree or
ruling; or
(iii) if, at the Special Meeting, the Stockholder Approval is not
obtained, provided, that the right to terminate the Agreement pursuant to this
Section 7.1(b)(iii) shall not be available to any party whose failure to
fulfill any obligation under this Agreement was the cause of, or resulted in,
the failure to obtain Stockholder Approval;
(c) by the Company:
(i) if the Company receives a Superior Proposal and the Board of
Directors has complied with the provisions of Section 6.6(a), (c) and (d),
including the notice provisions therein, and with the applicable requirements
of Section 7.3, including the payments required thereunder; or
(ii) if (A) the representations and warranties of any of the
Investors set forth in this Agreement (other than those set forth in Sections
4.1, 4.2 and 4.8) shall not be true and correct in all material respects on
and as of the date of this Agreement and on and as of the Closing Date as if
made on such date (except to the extent expressly made as of an earlier date,
in which case as of such date), (B) the representations and warranties set
forth in Sections 4.1, 4.2, and 4.8 shall not be true and correct in all
respects on each such date (except to the extent expressly made as of an
earlier date, in which case as of such date), or (C) any of the Investors
shall have breached or failed in any material respect to perform or comply
with any material obligation, agreement or covenant required by this Agreement
to be performed or complied with by it, which inaccuracy or breach is
incapable of being cured prior to the Expiration Date, except, in the case of
the inaccuracy of any representation or warranty, for changes specifically
permitted by this Agreement.
(d) by the Investors:
(i) if the Board of Directors or any committee thereof shall have
withdrawn or modified, in a manner adverse to the Investors, its approval or
recommendation of any of the transactions contemplated by this Agreement; or
(ii) if (A) the representations and warranties of the Company set
forth in this Agreement shall not be true and correct on and as of the date of
this Agreement and on and as of the date of such determination as if made on
such date (except to the extent expressly made as of an earlier date, in which
case as of such earlier date), except, (i) in the case of any such
representations and warranties (other than those set forth in the second
sentence of Section 3.1(b), Sections 3.2-3.6, Sections 3.11-3.16 and Section
3.21) where the failure to be true and correct (without giving effect to any
limitation as to "materiality" or "Material Adverse Effect" set forth therein)
would not have a Material Adverse Effect and (ii) in the case of the
representations and warranties set forth in the second sentence of Section
3.1(b), Sections 3.2-3.6, Sections 3.11-3.16 and Section 3.21 hereof, the
representations and warranties shall not be true and correct in all material
respects on each such date (except to the extent such statements in
representations and warranties are qualified by "materiality" or "Material
Adverse Effect", which shall statements be true and correct in all respects on
each such date), or (B) the Company shall have breached or failed in any
material respect to perform or comply with any material obligation, agreement
or covenant required by the Agreement to be performed or complied with by it,
which inaccuracy or breach cannot be cured or has not been cured prior to the
Expiration Date, except, in the case of the failure of any representation or
warranty, for changes specifically permitted by this Agreement; or
(iii) if any change, event or development or series of changes,
events or developments which individually or in the aggregate has had a
Material Adverse Effect subsequent to the date of this Agreement and which
Material Adverse Effect is incapable of being cured prior to the Expiration
Date, provided, that a party may not terminate the Agreement pursuant to this
Section 7.1(d)(iii) 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 change, event or development.
Section 7.2 Effect of Termination. Termination pursuant to Section
7.1 shall terminate all obligations and liabilities of the parties hereto
under this Agreement except for (i) liabilities for breach by any party under
this Agreement and (ii) obligations or liabilities arising under Sections 6.3,
7.2 and 7.3 and Articles VIII and IX.
Section 7.3 Termination Payment. In the event that (A) this Agreement
is terminated by the Investors pursuant to Section 7.1(d)(i), (B) this
Agreement is terminated by the Company pursuant to Section 7.1(c)(i), or (C)
(i) this Agreement is terminated by the Investors as a result of the failure
to satisfy the condition set forth in Section 5.1(g) of this Agreement and
such failure is due solely to a material breach (which is incapable of being
cured prior to the Expiration Date) by the ▇▇▇▇▇▇▇ Investors of their
obligations pursuant to the ▇▇▇▇▇▇▇ Purchase Agreement, and (ii) the Company
consummates a transaction that constitutes an Alternate Proposal within nine
months after the date this Agreement is terminated, then in any such event,
the Company shall pay to the Investor Managers an aggregate termination
payment in cash equal to $3,115,000 minus the sum of (x) any amount paid or
payable to the Investors pursuant to Section 6.3(a)(ii) of this Agreement and
(y) 50% of any amount paid or payable by the Company in respect of the
Expenses pursuant to this Agreement (the "Termination Payment"). The
Termination Payment shall be payable in addition to the Transaction Fee and
payment of Expenses payable pursuant to Section 6.3). The amounts payable by
the Company to the Investor Managers pursuant to this Section 7.3 shall be
allocable among the Investor Managers in proportion to the amounts set forth
opposite the names of the Investors affiliated with such Investor Managers as
set forth on Schedule 6.3(a) hereto.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Survival of Representations and Warranties. The
representations and warranties of the parties hereto contained in this
Agreement shall expire twelve months after the Closing Date, except that the
representations and warranties set forth in Sections 3.1(a), 3.2 and 3.3 shall
survive until 60 days after the expiration of the applicable statute of
limitations (including any extensions thereof) and the representations and
warranties set forth in Section 3.7 shall survive until eighteen months after
the Closing Date. After the expiration of such periods, any claim by a party
hereto based upon any such representation or warranty shall be of no further
force and effect, except to the extent a party has asserted a claim in
accordance with this Article VIII for breach of any such representation or
warranty prior to the expiration of such period, in which event any
representation or warranty to which such claim relates shall survive with
respect to such claim until such claim is resolved as provided in this Article
VIII. The covenants and agreements of the parties hereto contained in this
Agreement shall survive the Closing until performed in accordance with their
terms.
Section 8.2 Indemnification.
(a) The Company shall indemnify, defend and hold harmless the
Investors, their Affiliates, and their respective officers, directors,
partners, members, employees, agents, representatives, successors and assigns
(each an "Investor Indemnified Person") from and against all Losses incurred
or suffered by an Investor Indemnified Person arising from, relating to or as
a result of (i) the breach of any of the representations or warranties made by
the Company in this Agreement (which breach shall be determined without regard
to any materiality or Material Adverse Effect qualifications contained in the
representation and warranty giving rise to such claim for indemnity), (ii) the
breach of any covenant, obligation or agreement made by the Company in this
Agreement or (iii) any actual or threatened Litigation against such Investor
Indemnified Person by any Person (other than an Investor Indemnified Person)
in connection with (A) the transactions contemplated hereby or by the Related
Agreements, (B) the negotiation, execution, delivery and performance of this
Agreement or the Related Agreements or (C) any actions taken by any Investor
Indemnified Person pursuant hereto or thereto or in connection with the
transactions contemplated hereby or thereby (whether or not the transactions
contemplated hereby or thereby are consummated); provided, however, that the
Company shall not have any obligation to indemnify the Investor Indemnified
Persons pursuant to this Section 8.2(a)(iii) to the extent such suit, action,
claim or proceeding arises from a breach of this Agreement by any Investor
Indemnified Person or a failure of any representation or warranty set forth in
Article IV hereof to be true and correct and such breach or failure of a
representation or warranty to be true and correct results in any condition
contained in Sections 5.1 or 5.3 hereof being incapable of being satisfied
prior to May 30, 2003.
(b) Each Investor shall, solely on behalf of itself, separately and
not jointly, indemnify, defend and hold harmless the Company, its Affiliates,
and their respective officers, directors, partners, members, employees,
agents, representatives, successors and assigns (each a "Company Indemnified
Person") from and against all Losses incurred or suffered by a Company
Indemnified Person arising from, relating to, or as a result of (i) the breach
of any of the representations or warranties made by such Investor in this
Agreement or (ii) the breach of any covenant, obligation or agreement made by
such Investor in this Agreement.
(c) No claim may be made against the Company for indemnification with
respect to breaches of representations and warranties pursuant to Section
8.2(a)(i) above with respect to any Losses unless the aggregate amount of
Losses incurred by the Investor Indemnified Persons thereunder exceeds
$2,000,000, and the Company shall then only be liable for the amount of such
Losses which exceed $2,000,000. The maximum amount recoverable under Section
8.2(a)(i) by all Investor Indemnified Persons, in the aggregate, shall be
$20,000,000; provided, however, the maximum amount recoverable under Section
8.2(a)(i) with respect to a breach of the Company's representation and
warranty contained in Section 3.4 shall be an amount equal to the Purchase
Price. No claim may be made against the Investors for indemnification with
respect to breaches of representations and warranties pursuant to Section
8.2(b)(i) above with respect to any Losses unless the aggregate amount of
Losses incurred by the Company Indemnified Persons thereunder exceeds
$2,000,000, and the Investors shall then only be liable for the amount of such
Losses which exceed $2,000,000. The maximum amount recoverable under Section
8.2(b)(i) by all Company Indemnified Persons, in the aggregate, shall be
$20,000,000.
(d) In no case shall any payment be made in the case of an
indemnification claim under Section 8.2(a)(i) or 8.2(a)(ii) until a Loss
occurs. No Person shall have any liability to any Investor Indemnified Person
under Section 8.2(a)(i) for any breach of a representation or warranty to the
extent that a claim for indemnification is based upon facts of which any
Investor Indemnified Person had knowledge on or prior to the Closing Date,
unless such claim also relies upon a materially adverse occurrence or
development that occurs after the Closing Date. For purposes of this Section
8.2(d), (i) the Investors shall only be deemed to have knowledge of a fact if
any of the Persons listed on Schedule 8.2(d) has knowledge of the particular
fact and (ii) such individual shall be deemed to have knowledge only to the
extent of his or her actual knowledge of such fact and only to the extent of
his or her awareness that such fact constitutes a breach of such
representation or warranty.
Section 8.3 Procedure for Indemnification.
(a) If an Investor Indemnified Person or a Company Indemnified Person
(such Person being referred to as the "Indemnitee") shall receive notice or
otherwise learn of the assertion by a Person who is not a party to this
Agreement of any claim or of the commencement by any such Person of any action
(a "Claim") with respect to which the other party (the "Indemnifying Party")
may be obligated to provide indemnification, such Indemnitee shall give such
Indemnifying Party written notice thereof promptly after becoming aware of
such Claim; provided, that the failure of any Indemnitee to give notice as
provided in this Section 8.3 shall not relieve the applicable Indemnifying
Party of its obligations under this Article VIII, except to the extent that
such Indemnifying Party is materially prejudiced by such failure to give
notice; provided, further, that the applicable Indemnifying Party shall have
no obligations under Section 8.2(a)(i) or Section 8.2(b)(i), as applicable,
unless such written notice is received by the Indemnifying Party within the
survival periods set forth in Section 8.1. Such notice shall describe the
Claim in reasonable detail, and shall indicate the amount (estimated if
necessary) of the Loss that has been or may be sustained by or is claimed
against such Indemnitee.
(b) An Indemnifying Party may elect to compromise, settle or defend,
at such Indemnifying Party's own expense and by such Indemnifying Party's own
counsel, any Claim; provided, however, that the Indemnifying Party shall not
compromise, settle or defend a Claim without the consent of the Indemnitee
(which consent shall not be unreasonably withheld). If an Indemnifying Party
elects to compromise, settle or defend a Claim, it shall, within 30 days of
the receipt of notice from an Indemnitee pursuant to Section 8.3(a) (or
sooner, if the nature of such Claim so requires), notify the applicable
Indemnitee of its intent to do so, and such Indemnitee shall cooperate in a
commercially reasonable manner in the compromise or settlement of, or defense
against, such Claim. After notice from an Indemnifying Party to an Indemnitee
of its election to assume the defense of a Claim, the Indemnitee shall have
the right to participate in the defense thereof, at its own expense, and such
Indemnifying Party shall not be liable to such Indemnitee under this Article
VIII for any legal or other expenses subsequently incurred by such Indemnitee
in connection with the defense thereof (except expenses approved in advance by
the Indemnitee); provided, that such Indemnitee shall have the right to employ
one separate counsel reasonably satisfactory to the Indemnifying Party to
represent such Indemnitee if (i) in the reasonable judgment of the Indemnitee,
there are legal defenses available to such Indemnitee that are different from
or additional to those available to the Indemnifying Party, (ii) the
Indemnifying Party shall authorize in writing the Indemnitee to retain a
single, separate counsel at the Indemnifying Party's expense or (iii) the
defendants in any such Claim include both the Indemnifying Party and the
Indemnitee and, in such Indemnitee's reasonable judgment, a conflict of
interest between such Indemnitee and such Indemnifying Party exists in respect
of such Claim, and only in the events listed in clauses (i) through (iii) of
this paragraph (b) shall the reasonable fees and expenses of such separate
counsel be paid by such Indemnifying Party. If an Indemnifying Party elects
not to compromise, settle or defend against a Claim, or fails to notify an
Indemnitee of its election as provided in this Section 8.3 within 30 days of
notice from the Indemnitee pursuant to Section 8.3(a), such Indemnitee may
compromise, settle or defend such Claim at the expense of such Indemnifying
Party.
(c) If an Indemnifying Party chooses to defend any claim, the
applicable Indemnitee shall make available to such Indemnifying Party any
personnel or any books, records or other documents within its control that are
reasonably necessary or appropriate for such defense.
(d) If the aggregate amount of any Loss shall, at any time subsequent
to payment pursuant to this Agreement, be reduced by recovery, settlement or
otherwise, the amount of such reduction, net of any expenses incurred in
connection therewith or additional Losses incurred, shall promptly be repaid
by the applicable Indemnitee to the applicable Indemnifying Party.
(e) In the event of payment by an Indemnifying Party to any Indemnitee in
connection with any Claim, such Indemnifying Party shall be subrogated to and
shall stand in the place of such Indemnitee as to any events or circumstances
in respect of which such Indemnitee may have any right or claim relating to
such Claim. Such Indemnitee shall cooperate with such Indemnifying Party in a
reasonable manner, and, at the cost and expense of such Indemnifying Party, in
prosecuting any subrogated right or claim.
Section 8.4 Sole Remedy. Except in the case of fraud, the rights to
indemnification provided for in this Article VIII for a breach of
representations or warranties by the Investors (in the case of indemnification
pursuant to Section 8.2(b)(i)) or the Company (in the case of indemnification
pursuant to Section 8.2(a)(i)) shall constitute the sole post-closing remedy
of the Company and the Investors, respectively, for such breach, and the
Company and the Investors shall have no other liability or damages to the
other party resulting from any such breach.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE (WITHOUT
GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF).
Section 9.2 Jurisdiction; Forum; Service of Process; Waiver of Jury
Trial. With respect to any suit, action or proceeding ("Proceeding") arising
out of or relating to this Agreement each of the Investors and the Company
hereby irrevocably:
(a) submits to the exclusive jurisdiction of the United States
District Court for the Southern District of New York or the Court of Chancery
located in the State of Delaware, County of Newcastle (the "Selected Courts")
and waives any objection to venue being laid in the Selected Courts whether
based on the grounds of forum non conveniens or otherwise and hereby agrees
not to commence any such Proceeding other than before one of the Selected
Courts; provided, however, that a party may commence any Proceeding in a court
other than a Selected Court solely for the purpose of enforcing an order or
judgment issued by one of the Selected Courts;
(b) consents to service of process in any Proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid, or by
recognized international express carrier or delivery service, to the Company
or the Investors at their respective addresses referred to in Section 9.5
hereof; provided, however, that nothing herein shall affect the right of any
party hereto to serve process in any other manner permitted by law; and
(C) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE
WAIVED, WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF,
DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN
WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
CONTEMPLATED TRANSACTIONS, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AND AGREES THAT ANY OF THEM
MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE
KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY
TO WAIVE ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN THEM
RELATING TO THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS WILL
INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING
WITHOUT A JURY.
Section 9.3 Successors and Assigns. Except as otherwise provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors by operation of law and permitted assigns of the parties
hereto. The Investors may make the assignments permitted by Section 1.02 and,
subject to applicable securities laws, assign any of their rights hereunder to
a Permitted Transferee to the extent such Permitted Transferee also receives
and holds Shares or shares of Common Stock issuable upon conversion of the
Shares in accordance with the Stockholders Agreement. Other than as set forth
herein, no assignment of this Agreement may be made by any party at any time,
whether or not by operation of law, without each of the other parties' prior
written consent.
Section 9.4 Entire Agreement; Amendment. Other than as provided in
this Section 9.4, this Agreement, the Related Agreements and the
Confidentiality Agreement, dated June 12, 2002, between the Company and
Berkshire Partners LLC, constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof. Except as
expressly provided herein, neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated other than by a written instrument
signed by the Company and by each of the Investors. No waiver of any of the
provisions of this Agreement will be deemed or will constitute a waiver of any
other provision hereof (whether or not similar), nor will such waiver
constitute a continuing waiver unless otherwise expressly provided.
Section 9.5 Notices. All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or sent by telecopy,
nationally recognized overnight courier or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to such party at
the address set forth below or such other address as may hereafter be
designated in writing by such party to the other parties:
(a) if to the Company, to:
Hexcel Corporation
Two Stamford Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
with a copy to each of the following (which shall not
constitute notice):
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Coco, Esq.
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
(b) if to the Investors, to:
Berkshire Partners LLC
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. Small
and:
Greenbriar Equity Group LLC
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇-▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with a copy to (which shall not constitute notice):
Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
and ▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇, Esq.
All such notices, requests, consents and other communications shall be deemed
to have been given or made if and when delivered personally or by overnight
courier to the parties at the above addresses or sent by electronic
transmission, with confirmation received, to the telecopy numbers specified
above (or at such other address or telecopy number for a party as shall be
specified by like notice).
Section 9.6 Certain Definitions. As used herein, the following terms
shall have the meanings set forth below:
(a) "Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Securities Exchange Act
of 1934, as amended (the "Exchange Act");
(b) "beneficially owns" and "beneficial ownership" shall have the
meanings as used in Rules 13d-3 and 13d-5 promulgated under the Exchange Act,
except that for the purposes of Article IV of this Agreement, such meanings
shall include the right to acquire securities, whether or not such right is
exercisable immediately);
(c) "Common Stock" shall mean the Company's common stock, par value
$0.01 per share;
(d) "Credit Agreement" shall mean the Second Amended and Restated
Credit Agreement, dated as of September 15, 1998, as amended, among the
Company, certain of its Subsidiaries, the lenders parties thereto, Citibank,
N.A. and Credit Suisse First Boston;
(e) "Environmental Laws" means any federal, state, foreign or local
statute, law, rule, regulation, ordinance, code or rule of common law now in
effect and in each case as amended, and any applicable judicial interpretation
thereof, including any legally binding judicial or administrative order,
consent decree or judgment, relating to the environment, employee, health and
safety or Hazardous Materials, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, 42 U.S.C. ss. 9601 et seq.; the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. ss. 6901 et seq.; the Federal Water Pollution
Control Act, as amended, 33 U.S.C. ss. 1251 et seq.; the Toxic Substances
Control Act, 15 U.S.C. ss. 2601 et seq.; the Clean Air Act, 42 U.S.C. ss. 7401
et seq.; the Safe Drinking Water Act, 42 U.S.C. ▇▇.▇▇. 201 & 300f et seq.; the
Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq.; the Emergency Planning
and the Community Right-to-Know Act of 1986, 42 U.S.C. ss. 11001 et seq.; the
Hazardous Material Transportation Act, 49 U.S.C. ss. 1801 et seq. and the
Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq.; and any state
and local or foreign counterparts or equivalents, in each case as amended from
time to time;
(f) "Goldman Governance Agreement" shall mean the Governance
Agreement, dated December 19, 2000, among the Company, LXH, L.L.C, LXH II,
L.L.C. and the Goldman Investors and as amended on April 25, 2001;
(g) "Goldman Investors" shall mean, collectively, GS Capital Partners
2000 L.P., a Delaware limited partnership, GS Capital Partners 2000 Offshore,
L.P., a Cayman Islands exempted limited partnership, GS Capital Partners 2000
Employee Fund, L.P., a Delaware limited partnership, GS Capital Partners 2000
GmbH & Co. Beteiligungs KG, a German limited partnership and Stone Street Fund
2000, L.P., a Delaware limited partnership;
(h) "Goldman Purchase Agreement" shall mean the Stock Purchase
Agreement, dated December 18, 2002, by and among the Company and the Goldman
Investors;
(i) "Goldman Registration Rights Agreement" shall mean the
Registration Rights Agreement, dated December 19, 2000, between the Company,
LXH, L.L.C. and LXH II, L.L.C.;
(j) "Governmental Entity" shall mean any national, foreign, federal,
state or local judicial, legislative, executive, administrative or regulatory
body or authority;
(k) "Hazardous Materials" means (i) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is friable, urea
formaldehyde foam insulation, polychlorinated biphenyls, and radon gas; and
(ii) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous substances", "restricted hazardous wastes",
"toxic substances" or "toxic pollutants" under any applicable Environmental
Law;
(l) "Knowledge" shall mean, with respect to the Company, the
knowledge of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇;
(m) "Losses" shall mean each and all of the following items: claims,
losses, liabilities, obligations, payments, damages (actual or punitive),
charges, judgments, fines, penalties, amounts paid in settlement, costs and
expenses (including, without limitation, interest which may be imposed in
connection therewith, costs and expenses of investigation, actions, suits,
proceedings, demands, assessments and fees, expenses and disbursements of
counsel, consultants and other experts);
(n) "Material Adverse Effect" means any event which has had, has or
would reasonably be expected to have a material adverse effect on the
financial condition, results of operations or business of the Company and its
Subsidiaries, taken as a whole, other than (i) as a result of changes in
general economic or industry conditions or changes in applicable laws, rules
or regulations, (ii) as disclosed in Section 9.6(n)(ii) of the Company
Disclosure Schedule, or (iii) as a result of changes arising out of the
announcement of the transactions contemplated by this Agreement; provided,
however, that, for all purposes of this Agreement, any extension or amendment
by the Company of the Credit Agreement shall not be taken into account in
determining whether a "Material Adverse Effect" has occurred;
(o) "Permitted Transferee" shall have the meaning assigned to such
term in the Stockholders Agreement;
(p) "Person" shall mean any individual, firm, corporation, limited
liability company, partnership, company or other entity, and shall include any
successor (by merger or otherwise) of such entity;
(q) "Significant Subsidiaries" shall have the meaning ascribed
thereto in Rule 1-02 of Regulation S-X (17 CFR 210); and
(r) "Subsidiary" shall mean as to any Person, each corporation,
partnership or other entity of which shares of capital stock or other equity
interests having ordinary voting power (other than capital stock or other
equity interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers
of such corporation, partnership or other entity are at the time owned,
directly or indirectly, or the management of which is otherwise controlled,
directly or indirectly, or both, by such Person.
Section 9.7 Withholding. Each Investor agrees to indemnify, defend
and hold harmless the Company and its Affiliates from and against any
liability for taxes, interest and penalties imposed by any Governmental Entity
arising from or attributable to any failure of the Company to withhold any
taxes with respect to any payment made pursuant to this Agreement by the
Company to the Investor Manager of which it is an Affiliate.
Section 9.8 Counterparts. This Agreement may be executed in any
number of counterparts, each of which may be executed by only one of the
parties hereto, each of which shall be enforceable against the party actually
executing such counterpart, and all of which together shall constitute one
instrument.
Section 9.9 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid,
but if any provision of this Agreement is held to be invalid or unenforceable
in any respect, such invalidity or unenforceability shall not render invalid
or unenforceable any other provision of this Agreement.
Section 9.10 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
Section 9.11 No Public Announcement. None of the Investors or the
Company shall make any press release, public announcement or filing with any
Governmental Entity concerning the transactions contemplated by this
Agreement, except as and to the extent that any such party shall be obligated
to make any such disclosure by this Agreement, by law or by the NYSE and then
only after consultation with the other parties hereto regarding the basis of
such obligation and the content of such press release, public announcement or
filing or as the parties shall mutually agree. The parties agree that the
initial press release to be issued with respect to the execution and delivery
of this Agreement shall be in the form attached hereto as Exhibit J.
Section 9.12 Further Actions. Subject to Section 6.6, at any time or
from time to time after the Closing, the Company and the Investors agree to
cooperate with each other, and at the request of the other parties, to execute
and deliver any further instruments or documents and to take all such further
action as the other parties may reasonably request in order to evidence or
effectuate the consummation of the transactions contemplated hereby or by the
Related Agreements and to otherwise carry out the intent of the parties
hereunder or thereunder.
Section 9.13 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions and other equitable remedies to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions hereof in any of the Selected Courts, this being in addition to any
other remedy to which they are entitled at law or in equity. Any requirements
for the securing or posting of any bond with respect to such remedy are hereby
waived by each of the parties hereto. Each party further agrees that, in the
event of any action for an injunction or other equitable remedy in respect of
such breach or enforcement of specific performance, it will not assert the
defense that a remedy at law would be adequate.
IN WITNESS WHEREOF, each of the undersigned has caused the
foregoing Agreement to be executed under seal by one of its duly authorized
officers as of the date first above written.
HEXCEL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
GREENBRIAR EQUITY FUND, L.P.
By: Greenbriar Equity Capital, L.P.,
its general partner
By: Greenbriar Holdings LLC,
its general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Member
GREENBRIAR CO-INVESTMENT
PARTNERS, L.P.
By: Greenbriar Holdings LLC,
its general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Member
BERKSHIRE FUND V,
LIMITED PARTNERSHIP
By: Fifth Berkshire Associates LLC
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. Small
----------------------
Name: ▇▇▇▇▇▇ ▇. Small
Title: Managing Director
BERKSHIRE FUND VI,
LIMITED PARTNERSHIP
By: Sixth Berkshire Associates LLC
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. Small
----------------------
Name: ▇▇▇▇▇▇ ▇. Small
Title: Managing Director
BERKSHIRE INVESTORS LLC
By: /s/ ▇▇▇▇▇▇ ▇. Small
----------------------
Name: ▇▇▇▇▇▇ ▇. Small
Title: Managing Director
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATIONS
of
SERIES A
CONVERTIBLE PREFERRED STOCK
of
HEXCEL CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
Hexcel Corporation, a Delaware corporation (the "Corporation"),
certifies that pursuant to the authority contained in its Restated Certificate
of Incorporation (the "Certificate of Incorporation"), and in accordance with
the provisions of Section 151 of the General Corporation Law of the State of
Delaware (the "DGCL"), its Board of Directors (the "Board of Directors") has
adopted the following resolution creating a series of its Preferred Stock,
without par value, designated as Series A Convertible Preferred Stock:
RESOLVED, that a series of authorized Preferred Stock, without par
value, of the Corporation be hereby created, and that the designation and
amount thereof and the voting powers, preferences and relative, participating,
optional and other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof are as follows:
Section 1. Designation and Amount; Rank.
(a) Designation and Amount. The shares of such series shall be
designated as the "Series A Convertible Preferred Stock" (the "Convertible
Preferred Stock") and the number of shares constituting such series shall be
125,000 shares of Convertible Preferred Stock. Section 12 contains the
definitions of certain defined terms used herein.
(b) Rank. Except as otherwise set forth herein or the Series B
Certificate of Designations, the Convertible Preferred Stock shall, with
respect to dividend distributions and distributions upon liquidation,
winding-up and dissolution, whether voluntary or involuntary, of the
Corporation, whether now or hereafter issued, rank senior to all Junior Stock
and rank on parity with all Parity Stock, including without limitation, the
Series B Preferred Stock.
Section 2. Dividends and Distributions.
(a) Entitlement; Accrual; Payment.
(i) Commencing on the Dividend Commencement Date, the holders of
shares of Convertible Preferred Stock shall be entitled to receive on each
Dividend Payment Date in respect of the Dividend Period ending on (and
including) the date immediately prior to such Dividend Payment Date dividends
on each share of Convertible Preferred Stock at the rate of 6% per annum on
the Accrued Value thereof from the Dividend Commencement Date until the
earliest of (A) the date on which the Liquidation Preference of such share of
Convertible Preferred Stock is paid to the holder thereof in connection with
the Liquidation of the Corporation; (B) the date on which the Corporation
redeems such share of Convertible Preferred Stock; (C) the date on which such
share of Convertible Preferred Stock is converted into shares of Common Stock;
(D) the occurrence of a Mandatory Conversion Event and (E) the date on which
such share of Convertible Preferred Stock is otherwise acquired by the
Corporation, provided that with respect to the Initial Dividend Period, the
dividends set forth above shall be prorated based on the number of days in
such period. Such dividends shall be fully cumulative and accumulate and
accrue on a daily basis (computed on the basis of a 360-day year of twelve
30-day months) and compound quarterly in arrears on the Dividend Payment Dates
at the rate indicated above and in the manner set forth herein, whether or not
they have been declared and whether or not there are profits, surplus or other
funds of the Corporation legally available for the payment of dividends. In no
event shall dividends accrue or be payable on the Convertible Preferred Stock
prior to the Dividend Commencement Date pursuant to this Section 2(a)(i).
(ii) Such dividends shall, at the option of the Corporation, either
be paid in cash or accrue and compound and be added to the Accrued Value on
the applicable Dividend Payment Dates, provided, however, that all dividends
payable on any given Dividend Payment Date must either (i) all be paid in cash
or (ii) all accrue and compound and be added to the Accrued Value, in each
case on the Dividend Payment Date. Each such dividend which is payable in cash
shall be payable to the holders of record of shares of the Convertible
Preferred Stock on the Dividend Payment Date, as they appear on the share
records of the Corporation at the close of business on such record dates. Any
dividend that is not otherwise paid in cash on the applicable Dividend Payment
Date (whether due to the Corporation's election not to pay such dividend in
cash, its inability to pay such dividend in cash, or otherwise) shall
automatically, and without any action on the part of the Corporation, accrue
and compound and be added to the Accrued Value on such Dividend Payment Date.
(iii) In addition to dividends payable pursuant to Section 2(a)(i)
hereof, in the event any dividends are declared or paid or any other
distribution is made on or with respect to the Common Stock, the holders of
the Convertible Preferred Stock as of the record date established by the Board
of Directors for such dividend or distribution on the Common Stock shall be
entitled to receive as additional dividends (the "Additional Dividends") an
amount (whether in the form of cash, securities or other property) equal to
the amount (and in the form) of the dividends or distribution that such holder
would have received had the Convertible Preferred Stock been converted into
Common Stock as of the date immediately prior to the record date of such
dividend or distribution on the Common Stock; provided, however, that solely
for the purpose of determining the number of shares of Common Stock into which
the Convertible Preferred Stock is then convertible, the Conversion Limitation
(as defined in Section 7(a) below) shall be disregarded. Such Additional
Dividends shall be payable on the same payment date as the payment date for
the dividend on the Common Stock established by the Board of Directors (the
"Additional Dividend Payment Date"); provided, however, that if the
Corporation declares and pays a dividend or makes a distribution on the Common
Stock consisting in whole or in part of Common Stock (or options, rights,
warrants or other securities convertible into or exchangeable for Common
Stock), then no such dividend or distribution shall be payable in respect of
the Convertible Preferred Stock on account of the portion of such dividend or
distribution on the Common Stock payable in Common Stock and in lieu thereof
the applicable anti-dilution adjustment in Section 7(b) below shall apply. The
record date for any such Additional Dividends shall be the record date for the
applicable dividend or distribution on the Common Stock, and any such
Additional Dividends shall be payable to the holders of record of shares of
the Convertible Preferred Stock on the applicable record date, as they appear
on the share records of the Corporation at the close of business on such
record date.
(b) Priority With Respect to Junior Stock. Holders of shares of
Convertible Preferred Stock shall be entitled to receive the dividends
provided for in Section 2(a)(i) and 2(a)(ii) in preference to and in priority
over any dividends upon any of the Junior Stock.
Section 3. Voting Rights.
(a) General. Except as otherwise required by law or expressly
provided herein, each holder of Convertible Preferred Stock shall have full
voting rights and powers, and shall be entitled to vote on all matters put to
a vote or consent of stockholders of the Corporation, voting together with the
holders of the Common Stock and Series B Convertible Preferred Stock as a
single class, with each holder of shares of Convertible Preferred Stock having
the number of votes equal to the number of shares of Common Stock into which
such shares of Convertible Preferred Stock could be converted in accordance
with Section 7 hereof as of the record date for the vote or consent which is
being taken.
(b) Voting With Respect to Certain Matters. In addition to any
matters requiring a separate vote of the Convertible Preferred Stock under
applicable law, the Corporation shall not, without the prior consent or
approval of the holders of at least seventy percent (70%) of the issued and
outstanding shares of Convertible Preferred Stock, voting as a single class,
(i) amend, alter, repeal or restate its certificate of incorporation,
by-laws or this Certificate of Designations (whether by reclassification,
merger, consolidation, reorganization or otherwise) in a manner that alters or
changes, in any adverse manner, the powers, preferences, privileges or rights
of the Convertible Preferred Stock or which otherwise would adversely affect
the rights, privileges or preferences of the Convertible Preferred Stock; or
(ii) authorize, issue or otherwise create any shares of Senior Stock,
Parity Stock or additional shares of Convertible Preferred Stock.
Section 4. Redemption.
(a) General. Except as provided in this Section 4, the Corporation
shall have no right to redeem any shares of Convertible Preferred Stock.
(b) Mandatory Redemption.
(i) On January 22, 2010 (the "Mandatory Redemption Date"), the
Corporation shall be required to redeem (subject to the legal availability of
funds therefor) all remaining outstanding shares of Convertible Preferred
Stock for an amount in cash in respect of each share of Convertible Preferred
Stock equal to such share's Liquidation Preference (the "Mandatory Redemption
Price"). The Corporation shall take all actions required or permitted under
the DGCL to permit such redemption of the Convertible Preferred Stock.
Notwithstanding the foregoing, if the Mandatory Redemption Price of each share
is equal to the Participating Preference Amount (as such term is defined in
Section 6) rather than the Adjusted Accrued Value of such share, the
Corporation shall be entitled to pay all of the Mandatory Redemption Price in
Common Stock valued at the Closing Price of the Common Stock on the Business
Day immediately preceding the Mandatory Redemption Date; provided, however,
that each holder of shares to be redeemed under this Section 4(b)(i) may, in
any event, elect to receive the Adjusted Accrued Value in cash, in lieu of a
payment of the Participating Preference Amount in Common Stock, with respect
to each share being redeemed hereunder.
(ii) If notice has been mailed in accordance with Section 4(b)(iii)
and provided that on or before the Mandatory Redemption Date, all funds
necessary for such redemption shall have been set aside by the Corporation,
separate and apart from its other funds in trust for the pro rata benefit of
the holders of the shares so called for redemption, so as to be, and to
continue to be available therefor, then, from and after the Mandatory
Redemption Date, dividends on the shares of the Convertible Preferred Stock so
called for redemption shall cease to accumulate, and said shares shall no
longer be deemed to be outstanding and shall not have the status of shares of
Convertible Preferred Stock, and all rights of the holders thereof as
stockholders of the Corporation (except the right to receive from the
Corporation the Mandatory Redemption Price) shall cease. Upon surrender, in
accordance with said notice, of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Corporation shall so
require and the notice shall so state), such shares shall be redeemed by the
Corporation at the Mandatory Redemption Price.
(iii) Notice of any redemption pursuant to this Section 4(b) shall be
sent by or on behalf of the Corporation not less than 10 nor more than 60 days
prior to the Mandatory Redemption Date, by first class mail, postage prepaid,
to all holders of record of the Convertible Preferred Stock at their last
addresses as they shall appear on the books of the Corporation; provided,
however, that no failure to give such notice or any defect therein or in the
mailing thereof shall affect the validity of the giving of notice for the
redemption of any shares of Convertible Preferred Stock except as to the
holder to whom the Corporation has failed to give notice or except as to the
holder to whom notice was defective.
(iv) If at the Mandatory Redemption Date, the Corporation does not
have sufficient capital and surplus legally available to redeem all the
outstanding shares of the Convertible Preferred Stock, the Corporation shall
take all measures permitted under the DGCL to increase the amount of its
capital and surplus legally available, and the Corporation shall redeem as
many shares of the Convertible Preferred Stock as it may legally redeem,
ratably from the holders thereof in proportion to the number of shares held by
them, and shall thereafter from time to time, as soon as it shall have funds
available therefor, redeem as many shares of the Convertible Preferred Stock
as it legally may redeem until it has redeemed all of the outstanding shares
of the Convertible Preferred Stock. Shares of the Convertible Preferred Stock
not redeemed on the Mandatory Redemption Date shall accrue dividends at a rate
equal to 10% per annum of the Accrued Value, accruing and compounding in the
manner set forth in Section 2(a) hereof from the Mandatory Redemption Date
until such shares are redeemed by the Corporation in accordance with this
Section 4(b) at the Mandatory Redemption Price. If, and so long as, any
Mandatory Redemption Obligation with respect to shares of Convertible
Preferred Stock shall not be fully discharged, the Corporation shall not (i)
directly or indirectly, redeem, purchase or otherwise acquire any Parity Stock
(other than in accordance with the Series B Certificate of Designations) or
discharge any mandatory or optional redemption, sinking fund or other similar
obligation in respect of any Parity Stock (other than in accordance with the
Series B Certificate of Designations or except in connection with a
redemption, sinking fund or other similar obligation to be satisfied pro rata
with the Convertible Preferred Stock) or (ii) declare or make any Junior Stock
Distribution, or, directly or indirectly, discharge any mandatory or optional
redemption, sinking fund or other similar obligation in respect of any Junior
Stock.
(c) Redemption Upon a Change of Control.
(i) In the event there occurs a Change of Control, the Corporation
shall offer to purchase from each holder all of the Convertible Preferred
Stock held by such holder for an amount in cash in respect of each share of
Convertible Preferred Stock held by such holder equal to the Liquidation
Preference of such share of Convertible Preferred Stock, by delivery of a
notice of such offer (a "Change of Control Redemption Offer") within ten
Business Days following the Change of Control. In the event of a Change of
Control, each holder of Convertible Preferred Stock shall have the right (but
not the obligation) to require the Corporation to purchase any or all of the
Convertible Preferred Stock held by such holder for an amount in cash in
respect of each share of Convertible Preferred Stock held by such holder equal
to the Liquidation Preference of such share of Convertible Preferred Stock.
Notwithstanding the foregoing, if the redemption price of each share under
this Section 4(c) is equal to the Participating Preference Amount rather than
the Adjusted Accrued Value of such share, the Corporation shall be entitled to
pay all of such redemption price in Common Stock valued at the Closing Price
of the Common Stock on the Business Day immediately preceding the redemption
date set forth in the notice given by the Corporation pursuant to Section
4(c)(ii); provided, however, that each holder of shares to be redeemed under
this Section 4(c)(i) may, in any event, elect to receive the Adjusted Accrued
Value in cash, in lieu of a payment of the Participating Preference Amount in
Common Stock, with respect to each share being redeemed hereunder.
(ii) Within ten Business Days following the occurrence of a Change of
Control, the Corporation shall give notice by mail to each holder of
Convertible Preferred Stock, at such holder's address as it appears on the
transfer books of the Corporation, of such event, which notice shall set forth
(i) each holder's right to require the Corporation to redeem any or all shares
of Convertible Preferred Stock held by such holder, (ii) the redemption date
(which date shall be no more than 30 Business Days following the date of such
mailed notice), (iii) that any shares of Convertible Preferred Stock not
tendered will continue to accrue dividends as provided for in Section 2(a)
hereof and (iv) the procedures to be followed by such holder in exercising its
right to cause such redemption. In the event a record holder of shares of
Convertible Preferred Stock shall elect to require the Corporation to redeem
any or all of such holder's shares of Convertible Preferred Stock pursuant to
this Section 4(c), such holder shall deliver within 20 Business Days of the
mailing to it of the Corporation's notice described in this Section 4(c)(ii)
(a "Change of Control Redemption Request"), a written notice to the
Corporation so stating and specifying the number of such holder's shares to be
redeemed pursuant to this Section 4(c). The Corporation shall, in accordance
with the terms hereof, redeem the number of shares so specified on the date
fixed for redemption. Failure of the Corporation to give any notice required
by this Section 4(c)(ii), or the formal insufficiency of any such notice,
shall not prejudice the rights of any holders of shares of Convertible
Preferred Stock to cause the Corporation to redeem all such shares held by
them. Notwithstanding the foregoing, the Board of Directors may modify any
offer (other than with respect to the price to be paid in accordance with
Section 4(c)(i) hereof) pursuant to this Section 4(c) to the extent necessary
to comply with the Exchange Act and the rules and regulations thereunder.
(iii) If upon a Change of Control, the Corporation does not have
sufficient capital and surplus legally available to redeem all of the
outstanding shares of the Convertible Preferred Stock that the holders thereof
have required the Corporation redeem, the Corporation shall take all measures
permitted under the DGCL to increase the amount of its capital and surplus
legally available, and the Corporation shall redeem as many shares of the
Convertible Preferred Stock as it may legally redeem, ratably from the holders
electing redemption thereof in proportion to the number of shares held by
them, and shall thereafter from time to time, as soon as it shall have funds
available therefor, redeem as many shares of the Convertible Preferred Stock
held by such holders as it legally may until it has redeemed all of the shares
of the Convertible Preferred Stock the holders thereof require it to redeem.
Shares of the Convertible Preferred Stock not redeemed upon receipt of a
Change of Control Redemption Request shall accrue dividends at a rate equal to
10% per annum of the Accrued Value thereof, accruing and compounding in the
manner set forth in Section 2(a) hereof, from the date fixed by the
Corporation for a Change of Control Redemption until such shares are redeemed
by the Corporation in accordance with this Section 4(c). If, and so long as,
any Mandatory Redemption Obligation with respect to shares of Convertible
Preferred Stock shall not be fully discharged, the Corporation shall not (i)
directly or indirectly, redeem, purchase or otherwise acquire any Parity Stock
(other than in accordance with the Series B Certificate of Designations) or
discharge any mandatory or optional redemption, sinking fund or other similar
obligation in respect of any Parity Stock (other than in accordance with the
Series B Certificate of Designations or except in connection with a
redemption, sinking fund or other similar obligation to be satisfied pro rata
with the Convertible Preferred Stock) or (ii) declare or make any Junior Stock
Distribution, or, directly or indirectly, discharge any mandatory or optional
redemption, sinking fund or other similar obligation in respect of any Junior
Stock.
(iv) Notwithstanding anything to the contrary herein, until the
Corporation's 9-3/4% Senior Subordinated Notes due 2009 (the "Notes") have
been repurchased or repaid or permission for such redemption has been granted
under the Notes, the Corporation shall not effect a redemption pursuant to
Section 4(c) hereof; provided, however, that any failure to effect a
redemption under this Section 4(c)(iv) shall be treated for all intents and
purposes as a failure to redeem under Section 4(c)(iii) above and, without
limiting the generality of the foregoing, the increased dividend accrual rate
set forth in Section 4(c)(iii) above shall apply pending redemption. Any
shares not redeemed due to the terms of this Section 4(c)(iv) shall be
redeemed as soon as the Corporation is able to effect a redemption of such
shares (ratably in proportion to share ownership in the event of any partial
redemption) under the Notes.
(d) In the event the Corporation does not have sufficient capital,
surplus or other funds available, or the Debt Instruments otherwise restrict
its ability, to (A) redeem all shares of Convertible Preferred Stock entitled
to a redemption pursuant to this Section 4 and (B) redeem all shares of Series
B Preferred Stock entitled to a redemption pursuant to Section 4 of the Series
B Certificate of Designations, then the Corporation shall redeem the
Convertible Preferred Stock and Series B Preferred Stock pro rata based on the
relative amounts of the redemption payments payable to the holders of such
series in the aggregate. Any shares not redeemed because the Corporation does
not have sufficient capital, surplus or other funds available, or the Debt
Instruments otherwise restrict its ability to do so, shall be redeemed as soon
as the Corporation is able to effect a redemption of such shares (ratably in
proportion to share ownership in the event of any partial redemption).
Section 5. Reacquired Shares.
Any shares of Convertible Preferred Stock converted, redeemed,
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof, and, if
necessary to provide for the lawful redemption or purchase of such shares, the
capital represented by such shares shall be reduced in accordance with the
DGCL. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock, without par value, of the Corporation and
may be reissued as part of another series of Preferred Stock, without par
value, of the Corporation.
Section 6. Liquidation, Dissolution or Winding Up. If the Corporation
shall adopt a plan of liquidation or of dissolution, or commence a voluntary
case under the Federal bankruptcy laws or any other applicable state or
Federal bankruptcy, insolvency or similar law (any such laws, the "Bankruptcy
Law"), or consent to the entry of an order for relief in any involuntary case
under any such law or to the appointment of a receiver, liquidator, assignee,
custodian, trustee or sequestrator (or similar official) of the Corporation or
of any substantial part of its property, and on account of such event the
Corporation shall liquidate, dissolve or wind up, or upon any other
liquidation, dissolution or winding up of the Corporation (any such event, a
"Liquidation"), each holder shall be entitled to receive out of assets of the
Corporation available for distribution to its stockholders, in preference to
any distribution to holders of Junior Stock, including without limitation
Common Stock, an amount of cash with respect to each share of Convertible
Preferred Stock held by such holder (such amount being such share's
"Liquidation Preference") equal to the greater of (i) if measured prior to the
Dividend Commencement Date, the Stated Value, or, if measured on or following
the Dividend Commencement Date, the Adjusted Accrued Value, of such share and
(ii) the amount that would be payable to such holder in respect of Common
Stock issuable upon conversion of such share of Convertible Preferred Stock if
all outstanding shares of Convertible Preferred Stock were converted into
Common Stock immediately prior to the Liquidation in accordance with Section 7
hereof (the amount in this clause (ii) being referred to as the "Participating
Preference Amount"); provided, however, that solely for the purpose of
determining the number of shares of Common Stock into which the Convertible
Preferred Stock is then convertible, the Conversion Limitation shall be
disregarded; provided, further, in the event of a Liquidation that occurs due
to a voluntary or involuntary case of the Corportaion under Bankruptcy Law, if
the Liquidation Preference with respect to each share of Convertible Preferred
Stock is equal to the Participating Preference Amount, then, notwithstanding
anything to the contrary in this Certificate of Designations, each holder
shall receive, out of the assets of the Corporation available for distribution
to its stockholders, such Liquidation Preference as follows: (x) in preference
to any distribution to holders of Junior Stock, an amount of cash with respect
to each share of Convertible Preferred Stock held by such holder equal to the
Adjusted Accrued Value and (y) thereafter, the holders of Convertible
Preferred Stock shall be entitled to share in all remaining assets of the
Corporation, pari passu with the holders of the Common Stock (with the holders
of the Convertible Preferred Stock deemed to hold that number of shares of
Common Stock into which Convertible Preferred Stock with a Liquidation
Preference equal to the Excess Amount could be converted) until the holders of
Convertible Preferred Stock shall have received an amount equal to the amount
by which the Participating Preference Amount exceeds the Adjusted Accrued
Value (the "Excess Amount"). No full preferential payment on account of any
dissolution, winding-up or liquidation of the Corporation shall be made to the
holders of any class of Parity Stock unless there shall likewise be paid at
the same time to the holders of the Convertible Preferred Stock the full
amounts to which such holders are entitled with respect to such distribution.
If the assets of the Corporation are not sufficient to pay in full the
liquidation payments payable to the holders of the outstanding Convertible
Preferred Stock and outstanding shares of Parity Stock, then the holders of
all such shares shall share ratably in such distribution of assets in
accordance with the full respective preferential payments that would be
payable on such shares of Convertible Preferred Stock and such shares of
Parity Stock if all amounts payable thereon were payable in full.
Section 7. Optional Conversion.
Each share of Convertible Preferred Stock may, at the option of the
holder thereof, be converted into shares of Common Stock at any time, whether
or not the Corporation has given notice of redemption under Section 4, on the
terms and conditions set forth in this Section 7.
(a) Terms of Conversion. Each share of Convertible Preferred Stock
shall be convertible at any time, and from time to time, in the manner
hereinafter set forth into a number of fully paid and nonassessable shares of
Common Stock equal to the quotient obtained by dividing the Stated Value by
the Conversion Price; provided, however, that in no event shall shares of
Convertible Preferred Stock be convertible into Common Stock to the extent,
and at any time, that (i) such conversion would cause the holder thereof
(together with its affiliates) to have beneficial ownership (which shall have
the meaning as used in Rules 13d-3 and 13d-5 promulgated under the Exchange
Act, except that for the purposes of this Section 7(a), such meaning shall
include the right to acquire securities, whether or not such right is
exercisable immediately) of more than 39.9% of the voting power of the
Corporation's outstanding voting stock, and (ii) the Notes are outstanding and
beneficial ownership by any holder or group of holders of at least 40% of the
voting power of the Corporation's outstanding voting stock would constitute a
"change of control" thereunder (the "Conversion Limitation") (it being
understood for the purposes of this Section 7(a) that any securities
beneficially owned by any Berkshire/Greenbriar Investor will be deemed to be
beneficially owned by all Berkshire/Greenbriar Investors and that any
Conversion Limitation shall be applied pro rata, based on ownership of
Convertible Preferred Stock as amongst the Berkshire/Greenbriar Investors);
provided, further, any shares of Convertible Preferred Stock which are not
convertible at any time due to the Conversion Limitation shall remain
outstanding and entitled to all of the rights and privileges contained in this
Certificate of Designations.
(b) Adjustment of Conversion Price. The Conversion Price shall be
subject to adjustment from time to time as follows:
(i) In case the Corporation shall at any time or from time to time
after the original issuance of the Convertible Preferred Stock declare a
dividend or make a distribution on the outstanding shares of Common Stock or
securities convertible into Common Stock, in either case, in shares of Common
Stock, or effect a subdivision, combination, consolidation or reclassification
of the outstanding shares of Common Stock into a greater or lesser number of
shares of Common Stock, then, and in each such case, the Conversion Price in
effect immediately prior to such event or the record date therefor, whichever
is earlier, shall be adjusted by multiplying such Conversion Price by a
fraction, the numerator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event and the denominator of which
is the number of shares of Common Stock outstanding immediately after such
event. An adjustment made pursuant to this Section 7(b)(i) shall become
effective (x) in the case of any such dividend or distribution, immediately
after the close of business on the record date for the determination of
holders of shares of Common Stock entitled to receive such dividend or
distribution, or (y) in the case of any such subdivision, reclassification,
consolidation or combination, at the close of business on the day upon which
such corporate action becomes effective.
(ii) In case the Corporation shall at any time or from time to time
after the original issuance of the Convertible Preferred Stock issue shares of
Common Stock (or options, rights, warrants or other securities convertible
into or exchangeable for shares of Common Stock) at a price per share (or
having an exercise or conversion price per share) less than the Conversion
Price in effect as of the Business Day immediately preceding such issuance of
Common Stock or securities, other than (x) shares of Common Stock, options or
other securities issued under any employee or director benefit plan or program
of the Corporation approved by the Board of Directors (or any duly authorized
committee thereof) of the Corporation or shares of Common Stock issued upon
the exercise thereof, (y) shares of Common Stock issuable upon the conversion
of the Convertible Preferred Stock, the Series B Preferred Stock, the
Corporation's 7% Convertible Subordinated Notes Due 2003 or the Corporation's
7% Convertible Subordinated Debentures due 2011 or (z) shares of Common Stock
issued pursuant to Sections 4(b)(i), 4(c)(i) or 9(a) (the issuances under
clauses (x), (y) and (z) being referred to as "Excluded Issuances"), then, and
in each such case, the Conversion Price in effect immediately prior to such
issuance of Common Stock or securities shall be reduced so as to be equal to
an amount determined by multiplying such Conversion Price by a fraction of
which the numerator shall be the sum of (A) the number of shares of Common
Stock outstanding on a fully diluted basis immediately prior to such issuance
and (B) the number of additional shares of Common Stock which the aggregate
consideration for the number of shares of Common Stock so offered would
purchase at the then Conversion Price per share of Common Stock, and the
denominator shall be the number of shares of Common Stock outstanding on a
fully diluted basis immediately after such issuance. An adjustment made
pursuant to this Section 7(b)(ii) shall become effective (x) in the case of an
offering of rights, warrants or options or other securities convertible into
or exchangeable for Common Stock to all or substantially all of the holders of
the Common Stock or any other issuance contemplated by this Section 7(b)(ii)
where a record date is fixed for the determination of stockholders entitled to
participate in such issuance, immediately after the close of business such
record date and (y) in all other cases, the Business Day immediately preceding
the date of issuance of shares of Common Stock (or options, rights, warrants
or other securities convertible into or exchangeable for shares of Common
Stock) contemplated by this Section 7(b)(ii).
(iii) For the purposes of any adjustment of the Conversion Price
pursuant to paragraph (ii) of this Section 7(b), the following provisions
shall be applicable:
(1) In the case of the issuance of Common Stock for cash in a public
offering or private placement, the aggregate consideration shall be deemed to
be the amount of cash paid therefor before deducting therefrom any discounts,
commissions or placement fees payable by the Corporation to any underwriter or
placement agent in connection with the issuance and sale thereof.
(2) In the case of the issuance of Common Stock for a consideration
in whole or in part other than cash, the consideration other than cash shall
be deemed to be the Fair Market Value thereof.
(3) In the case of the issuance of options to purchase or rights to
subscribe for Common Stock, securities by their terms convertible into or
exchangeable for Common Stock, or options to purchase or rights to subscribe
for such convertible or exchangeable securities (except with respect to
Excluded Issuances):
(A) the aggregate maximum number of shares of Common Stock
deliverable upon exercise of such options to purchase or rights to subscribe
for Common Stock shall be deemed to have been issued at the time such options
or rights were issued and for a consideration equal to the consideration
(determined in the manner provided in Sections 7(b)(iii)(1) and (2) above), if
any, received by the Corporation upon the issuance of such options or rights
plus the exercise price provided in such options or rights for the Common
Stock covered thereby;
(B) the aggregate maximum number of shares of Common Stock
deliverable upon conversion of or in exchange for any such convertible or
exchangeable securities or upon the exercise of options to purchase or rights
to subscribe for such convertible or exchangeable securities and subsequent
conversion or exchange thereof shall be deemed to have been issued at the time
such securities, options, or rights were issued and for a consideration equal
to the consideration received by the Corporation for any such securities and
related options or rights (excluding any cash received on account of accrued
interest or accrued dividends), plus the additional consideration, if any, to
be received by the Corporation upon the conversion or exchange of such
securities or the exercise of any related options or rights (the consideration
in each case to be determined in the manner provided above); (C) on any
increase in the number of shares or decrease in exercise price of Common Stock
deliverable upon exercise of any such options or rights or conversions of or
exchanges for such securities, other than a change resulting from the
anti-dilution provisions thereof, the applicable Conversion Price shall
forthwith be readjusted retroactively to give effect to such increase or
decrease; and
(D) no further adjustment of the Conversion Price adjusted upon the
issuance of any such options, rights, convertible securities or exchangeable
securities shall be made as a result of the actual issuance of Common Stock on
the exercise of any such rights or options or any conversion or exchange of
any such securities.
(4) All calculations of the Conversion Price shall be made to the
nearest one one-hundredth of a cent. Anything in Section 7(b)(ii) to the
contrary notwithstanding, in no event shall the then current Conversion Price
be increased as a result of any calculation made at any time pursuant to
Section 7(b)(ii).
(5) The number of shares of Common Stock at any time outstanding
shall not include any shares of Common Stock then owned or held by or for the
account of the Corporation.
(c) Reorganization, Consolidation, Merger, Asset Sale. In case of any
capital reorganization or reclassification of outstanding shares of Common
Stock (other than a reclassification covered by Section 7(b)), or in case of
any consolidation or merger of the Corporation with or into another Person, or
in case of any sale or conveyance to another Person of the property of the
Corporation as an entirety or substantially as an entirety (each of the
foregoing being referred to as a "Transaction"), each share of Convertible
Preferred Stock then outstanding shall thereafter be convertible into, upon
receipt of any requisite governmental approvals, in lieu of the Common Stock
issuable upon such conversion prior to the consummation of such Transaction,
the kind and amount of shares of stock and other securities and property
(including cash) receivable upon the consummation of such Transaction by a
holder of that number of shares of Common Stock into which one share of
Convertible Preferred Stock was convertible immediately prior to the
consummation of such Transaction. In any such case, the Corporation will make
appropriate provisions (as determined in good faith by the Board of Directors)
to ensure that the provisions of Sections 2-3, 4(a), 4(c), 6-7 and 9 herein
will continue to be applicable to the Convertible Preferred Stock or any such
other shares of stock and other securities (other than Common Stock) and
property deliverable upon conversion of the shares of Convertible Preferred
Stock remaining outstanding following the Transaction. In case securities or
property other than Common Stock shall be issuable or deliverable upon
conversion as aforesaid, then all references in this Section 7 shall be deemed
to apply, so far as appropriate and as nearly as may be, to such other
securities or property.
Notwithstanding anything contained herein to the contrary, the
Corporation will not effect any Transaction unless, prior to the consummation
thereof, the Surviving Person (as defined in Section 12) thereof, if other
than the Corporation, shall assume, by written instrument mailed to each
record holder of shares of Convertible Preferred Stock, at such holder's
address as it appears on the transfer books of the Corporation, the obligation
to deliver to such holder such cash, property and securities to which, in
accordance with the foregoing provisions, such holder is entitled. Nothing
contained in this Section 7(c) shall limit the rights of holders of the
Convertible Preferred Stock to convert the Convertible Preferred Stock or to
require the Corporation to effect a redemption in connection with a
Transaction.
(d) Conversion Procedures. The holder of any shares of Convertible
Preferred Stock may exercise its right to convert such shares into shares of
Common Stock at any time by surrendering for such purpose to the Corporation,
at its principal office or at such other office or agency maintained by the
Corporation for that purpose, a certificate or certificates representing the
shares of Convertible Preferred Stock to be converted duly endorsed to the
Corporation in blank accompanied by a written notice stating that such holder
elects to convert all or a specified whole number of such shares in accordance
with the provisions of this Section 7. The Corporation will pay any and all
documentary, stamp or similar issue or transfer tax and any other taxes that
may be payable in respect of any issue or delivery of shares of Common Stock
to the holder on conversion of the Convertible Preferred Stock pursuant
hereto. As promptly as practicable, and in any event within three Business
Days after the surrender of such certificate or certificates and the receipt
of such notice relating thereto and, if applicable, payment of all transfer
taxes (or the demonstration to the satisfaction of the Corporation that such
taxes are inapplicable), the Corporation shall deliver or cause to be
delivered (i) certificates (which shall bear legends, if appropriate)
registered in the name of such holder representing the number of validly
issued, fully paid and nonassessable full shares of Common Stock to which the
holder of shares of Convertible Preferred Stock so converted shall be
entitled, (ii) if less than the full number of shares of Convertible Preferred
Stock evidenced by the surrendered certificate or certificates are being
converted, a new certificate or certificates, of like tenor, for the number of
shares evidenced by such surrendered certificate or certificates less the
number of shares converted and (iii) payment of all amounts to which a holder
is entitled pursuant to Section 7(e) hereof. Such conversion shall be deemed
to have been made at the close of business on the date of receipt of such
notice and of such surrender of the certificate or certificates representing
the shares of Convertible Preferred Stock to be converted so that the rights
of the holder thereof as to the shares being converted shall cease except for
the right to receive shares of Common Stock, and the person entitled to
receive the shares of Common Stock shall be treated for all purposes as having
become the record holder of such shares of Common Stock at such time.
(e) Fractional Shares. In connection with the conversion of any
shares of Convertible Preferred Stock pursuant to this Section 7 or Section 8,
no fractions of shares of Common Stock shall be issued, but in lieu thereof
the Corporation shall pay a cash adjustment in respect of such fractional
interest (after aggregating all such shares being converted) in an amount
equal to such fractional interest multiplied by the Current Market Price per
share of Common Stock on the day on which such shares of Convertible Preferred
Stock are deemed to have been converted.
(f) Dividends; Distributions. In case at any time or from time to
time the Corporation shall pay any dividend or make any other distribution to
the holders of its Common Stock, or shall offer for subscription pro rata to
the holders of its Common Stock any additional shares of stock of any class or
any other right, or there shall be any capital reorganization or
reclassification of the Common Stock of the Corporation or consolidation or
merger of the Corporation with or into another corporation, or any sale or
conveyance to another corporation of the property of the Corporation as an
entirety or substantially as an entirety, or there shall be a voluntary or
involuntary dissolution, liquidation or winding up of the Corporation, then,
in any one or more of said cases the Corporation shall give at least twenty
(20) days' prior written notice to the registered holders of the Convertible
Preferred Stock at the addresses of each as shown on the books of the
Corporation of the date on which (i) the books of the corporation shall close
or a record shall be taken for such stock dividend, distribution or
subscription rights or (ii) such reorganization, reclassification,
consolidation, merger, sale or conveyance, dissolution, liquidation or winding
up shall take place, as the case may be. Such notice shall also specify the
date, if known, as of which the holders of the Common Stock and of the
Convertible Preferred Stock of record shall participate in said dividend,
distribution or subscription rights or shall be entitled to exchange their
Common Stock or Convertible Preferred Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale or conveyance, or participate in such dissolution, liquidation or winding
up, as the case may be.
The Corporation shall at all times reserve and keep available, free
from liens, charges and security interests and not subject to any pre-emptive
rights, for issuance upon conversion of the Convertible Preferred Stock, such
number of its authorized but unissued shares of Common Stock as will from time
to time be sufficient to permit the conversion of all outstanding shares of
Convertible Preferred Stock, and shall take all action required to increase
the authorized number of shares of Common Stock if necessary to permit the
conversion of all outstanding shares of Convertible Preferred Stock.
Section 8. Mandatory Conversion. Whether or not the Corporation has
given notice of a redemption pursuant to Section 4, each share of Convertible
Preferred Stock shall, immediately upon the occurrence of a Mandatory
Conversion Event, automatically convert into fully paid and non-assessable
shares of Common Stock. The number of shares of Common Stock to which a holder
of Convertible Preferred Stock shall be entitled upon such automatic
conversion shall be determined by dividing (x) the Stated Value by (y) the
Conversion Price in effect at the close of business on the Business Day
immediately preceding such date; provided, however, that in no event shall
shares of Convertible Preferred Stock be converted into Common Stock to the
extent, and at any time, the Conversion Limitation is applicable (it being
understood for the purposes of this Section 8 that any securities beneficially
owned by any Berkshire/Greenbriar Investor will be deemed to be beneficially
owned by all Berkshire/Greenbriar Investors and that any Conversion Limitation
applied under this Section 8 shall be applied as amongst the
Berkshire/Greenbriar Investors pro rata, based on ownership of the Convertible
Preferred Stock); provided, further, any shares of Convertible Preferred Stock
which are not convertible at any time pursuant to this Section 8 due to the
Conversion Limitation shall remain outstanding and entitled to all of the
rights and privileges contained in this Certificate of Designations. Any
holder's shares of Convertible Preferred Stock not convertible pursuant to
this Section 8 due to the Conversion Limitation shall, immediately upon such
time as the Conversion Limitation is no longer applicable to such holder,
automatically convert into fully-paid and non-assessable shares of Common
Stock in accordance with the formula provided for in the immediately preceding
sentence of this Section 8. Any conversion pursuant to this Section 8 shall
occur automatically and without any further action by the holders of such
shares and whether or not the certificates representing such shares are
surrendered to the Corporation or its transfer agent. Upon the occurrence of
such automatic conversion of the Convertible Preferred Stock, the Corporation
shall provide written notice to the holders of the Convertible Preferred Stock
and the holders of the Convertible Preferred Stock shall, a reasonable time
thereafter, surrender the certificates representing such shares at the office
of the Corporation or any transfer agent for the Convertible Preferred Stock.
Thereupon, there shall be issued and delivered to such holder promptly at such
office and in its name as shown on such surrendered certificate or
certificates, a certificate or certificates for the number of shares of Common
Stock into which the shares of Convertible Preferred Stock surrendered were
convertible on the date on which such automatic conversion occurred. All
certificates evidencing shares of Convertible Preferred Stock which are
required to be surrendered for conversion in accordance with the provisions
hereof shall, from and after the occurrence of the Mandatory Conversion Event,
be deemed to have been retired and cancelled and the shares of Convertible
Preferred Stock represented thereby converted into Common Stock for all
purposes, notwithstanding the failure of the holder or holders thereof to
surrender such certificates.
Section 9. Payment Upon Conversion.
(a) Upon conversion of a share of Convertible Preferred Stock
pursuant to Section 7 hereof, the holder of such share shall be entitled to
receive an amount equal to such share's Conversion Payment. Any Conversion
Payment made pursuant to this Section 9(a) may be paid by the Corporation,
with respect to any such Conversion Payment, (i) all in cash or (ii) all in
shares of Common Stock, provided that (A) if the Corporation is paying in
shares of Common Stock at its option, such shares of Common Stock shall be
valued at 90% of the Closing Price on the date of such conversion and (B) if
the Corporation is paying in shares of Common Stock because it does not have
available sufficient capital, surplus or other funds available to pay, or is
restricted by the Debt Instruments from paying, such Conversion Payment in
cash, such shares of Common Stock shall be valued at 95% of the Closing Price
on the date of such conversion. With respect to shares of Convertible
Preferred Stock which have been surrendered to the Corporation on the same
date in accordance with Section 7(d) hereof, each holder thereof shall be
entitled to receive the same type of consideration in payment of its
Conversion Payment.
(b) Upon conversion of a share of Convertible Preferred Stock
pursuant to Section 8 hereof, the holder of such share shall be entitled to
receive an amount in cash equal to such share's Conversion Payment.
Section 10. Reports as to Adjustments.
Whenever the number of shares of Common Stock into which each share
of Convertible Preferred Stock is convertible (or the number of votes to which
each share of Convertible Preferred Stock is entitled) is adjusted as provided
in Section 7, the Corporation shall promptly mail to the holders of record of
the outstanding shares of Convertible Preferred Stock at their respective
addresses as the same shall appear in the Corporation's stock records a notice
stating that the number of shares of Common Stock into which the shares of
Convertible Preferred Stock are convertible has been adjusted and setting
forth the new number of shares of Common Stock (or describing the new stock,
securities, cash or other property) into which each share of Convertible
Preferred Stock is convertible, as a result of such adjustment, a brief
statement of the facts requiring such adjustment and the computation thereof,
and when such adjustment became effective.
Section 11. Tax Matters.
Except as otherwise agreed to in writing by the Corporation, holders
of Convertible Preferred Stock shall provide the Corporation, in the time and
the manner prescribed by applicable law, validly completed and executed
Internal Revenue Service Forms W-9 or W-8BEN or other applicable W-8 (each an
"IRS Form"). If the Corporation determines, in its sole discretion, that such
IRS Form entitles the holder to either (x) a complete exemption from
withholding taxes or (y) a reduction of withholding taxes, with respect to any
payment to such holder pursuant to the Convertible Preferred Stock, the
Corporation shall not withhold from such payment or shall withhold such
reduced amount of withholding taxes from such payment, as the case may be. In
all other cases, the Corporation shall be entitled to withhold from any
payment to such holder of Convertible Preferred Stock with respect to such
Convertible Preferred Stock the applicable amount of any United States
federal, state, local or foreign withholding tax that the Corporation, in its
sole discretion, believes it is required to withhold pursuant to applicable
law. Notwithstanding the above or anything else in this Certificate of
Designations, the Corporation shall, unless otherwise determined after the
date hereof by an applicable taxing authority or court of competent
jurisdiction, take the position for federal, state and local income tax
purposes that neither any accretion of the dividend under Section 2(a) of the
Certificate of Designations nor any difference between issue price and
redemption price of the Convertible Preferred Stock gives rise to a
distribution taxable to holders of such stock uunder Section 305 of the Code
or the regulations thereunder, and shall file all tax returns (including
information returns, if any) consistent with that position.
Section 12. Definitions.
For the purposes of the Certificate of Designations of Convertible
Preferred Stock which embodies this resolution:
"Accrued Value" means, with respect to a share of Convertible
Preferred Stock, the sum of (as adjusted for any split, subdivision,
combination, consolidation, recapitalization or similar event with respect to
the Convertible Preferred Stock) (i) $1,195.618 plus (ii) an amount equal to
the aggregate of all accrued but unpaid dividends (whether or not declared) on
such share which have been added to Accrued Value as provided for in Sections
2(a)(ii), 4(b)(iv), 4(c)(iii) and 4(c)(iv).
"Adjusted Accrued Value" means an amount per share of Convertible
Preferred Stock equal to the sum of (i) the Stated Value plus (ii) an amount
equal to the aggregate of all accrued but unpaid dividends (whether or not
declared) on such share which have been added to Accrued Value as provided for
in Sections 2(a)(ii), 4(b)(iv), 4(c)(iii) and 4(c)(iv) plus (iii) an amount
equal to all accrued and unpaid dividends on such share which have not been
added to Accrued Value; provided, however, that solely for purposes for
Section 4(c)(i), the Adjusted Accrued Value component of Liquidation
Preference shall mean the product of (A) the Adjusted Accrued Value as
calculated absent this proviso and (B) 1.01.
"affiliate" shall have the meaning set forth in Rule 12b-2
promulgated by the Securities and Exchange Commission under the Exchange Act.
"Berkshire/Greenbriar Investors" means any of the parties defined as
an "Investor" in the Stockholders Agreement, dated [ ], 2003, among Berkshire
Fund V, Limited Partnership, Berkshire Fund VI, Limited Partnership, Berkshire
Fund V Investment Corp., Berkshire Fund VI Investment Corp., Berkshire
Investors LLC, Greenbriar Co-Investment Partners, L.P. and Greenbriar Equity
Fund, L.P.
"Business Day" means any day other than a Saturday, Sunday, or a day
on which commercial banks in the City of New York are authorized or obligated
by law or executive order to close.
"Capital Stock" means (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing person.
"Change of Control" shall have the meaning assigned to such term in
the Senior Subordinated Note Indenture in effect as of the date hereof.
"Closing Price" per share of Common Stock on any date shall be the
closing sale price on such day or, in case no such sale takes place on such
day, the average of the reported closing bid and asked prices, in each case on
the New York Stock Exchange, or, if such security is not listed or admitted to
trading on the New York Stock Exchange, on the principal national securities
exchange or quotation system on which such security is quoted or listed or
admitted to trading, or, if not quoted or listed or admitted to trading on any
national securities exchange or quotation system, the average of the closing
bid and asked prices of such security on the over-the-counter market on the
day in question as reported by the National Quotation Bureau Incorporated, or
a similarly generally accepted reporting service, or if not so available, in
such manner as furnished by any New York Stock Exchange member firm selected
from time to time by the Board of Directors for that purpose or a price
determined in good faith by the Board of Directors.
"Common Stock" means the common stock, par value $0.01 per share, of
the Corporation.
"Conversion Payment" means (i) an amount equal to the aggregate of
all accrued but unpaid dividends (whether or not declared) on such share which
have been added to Accrued Value as provided for in Section 2(a)(ii) prior to
the occurrence of a Dividend Accrual Event plus (ii) an amount equal to all
accrued and unpaid dividends on such share which have not been added to
Accrued Value prior to the occurrence of a Dividend Accrual Event.
"Conversion Price" shall be equal to the Initial Conversion Price,
subject to adjustment as provided in Section 7(b).
"Current Market Price" per share of Common Stock on any date shall be
the average of the Closing Prices of a share of Common Stock for the five
consecutive Trading Days selected by the Corporation commencing not less than
10 Trading Days nor more than 20 Trading Days before the date in question. If
on any such Trading Day the Common Stock is not quoted by any organization
referred to in the definition of Closing Price, the Current Market Price of
the Common Stock on such day shall be determined in good faith by the Board of
Directors.
"Debt Instruments" shall mean (i) Hexcel's Second Amended and
Restated Credit Agreement, dated as of September 15, 1998, as amended from
time to time, or any replacement thereof and (ii) the Senior Subordinated
Indenture.
"Dividend Accrual Event" shall occur if the Closing Price per share
of Common Stock over any sixty (60) consecutive Trading Days exceeds an amount
per share equal to 200% of the Initial Conversion Price; provided that the
60th consecutive Trading Day is a date that is later than the three year
anniversary of the Issuance Date.
"Dividend Commencement Date" shall mean the date that is the three
year anniversary of the Issuance Date.
"Dividend Payment Date" means each of January 15, April 15, July 15
and October 15, except that if such date is not a Business Day then the
Dividend Payment Date shall be the next day that is a Business Day.
"Dividend Period" means the Initial Dividend Period and, thereafter,
each quarterly period from a Dividend Payment Date to the next following
Dividend Payment Date (but without including such later Dividend Payment
Date).
"Exchange Act" means the Securities Exchange Act of 1934, as amended
and the rules and regulations promulgated thereunder.
"Fair Market Value" with respect to any property shall mean the value
assigned in good faith to such property by the Board of Directors.
"GAAP" means United States generally accepted accounting principles.
"Indenture Change of Control" shall have the meaning assigned to the
term "Change of Control" in the Senior Subordinated Note Indenture.
"Initial Conversion Price" means $3.00 (as adjusted for any split,
subdivision, combination, consolidation or reclassification of the Common
Stock).
"Initial Dividend Period" means the dividend period commencing on the
Dividend Commencement Date and ending on the first Dividend Payment Date to
occur thereafter (but without including such Dividend Payment Date).
"Issuance Date" means the original date of issuance of the
Convertible Preferred Stock.
"Junior Stock" means the Common Stock of the Corporation and each
other class of Capital Stock of the Corporation or series of Preferred Stock
of the Corporation currently existing or established hereafter (other than the
Series B Preferred Stock) unless such class of Capital Stock or series of
Preferred Stock is issued and established after the date of this Certificate
of Designations and expressly provides that such class or series will rank on
parity with (together with the Series B Preferred Stock, the "Parity Stock")
or senior to ("Senior Stock") the Convertible Preferred Stock as to dividend
rights and rights on liquidation, winding up and dissolution.
"Junior Stock Distribution" means the declaration or payment or
setting apart for payment of any dividends (other than dividends or
distributions paid in shares of, or options, warrants or rights to subscribe
for or purchase shares of, Junior Stock) or other distribution declared or
made upon Junior Stock, or the redemption, repurchase or other acquisition of
any Junior Stock.
"Liquidation Preference" has the meaning set forth in Section 6
above.
"Mandatory Conversion Event" shall occur if the Closing Price per
share of Common Stock over any sixty (60) consecutive Trading Days exceeds an
amount per share equal to 300% of the Initial Conversion Price; provided that
the 60th consecutive Trading Day is a date that is later than the three year
anniversary of the Issuance Date.
"Mandatory Redemption Obligation" means any redemption obligation of
the Corporation pursuant to Sections 4(b) or 4(c) hereof.
"Person" means an individual, partnership, corporation, limited
liability company or partnership, unincorporated organization, trust or joint
venture, or a governmental agency or political subdivision thereof, or other
entity of any kind.
"Senior Subordinated Note Indenture" means the Indenture, dated
January 21, 1999, between the Corporation and The Bank of New York, as
trustee, relating to the issuance of the Corporation's 9-3/4% Senior
Subordinated Notes due 2009.
"Series B Certificate of Designations" means the Certificate of
Designations governing the Series B Preferred Stock.
"Series B Liquidation Preference" shall have the meaning assigned to
"Liquidation Preference" in the Series B Certificate of Designations.
"Series B Preferred Stock" means the Corporation's Series B
Convertible Preferred Stock, without par value.
"Stated Value" means, with respect to a share of Convertible
Preferred Stock, $1,000 (as adjusted for any split, subdivision, combination,
consolidation, recapitalization or similar event with respect to the
Convertible Preferred Stock).
"Subsidiary" of any Person means any corporation or other entity of
which a majority of the voting power of the voting equity securities or equity
interest is owned, directly or indirectly, by such Person.
"Surviving Person" means the continuing or surviving Person of a
merger, consolidation or other corporate combination, the Person receiving a
transfer of all or a substantial part of the properties and assets of the
Corporation, or the Person consolidating with or merging into the Corporation
in a merger, consolidation or other corporate combination in which the
Corporation is the continuing or surviving Person, but in connection with
which the Convertible Preferred Stock or Common Stock of the Corporation is
exchanged, converted or reinstated into the securities of any other Person or
cash or any other property; provided, however, if such Surviving Person is a
direct or indirect Subsidiary of a Person, the parent entity shall be deemed
to be a Surviving Person.
"Trading Day" means a day on which the principal national securities
exchange on which the Common Stock is quoted, listed or admitted to trading is
open for the transaction of business or, if the Common Stock is not quoted,
listed or admitted to trading on any national securities exchange (or the
Nasdaq Stock Market), any Business Day.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designations of Convertible Preferred Stock to be duly executed this ____ day
of ___________, 2003.
HEXCEL CORPORATION
By:
---------------------
Name:
Title:
EXHIBIT B
FORM OF
CERTIFICATE OF DESIGNATIONS
of
SERIES B
CONVERTIBLE PREFERRED STOCK
of
HEXCEL CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
Hexcel Corporation, a Delaware corporation (the "Corporation"),
certifies that pursuant to the authority contained in its Restated Certificate
of Incorporation (the "Certificate of Incorporation"), and in accordance with
the provisions of Section 151 of the General Corporation Law of the State of
Delaware (the "DGCL"), its Board of Directors (the "Board of Directors") has
adopted the following resolution creating a series of its Preferred Stock,
without par value, designated as Series B Convertible Preferred Stock:
RESOLVED, that a series of authorized Preferred Stock, without par
value, of the Corporation be hereby created, and that the designation and
amount thereof and the voting powers, preferences and relative, participating,
optional and other special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof are as follows:
Section 1. Designation and Amount; Rank.
(a) Designation and Amount. The shares of such series shall be
designated as the "Series B Convertible Preferred Stock" (the "Convertible
Preferred Stock") and the number of shares constituting such series shall be
125,000 shares of Convertible Preferred Stock. Section 11 contains the
definitions of certain defined terms used herein.
(b) Rank. Except as otherwise set forth herein, the Convertible
Preferred Stock shall (i) with respect to Participating Dividends (as defined
below) rank pari passu with all Junior Stock and (ii) with respect to
distributions upon liquidation, winding-up and dissolution, whether voluntary
or involuntary, of the Corporation, whether now or hereafter issued, rank
senior to all Junior Stock and rank on parity with all Parity Stock,
including, without limitation, the Series A Preferred Stock.
Section 2. Dividends and Distributions. In the event any dividends
are declared or paid or any other distribution is made on or with respect to
the Common Stock, the holders of the Convertible Preferred Stock as of the
record date established by the Board of Directors for such dividend or
distribution on the Common Stock shall be entitled to receive as dividends
(the "Participating Dividends") an amount (whether in the form of cash,
securities or other property) equal to the amount (and in the form) of the
dividends or distribution that such holder would have received had the
Convertible Preferred Stock been converted into Common Stock as of the date
immediately prior to the record date of such dividend or distribution on the
Common Stock; provided, however, that solely for the purpose of determining
the number of shares of Common Stock into which the Convertible Preferred
Stock is then convertible, the Conversion Limitation (as defined in Section
7(a) below) shall be disregarded. Such Participating Dividends shall be
payable on the same payment date as the payment date for the dividend on the
Common Stock established by the Board of Directors (the " Participating
Dividend Payment Date"); provided, however, that if the Corporation declares
and pays a dividend or makes a distribution on the Common Stock consisting in
whole or in part of Common Stock (or options, rights, warrants or other
securities convertible into or exchangeable for Common Stock), then no such
dividend or distribution shall be payable in respect of the Convertible
Preferred Stock on account of the portion of such dividend or distribution on
the Common Stock payable in Common Stock and in lieu thereof the applicable
anti-dilution adjustment in Section 7(b) below shall apply. The record date
for any such Participating Dividends shall be the record date for the
applicable dividend or distribution on the Common Stock, and any such
Participating Dividends shall be payable to the holders of record of shares of
the Convertible Preferred Stock on the applicable record date, as they appear
on the share records of the Corporation at the close of business on such
record date.
Section 3. Voting Rights.
(a) General. Except as otherwise required by law or expressly
provided herein, each holder of Convertible Preferred Stock shall have full
voting rights and powers, and shall be entitled to vote on all matters put to
a vote or consent of stockholders of the Corporation, voting together with the
holders of the Common Stock and Series A Preferred Stock as a single class,
with each holder of shares of Convertible Preferred Stock having the number of
votes equal to the number of shares of Common Stock into which such shares of
Convertible Preferred Stock could be converted in accordance with Section 7
hereof as of the record date for the vote or consent which is being taken.
(b) Voting With Respect to Certain Matters. In addition to any
matters requiring a separate vote of the Convertible Preferred Stock under
applicable law, the Corporation shall not, without the prior consent or
approval of the holders of at least seventy percent (70%) of the issued and
outstanding shares of Convertible Preferred Stock, voting as a single class,
amend, alter, repeal or restate its certificate of incorporation, by-laws or
this Certificate of Designations (whether by reclassification, merger,
consolidation, reorganization or otherwise) in a manner that alters or
changes, in any adverse manner, the powers, preferences, privileges or rights
of the Convertible Preferred Stock or which otherwise would adversely affect
the rights, privileges or preferences of the Convertible Preferred Stock.
Section 4. Redemption.
(a) General. Except as provided in this Section 4, the Corporation
shall have no right to redeem any shares of Convertible Preferred Stock.
(b) Mandatory Redemption.
(i) On January 22, 2010 (the "Mandatory Redemption Date"), the
Corporation shall be required to redeem (subject to the legal availability of
funds therefor) each remaining outstanding share of Convertible Preferred
Stock for an amount equal to such share's Redemption Amount. If the Redemption
Amount of each share under this Section 4(b) is equal to the Participating
Redemption Amount rather than the Stated Value, the Corporation shall pay the
Redemption Amount by issuing to the holder of each such share of Convertible
Preferred Stock a number of shares of Common Stock equal to the Stated Value
divided by the Conversion Price. If the Redemption Amount under this Section
4(b) is equal to the Stated Value rather than the Participating Redemption
Amount or if such holder has elected to receive cash in respect of such
holder's shares of Series A Preferred Stock pursuant to the last proviso of
Section 4(b)(i) of the Series A Certificate of Designations, the Redemption
Amount for each share of Convertible Preferred Stock shall be paid by paying
to the holder of such share of Convertible Preferred Stock an amount in cash
equal to the Stated Value. The Corporation shall take all actions required or
permitted under the DGCL to permit such redemption of the Convertible
Preferred Stock.
(ii) If notice has been mailed in accordance with Section 4(b)(iii)
and provided that on or before the Mandatory Redemption Date, all funds
necessary for such redemption shall have been set aside by the Corporation,
separate and apart from its other funds in trust for the pro rata benefit of
the holders of the shares so called for redemption, so as to be, and to
continue to be available therefor, then, from and after the Mandatory
Redemption Date, dividends on the shares of the Convertible Preferred Stock so
called for redemption shall cease to accumulate, and said shares shall no
longer be deemed to be outstanding and shall not have the status of shares of
Convertible Preferred Stock, and all rights of the holders thereof as
stockholders of the Corporation (except the right to receive from the
Corporation the Redemption Amount) shall cease. Upon surrender, in accordance
with said notice, of the certificates for any shares so redeemed (properly
endorsed or assigned for transfer, if the Corporation shall so require and the
notice shall so state), such shares shall be redeemed by the Corporation at
the Redemption Amount.
(iii) Notice of any redemption pursuant to this Section 4(b) shall be
sent by or on behalf of the Corporation not less than 10 nor more than 60 days
prior to the Mandatory Redemption Date, by first class mail, postage prepaid,
to all holders of record of the Convertible Preferred Stock at their last
addresses as they shall appear on the books of the Corporation; provided,
however, that no failure to give such notice or any defect therein or in the
mailing thereof shall affect the validity of the giving of notice for the
redemption of any shares of Convertible Preferred Stock except as to the
holder to whom the Corporation has failed to give notice or except as to the
holder to whom notice was defective.
(iv) If at the Mandatory Redemption Date, the Corporation does not
have sufficient capital and surplus legally available to redeem all the
outstanding shares of the Convertible Preferred Stock, the Corporation shall
take all measures permitted under the DGCL to increase the amount of its
capital and surplus legally available, and the Corporation shall redeem as
many shares of the Convertible Preferred Stock as it may legally redeem,
ratably from the holders thereof in proportion to the number of shares held by
them, and shall thereafter from time to time, as soon as it shall have funds
available therefor, redeem as many shares of the Convertible Preferred Stock
as it legally may redeem until it has redeemed all of the outstanding shares
of the Convertible Preferred Stock. Shares of the Convertible Preferred Stock
not redeemed on the Mandatory Redemption Date shall remain outstanding and be
entitled to all of the rights and privileges contained in this Certificate of
Designations until such shares are redeemed by the Corporation in accordance
with this Section 4(b) at the Redemption Amount. If, and so long as, any
Mandatory Redemption Obligation with respect to shares of Convertible
Preferred Stock shall not be fully discharged, the Corporation shall not (i)
directly or indirectly, redeem, purchase or otherwise acquire any Parity Stock
(other than in accordance with the Series A Certificate of Designations) or
discharge any mandatory or optional redemption, sinking fund or other similar
obligation in respect of any Parity Stock (other than in accordance with the
Series A Certificate of Designations or except in connection with a
redemption, sinking fund or other similar obligation to be satisfied pro rata
with the Convertible Preferred Stock) or (ii) declare or make any Junior Stock
Distribution, or, directly or indirectly, discharge any mandatory or optional
redemption, sinking fund or other similar obligation in respect of any Junior
Stock.
(c) Redemption Upon a Change of Control.
(i) In the event there occurs a Change of Control, the Corporation
shall offer to purchase from each holder of Convertible Preferred Stock all of
the number of shares of Convertible Preferred Stock of such holder equal to
the number of shares of Series A Preferred Stock the Corporation redeems from
such holder under Section 4(c) of the Series A Certificate of Designations for
an amount in respect of each share of Convertible Preferred Stock held by such
holder equal to the Redemption Amount of such share of Convertible Preferred
Stock, by delivery of a notice of such offer (a "Change of Control Redemption
Offer") within ten Business Days following the Change of Control. In the event
of a Change of Control, each holder of Convertible Preferred Stock shall have
the right (but not the obligation) to require the Corporation to purchase such
number of shares of Convertible Preferred Stock equal to the number of shares
of Series A Preferred Stock the Corporation redeems from such holder under
Section 4(c) of the Series A Certificate of Designations for an amount in
respect of each share of Convertible Preferred Stock so purchasable equal to
the Redemption Amount of such share of Convertible Preferred Stock as follows.
If the Redemption Amount of each share under this Section 4(c) is equal to the
Participating Redemption Amount rather than the Stated Value of such share,
the Corporation shall pay the Redemption Amount by issuing to a holder for
each share of Convertible Preferred Stock held by such holder a number of
shares of Common Stock equal to the Stated Value divided by the Conversion
Price. If the Redemption Amount under this Section 4(c) is equal to the Stated
Value rather than Participating Redemption Amount or if such holder has
elected to receive cash in respect of such holder's shares of Series A
Preferred Stock pursuant to the last proviso of Section 4(c)(i) of the Series
A Certificate of Designations, the Redemption Amount for each share of
Convertible Preferred Stock shall be paid by (a) paying to the holder of such
share of Convertible Preferred Stock an amount in cash equal to the Adjusted
Value and (b) issuing to the holder of such share of Convertible Preferred
Stock a number of shares of Common Stock equal to the quotient obtained by
dividing (i) the excess of the Stated Value over the Adjusted Value by (ii)
the Conversion Price. Shares of the Convertible Preferred Stock not redeemed
pursuant to this Section 4(c)(ii) shall remain outstanding and be entitled to
all of the rights and privileges contained in this Certificate of
Designations.
(ii) Within ten Business Days following the occurrence of a Change of
Control, the Corporation shall give notice by mail to each holder of
Convertible Preferred Stock, at such holder's address as it appears on the
transfer books of the Corporation, of such event, which notice shall set forth
(i) each holder's right to require the Corporation to redeem any or all amount
(determined in accordance with Section 4(c)(i)) of shares of Convertible
Preferred Stock held by such holder, (ii) the redemption date (which date
shall be no more than 30 Business Days following the date of such mailed
notice), (iii) that any shares of Convertible Preferred Stock not tendered
will continue to be entitled to dividends as provided for in Section 2 hereof
and (iv) the procedures to be followed by such holder in exercising its right
to cause such redemption. In the event a record holder of shares of
Convertible Preferred Stock shall elect to require the Corporation to redeem
any or all of such holder's shares of Convertible Preferred Stock pursuant to
this Section 4(c), such holder shall deliver within 20 Business Days of the
mailing to it of the Corporation's notice described in this Section 4(c)(ii)
(a "Change of Control Redemption Request"), a written notice to the
Corporation so stating and specifying the number of such holder's shares to be
redeemed pursuant to this Section 4(c). The Corporation shall, in accordance
with the terms hereof, redeem the number of shares so specified on the date
fixed for redemption. Failure of the Corporation to give any notice required
by this Section 4(c)(ii), or the formal insufficiency of any such notice,
shall not prejudice the rights of any holders of shares of Convertible
Preferred Stock to cause the Corporation to redeem all such shares held by
them. Notwithstanding the foregoing, the Board of Directors may modify any
offer (other than with respect to the price to be paid in accordance with
Section 4(c)(i) hereof) pursuant to this Section 4(c) to the extent necessary
to comply with the Exchange Act and the rules and regulations thereunder.
(iii) If upon a Change of Control, the Corporation does not have
sufficient capital and surplus legally available to redeem all of the
outstanding shares of the Convertible Preferred Stock that the holders thereof
have required the Corporation redeem, the Corporation shall take all measures
permitted under the DGCL to increase the amount of its capital and surplus
legally available, and the Corporation shall redeem as many shares of the
Convertible Preferred Stock as it may legally redeem, ratably from the holders
electing redemption thereof in proportion to the number of shares held by
them, and shall thereafter from time to time, as soon as it shall have funds
available therefor, redeem as many shares of the Convertible Preferred Stock
held by such holders as it legally may until it has redeemed all of the shares
of the Convertible Preferred Stock the holders thereof require it to redeem.
Shares of the Convertible Preferred Stock not redeemed upon receipt of a
Change of Control Redemption Request shall remain outstanding and be entitled
to all of the rights and privileges contained in this Certificate of
Designations until such shares are redeemed by the Corporation in accordance
with this Section 4(c). If, and so long as, any Mandatory Redemption
Obligation with respect to shares of Convertible Preferred Stock shall not be
fully discharged, the Corporation shall not (i) directly or indirectly,
redeem, purchase or otherwise acquire any Parity Stock (other than in
accordance with the Series A Certificate of Designations) or discharge any
mandatory or optional redemption, sinking fund or other similar obligation in
respect of any Parity Stock (other than in accordance with the Series A
Certificate of Designations or except in connection with a redemption, sinking
fund or other similar obligation to be satisfied pro rata with the Convertible
Preferred Stock) or (ii) declare or make any Junior Stock Distribution, or,
directly or indirectly, discharge any mandatory or optional redemption,
sinking fund or other similar obligation in respect of any Junior Stock.
(iv) Notwithstanding anything to the contrary herein, until the
Corporation's 9-3/4% Senior Subordinated Notes due 2009 (the "Notes") have
been repurchased or repaid or permission for such redemption has been granted
under the Notes, the Corporation shall not effect a redemption pursuant to
Section 4(c) hereof; provided, however, that any failure to effect a
redemption under this Section 4(c)(iv) shall be treated for all intents and
purposes as a failure to redeem under Section 4(c)(iii) and the shares of the
Convertible Preferred Stock not redeemed upon receipt of a Change of Control
Redemption Request shall remain outstanding and be entitled to all of the
rights and privileges contained in this Certificate of Designations until such
shares are redeemed by the Corporation in accordance with this Section 4(c).
Any shares not redeemed due to the terms of this Section 4(c)(iv) shall be
redeemed as soon as the Corporation is able to effect a redemption of such
shares (ratably in proportion to share ownership in the event of any partial
redemption) under the Notes.
(d) In the event the Corporation does not have sufficient capital,
surplus or other funds available, or the Debt Instruments otherwise restrict
its ability, to (A) redeem all shares of Convertible Preferred Stock entitled
to a redemption pursuant to this Section 4 and (B) redeem all shares of Series
A Preferred Stock entitled to a redemption pursuant to Section 4 of the Series
A Certificate of Designations, then the Corporation shall redeem the
Convertible Preferred Stock and Series A Preferred Stock pro rata based on the
relative amounts of the redemption payments payable to the holders of such
series in the aggregate. Any shares not redeemed because the Corporation does
not have sufficient capital, surplus or other funds available, or the Debt
Instruments otherwise restrict its ability to do so, shall be redeemed as soon
as the Corporation is able to effect a redemption of such shares (ratably in
proportion to share ownership in the event of any partial redemption).
Section 5. Reacquired Shares.
Any shares of Convertible Preferred Stock converted, redeemed,
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof, and, if
necessary to provide for the lawful redemption or purchase of such shares, the
capital represented by such shares shall be reduced in accordance with the
DGCL. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock, without par value, of the Corporation and
may be reissued as part of another series of Preferred Stock, without par
value, of the Corporation.
Section 6. Liquidation, Dissolution or Winding Up. If the Corporation
shall adopt a plan of liquidation or of dissolution, or commence a voluntary
case under the Federal bankruptcy laws or any other applicable state or
Federal bankruptcy, insolvency or similar law (any such laws, the "Bankruptcy
Law"), or consent to the entry of an order for relief in any involuntary case
under any such law or to the appointment of a receiver, liquidator, assignee,
custodian, trustee or sequestrator (or similar official) of the Corporation or
of any substantial part of its property, and on account of such event the
Corporation shall liquidate, dissolve or wind up, or upon any other
liquidation, dissolution or winding up of the Corporation (any such event, a
"Liquidation"), each holder shall be entitled to receive out of assets of the
Corporation available for distribution to its stockholders, in preference to
any distribution to holders of Junior Stock, including without limitation
Common Stock, an amount of cash with respect to each share of Convertible
Preferred Stock held by such holder (such amount being such share's
"Liquidation Preference") equal to the greater of (i) the Adjusted Value plus
the amount of proceeds that would be distributed in such Liquidation to a
holder of the number of shares of Common Stock of the Corporation equal to the
quotient obtained by dividing (x) the Stated Value minus the Adjusted Value,
by (y) the Conversion Price, and (ii) the amount that would be payable to such
holder in respect of Common Stock issuable upon conversion of such share of
Convertible Preferred Stock if all outstanding shares of Convertible Preferred
Stock were converted into Common Stock immediately prior to the Liquidation in
accordance with Section 7 hereof (the amount in this clause (ii) being
referred to as the "Participating Preference Amount"); provided, however, that
solely for the purpose of determining the number of shares of Common Stock
into which the Convertible Preferred Stock is then convertible, the Conversion
Limitation shall be disregarded; provided, further, in the event of a
Liquidation that occurs due to a voluntary or involuntary case of the
Corporation under Bankruptcy Law, if the Liquidation Preference with respect
to each share of Convertible Preferred Stock is equal to the Participating
Preference Amount, then, notwithstanding anything to the contrary in this
Certificate of Designations, each holder shall receive, out of the assets of
the Corporation available for distribution to its stockholders, such
Liquidation Preference as follows: (x) in preference to any distribution to
holders of Junior Stock, an amount of cash with respect to each share of
Convertible Preferred Stock held by such holder equal to the (i) Adjusted
Value plus (ii) the amount of proceeds that would be distributed in such
Liquidation to a holder of the number of shares of Common Stock of the
Corporation equal to the quotient obtained by dividing (A) the Stated Value
minus the Adjusted Value, by (B) the Conversion Price, and (y) thereafter, the
holders of Convertible Preferred Stock shall be entitled to share in all
remaining assets of the Corporation, pari passu with the holders of the Common
Stock (with the holders of the Convertible Preferred Stock deemed to hold that
number of shares of Common Stock into which Convertible Preferred Stock with a
Liquidation Preference equal to the Excess Amount could be converted) until
the holders of Convertible Preferred Stock shall have received an amount equal
to the amount by which the Participating Preference Amount exceeds the (i)
Adjusted Value plus (ii) the amount of proceeds that would be distributed in
such Liquidation to a holder of the number of shares of Common Stock of the
Corporation equal to the quotient obtained by dividing (A) the Stated Value
minus the Adjusted Value, by (B) the Conversion Price (the "Excess Amount").
No full preferential payment on account of any dissolution, winding-up or
liquidation of the Corporation shall be made to the holders of any class of
Parity Stock unless there shall likewise be paid at the same time to the
holders of the Convertible Preferred Stock the full amounts to which such
holders are entitled with respect to such distribution. If the assets of the
Corporation are not sufficient to pay in full the liquidation payments payable
to the holders of the outstanding Convertible Preferred Stock and outstanding
shares of Parity Stock, then the holders of all such shares shall share
ratably in such distribution of assets in accordance with the full respective
preferential payments that would be payable on such shares of Convertible
Preferred Stock and such shares of Parity Stock if all amounts payable thereon
were payable in full.
Section 7. Optional Conversion.
Each share of Convertible Preferred Stock may, at the option of the
holder thereof, be converted into shares of Common Stock at any time, whether
or not the Corporation has given notice of redemption under Section 4, on the
terms and conditions set forth in this Section 7.
(a) Terms of Conversion. Each share of Convertible Preferred Stock
shall be convertible at any time, and from time to time, in the manner
hereinafter set forth into a number of fully paid and nonassessable shares of
Common Stock equal to the quotient obtained by dividing the Stated Value by
the Conversion Price; provided, however, that in no event shall shares of
Convertible Preferred Stock be convertible into Common Stock to the extent,
and at any time, that (i) such conversion would cause the holder thereof
(together with its affiliates) to have beneficial ownership (which shall have
the meaning as used in Rules 13d-3 and 13d-5 promulgated under the Exchange
Act, except that for the purposes of this Section 7(a), such meaning shall
include the right to acquire securities, whether or not such right is
exercisable immediately) of more than 39.9% of the voting power of the
Corporation's outstanding voting stock, and (ii) the Notes are outstanding and
beneficial ownership by any holder or group of holders of at least 40% of the
voting power of the Corporation's outstanding voting stock would constitute a
"change of control" thereunder (the "Conversion Limitation") (it being
understood for the purposes of this Section 7(a) that any securities
beneficially owned by any Berkshire/Greenbriar Investor will be deemed to be
beneficially owned by all Berkshire/Greenbriar Investors and that any
Conversion Limitation shall be applied pro rata, based on ownership of
Convertible Preferred Stock as amongst the Berkshire/Greenbriar Investors);
provided, further, any shares of Convertible Preferred Stock which are not
convertible at any time due to the Conversion Limitation shall remain
outstanding and entitled to all of the rights and privileges contained in this
Certificate of Designations.
(b) Adjustment of Conversion Price. The Conversion Price shall be
subject to adjustment from time to time as follows:
(i) In case the Corporation shall at any time or from time to time
after the original issuance of the Convertible Preferred Stock declare a
dividend or make a distribution on the outstanding shares of Common Stock or
securities convertible into Common Stock, in either case, in shares of Common
Stock, or effect a subdivision, combination, consolidation or reclassification
of the outstanding shares of Common Stock into a greater or lesser number of
shares of Common Stock, then, and in each such case, the Conversion Price in
effect immediately prior to such event or the record date therefor, whichever
is earlier, shall be adjusted by multiplying such Conversion Price by a
fraction, the numerator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event and the denominator of which
is the number of shares of Common Stock outstanding immediately after such
event. An adjustment made pursuant to this Section 7(b)(i) shall become
effective (x) in the case of any such dividend or distribution, immediately
after the close of business on the record date for the determination of
holders of shares of Common Stock entitled to receive such dividend or
distribution, or (y) in the case of any such subdivision, reclassification,
consolidation or combination, at the close of business on the day upon which
such corporate action becomes effective.
(ii) All calculations of the Conversion Price shall be made to the
nearest one one-hundredth of a cent.
(iii) For purposes of any adjustment of the Conversion Price pursuant
to paragraph (i) of this Section 7(b), the number of shares of Common Stock at
any time outstanding shall not include any shares of Common Stock then owned
or held by or for the account of the Corporation.
(c) Reorganization, Consolidation, Merger, Asset Sale. In case of any
capital reorganization or reclassification of outstanding shares of Common
Stock (other than a reclassification covered by Section 7(b)), or in case of
any consolidation or merger of the Corporation with or into another Person, or
in case of any sale or conveyance to another Person of the property of the
Corporation as an entirety or substantially as an entirety (each of the
foregoing being referred to as a "Transaction"), each share of Convertible
Preferred Stock then outstanding shall thereafter be convertible into, upon
receipt of any requisite governmental approvals, in lieu of the Common Stock
issuable upon such conversion prior to the consummation of such Transaction,
the kind and amount of shares of stock and other securities and property
(including cash) receivable upon the consummation of such Transaction by a
holder of that number of shares of Common Stock into which one share of
Convertible Preferred Stock was convertible immediately prior to the
consummation of such Transaction. In any such case, the Corporation will make
appropriate provisions (as determined in good faith by the Board of Directors)
to ensure that the provisions of Sections 2-3, 4(a), 4(c), 6 and 7 herein will
continue to be applicable to the Convertible Preferred Stock or any such other
shares of stock and other securities (other than Common Stock) and property
deliverable upon conversion of the shares of Convertible Preferred Stock
remaining outstanding following the Transaction. In case securities or
property other than Common Stock shall be issuable or deliverable upon
conversion as aforesaid, then all references in this Section 7 shall be deemed
to apply, so far as appropriate and as nearly as may be, to such other
securities or property.
Notwithstanding anything contained herein to the contrary, the
Corporation will not effect any Transaction unless, prior to the consummation
thereof, the Surviving Person (as defined in Section 11) thereof, if other
than the Corporation, shall assume, by written instrument mailed to each
record holder of shares of Convertible Preferred Stock, at such holder's
address as it appears on the transfer books of the Corporation, the obligation
to deliver to such holder such cash, property and securities to which, in
accordance with the foregoing provisions, such holder is entitled. Nothing
contained in this Section 7(c) shall limit the rights of holders of the
Convertible Preferred Stock to convert the Convertible Preferred Stock or to
require the Corporation to effect a redemption in connection with a
Transaction.
(d) Conversion Procedures. The holder of any shares of Convertible
Preferred Stock may exercise its right to convert such shares into shares of
Common Stock at any time by surrendering for such purpose to the Corporation,
at its principal office or at such other office or agency maintained by the
Corporation for that purpose, a certificate or certificates representing the
shares of Convertible Preferred Stock to be converted duly endorsed to the
Corporation in blank accompanied by a written notice stating that such holder
elects to convert all or a specified whole number of such shares in accordance
with the provisions of this Section 7. The Corporation will pay any and all
documentary, stamp or similar issue or transfer tax and any other taxes that
may be payable in respect of any issue or delivery of shares of Common Stock
to the holder on conversion of the Convertible Preferred Stock pursuant
hereto. As promptly as practicable, and in any event within three Business
Days after the surrender of such certificate or certificates and the receipt
of such notice relating thereto and, if applicable, payment of all transfer
taxes (or the demonstration to the satisfaction of the Corporation that such
taxes are inapplicable), the Corporation shall deliver or cause to be
delivered (i) certificates (which shall bear legends, if appropriate)
registered in the name of such holder representing the number of validly
issued, fully paid and nonassessable full shares of Common Stock to which the
holder of shares of Convertible Preferred Stock so converted shall be
entitled, (ii) if less than the full number of shares of Convertible Preferred
Stock evidenced by the surrendered certificate or certificates are being
converted, a new certificate or certificates, of like tenor, for the number of
shares evidenced by such surrendered certificate or certificates less the
number of shares converted and (iii) payment of all amounts to which a holder
is entitled pursuant to Section 7(e) hereof. Such conversion shall be deemed
to have been made at the close of business on the date of receipt of such
notice and of such surrender of the certificate or certificates representing
the shares of Convertible Preferred Stock to be converted so that the rights
of the holder thereof as to the shares being converted shall cease except for
the right to receive shares of Common Stock, and the person entitled to
receive the shares of Common Stock shall be treated for all purposes as having
become the record holder of such shares of Common Stock at such time.
(e) Fractional Shares. In connection with the conversion of any
shares of Convertible Preferred Stock pursuant to this Section 7 or Section 8,
no fractions of shares of Common Stock shall be issued, but in lieu thereof
the Corporation shall pay a cash adjustment in respect of such fractional
interest (after aggregating all such shares being converted) in an amount
equal to such fractional interest multiplied by the Current Market Price per
share of Common Stock on the day on which such shares of Convertible Preferred
Stock are deemed to have been converted.
(f) Dividends; Distributions. In case at any time or from time to
time the Corporation shall pay any dividend or make any other distribution to
the holders of its Common Stock, or shall offer for subscription pro rata to
the holders of its Common Stock any additional shares of stock of any class or
any other right, or there shall be any capital reorganization or
reclassification of the Common Stock of the Corporation or consolidation or
merger of the Corporation with or into another corporation, or any sale or
conveyance to another corporation of the property of the Corporation as an
entirety or substantially as an entirety, or there shall be a voluntary or
involuntary dissolution, liquidation or winding up of the Corporation, then,
in any one or more of said cases the Corporation shall give at least twenty
(20) days' prior written notice to the registered holders of the Convertible
Preferred Stock at the addresses of each as shown on the books of the
Corporation of the date on which (i) the books of the corporation shall close
or a record shall be taken for such stock dividend, distribution or
subscription rights or (ii) such reorganization, reclassification,
consolidation, merger, sale or conveyance, dissolution, liquidation or winding
up shall take place, as the case may be. Such notice shall also specify the
date, if known, as of which the holders of the Common Stock and of the
Convertible Preferred Stock of record shall participate in said dividend,
distribution or subscription rights or shall be entitled to exchange their
Common Stock or Convertible Preferred Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale or conveyance, or participate in such dissolution, liquidation or winding
up, as the case may be.
The Corporation shall at all times reserve and keep available, free
from liens, charges and security interests and not subject to any pre-emptive
rights, for issuance upon conversion of the Convertible Preferred Stock, such
number of its authorized but unissued shares of Common Stock as will from time
to time be sufficient to permit the conversion of all outstanding shares of
Convertible Preferred Stock, and shall take all action required to increase
the authorized number of shares of Common Stock if necessary to permit the
conversion of all outstanding shares of Convertible Preferred Stock.
Section 8. Mandatory Conversion. Whether or not the Corporation has
given notice of a redemption pursuant to Section 4, each share of Convertible
Preferred Stock shall, immediately upon the occurrence of a Mandatory
Conversion Event, automatically convert into fully paid and non-assessable
shares of Common Stock. The number of shares of Common Stock to which a holder
of Convertible Preferred Stock shall be entitled upon such automatic
conversion shall be determined by dividing (x) the Stated Value by (y) the
Conversion Price in effect at the close of business on the Business Day
immediately preceding such date; provided, however, that in no event shall
shares of Convertible Preferred Stock be converted into Common Stock to the
extent, and at any time, the Conversion Limitation is applicable (it being
understood for the purposes of this Section 8 that any securities beneficially
owned by any Berkshire/Greenbriar Investor will be deemed to be beneficially
owned by all Berkshire/Greenbriar Investors and that any Conversion Limitation
applied under this Section 8 shall be applied as amongst the
Berkshire/Greenbriar Investors pro rata, based on ownership of the Convertible
Preferred Stock); provided, further, any shares of Convertible Preferred Stock
which are not convertible at any time pursuant to this Section 8 due to the
Conversion Limitation shall remain outstanding and entitled to all of the
rights and privileges contained in this Certificate of Designations. Any
holder's shares of Convertible Preferred Stock not convertible pursuant to
this Section 8 due to the Conversion Limitation shall, immediately upon such
time as the Conversion Limitation is no longer applicable to such holder,
automatically convert into fully-paid and non-assessable shares of Common
Stock in accordance with the formula provided for in the immediately preceding
sentence of this Section 8. Any conversion pursuant to this Section 8 shall
occur automatically and without any further action by the holders of such
shares and whether or not the certificates representing such shares are
surrendered to the Corporation or its transfer agent. Upon the occurrence of
such automatic conversion of the Convertible Preferred Stock, the Corporation
shall provide written notice to the holders of the Convertible Preferred Stock
and the holders of the Convertible Preferred Stock shall, a reasonable time
thereafter, surrender the certificates representing such shares at the office
of the Corporation or any transfer agent for the Convertible Preferred Stock.
Thereupon, there shall be issued and delivered to such holder promptly at such
office and in its name as shown on such surrendered certificate or
certificates, a certificate or certificates for the number of shares of Common
Stock into which the shares of Convertible Preferred Stock surrendered were
convertible on the date on which such automatic conversion occurred. All
certificates evidencing shares of Convertible Preferred Stock which are
required to be surrendered for conversion in accordance with the provisions
hereof shall, from and after the occurrence of the Mandatory Conversion Event,
be deemed to have been retired and cancelled and the shares of Convertible
Preferred Stock represented thereby converted into Common Stock for all
purposes, notwithstanding the failure of the holder or holders thereof to
surrender such certificates.
Section 9. Reports as to Adjustments.
Whenever the number of shares of Common Stock into which each share
of Convertible Preferred Stock is convertible (or the number of votes to which
each share of Convertible Preferred Stock is entitled) is adjusted as provided
in Section 7, the Corporation shall promptly mail to the holders of record of
the outstanding shares of Convertible Preferred Stock at their respective
addresses as the same shall appear in the Corporation's stock records a notice
stating that the number of shares of Common Stock into which the shares of
Convertible Preferred Stock are convertible has been adjusted and setting
forth the new number of shares of Common Stock (or describing the new stock,
securities, cash or other property) into which each share of Convertible
Preferred Stock is convertible, as a result of such adjustment, a brief
statement of the facts requiring such adjustment and the computation thereof,
and when such adjustment became effective.
Section 10. Tax Matters.
Except as otherwise agreed to in writing by the Corporation, holders
of Convertible Preferred Stock shall provide the Corporation, in the time and
the manner prescribed by applicable law, validly completed and executed
Internal Revenue Service Forms W-9 or W-8BEN or other applicable W-8 (each an
"IRS Form"). If the Corporation determines, in its sole discretion, that such
IRS Form entitles the holder to either (x) a complete exemption from
withholding taxes or (y) a reduction of withholding taxes, with respect to any
payment to such holder pursuant to the Convertible Preferred Stock, the
Corporation shall not withhold from such payment or shall withhold such
reduced amount of withholding taxes from such payment, as the case may be. In
all other cases, the Corporation shall be entitled to withhold from any
payment to such holder of Convertible Preferred Stock with respect to such
Convertible Preferred Stock the applicable amount of any United States
federal, state, local or foreign withholding tax that the Corporation, in its
sole discretion, believes it is required to withhold pursuant to applicable
law. Notwithstanding the above or anything else in this Certificate of
Designations, the Corporation shall, unless otherwise determined after the
date hereof by an applicable taxing authority or court of competent
jurisdiction, take the position for federal, state and local income tax
purposes that any difference between issue price and redemption price of the
Convertible Preferred Stock does not give rise to a distribution taxable to
holders of such stock under Section 305 of the Code or the regulations
thereunder, and shall file all tax returns (including information returns, if
any) consistent with that position.
Section 11. Definitions.
For the purposes of the Certificate of Designations of Convertible
Preferred Stock which embodies this resolution:
"Adjusted Value" shall equal the Stated Value multiplied by the
lesser of (1) 1.00, and (2) the quotient obtained by dividing (a) the number
of days elapsed between the Issuance Date and the date of Liquidation (in the
case of Section 6) or redemption (in the case of Section 4), as applicable by
(b) 1096.
"affiliate" shall have the meaning set forth in Rule 12b-2
promulgated by the Securities and Exchange Commission under the Exchange Act.
"Berkshire/Greenbriar Investors" means any of the parties defined as
an "Investor" in the Stockholders Agreement, dated [ ], 2003, among Berkshire
Fund V, Limited Partnership, Berkshire Fund VI, Limited Partnership, Berkshire
Fund V Investment Corp., Berkshire Fund VI Investment Corp., Berkshire
Investors LLC, Greenbriar Co-Investment Partners, L.P. and Greenbriar Equity
Fund, L.P.
"Business Day" means any day other than a Saturday, Sunday, or a day
on which commercial banks in the City of New York are authorized or obligated
by law or executive order to close.
"Capital Stock" means (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (iv) any other interest or participation that confers on a person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing person.
"Change of Control" shall have the meaning assigned to such term in
the Senior Subordinated Note Indenture in effect as of the date hereof.
"Closing Price" per share of Common Stock on any date shall be the
closing sale price on such day or, in case no such sale takes place on such
day, the average of the reported closing bid and asked prices, in each case on
the New York Stock Exchange, or, if such security is not listed or admitted to
trading on the New York Stock Exchange, on the principal national securities
exchange or quotation system on which such security is quoted or listed or
admitted to trading, or, if not quoted or listed or admitted to trading on any
national securities exchange or quotation system, the average of the closing
bid and asked prices of such security on the over-the-counter market on the
day in question as reported by the National Quotation Bureau Incorporated, or
a similarly generally accepted reporting service, or if not so available, in
such manner as furnished by any New York Stock Exchange member firm selected
from time to time by the Board of Directors for that purpose or a price
determined in good faith by the Board of Directors.
"Common Stock" means the common stock, par value $0.01 per share, of
the Corporation.
"Conversion Price" shall be equal to the Initial Conversion Price,
subject to adjustment as provided in Section 7(b).
"Current Market Price" per share of Common Stock on any date shall be
the average of the Closing Prices of a share of Common Stock for the five
consecutive Trading Days selected by the Corporation commencing not less than
10 Trading Days nor more than 20 Trading Days before the date in question. If
on any such Trading Day the Common Stock is not quoted by any organization
referred to in the definition of Closing Price, the Current Market Price of
the Common Stock on such day shall be determined in good faith by the Board of
Directors.
"Debt Instruments" shall mean (i) Hexcel's Second Amended and
Restated Credit Agreement, dated as of September 15, 1998, as amended from
time to time, or any replacement thereof and (ii) the Senior Subordinated
Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
and the rules and regulations promulgated thereunder.
"Fair Market Value" with respect to any property shall mean the value
assigned in good faith to such property by the Board of Directors.
"GAAP" means United States generally accepted accounting principles.
"Indenture Change of Control" shall have the meaning assigned to the
term "Change of Control" in the Senior Subordinated Note Indenture.
"Initial Conversion Price" means $3.00 (as adjusted for any split,
subdivision, combination, consolidation or reclassification of the Common
Stock).
"Issuance Date" means the original date of issuance of the
Convertible Preferred Stock.
"Junior Stock" means the Common Stock of the Corporation and each
other class of Capital Stock of the Corporation or series of Preferred Stock
of the Corporation currently existing or established hereafter (other than the
Series A Preferred Stock) unless such class of Capital Stock or series of
Preferred Stock is issued and established after the date of this Certificate
of Designations and expressly provides that such class or series will rank on
parity with (together with the Series A Preferred Stock, the "Parity Stock")
or senior to ("Senior Stock") the Convertible Preferred Stock as to dividend
rights and rights on liquidation, winding up and dissolution.
"Junior Stock Distribution" means the declaration or payment or
setting apart for payment of any dividends (other than dividends or
distributions paid in shares of, or options, warrants or rights to subscribe
for or purchase shares of, Junior Stock) or other distribution declared or
made upon Junior Stock, or the redemption, repurchase or other acquisition of
any Junior Stock.
"Liquidation Preference" has the meaning set forth in Section 6
above.
"Mandatory Conversion Event" shall occur if the Closing Price per
share of Common Stock over any sixty (60) consecutive Trading Days exceeds an
amount per share equal to 300% of the Initial Conversion Price; provided that
the 60th consecutive Trading Day is a date that is later than the three year
anniversary of the Issuance Date.
"Mandatory Redemption Obligation" means any redemption obligation of
the Corporation pursuant to Sections 4(b) or 4(c) hereof.
"Participating Redemption Amount" has the meaning set forth in the
definition of Redemption Amount below.
"Person" means an individual, partnership, corporation, limited
liability company or partnership, unincorporated organization, trust or joint
venture, or a governmental agency or political subdivision thereof, or other
entity of any kind.
"Redemption Amount" means, with respect to each share of Convertible
Preferred Stock held by a holder, the greater of (i) the Stated Value of such
share of Convertible Preferred Stock and (ii) the amount that would be payable
to such holder in respect of Common Stock issuable upon conversion of such
share of Convertible Preferred Stock if all outstanding shares of Convertible
Preferred Stock were converted into Common Stock immediately prior to a
redemption in accordance with Section 4 hereof (the amount in this clause (ii)
being referred to as the "Participating Redemption Amount").
"Senior Subordinated Note Indenture" means the Indenture, dated
January 21, 1999, between the Corporation and The Bank of New York, as
trustee, relating to the issuance of the Corporation's 9-3/4% Senior
Subordinated Notes due 2009.
"Series A Certificate of Designations" means the Certificate of
Designations governing the Series A Preferred Stock.
"Series A Liquidation Preference" shall have the meaning assigned to
"Liquidation Preference" in the Series A Certificate of Designations.
"Series A Preferred Stock" means the Corporation's Series A
Convertible Preferred Stock, without par value.
"Stated Value" means, with respect to a share of Convertible
Preferred Stock, $195.618 (as adjusted for any split, subdivision,
combination, consolidation, recapitalization or similar event with respect to
the Convertible Preferred Stock).
"Subsidiary" of any Person means any corporation or other entity of
which a majority of the voting power of the voting equity securities or equity
interest is owned, directly or indirectly, by such Person.
"Surviving Person" means the continuing or surviving Person of a
merger, consolidation or other corporate combination, the Person receiving a
transfer of all or a substantial part of the properties and assets of the
Corporation, or the Person consolidating with or merging into the Corporation
in a merger, consolidation or other corporate combination in which the
Corporation is the continuing or surviving Person, but in connection with
which the Convertible Preferred Stock or Common Stock of the Corporation is
exchanged, converted or reinstated into the securities of any other Person or
cash or any other property; provided, however, if such Surviving Person is a
direct or indirect Subsidiary of a Person, the parent entity shall be deemed
to be a Surviving Person.
"Trading Day" means a day on which the principal national securities
exchange on which the Common Stock is quoted, listed or admitted to trading is
open for the transaction of business or, if the Common Stock is not quoted,
listed or admitted to trading on any national securities exchange (or the
Nasdaq Stock Market), any Business Day.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designations of Convertible Preferred Stock to be duly executed this ____ day
of ___________, 2003.
HEXCEL CORPORATION
By:
----------------------
Name:
Title:
EXHIBIT C
FORM OF
STOCKHOLDERS AGREEMENT
dated as of
[ ], 2003
among
Berkshire Fund V, Limited Partnership,
Berkshire Fund VI, Limited Partnership,
Berkshire Fund V Investment Corp.,
Berkshire Fund VI Investment Corp.,
Berkshire Investors LLC
Greenbriar Co-Investment Partners, L.P.
Greenbriar Equity Fund, L.P.
and
Hexcel Corporation
STOCKHOLDERS AGREEMENT, dated as of [ ], 2003, among Berkshire Fund V,
Limited Partnership, a Massachusetts limited partnership ("Berkshire V"),
Berkshire Fund VI, Limited Partnership, a Massachusetts limited partnership
("Berkshire VI"), Berkshire Fund V Investment Corp., a Massachusetts corporation
("Berkshire V Investment Corp."), Berkshire Fund VI Investment Corp., a
Massachusetts corporation ("Berkshire VI Investment Corp."), Berkshire Investors
LLC, a Massachusetts limited liability company ("Berkshire Investors"),
Greenbriar Co-Investment Partners, L.P., a Delaware limited partnership
("Greenbriar Co-Investment"), Greenbriar Equity Fund, L.P., a Delaware limited
partnership ("Greenbriar Fund"), and Hexcel Corporation, a Delaware corporation
("Hexcel").
WHEREAS, Berkshire Investors, Berkshire V, Berkshire VI, Greenbriar
Co-Investment and Greenbriar Fund and Hexcel are parties to a Stock Purchase
Agreement, dated as of December 18, 2002 (the "Purchase Agreement"), and have
consummated the transactions contemplated therein (the "Transactions"), whereby
the Investors now Beneficially Own approximately [ ]% of the Total Voting Power
of Hexcel (as such terms are defined below); and
WHEREAS, the parties hereto wish to further establish the nature of
their relationship and set forth their agreement concerning the governance of
Hexcel following consummation of the Transactions as well as certain matters
relating to the Investors' ownership of Voting Securities (as such terms are
defined below).
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. As used in this Agreement, the following
terms shall have the following meanings:
"ACQUISITION SHARES" means additional Voting Securities (other than the
Series B Convertible Preferred Stock), the Beneficial Ownership of which may be,
subject to Section 4.01(b) hereof, acquired by purchase or otherwise; provided,
however, that under no circumstances shall the Investors be permitted to own
more than 39.5% of the Total Voting Power of Hexcel.
"ADDITIONAL SHARES" means, as of any date of determination, shares of
Hexcel Common Stock the Beneficial Ownership of which may be acquired by the
Investors pursuant to grants of stock options or other stock-based awards to the
Investor Directors by Hexcel pursuant to any stock option or stock incentive
plan approved by the Board of Directors of Hexcel, including without limitation
the Hexcel Incentive Stock Plan.
An "AFFILIATE" of any Person means any other Person that, directly or
indirectly, through one or more intermediaries, Controls, is Controlled by, or
is under common Control with, such first Person. "CONTROL" has the meaning
specified in Rule 12b-2 under the Exchange Act as in effect on the date of this
Agreement.
Any Person shall be deemed to "BENEFICIALLY OWN", to have "BENEFICIAL
OWNERSHIP" of, or to be "BENEFICIALLY OWNING" any securities (which securities
shall also be deemed "BENEFICIALLY OWNED" by such Person) that such Person is
deemed to "beneficially own" within the meaning of Rules 13d-3 and 13d-5 under
the Exchange Act as in effect on the date of this Agreement; provided that,
except for the rights set forth in Section 3.02 hereof, any Person shall be
deemed to Beneficially Own any securities that such Person has the right to
acquire, whether or not such right is exercisable immediately.
"BOARD" means the board of directors of Hexcel.
"BROAD DISTRIBUTION" with respect to Voting Securities, means a
distribution of Voting Securities that, to the knowledge, after due inquiry, of
the Person on whose behalf such distribution is being made, will not result in
the acquisition by any other Person of Beneficial Ownership of any such Voting
Securities to the extent that, after giving effect to such acquisition, such
acquiring Person (other than any Investor and other than any underwriter acting
in such capacity in an underwritten public offering of Hexcel Common Stock)
would Beneficially Own in excess of 5% of the Total Voting Power of Hexcel.
"BUYOUT TRANSACTION" means a tender offer, merger or any similar
transaction that offers holders of Voting Securities (other than, if applicable,
the Person proposing such transaction) the opportunity to dispose of the Voting
Securities Beneficially Owned by such holders or otherwise contemplates the
acquisition by any Person or Group of Voting Securities that would result in
Beneficial Ownership by such Person or Group of a majority of the Voting
Securities outstanding, or a sale of all or substantially all of Hexcel's
assets.
"CLOSING DATE" means the date of the closing of the Transactions.
"CONVERSION SHARES" means, at any time, those shares of Hexcel Common
Stock issuable upon conversion of the shares of Series A Convertible Preferred
Stock or Series B Convertible Preferred Stock (as equitably adjusted to reflect
any stock split, combination, reorganization, recapitalization, reclassification
or other similar event involving the Hexcel Common Stock).
"CONVERTIBLE PREFERRED STOCK" means, collectively, the Series A
Convertible Preferred Stock and the Series B Convertible Preferred Stock.
"CUSTOMARY ACQUISITION/CONTROL PREMIUM" means the aggregate realizable
value for all Voting Securities (including Voting Securities owned by the
Investors), assuming a sale of Hexcel in its entirety in a transaction or series
of related transactions to a third party or parties on an arm's length basis in
a controlled auction process designed to maximize shareholder value by
attracting all possible bidders, including the Investors and their Affiliates.
"DEBT INSTRUMENTS" shall mean (i) Hexcel's Second Amended and Restated
Credit Agreement, dated as of September 15, 1998, as amended from time to time,
or any replacement thereof and (ii) the Indenture, dated as of January 21, 1999,
relating to Hexcel's 9-3/4% Senior Subordinated Notes Due 2009 (the "SENIOR
INDENTURE").
"DISINTERESTED DIRECTORS" means, with respect to any Buyout
Transaction, those directors of Hexcel which are not interested directors
(within the meaning of Section 144 of the Delaware General Corporation Law) with
respect to such Buyout Transaction, it being understood that no Investor Nominee
shall be deemed to be not interested with respect to any Investor Buyout
Transaction.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"GOLDMAN DIRECTOR" means a director who is nominated to the Board by
either of GS Capital Partners 2000 L.P. or LXH II, L.L.C. pursuant to the
Goldman Governance Agreement.
"GOLDMAN GOVERNANCE AGREEMENT" shall mean the Amended and Restated
Governance Agreement, dated [ ], 2003 among LXH, L.L.C., LXH II, L.L.C., GS
Capital Partners 2000 L.P., GS Capital Partners 2000 Offshore, L.P., GS Capital
Partners 2000 Employee Fund, L.P., GS Capital Partners 2000 GMBH & Co.
Beteiligungs KG, and Stone Street Fund 2000, L.P and Hexcel.
"GOLDMAN INVESTORS" means any of (i) LXH, L.L.C., (ii) LXH II, L.L.C.
(iii) GS Capital Partners 2000 L.P., (iv) GS Capital Partners 2000 Offshore,
L.P., (v) GS Capital Partners 2000 Employee Fund, L.P., (vi) GS Capital Partners
2000 GMBH & Co. Beteiligungs KG, (vii) Stone Street Fund 2000, L.P. or (viii)
The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, Inc., or any direct or indirect Subsidiary of The
▇▇▇▇▇▇▇ Sachs Group, Inc. formed for the purpose of effecting principal
transactions; provided, however, that any such Person specified in clause (viii)
that desires to acquire Voting Securities in accordance with the Goldman
Governance Agreement shall, as a condition to acquiring any such Voting
Securities, execute a joinder agreement in which it shall agree to be bound by
the provisions of the Goldman Governance Agreement to the same extent as the
Goldman Investors and shall thereafter be deemed to be an "Investor" for all
purposes of the Goldman Governance Agreement for so long as it holds Voting
Securities.
"GOVERNMENTAL ENTITY" means any court, administrative agency,
regulatory body, commission or other governmental authority, board, bureau or
instrumentality, domestic or foreign and any subdivision thereof.
"GROUP" has the meaning set forth in Section 13(d) of the Exchange Act
as in effect on the date of this Agreement.
"HEXCEL" has the meaning set forth in the recitals to this Agreement.
"HEXCEL COMMON STOCK" means the common stock of Hexcel, par value $0.01
per share, and any equity securities issued or issuable in exchange for or with
respect to such common stock by way of a stock dividend, stock split or
combination of shares or in connection with a reclassification,
recapitalization, merger, consolidation or other reorganization.
"HEXCEL INCENTIVE STOCK PLAN" means the Hexcel Corporation Incentive
Stock Plan, as amended and restated through [ ], 2003 and any subsequent
amendment thereto or replacement thereof approved by the Board of Directors of
Hexcel.
"INDEMNIFIED INDIVIDUALS" means each of the individuals who at any time
were officers or directors of Hexcel and their respective heirs and personal and
legal representatives.
"INDEPENDENT DIRECTOR" means a director of Hexcel who is not an
Investor Director or a Goldman Director and who (i) is not and has never been an
officer, employee, partner or director of any of the Investors, the Goldman
Investors or their respective Affiliates or associates (as defined in Rule 12b-2
under the Exchange Act), in each case other than Hexcel and (ii) has no
affiliation or compensation, consulting or contractual relationship with any of
the Investors, the Goldman Investors or their respective Affiliates or
associates (in each case other than Hexcel) such that a reasonable person would
regard such director as likely to be unduly influenced by any of such Persons or
any of their Affiliates or associates (in each case other than Hexcel).
"INITIAL SHARES" means (i) the 77,875 shares of Series A Convertible
Preferred Stock purchased by the Investors pursuant to the Purchase Agreement,
(ii) the 77,875 shares of Series B Convertible Preferred Stock purchased by the
Investors pursuant to the Purchase Agreement and (iii) the Conversion Shares (as
equitably adjusted to reflect any stock split, combination, reorganization,
recapitalization, reclassification or other similar event involving the Hexcel
Common Stock or Convertible Preferred Stock, as applicable).
"INVESTOR BUYOUT TRANSACTION" means a Buyout Transaction by the
Investors or their Affiliates or any other Person acting on behalf of the
Investors or their Affiliates, or any Person who is part of a Group with the
Investors, involving the acquisition of all (but not less than all) Voting
Securities held by the Other Holders, provided that all Other Holders are
entitled to receive Requisite Consideration upon consummation of such Buyout
Transaction.
"INVESTOR DIRECTORS" means Investor Nominees who are elected or
appointed to serve as members of the Board in accordance with this Agreement.
"INVESTOR NOMINEES" means such Persons as are so designated by the
Investors, as such designations may change from time to time in accordance with
this Agreement, to serve as members of the Board pursuant to Section 2.03
hereof.
"INVESTORS" means any of (i) Berkshire V, (ii) Berkshire VI, (iii)
Berkshire Investors, (iv) Berkshire V Investment Corp. (for so long as it
Beneficially Owns Voting Securities), (v) Berkshire VI Investment Corp. (for so
long as it Beneficially Owns Voting Securities), (vi) Greenbriar Co-Investment,
(vii) Greenbriar Fund, or (viii) any investment entity controlled by or under
common control with either of Berkshire Partners LLC or Greenbriar Equity Group
LLC; provided, however, that any such Person specified in clause (viii) that
desires to acquire Voting Securities in accordance with this Agreement shall, as
a condition to acquiring any such Voting Securities, execute a joinder agreement
in which it shall agree to be bound by the provisions of this Agreement to the
same extent as the Investors and shall thereafter be deemed to be an "Investor"
for all purposes of this Agreement unless such Person does not hold any Voting
Securities.
"NON-INVESTOR DIRECTOR" means a director of Hexcel who is not an
Investor Director and who (i) is not and has never been an officer, employee,
partner or director of any of the Investors or their Affiliates or associates
(as defined in Rule 12b-2 under the Exchange Act), in each case other than
Hexcel, and (ii) has no affiliation or compensation, consulting or contractual
relationship with any of the Investors or their Affiliates or associates (in
each case other than Hexcel) such that a reasonable person would regard such
director as likely to be unduly influenced by any of such Persons or any of
their Affiliates or associates (in each case other than Hexcel).
"OTHER HOLDERS" means the holders of the Other Shares.
"OTHER SHARES" means Voting Securities not Beneficially Owned by any of
the Investors or the Goldman Investors.
"PERSON" means any individual, Group, corporation, firm, partnership,
joint venture, trust, business association, organization, Governmental Entity or
other entity.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
dated as of the date hereof between Berkshire V, Berkshire VI, Berkshire
Investors, Greenbriar Co-Investment, Greenbriar Fund and Hexcel.
"REQUISITE CONSIDERATION" means consideration that is (i) approved by
(x) a majority of the Independent Directors acting solely in the interests of
the Other Holders, after the receipt of an opinion of an independent nationally
recognized investment banking firm retained by them or (y) a majority in
interest of the Other Holders by means of a Stockholder Vote solicited pursuant
to a proxy statement containing the information required by Schedule 14A under
the Exchange Act (it being understood that the Independent Directors shall,
consistent with their fiduciary duties, be free to include in such proxy
statement, if applicable, the reasons underlying any failure by them to approve
a Buyout Transaction by the requisite vote, including whether a fairness opinion
was sought by the Independent Directors and any opinions or recommendations
expressed in connection therewith) and (ii) in the opinion of an independent
nationally recognized investment banking firm (including such a firm retained by
the Investors), fair to the Other Holders from a financial point of view. In
connection with the retention of any investment banking firm referred to herein,
the Independent Directors shall instruct such investment banking firm, unless
the Independent Directors conclude, after consultation with their outside legal
and financial advisors, that such instructions are not appropriate, to (a) value
Hexcel's businesses taking into account a premium for control and (b) assume for
purposes of such opinion that the Other Holders are entitled to their
proportionate part of a Customary Acquisition/Control Premium.
"SEC" means the Securities and Exchange Commission or any successor
Governmental Entity.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SERIES A CERTIFICATE OF DESIGNATIONS" means the Certificate of
Designations for the Series A Convertible Preferred Stock.
"SERIES B CERTIFICATE OF DESIGNATIONS" means the Certificate of
Designations for the Series B Convertible Preferred Stock.
"SERIES A CONVERTIBLE PREFERRED STOCK" means the Series A Convertible
Preferred Stock, without par value, of Hexcel.
"SERIES B CONVERTIBLE PREFERRED STOCK" means the Series B Convertible
Preferred Stock, without par value, of Hexcel.
"SIGNIFICANT SUBSIDIARY" has the meaning set forth in Rule 1-02 of
Regulation S-X under the Securities Act as in effect on the date of this
Agreement.
"STANDSTILL PERIOD" means the three-year period commencing on the
Closing Date.
"STOCKHOLDER VOTE" means as to any matter to be presented to holders of
Voting Securities, a vote at a duly called and held annual or special meeting of
the holders of Voting Securities entitled to vote on such matter.
"SUBSIDIARY" means, with respect to any Person, as of any date of
determination, any other Person as to which such Person owns, directly or
indirectly, or otherwise controls, more than 50% of the voting shares or other
similar interests.
"THIRD PARTY OFFER" means a bona fide offer to enter into a Buyout
Transaction by a Person other than any of the Investors or any of their
respective Affiliates, any other Person acting on behalf of any of the Investors
or any of their respective Affiliates, or any Person who is part of a Group with
any of the Investors or any of their respective Affiliates, that does not treat
the Investors or their respective Affiliates differently than the Other Holders.
"TOTAL VOTING POWER OF HEXCEL" means the total number of votes that may
be cast in the election of directors of Hexcel if all Voting Securities
outstanding or treated as outstanding pursuant to the final two sentences of
this definition were present and voted at a meeting held for such purpose. The
percentage of the Total Voting Power of Hexcel Beneficially Owned by any Person
is the percentage of the Total Voting Power of Hexcel that is represented by the
total number of votes that may be cast in the election of directors of Hexcel by
Voting Securities Beneficially Owned by such Person. In calculating such
percentage, each share of Convertible Preferred Stock shall be outstanding or
shall be treated as outstanding for all purposes of this Agreement without
regard to the Person holding such share until such time as such share of
Convertible Preferred Stock is redeemed or repurchased by the Company or
converted into Common Stock in accordance with the Series A Certificate of
Designations or Series B Certificate of Designations, as applicable. In
calculating such percentage, the Voting Securities Beneficially Owned by any
Person that are not outstanding but are subject to issuance upon exercise or
exchange of rights of conversion or any options, warrants or other rights
Beneficially Owned by such Person shall be deemed to be outstanding for the
purpose of computing the percentage of the Total Voting Power of Hexcel
represented by Voting Securities Beneficially Owned by such Person, but shall
not be deemed to be outstanding for the purpose of computing the percentage of
the Total Voting Power of Hexcel represented by Voting Securities Beneficially
Owned by any other Person.
"TRANSACTIONS" has the meaning set forth in the recitals to this
Agreement.
"VOTING SECURITIES" means Hexcel Common Stock, the Convertible
Preferred Stock and any other securities of Hexcel or any Subsidiary of Hexcel
entitled to vote generally in the election of directors of Hexcel or such
Subsidiary of Hexcel.
ARTICLE II
CORPORATE GOVERNANCE
SECTION 2.01 BOARD OF DIRECTORS. Subject to Section 2.02(e), the Board
shall consist of ten members, one of whom shall be designated the Chairman of
the Board. The Chairman of the Board shall be designated by a majority of the
members of the Board.
SECTION 2.02 INVESTORS BOARD REPRESENTATION. (a) Subject to Sections
2.02(d) and 2.05(c), for so long as the Investors Beneficially Own 15% or more
of the Total Voting Power of Hexcel, the parties hereto shall exercise all
authority under applicable law to cause any slate of directors presented to
stockholders for election to the Board to consist of such nominees that, if
elected, would result in the Board consisting of two Investor Directors and
eight Non- Investor Directors (including at least five Independent Directors);
provided, however, that in the event the Total Voting Power of Hexcel
Beneficially Owned by the Investors at any time is below 15% of the Total Voting
Power of Hexcel, the Investors shall have no further right to nominate two
Directors pursuant to this Section 2.02(a); provided, further, that if the
Investors, directly or indirectly, during the term of this Agreement shall have
sold, transferred or otherwise disposed of, on a cumulative basis, Beneficial
Ownership of shares of Hexcel Common Stock and/or Convertible Preferred Stock
together representing 662/3% or more of the Total Voting Power of Hexcel
represented by the Initial Shares as of the Closing Date to Persons that are not
Investors, then the parties hereto shall exercise all authority under applicable
law to cause any slate of directors presented to stockholders for election to
the Board to consist of such nominees that, if elected, would result in the
Board consisting of one Investor Director and nine Non-Investor Directors
(including at least six Independent Directors).
(b) Subject to Sections 2.02(d) and 2.05(c), for so long as the
Investors Beneficially Own less than 15% but at least 10% of the Total Voting
Power of Hexcel, the parties hereto shall exercise all authority under
applicable law to cause any slate of directors presented to stockholders for
election to the Board to consist of such nominees that, if elected, would result
in the Board consisting of one Investor Director and nine Non-Investor Directors
(including at least six Independent Directors); provided, however, that in the
event the Total Voting Power of Hexcel Beneficially Owned by the Investors at
any time is below 10% of the Total Voting Power of Hexcel, the Investors shall
have no further right to nominate one Investor Director pursuant to this Section
2.02(b).
(c) Additional Shares shall not be included in any calculation of the
Investors' Beneficial Ownership of the Total Voting Power of Hexcel under this
Agreement.
(d) Notwithstanding anything in this Agreement, Hexcel may increase the
size of the Board through the appointment of one or more additional independent
directors (as such term is used in the New York Stock Exchange ("NYSE") listing
requirements) in order to comply with any applicable law, regulation or NYSE
rule; provided, that, in the event of any such change, Hexcel will use its
commercially reasonable best efforts to give the Investors the right to
nominate, as nearly as possible, that proportion of the directors as permitted
by the terms of Sections 2.02(a) and 2.02(b). Any director appointed to the
Board pursuant to the first clause of this Section 2.02(d) shall be selected by
a majority of the Independent Directors and shall be an Independent Director.
Each of the Investors shall perform any and all actions as reasonably requested
by Hexcel in order for the Board to be changed pursuant to this Section 2.02(d).
SECTION 2.03 DESIGNATION OF SLATE. (a) Any Investor Nominees that are
included in a slate of directors pursuant to Section 2.02 shall be designated as
provided in this Section 2.03, and any Non-Investor Director nominees who are to
be included in any slate of directors pursuant to Section 2.02 shall be
designated by majority vote by the then incumbent Non-Investor Directors
(including the Chairman of the Board if he or she is an Independent Director)
except that, to the extent that any such Non-Investor Director nominees are to
be appointed by other holders of Voting Securities pursuant to any stockholders
agreement existing on the date hereof between Hexcel and such holders of Voting
Securities, such nominees shall be designated by such holders in accordance with
the terms of such agreement. Hexcel's nominating committee, if any (or if there
is no such nominating committee, the Board or any other duly authorized
committee thereof), shall nominate each person so designated. The initial
Investor Nominees shall be ▇▇▇▇▇▇ ▇. Small and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇. Upon
consummation of the Transactions, a sufficient number of the then serving
Independent Directors will resign in order to permit the appointment of the
initial Investor Nominees to fill the vacancies thereby created. The remaining
initial members of the Board shall be ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, [ ]1. The initial Chairman of the Board shall be ▇▇▇▇▇
▇. ▇▇▇▇▇▇.
(b) The parties hereby agree that for so long as (i) the Investors are
permitted to designate two Investor Directors pursuant to this Agreement, one
director shall be designated by Berkshire VI and one director shall be
designated by Greenbriar Fund; and (ii) the Investors are permitted to designate
one Investor Director pursuant to this Agreement, such director shall be
designated by mutual agreement of Berkshire VI and Greenbriar Fund.
(c) If, for any reason, all of the Investor Directors designated
pursuant to Section 2.02 and this Section 2.03 are not elected to the Board by
stockholders, then Hexcel shall exercise all authority under applicable law to
cause any person designated by the Investors to be elected to the Board, and
during any such absence of membership on the Board, Hexcel shall, after
receiving notice from the Investors as to the identity of a representative of
the Investors, (i) permit such representative to attend all Board meetings and
to the extent contemplated by Section 2.04 all committees thereof as an
observer; (ii) provide such representative advance notice of each such meeting,
including such meeting's time and place, at the same time and in the same manner
as such notice is provided to the members of the Board (or such committee
thereof); (iii) provide such representative with copies of all materials,
including notices, minutes and consents, distributed to the members of the Board
(or such committee thereof) at the same time as such materials are distributed
to such Board (or such committee thereof) and shall permit such representative
to have the same access to information concerning the business and operations of
Hexcel as such representative would have had as an Investor Director; and (iv)
on a basis consistent with the members of the Board, permit such representative
to discuss the affairs, finances and accounts of Hexcel with, and to make
proposals and furnish advice with respect thereto, the Board, without voting;
provided, in each case, that such representative agrees in writing to maintain
the confidentiality of all materials and information provided to him pursuant to
this Section 2.03(c) and to return to Hexcel all such materials and information
at such time as such representative ceases to act as a representative pursuant
to this Section 2.03(c).
--------------------------
1 The remaining members of the Board will be selected by Hexcel and shall
consist of four members currently on the Board.
SECTION 2.04 COMMITTEE MEMBERSHIP. So long as the Investors shall be
entitled to designate two Investor Nominees for election to the Board under this
Agreement, the finance, compensation, nominating, audit and any other committee
of the Board shall consist of at least one Investor Director; provided, however,
that if no Investor Director is eligible for membership on an above-listed
committee under then-applicable listing standards of the NYSE or any other
applicable law, rule or regulation, then such committee of the Board shall
include an Investor Director only when so permitted by the listing standards of
the NYSE or any other applicable law, rule or regulation; provided, further,
that Hexcel shall exercise all authority under applicable law, rule and
regulation to permit the inclusion of any Investor Director designated by the
Investors on such committee, including, without limitation, causing an increase
in the number of directors on such committee. To the extent that Investor
Directors are not eligible for membership on the finance committee, compensation
committee, nominating committee, audit committee and/or other committees of the
Board, the Investors shall be entitled to designate a representative to attend
and observe such committee meetings, provided that the observation is not
prohibited by applicable listing standards, laws, rules or regulations. The size
of each committee of the Board shall be increased by one, as appropriate, on the
Closing Date so as to allow for the appointment of an Investor Director to each
such committee.
SECTION 2.05 RESIGNATIONS AND REPLACEMENTS. (a) If at any time a member
of the Board resigns (pursuant to this Section 2.05 or otherwise) or is removed
in accordance with applicable law or Hexcel's by-laws, a new member shall be
designated to replace such member until the next election of directors. If
consistent with Section 2.02 the replacement director is to be an Investor
Director, the party that designated such Investor Director shall designate the
replacement Investor Director. Except as set forth in paragraph (c) below, if
consistent with Section 2.02, the replacement director is to be a Non-Investor
Director, such Non-Investor Director (including the Chairman of the Board if he
or she is a Non-Investor Director) shall be designated in accordance with the
terms of this Agreement.
(b) Subject to paragraph (c) below, if at any time the number of
Investor Nominees entitled to be nominated to the Board in accordance with this
Agreement in an election of directors presented to stockholders would decrease,
within 10 days thereafter the Investors shall cause a sufficient number of
Investor Directors to resign from the Board so that the number of Investor
Directors on the Board after such resignation(s) equals the number of Investor
Nominees that the Investors would have been entitled to designate had an
election of directors taken place at such time. The Investors shall also cause a
sufficient number of Investor Directors to resign from any relevant committees
of the Board so that such committees are comprised in the manner contemplated by
Section 2.04 after giving effect to such resignations. Any vacancies created by
the resignations required by this Section 2.05(b) shall be filled by Independent
Directors.
(c) If at any time the percentage of the Total Voting Power of Hexcel
Beneficially Owned by the Investors decreases as a result of an issuance of
Voting Securities by Hexcel (other than any of the issuances described in the
last sentence of this Section 2.05(c)), the Investors may notify Hexcel that the
Investors intend to acquire a sufficient amount of additional Voting Securities
in accordance with this Agreement necessary to maintain their then current level
of Board representation within 90 days. In such event, until the end of such
period (and thereafter if the Investors in fact restore their percentage of the
Total Voting Power of Hexcel during such period and provided that the Investors
continue to maintain the requisite level of Beneficial Ownership of Voting
Securities in accordance with Section 2.02) the Board shall continue to have the
number of Investor Directors that corresponds to the percentage of the Total
Voting Power of Hexcel Beneficially Owned by the Investors prior to such
issuance of Voting Securities by Hexcel. Notwithstanding any provision herein to
the contrary, the provisions of this Section 2.05(c) shall not apply to any
issuances of Voting Securities (x) upon conversion of any convertible securities
which are either outstanding on the date hereof (including, without limitation,
issuances of securities upon any payment of dividends on, redemption of, or
otherwise payable with respect to the Series A Convertible Preferred Stock or
Series B Convertible Preferred Stock) or approved by the Board or a duly
authorized committee of the Board after the date hereof in accordance with
Section 2.06 hereof, or (y) pursuant to employee or director stock option or
incentive compensation or similar plans outstanding as of the date hereof or,
subsequent to the date hereof, approved by the Board or a duly authorized
committee of the Board.
SECTION 2.06 INVESTOR DIRECTOR APPROVALS. The Board shall not
authorize, approve or ratify any of the following actions without the approval
of a majority of the Investor Directors for so long as and at any time the
Investors Beneficially Own 15% or more of the Total Voting Power of Hexcel, and,
if the Investors percentage Beneficial Ownership of the Total Voting Power of
Hexcel is reduced below 15% by an issuance of Voting Securities by Hexcel, no
such authorization, approval, or ratification shall be given by the Board
without the approval of a majority of the Investor Directors (x) until 10
business days after Hexcel notifies the Investors in writing of such issuance,
and (y) if the Investors shall have notified Hexcel within 10 business days
after their receipt of a written notification of such issuance that the
Investors, pursuant to the option granted to the Investors by Section 3.02 of
this Agreement, intend to acquire a sufficient amount of Voting Securities
within such 90-day period referred to therein, so that the Investors will
Beneficially Own at least 15% of the Total Voting Power of Hexcel by the end of
such 90-day period, subject to Section 2.05(c), during the 90-day period
following an issuance of Voting Securities by Hexcel that causes the Investors
to Beneficially Own less than 15% of the Total Voting Power of Hexcel:
(i) any merger, consolidation, acquisition or other business
combination involving Hexcel or any Subsidiary of Hexcel (other than a
Buyout Transaction) if the value of the consideration to be paid or
received by Hexcel and/or its stockholders in any such individual
transaction or in such transaction when added to the aggregate value of
the consideration paid or received by Hexcel and/or its stockholders in
all other such transactions approved by the Board during the
immediately preceding 12 months exceeds the greater of (x) $75 million
or (y) 11% of Hexcel's total consolidated assets;
(ii) any sale, transfer, assignment, conveyance, lease or
other disposition or any series of related dispositions of any assets,
business or operations of Hexcel or any of its Subsidiaries (other than
a Buyout Transaction) if the value of the assets, business or
operations so disposed during the immediately preceding 12 months
exceeds the greater of (x) $75 million or (y) 11% of Hexcel's total
consolidated assets; or
(iii) any issuance by Hexcel or any Significant Subsidiary of
Hexcel of equity or equity-related securities (other than (1) pursuant
to customary employee or director stock option or incentive
compensation or similar plans approved by the Board or a duly
authorized committee of the Board, (2) pursuant to transactions solely
among Hexcel and its wholly owned Subsidiaries (including any
Subsidiaries which would be wholly owned by Hexcel but for the issuance
of directors' or shareholders' qualifying shares), (3) upon conversion
of convertible securities or upon exercise of warrants or options,
which convertible securities, warrants or options are either
outstanding on the date of this Agreement (including, without
limitation, issuances of securities upon any payment of dividends on,
redemption of, or otherwise payable with respect to the Series A
Convertible Preferred Stock or the Series B Convertible Preferred
Stock) or approved by the Board or a duly authorized committee of the
Board after the date of this Agreement in accordance with this Section
2.06, or (4) in connection with any mergers, consolidations,
acquisitions or other business combinations involving Hexcel or any
Subsidiary of Hexcel which are approved by the Board or a duly
authorized committee of the Board in accordance with this Section 2.06
(if applicable)) for which the consideration received by Hexcel for
such transactions during the immediately preceding 12 months exceeds
$25 million.
SECTION 2.07 BOARD OF DIRECTOR APPROVALS. Subject to Section 3.03, if
applicable, for so long as there are any Investor Directors serving on the
Board, the Board shall not authorize, approve or ratify any action (a "Board
Action"), at a meeting of the Board, by written consent or otherwise, without
the approval of a minimum of six (6) members of the Board, of which at least two
(2) of such six (6) members shall be Independent Directors, or in the event that
the Board shall consist of less than six (6) members due to vacancies on the
Board, the approval of all members of the Board shall be required for any Board
Action.
SECTION 2.08 SOLICITATION AND VOTING OF SHARES. (a) Hexcel shall use
commercially reasonable efforts to solicit from the stockholders of Hexcel
eligible to vote for the election of directors proxies in favor of the Board
nominees selected in accordance with Section 2.02.
(a) In any election of directors or at any meeting of the stockholders
of Hexcel called expressly for the removal of directors, for so long as the
Board includes (and will include after any such removal) Investor Directors
contemplated by Section 2.02, the Investors shall be present for purposes of
establishing a quorum and shall vote all their Voting Securities entitled to
vote (1) in favor of any nominee or director selected in accordance with Section
2.02, (2) in favor of any nominee or director placed by Hexcel on the slate of
directors presented to stockholders for election to the Board in accordance with
the terms of any stockholders agreement, existing on the date hereof, between
Hexcel and a holder or holders of Voting Securities, (3) against the removal of
any director designated in accordance with Section 2.02 hereof and (4) against
the removal of any director placed by Hexcel on the slate of directors presented
to stockholders for election to the Board and elected to the Board by the
stockholders in accordance with the terms of any stockholders agreement,
existing on the date hereof, between Hexcel and a holder or holders of Voting
Securities. Except as provided above and in Section 3.03, the Investors shall be
free to vote in their sole discretion all their Voting Securities entitled to
vote on any other matter submitted to or acted upon by stockholders; provided,
however, that the Investors shall vote against any amendment to Hexcel's
certificate of incorporation with respect to the directors' and officers'
indemnification provisions contained therein which would adversely affect the
rights thereunder of the Indemnified Individuals at any time prior to such vote,
except for such modifications as are required by applicable law.
SECTION 2.09 BY-LAWS; RESTRICTIONS ON COMPANY ACTION; ANTI-TAKEOVER
MEASURES. (a) Hexcel shall cause the amendment of its by-laws to reflect the
provisions of Article II of this Agreement and such other matters as the parties
may reasonably agree. The form of such amended by-laws is attached hereto as
Exhibit A. For so long as the Investors are entitled to designate an Investor
Nominee pursuant to Section 2.02, those by-laws reflecting the provisions of
Article II of this Agreement shall not thereafter be amended during the term of
this Agreement except with the Investors' written consent. Hexcel and each of
the Investors shall each take or cause to be taken all lawful action necessary
to ensure at all times that Hexcel's certificate of incorporation and by-laws
are not at any time inconsistent with the provisions of this Agreement.
(b) Except with the Investors' prior written consent, Hexcel shall not
cause or permit any amendment, restatement, modification or change to, or waiver
of, any provision contained in any agreement (other than customary employee or
director stock option or incentive compensation or similar plans approved by the
Board or a duly authorized committee of the Board) between a stockholder or
stockholders and Hexcel that provides such stockholder or stockholders (1)
governance rights, board representation rights, voting rights, transfer
restrictions or any other similar rights relating to Hexcel and/or Voting
Securities held by such holder or holders or (2) registration rights with
respect to Voting Securities held by such holder or holders.
(c) Except as required by applicable law, rule or regulation, Hexcel
shall not approve or recommend to its stockholders any transaction or approve,
recommend or take any other action (other than those expressly contemplated by
this Agreement and other than those that affect the Investors and each Other
Holder or each director at the same time in the same manner) that would (1)
materially adversely discriminate against the Investors as stockholders of
Hexcel or (2) restrict the right of any Investor Director to vote on any matter
as such director believes appropriate in light of his or her duties as a
director or the manner in which an Investor Director may participate in his or
her capacity as a director in deliberations or discussions at meetings of the
Board or any committee thereof, except with respect to (i) entering into
contractual or other business relationships with any of the Investors or any of
their Affiliates (other than in their capacity as stockholders of Hexcel), (ii)
disputes with any of the Investors or any of their Affiliates (including
disputes under this Agreement), (iii) interpretation or enforcement of this
Agreement or any other agreement with the Investors or any of their Affiliates
or (iv) any other matter involving an actual or potential conflict of interest
due to such director's relationship with the Investors or any of their
Affiliates. In addition, Hexcel shall not enter into any agreement or
instrument, nor amend the Debt Instruments or other material agreements and
instruments to which it is a party in such a manner, that would (i) prohibit any
Investor from acquiring the Acquisition Shares or (ii) cause an Investor's
acquisition of Acquisition Shares to conflict with, or cause Hexcel to breach or
violate, the terms of any such agreement or instrument. Notwithstanding the
foregoing, Hexcel may adopt or implement any takeover defense measures
applicable to the Investors or any of their Affiliates, including the
institution or amendment by Hexcel or any of its Subsidiaries of any
stockholders rights plan or similar plan or device, or any change of control
matters (including provisions in future agreements or collaborations), provided,
that such takeover defense measures shall not restrict the rights of the
Investors to acquire any Voting Securities pursuant to the provisions of this
Agreement.
ARTICLE III
STANDSTILL
SECTION 3.01 STANDSTILL. (a) Except as otherwise expressly provided in
this Agreement (including Section 2.05(c), this Section 3.01, Section 3.02 or
Section 3.03) or as specifically approved by a majority of the Non-Investor
Directors, including at least two Independent Directors (so long as such
approval was not obtained by any of the Investors in violation of this
Agreement), none of the Investors or any of their respective Affiliates shall,
directly or indirectly, (i) by purchase or otherwise, Beneficially Own, acquire,
agree to acquire or offer to acquire any Voting Securities or direct or indirect
rights or options to acquire Voting Securities (including any voting trust
certificates representing such securities) other than the Initial Shares and,
subject to Section 4.01(b), the Additional Shares and the Acquisition Shares,
(ii) enter, propose to enter into, solicit or support any merger or business
combination or similar transaction involving Hexcel or any of its Subsidiaries,
or purchase, acquire, propose to purchase or acquire or solicit or support the
purchase or acquisition of any portion of the business or assets of Hexcel or
any of its Subsidiaries (except for proposals to purchase or acquire a
non-material portion of the assets of Hexcel or any of its Subsidiaries that are
not required to be publicly disclosed), (iii) initiate or propose any
securityholder proposal without the approval of the Board granted in accordance
with this Agreement or make, or in any way participate in, any "solicitation" of
"proxies" (as such terms are used in the proxy rules promulgated by the SEC
under the Exchange Act) to vote, or seek to advise or influence any Person with
respect to the voting of, any Voting Securities or request or take any action to
obtain any list of securityholders for such purposes with respect to any matter
other than those upon which the Investors may vote in their sole respective
discretion pursuant to Section 2.08 (or, as to such matters, solicit any Person
in a manner that would require the filing of a proxy statement under Regulation
14A of the Exchange Act), (iv) form, join or in any way participate in a Group
(other than a Group consisting solely of the Investors) formed for the purpose
of acquiring, holding, voting or disposing of or taking any other action with
respect to Voting Securities that would be required under Section 13(d) of the
Exchange Act to file a Statement on Schedule 13D with respect to such Voting
Securities, (v) deposit any Voting Securities in a voting trust or enter into
any voting agreement or arrangement with respect thereto (other than this
Agreement and such voting trusts or agreements which are solely between
Investors or made between the Investors and the Company pursuant to this
Agreement), (vi) seek representation on the Board, the removal of any directors
from the Board or a change in the size or composition of the Board (in each
case, other than as provided in this Agreement), (vii) make any request to amend
or waive any provision of this Section 3.01, which request would require public
disclosure under applicable law, rule or regulation, (viii) disclose any intent,
purpose, plan, arrangement or proposal inconsistent with the foregoing
(including any such intent, purpose, plan, arrangement or proposal that is
conditioned on or would require the waiver, amendment, nullification or
invalidation of any of the foregoing) or take any action that would require
public disclosure of any such intent, purpose, plan, arrangement or proposal,
(ix) take any action challenging the validity or enforceability of the foregoing
or (x) assist, advise, encourage or negotiate with any Person with respect to,
or seek to do, any of the foregoing.
(b) Nothing in this Section 3.01 shall (i) prohibit or restrict any of
the Investors from responding to any inquiries from any shareholders of Hexcel
as to the Investors' intention with respect to the voting of any Voting
Securities Beneficially Owned by such Investors so long as such response is
consistent with the terms of this Agreement; (ii) restrict the right of each
Investor Director on the Board or any committee thereof to vote on any matter as
such individual believes appropriate in light of his or her duties as a director
or committee member or the manner in which an Investor Director may participate
in his or her capacity as a director in deliberations or discussions at meetings
of the Board or as a member of any committee thereof; (iii) subject to Section
4.01(b), prohibit the Investors from Beneficially Owning Voting Securities
issued as dividends or distributions in respect of, or issued upon conversion,
exchange or exercise of, securities which the Investors are permitted to
Beneficially Own under this Agreement; (iv) prohibit any officer, director,
employee or agent of the Investors from purchasing or otherwise acquiring Voting
Securities so long as he or she is not a member of a Group that includes any of
the Investors or is not otherwise acting on behalf of any of the Investors; or
(v) prohibit the Investors from disclosing in accordance with their respective
obligations (if any) under the federal securities laws or other applicable law
their desire (if any) that Hexcel become the subject of a Buyout Transaction.
(c) Nothing in this Section 3.01 shall prohibit or restrict the
Investors from (i) after the Standstill Period, proposing, participating in,
supporting or causing the consummation of an Investor Buyout Transaction,
subject to Section 3.03 or (ii) participating in a Third Party Offer in
accordance with Section 3.03.
(d) Notwithstanding anything to the contrary set forth in this Section
3.01, if, at any time following the consummation of a bankruptcy proceeding
involving Hexcel, any Person (other than Hexcel) is permitted by law or the
bankruptcy court in which the proceeding is pending to propose a plan of
reorganization for Hexcel, the Investors shall be permitted to propose a plan of
reorganization for Hexcel; provided, that no plan of reorganization shall be
proposed by the Investors prior to the expiration or termination of the
exclusivity period for Hexcel's filing of a plan of reorganization, as such
exclusivity period may be extended from time to time (it being understood and
agreed that the Investors shall not object to any extension of Hexcel's
exclusivity period and shall not initiate or otherwise support any proceeding to
terminate or shorten the length of Hexcel's exclusivity period).
(e) Notwithstanding the foregoing and subject to Section 4.01(b), the
Investors may, during the term of this Agreement, by purchase or otherwise,
acquire, agree to acquire or offer to acquire the Acquisition Shares.
SECTION 3.02 INVESTORS RIGHT TO MAINTAIN POSITION. In addition to the
rights set forth in Sections 2.05(c) and 2.06 hereof, Hexcel hereby grants to
the Investors the following irrevocable option:
If, at any time after the Closing Date for so long as the Investors
shall be entitled to designate one or more Investor Nominees for election to the
Board and Hexcel shall issue for cash any additional Voting Securities, then
Hexcel shall notify the Investors of such issuance and the price and terms
thereof, and the Investors shall have the option, for a period of 45 days after
receipt of such notice, to purchase from Hexcel an Amount (as defined below) of
such Voting Securities for the same consideration per security and on the same
terms as were applicable to such issuance by Hexcel. The foregoing option shall
not apply to any issuances of Voting Securities (x) upon conversion of any
convertible securities which are either outstanding on the date hereof
(including, without limitation, issuances of securities upon any payment of
dividends on, redemption of, or otherwise payable with respect to the Series A
Convertible Preferred Stock or the Series B Convertible Preferred Stock) or
approved by the Board or a duly authorized committee of the Board after the date
hereof in accordance with Section 2.06 hereof, or (y) pursuant to employee or
director stock option or incentive compensation or similar plans outstanding as
of the date hereof or, subsequent to the date hereof, approved by the Board or a
duly authorized committee of the Board. An "Amount" shall mean such number of
securities that would allow the Investors to Beneficially Own the same
percentage of the Total Voting Power of Hexcel as the Investors Beneficially
Owned immediately prior to such issuance (other than Additional Shares).
SECTION 3.03 THIRD PARTY OFFERS; INVESTOR BUYOUT TRANSACTIONS.
(a) In the event that Hexcel becomes the subject of a Third Party Offer
that is made prior to the date that is eighteen months from the Closing Date and
such Third Party Offer is approved by (x) a majority of the Board and (y) a
majority of Disinterested Directors, including the approval of at least two
Independent Directors, the Investors may act at their sole discretion with
respect to such Third Party Offer.
(b) In the event that Hexcel becomes the subject of a Third Party Offer
that is made prior to the date that is eighteen months from the Closing Date and
such Third Party Offer is (i) not approved by a majority of the Board or (ii)
approved by a majority of the Board but not by a majority of the Disinterested
Directors, including the approval of at least two Independent Directors, none of
the Investors nor any of their respective Affiliates (other than with respect to
Additional Shares) may support such Third Party Offer, vote in favor of such
Third Party Offer or tender or sell their Voting Securities to the Person making
such Third Party Offer.
(c) In the event that Hexcel becomes the subject of a Third Party Offer
or an Investor Buyout Transaction that is made after the date that is eighteen
months from the Closing Date and such Third Party Offer or Investor Buyout
Transaction is (i) not approved by a majority of the Board or (ii) approved by a
majority of the Board but not by a majority of the Disinterested Directors,
including the approval of at least two Independent Directors, the Investors and
each of their respective Affiliates (other than with respect to Additional
Shares) must vote all of their Voting Securities against such Third Party Offer
or Investor Buyout Transaction in proportion to the votes cast against such
Third Party Offer or Investor Buyout Transaction with respect to Other Shares
and may not tender or sell their Voting Securities to the Person making such
Third Party Offer or Investor Buyout Transaction in a proportion greater than
the tenders or sales made by the Other Holders to the Person making such Third
Party Offer or Investor Buyout Transaction; it being understood that the
Investors may enter into agreements to tender or sell Voting Securities to any
such Person conditioned upon final determination of the number of Voting
Securities permitted to be so tendered or sold under this Section 3.03 and
Section 3.01.
ARTICLE IV
TRANSFER RESTRICTIONS
SECTION 4.01 RESTRICTIONS. (a) Other than sales, transfers, or other
dispositions (v) pursuant to the Series A Certificate of Designations, (w)
pursuant to the Series B Certificate of Designations, (x) from one Investor to
another Investor (provided that such Investor is a signatory to this Agreement
or has executed, at the time of such sale, transfer or other disposition, a
joinder in which it shall agree to be bound by the provisions of this Agreement
to the same extent as the Investors signatory hereto (a "Permitted Transferee"),
(y) of the Additional Shares by the Persons holding such Additional Shares or
(z) of Voting Securities registered in accordance with Section 2.2(a) of the
Registration Rights Agreement (only if such registration includes a registration
of Voting Securities Beneficially Owned by the Goldman Investors), none of the
Investors or their respective Affiliates, directly or indirectly, may sell,
transfer or otherwise dispose of Beneficial Ownership of Voting Securities
(including any Acquisition Shares) for a period of eighteen months after the
Closing Date. During the period commencing eighteen months from the Closing
Date, the Investors, directly or indirectly, may only sell, transfer or
otherwise dispose of Beneficial Ownership of Voting Securities (i) to another
Investor (provided that such Investor is a signatory to this Agreement or has
executed, at the time of such sale, transfer or other disposition, a joinder in
which it shall agree to be bound by the provisions of this Agreement to the same
extent as the Investors signatory hereto), (ii) in accordance with Rule 144
under the Securities Act (including the volume and manner-of-sale limitations of
Rule 144 regardless of whether such limitations are applicable) and otherwise
subject to compliance with the Securities Act, (iii) in a registered public
offering, (iv) in a transaction exempt from the registration requirements of the
Securities Act in a manner calculated to achieve a Broad Distribution, (v) in a
Third Party Offer if and to the extent permitted under Section 3.03 or (vi)
which are Additional Shares.
(b) Notwithstanding anything to the contrary in this Agreement, none of
the Investors or their Affiliates may, directly or indirectly, acquire, sell,
transfer or otherwise dispose of Beneficial Ownership of Voting Securities if
such acquisition, sale, transfer or other disposition would result in a default
or acceleration of amounts outstanding under the Debt Instruments, unless prior
to the consummation of such acquisition, sale, transfer or other disposition,
any required consents under the Debt Instruments to effect such acquisition,
sale, transfer or disposition shall have been obtained.
SECTION 4.02 LEGENDS. (a) Except as set forth in paragraph (b) below,
during the term of this Agreement all certificates representing Voting
Securities Beneficially Owned by the Investors shall bear an appropriate
restrictive legend indicating that such Voting Securities are subject to
restrictions pursuant to this Agreement and that such Voting Securities were not
issued pursuant to a public offering registered pursuant to the Securities Act.
(b) Upon any transfer or proposed transfer of Beneficial Ownership by
the Investors of any Voting Securities to any Person other than the Investors
that is permitted pursuant to this Agreement, Hexcel shall, upon receipt of
timely notice and such certificates, opinions and other documentation as shall
be reasonably requested by Hexcel, cause certificates representing such
transferred Voting Securities to be issued not later than the time needed to
effect such transfer (x) without any restrictive legend if upon consummation of
such transfer such Voting Securities are no longer "restricted securities" as
defined in Rule 144 under the Securities Act or (y) without any reference to
this Agreement.
SECTION 4.03 EFFECT. Any purported transfer of Voting Securities that
is inconsistent with the provisions of this Article IV shall be null and void
and of no force or effect.
SECTION 4.04 CONTROL OF THE INVESTORS. (a) Each of the Investors
represents and warrants to Hexcel, as of the date hereof, that such Investor is
controlled by, or under common control with, Berkshire Partners LLC or
Greenbriar Equity Group LLC, as the case may be.
(b) Each of the Investors separately and not jointly covenants that for
so long as any Investor Beneficially Owns Voting Securities pursuant to this
Agreement, such Investor shall remain controlled by or under common control with
Berkshire Partners LLC or Greenbriar Equity Group LLC, as the case may be.
ARTICLE V
TERMINATION
SECTION 5.01 TERM. (a) This Agreement shall automatically terminate
upon the earlier of:
(i) the tenth anniversary of the Closing Date; or
(ii) the occurrence of any event in accordance with this
Agreement which causes the percentage of the Total Voting Power of
Hexcel Beneficially Owned by the Investors to be either (x) less than
10% or (y) 90% or more.
(b) If Hexcel is in breach of or violates any material obligation under
this Agreement and fails to cure such breach or violation within 60 days after
delivery of written notice from the Investors specifying such breach or
violation and requesting its cure, the Investors may terminate their respective
obligations under this Agreement by written notice to Hexcel.
(c) If any of the Investors is in breach of or violates any material
obligation under this Agreement and such Investor fail to cure such breach or
violation within 60 days after delivery of written notice from Hexcel specifying
such breach or violation and requesting its cure, Hexcel may terminate its
obligations under this Agreement by written notice to the Investors.
ARTICLE VI
MISCELLANEOUS
SECTION 6.01 NOTICES. All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or sent by telecopy,
nationally recognized overnight courier or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to such party at the
address set forth below or such other address as may hereafter be designated in
writing by such party to the other parties:
(a) if to Hexcel, to:
Hexcel Corporation
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(T) (▇▇▇) ▇▇▇-▇▇▇▇
(F) (203)
358-3972
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(T) (▇▇▇) ▇▇▇-▇▇▇▇
(F) (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Coco, Esq. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
(b) if to the Investors, to:
Berkshire Partners LLC
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
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(T) (▇▇▇) ▇▇▇-▇▇▇▇
(F) (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. Small
and:
Greenbriar Equity Group LLC
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇-▇▇▇
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(T) (▇▇▇) ▇▇▇-▇▇▇▇
(F) (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with a copy to:
Ropes & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(T) (▇▇▇) ▇▇▇-▇▇▇▇
(F) (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. and ▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇, Esq.
SECTION 6.02 INTERPRETATION. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "included", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation".
SECTION 6.03 SEVERABILITY. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or entity
or any circumstance, is found to be invalid or unenforceable in any
jurisdiction, (a) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid or unenforceable provision and (b) the
remainder of this Agreement and the application of such provision to other
Persons or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any
other jurisdiction.
SECTION 6.04 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which
shall, taken together, be considered one and the same agreement, it being
understood that both parties need not sign the same counterpart.
SECTION 6.05 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This
Agreement, together with the Purchase Agreement, the Registration Rights
Agreement, the Series A Certificate of Designations and the Series B Certificate
of Designations (a) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof and (b) is not intended to confer upon any
Person, other than the parties hereto and, solely with respect to the proviso in
Section 2.08(b), the Indemnified Individuals, any rights or remedies hereunder.
SECTION 6.06 FURTHER ASSURANCES. Each party shall execute, deliver,
acknowledge and file such other documents and take such further actions as may
be reasonably requested from time to time by the other party hereto to give
effect to and carry out the transactions contemplated herein.
SECTION 6.07 GOVERNING LAW; EQUITABLE REMEDIES. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE
(WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF). The parties
hereto agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with its specific
terms or was otherwise breached. It is accordingly agreed that the parties
hereto shall be entitled to an injunction or injunctions and other equitable
remedies to prevent breaches of this Agreement and to enforce specifically the
terms and provisions hereof in any of the Selected Courts (as defined below),
this being in addition to any other remedy to which they are entitled at law or
in equity. Any requirements for the securing or posting of any bond with respect
to such remedy are hereby waived by each of the parties hereto. Each party
further agrees that, in the event of any action for an injunction or other
equitable remedy in respect of such breach or enforcement of specific
performance, it will not assert the defense that a remedy at law would be
adequate.
SECTION 6.08 CONSENT TO JURISDICTION. With respect to any suit, action
or proceeding ("Proceeding") arising out of or relating to this Agreement or any
transaction contemplated hereby each of the parties hereto hereby irrevocably
(i) submits to the exclusive jurisdiction of the United States District Court
for the Southern District of New York or the Court of Chancery located in the
State of Delaware, County of Newcastle (the "Selected Courts") and waives any
objection to venue being laid in the Selected Courts whether based on the
grounds of forum non conveniens or otherwise and hereby agrees not to commence
any such Proceeding other than before one of the Selected Courts; provided,
however, that a party may commence any Proceeding in a court other than a
Selected Court solely for the purpose of enforcing an order or judgment issued
by one of the Selected Courts; (ii) consents to service of process in any
Proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, or by recognized international express carrier or delivery
service, to the Company or the Investors at their respective addresses referred
to in Section 6.01 hereof; provided, however, that nothing herein shall affect
the right of any party hereto to serve process in any other manner permitted by
law; and (iii) TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE
WAIVED, WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF,
DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING IN
WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
CONTEMPLATED TRANSACTIONS, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AND AGREE THAT ANY OF THEM MAY
FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING,
VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE ITS
RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO
THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS WILL INSTEAD BE TRIED IN
A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
SECTION 6.09 AMENDMENTS; WAIVERS. (a) No provision of this Agreement
may be amended or waived unless such amendment or waiver is in writing and
signed, in the case of an amendment, by the parties hereto, or in the case of a
waiver, by the party against whom the waiver is to be effective; provided that
no such amendment or waiver by Hexcel shall be effective without the approval of
a majority of the Independent Directors. Notwithstanding any provision herein to
the contrary, if a majority of the Independent Directors determine in good faith
to do so, such Independent Directors may seek to enforce, in the name and on
behalf of Hexcel, the terms of this Agreement against the Investors.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 6.10 ASSIGNMENT. Neither this Agreement nor any of the rights
or obligations hereunder shall be assigned by any of the parties hereto without
the prior written consent of the other parties. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
SECTION 6.10 VENTURE CAPITAL OPERATING COMPANY MATTERS. Each of
Berkshire Fund VI and Greenbriar Fund shall have rights to substantial
participation in the management of the Company solely by acting through their
respective rights to each appoint a member to the Board of Directors pursuant to
Section 2.03(b) hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered, all as of the date first set forth above.
BERKSHIRE FUND V,
LIMITED PARTNERSHIP
By: Fifth Berkshire Associates LLC
its general partner
By: ______________________________
Name:
Title:
BERKSHIRE FUND VI,
LIMITED PARTNERSHIP
By: Sixth Berkshire Associates LLC
its general partner
By: ______________________________
Name:
Title:
BERKSHIRE FUND V INVESTMENT CORP.
By:________________________________
Name:
Title:
BERKSHIRE FUND VI INVESTMENT CORP.
By:________________________________
Name:
Title:
BERKSHIRE INVESTORS LLC
By:________________________________
Name:
Title:
GREENBRIAR CO-INVESTMENT
PARTNERS, L.P.
By: Greenbriar Holdings LLC
its general partner
By: ______________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Member
GREENBRIAR EQUITY FUND, L.P.
By: Greenbriar Equity Capital, L.P.,
its general partner
By: Greenbriar Holdings LLC
its general partner
By: ______________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Member
HEXCEL CORPORATION
By:_________________________
Name:
Title:
EXHIBIT D
REGISTRATION RIGHTS AGREEMENT
among
HEXCEL CORPORATION,
BERKSHIRE FUND V, LIMITED PARTNERSHIP
BERKSHIRE FUND VI, LIMITED PARTNERSHIP
BERKSHIRE INVESTORS LLC,
GREENBRIAR CO-INVESTMENT PARTNERS, L.P.,
and
GREENBRIAR EQUITY FUND, L.P.
Dated as of [ ], 2003
This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is made as of
[ ], 2003, among Hexcel Corporation, a Delaware corporation (the "Company"),
Berkshire Fund V, Limited Partnership, a Massachusetts limited partnership
("Berkshire V"), Berkshire Fund VI, Limited Partnership, a Massachusetts
limited partnership ("Berkshire VI"), Berkshire Investors LLC, a Massachusetts
limited liability company ("Berkshire LLC"), Greenbriar Co-Investment
Partners, L.P., a Delaware limited partnership ("Greenbriar Co-Investment"),
and Greenbriar Equity Fund, L.P., a Delaware limited partnership ("Greenbriar
Equity" and, together with Greenbriar Co-Investment, Berkshire V, Berkshire VI
and Berkshire LLC, the "Investors").
WHEREAS, the Investors have entered into a Stock Purchase Agreement
(the "Stock Purchase Agreement"), dated as of December 18, 2002, with the
Company, pursuant to which, upon the terms and subject to the conditions
contained therein, each has agreed to purchase shares of Series A Convertible
Preferred Stock and Series B Convertible Preferred Stock (as such terms are
defined below) from the Company;
WHEREAS, simultaneously herewith, the Investors and the Company are
executing and delivering a Stockholders Agreement (the "Stockholders
Agreement") providing, among other things, for certain rights and obligations
with respect to the ownership of the shares of Series A Convertible Preferred
Stock and Series B Convertible Preferred Stock acquired by the Investors
pursuant to the Stock Purchase Agreement and shares of the Common Stock
issuable upon conversion of such shares of Series A Convertible Preferred
Stock and Series B Convertible Preferred Stock; and
WHEREAS, (i) in connection with the execution and delivery by the
Investors of the Stock Purchase Agreement and the consummation of the
transactions contemplated thereby and (ii) to induce the Investors to execute
and deliver the Stockholders Agreement and to consummate the transactions
contemplated thereby, the Company has agreed to provide the Investors with the
registration rights set forth in this Agreement.
ACCORDINGLY, the parties hereto agree as follows:
1. Certain Definitions.
As used in this Agreement, capitalized terms not otherwise defined
herein shall have the meanings ascribed to them below:
"Affiliate" means (i) with respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (ii) with respect to any
individual, shall also mean the spouse or child of such individual; provided,
that neither the Company nor any Person controlled by the Company shall be
deemed to be an Affiliate of any Holder.
"Certificate of Incorporation" means the Certificate of Incorporation
of the Company, as amended and in effect on the date hereof.
"Common Stock" means the common stock, par value $.01 per share, of
the Company and any equity securities issued or issuable in exchange for or
with respect to the Common Stock by way of a stock dividend, stock split or
combination of shares or in connection with a reclassification,
recapitalization, merger, consolidation or other reorganization.
"Common Stock Equivalents" means all options, warrants and other
securities convertible into, or exchangeable or exercisable for, (at any time
or upon the occurrence of any event or contingency and without regard to any
vesting or other conditions to which such securities may be subject), Common
Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expenses" means any and all fees and expenses incurred in connection
with the Company's performance of or compliance with Article 2, including,
without limitation: (i) SEC, stock exchange or NASD registration and filing
fees and all listing fees and fees with respect to the inclusion of securities
on the New York Stock Exchange or on any securities market on which the Common
Stock is listed or quoted, (ii) fees and expenses of compliance with state
securities or "blue sky" laws and in connection with the preparation of a
"blue sky" survey, including without limitation, reasonable fees and expenses
of blue sky counsel, (iii) printing and copying expenses, (iv) messenger and
delivery expenses, (v) expenses incurred in connection with any road show,
(vi) fees and disbursements of counsel for the Company, (vii) with respect to
each registration, the fees and disbursements (which shall not exceed $75,000
per registration) of one counsel for the selling Holder(s) (selected by the
Majority Participating Holders, in the case of a registration pursuant to
Section 2.1, and selected by the underwriter, in the case of a registration
pursuant to Section 2.2), (viii) fees and disbursements of all independent
public accountants (including the expenses of any audit and/or "cold comfort"
letter) and fees and expenses of other persons, including special experts,
retained by the Company, (ix) fees and expenses payable to a Qualified
Independent Underwriter (as such term is defined in Schedule E to the By-Laws
of the NASD) and (x) any other fees and disbursements of underwriters, if any,
customarily paid by issuers of securities.
"Goldman Holders" means any of LXH L.L.C., a Delaware limited
liability company ("LXH") , LXH II, L.L.C., a Delaware limited liability
company ("LXH II" and, together with LXH, the "LXH Investors"), GS Capital
Partners 2000, L.P., a Delaware limited partnership, GS Capital Partners 2000
Offshore, L.P., a Cayman Islands exempted limited partnership, GS Capital
Partners 2000 Employee Fund, L.P., a Delaware limited partnership, GS Capital
Partners 2000 GmbH & Co. Beteiligungs KG, a German limited partnership, and
Stone Street Fund 2000, L.P., a Delaware limited partnership (collectively,
the "Goldman Investors") and any Person who shall hereafter acquire and hold
Goldman Registrable Securities in accordance with the terms of the Amended and
Restated Governance Agreement (the "Governance Agreement"), dated [ ], 2003
among the Company and the Goldman Investors.
"Goldman Registrable Securities" means (a) any shares of Common Stock
held by the Goldman Holders on the date hereof, (b) any shares of Common Stock
issued or issuable, directly or indirectly, upon conversion or redemption of
shares of Series A Convertible Preferred Stock held by the Goldman Holders
(including, without limitation, in satisfaction of a Conversion Payment (as
such term is defined in the Series A Convertible Preferred Stock Certificate
of Designations (as defined below)) or any payment of shares upon a redemption
under such Certificate), (c) any shares of Common Stock issued or issuable,
directly or indirectly, upon conversion or redemption of shares of Series B
Convertible Preferred Stock held by the Goldman Holders (including, without
limitation, in satisfaction of any payment of shares upon a redemption under
the Series B Convertible Preferred Stock Certificate of Designations (as
defined below)), (d) any shares of Common Stock issued or issuable, directly
or indirectly in exchange for or with respect to the Common Stock referenced
in clause (a) above by way of stock dividend, stock split or combination of
shares or in connection with a reclassification, recapitalization, merger,
consolidation or other reorganization, (e) any shares of Series A Convertible
Preferred Stock held by the Goldman Holders; provided, however that the shares
of Series A Convertible Preferred Stock shall not be deemed to be Goldman
Registrable Securities until the date that is three years from the date hereof
and (f) any shares of Common Stock acquired by the Goldman Holders from third
parties after the date hereof for so long as such Goldman Holder is an
Affiliate of the Company. As to any particular Goldman Registrable Securities,
such securities shall cease to be Goldman Registrable Securities when (A) a
registration statement with respect to the sale of such securities shall have
been declared effective under the Securities Act and such securities shall
have been disposed of in accordance with such registration statement, or (B)
such securities shall have been sold (other than in a privately negotiated
sale) pursuant to Rule 144 (or any successor provision) under the Securities
Act and in compliance with the requirements of paragraphs (f) and (g) of Rule
144 (notwithstanding the provisions of paragraph (k) of such Rule).
"Goldman Registration Rights Agreement" means the Amended and
Restated Registration Rights Agreement, dated as of the date hereof, between
the Company and the Goldman Investors.
"Holder" or "Holders" means any Person who is a signatory to this
Agreement and any Person who shall hereafter acquire and hold Registrable
Securities in accordance with the terms of the Stockholders Agreement.
"Majority Participating Holders" means Participating Holders holding
more than 50% of the Registrable Securities proposed to be included in any
offering of Registrable Securities by such Participating Holders pursuant to
Section 2.1 or Section 2.2 hereto.
"Person" means any individual, corporation, limited liability
company, limited or general partnership, joint venture, association,
joint-stock company, trust, unincorporated organization or government or any
agency or political subdivisions thereof.
"Registrable Securities" means (a) any shares of Common Stock held by
the Holders, provided that, to the extent any Holder holds solely shares of
Common Stock acquired from third parties, such shares shall be Registrable
Securities only for so long as such Holder is an Affiliate of the Company, (b)
any shares of Common Stock issued or issuable, directly or indirectly, upon
conversion or redemption of shares of Series A Convertible Preferred Stock
held by the Holders (including, without limitation, in satisfaction of a
Conversion Payment (as such term is defined in the Series A Convertible
Preferred Stock Certificate of Designations) or any payment of shares upon a
redemption under such Certificate), (c) any shares of Common Stock issued or
issuable, directly or indirectly, upon conversion or redemption of shares of
Series B Convertible Preferred Stock held by the Holders (including, without
limitation, in satisfaction of any payment of shares upon a redemption under
the Series B Convertible Preferred Stock Certificate of Designations), (d) any
shares of Common Stock issued or issuable, directly or indirectly in exchange
for or with respect to the Common Stock referenced in clause (a) above by way
of stock dividend, stock split or combination of shares or in connection with
a reclassification, recapitalization, merger, consolidation or other
reorganization, and (e) any shares of Series A Convertible Preferred Stock
held by the Holders; provided, however that the shares of Series A Convertible
Preferred Stock shall not be deemed to be Registrable Securities until the
date that is three years from the date hereof. As to any particular
Registrable Securities, such securities shall cease to be Registrable
Securities when (A) a registration statement with respect to the sale of such
securities shall have been declared effective under the Securities Act and
such securities shall have been disposed of in accordance with such
registration statement, or (B) such securities shall have been sold (other
than in a privately negotiated sale) pursuant to Rule 144 (or any successor
provision) under the Securities Act and in compliance with the requirements of
paragraphs (f) and (g) of Rule 144 (notwithstanding the provisions of
paragraph (k) of such Rule).
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Convertible Preferred Stock" means the Series A Convertible
Preferred Stock of the Company and any equity securities issued or issuable in
exchange for or with respect to the Series A Convertible Preferred Stock by
way of a stock dividend, stock split or combination of shares or in connection
with a reclassification, recapitalization, merger, consolidation or other
reorganization.
"Series A Convertible Preferred Stock Certificate of Designations"
means the Certificate of Designations of the Series A Convertible Preferred
Stock, dated [ ], 2003.
"Series B Convertible Preferred Stock" means the Series B Convertible
Preferred Stock of the Company and any equity securities issued or issuable in
exchange for or with respect to the Series B Convertible Preferred Stock by
way of a stock dividend, stock split or combination of shares or in connection
with a reclassification, recapitalization, merger, consolidation or other
reorganization.
"Series B Convertible Preferred Stock Certificate of Designations"
means the Certificate of Designations of the Series B Convertible Preferred
Stock, dated [ ], 2003.
"Trading Day" means a day on which the principal national securities
exchange on which the Common Stock is quoted, listed or admitted to trading is
open for the transaction of business or, if the Common Stock is not quoted,
listed or admitted to trading on any national securities exchange (or the
Nasdaq Stock Market), any day other than a Saturday, Sunday, or a day on which
commercial banks in the City of New York are authorized or obligated by law or
executive order to close.
"Total Voting Power" means the total number of votes that may be cast
in the election of directors of the Company if all Voting Securities
outstanding or treated as outstanding pursuant to the final two sentences of
this definition were present and voted at a meeting held for such purpose. The
percentage of the Total Voting Power held by any Person is the percentage of
the Total Voting Power that is represented by the total number of votes that
may be cast in the election of directors of the Company by Voting Securities
held by such Person. In calculating such percentage, each share of Series A
Convertible Preferred Stock and each share of Series B Convertible Preferred
Stock shall be outstanding or shall be treated as outstanding for all purposes
of this Agreement without regard to the Person holding such share until such
time as such share of Series A Convertible Preferred Stock or Series B
Convertible Preferred Stock is redeemed or repurchased by the Company or
converted into Common Stock in accordance with the Series A Convertible
Preferred Stock Certificate of Designations or the Series B Convertible
Preferred Stock Certificate of Designations, as applicable. In calculating
such percentage, the Voting Securities held by any Person that are not
outstanding but are subject to issuance upon exercise or exchange of rights of
conversion or any options, warrants or other rights held by such Person shall
be deemed to be outstanding for the purpose of computing the percentage of the
Total Voting Power represented by Voting Securities held by such Person, but
shall not be deemed to be outstanding for the purpose of computing the
percentage of the Total Voting Power represented by Voting Securities
Beneficially Owned by any other Person.
"Voting Securities" means Common Stock, the Series A Convertible
Preferred Stock, the Series B Convertible Preferred Stock and any other
securities of the Company or any Subsidiary (as such term is defined in the
Stockholders Agreement) entitled to vote generally in the election of
directors of the Company or any Subsidiary.
2. Registration Rights.
2.1 Demand Registrations.
(a) (i) Subject to Section 2.1(b) below, at any time after the date
that is eighteen months from the date hereof, the Holders shall have the right
to require the Company to file a registration statement under the Securities
Act covering such aggregate number of Registrable Securities which represents
20% or greater of the Total Voting Power of the then outstanding Registrable
Securities, by delivering a written request therefor to the Company specifying
the number of Registrable Securities to be included in such registration by
such Holders and the intended method of distribution thereof; provided,
however that no shares of Common Stock issued or issuable, directly or
indirectly, upon conversion of (x) shares of Series A Convertible Preferred
Stock or (y) shares of Series B Convertible Preferred Stock may be included in
such request prior to the date that is eighteen months from the date hereof.
All such requests by any Holder pursuant to this Section 2.1(a)(i) are
referred to herein as "Demand Registration Requests," and the registrations so
requested are referred to herein as "Demand Registrations" (with respect to
any Demand Registration, the Holders making such demand for registration being
referred to as the "Initiating Holders"). As promptly as practicable, but no
later than ten days after receipt of a Demand Registration Request, the
Company shall give written notice (the "Demand Exercise Notice") of such
Demand Registration Request to all Holders of record of Registrable
Securities.
(ii) The Company, subject to Sections 2.3 and 2.6, shall include in a
Demand Registration (x) the Registrable Securities of the Initiating Holders
and (y) the Registrable Securities of any other Holder of Registrable
Securities which shall have made a written request to the Company for
inclusion in such registration (together with the Initiating Holders, the
"Participating Holders") (which request shall specify the maximum number of
Registrable Securities intended to be disposed of by such Participating
Holders) within 30 days after the receipt of the Demand Exercise Notice (or,
15 days if, at the request of the Initiating Holders, the Company states in
such written notice or gives telephonic notice to all Holders, with written
confirmation to follow promptly thereafter, that such registration will be on
a Form S-3).
(iii) The Company shall, as expeditiously as possible but subject to
Section 2.1(b), use its commercially reasonable efforts to (x) effect such
registration under the Securities Act of the Registrable Securities which the
Company has been so requested to register, for distribution in accordance with
such intended method of distribution, and (y) if requested by the Majority
Participating Holders, obtain acceleration of the effective date of the
registration statement relating to such registration.
(b) Notwithstanding anything to the contrary in Section 2.1(a), the
Demand Registration rights granted in Section 2.1(a) to the Holders are
subject to the following limitations: (i) the Company shall not be required to
cause a registration pursuant to Section 2.1(a)(i) to be declared effective
within a period of 180 days after the effective date of any other registration
statement of the Company filed pursuant to the Securities Act; (ii) if the
Board of Directors of the Company, in its good faith judgment, determines that
any registration of Registrable Securities should not be made or continued
because it would materially interfere with any material financing,
acquisition, corporate reorganization or merger or other transaction or event
involving the Company or any of its subsidiaries (a "Valid Business Reason"),
the Company may postpone filing a registration statement relating to a Demand
Registration Request until such Valid Business Reason no longer exists, but in
no event for more than three months (such period of postponement or withdrawal
under this clause (ii), the "Postponement Period"); and the Company shall give
written notice of its determination to postpone or withdraw a registration
statement and of the fact that the Valid Business Reason for such postponement
or withdrawal no longer exists, in each case, promptly after the occurrence
thereof; provided, however, the Company shall not be permitted to postpone or
withdraw a registration statement after the expiration of any Postponement
Period until twelve months after the expiration of such Postponement Period;
(iii) the Company shall not be obligated to effect more than three Demand
Registrations under Section 2.1(a) for the Holders, and (iv) the Company shall
not be required to effect a Demand Registration unless the Registrable
Securities to be included in such registration have an aggregate anticipated
offering price of at least $25,000,000 (based on the then-current market price
of the Registrable Securities).
If the Company shall give any notice of postponement or withdrawal of
any registration statement pursuant to clause (ii) above, the Company shall
not, during the period of postponement or withdrawal, register any equity
security of the Company, other than pursuant to a registration statement on
Form S-4 or S-8 (or an equivalent registration form then in effect). Each
Holder of Registrable Securities agrees that, upon receipt of any notice from
the Company that the Company has determined to withdraw any registration
statement pursuant to clause (ii) above, such Holder will discontinue its
disposition of Registrable Securities pursuant to such registration statement
and, if so directed by the Company, will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies, then in such
Holder's possession of the prospectus covering such Registrable Securities
that was in effect at the time of receipt of such notice. If the Company shall
have withdrawn or prematurely terminated a registration statement filed under
Section 2.1(a)(i) (whether pursuant to clause (ii) above or as a result of any
stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court), the Company shall not be considered to have
effected an effective registration for the purposes of this Agreement until
the Company shall have filed a new registration statement covering the
Registrable Securities covered by the withdrawn registration statement and
such registration statement shall have been declared effective and shall not
have been withdrawn. If the Company shall give any notice of withdrawal or
postponement of a registration statement, the Company shall, at such time as
the Valid Business Reason that caused such withdrawal or postponement no
longer exists (but in no event later than three months after the date of the
postponement or withdrawal), use its commercially reasonable best efforts to
effect the registration under the Securities Act of the Registrable Securities
covered by the withdrawn or postponed registration statement in accordance
with this Section 2.1 (unless the Initiating Holders shall have withdrawn such
request, in which case the Company shall not be considered to have effected an
effective registration for the purposes of this Agreement).
(c) The Company, subject to Sections 2.3 and 2.6, may elect to
include in any registration statement and offering made pursuant to Section
2.1(a)(i), (i) authorized but unissued shares of Common Stock or shares of
Common Stock held by the Company as treasury shares and (ii) any other shares
of Common Stock which are requested to be included in such registration
pursuant to the exercise of piggyback rights granted by the Company which are
not inconsistent with the rights granted in, or otherwise conflict with the
terms of, this Agreement ("Additional Piggyback Rights"); provided, however,
that such inclusion shall be permitted only to the extent that it is pursuant
to and subject to the terms of the underwriting agreement or arrangements, if
any, entered into by the Participating Holders.
(d) In connection with any Demand Registration, the Company shall
have the right to designate the lead managing underwriter in connection with
such registration and each other managing underwriter for such registration,
provided that in each case, each such underwriter is reasonably satisfactory
to the Majority Participating Holders.
2.2 Piggyback Registrations.
(a) If, at any time, the Company proposes or is required to register
any of its equity securities under the Securities Act (other than pursuant to
(i) registrations on such form or similar form(s) solely for registration of
securities in connection with an employee benefit plan or dividend
reinvestment plan or a merger or consolidation or (ii) a Demand Registration
under Section 2.1) on a registration statement on Form S-1, Form S-2 or Form
S-3 (or an equivalent general registration form then in effect), whether or
not for its own account, the Company shall give prompt written notice of its
intention to do so to each of the Holders of record of Registrable Securities.
Upon the written request of any such Holder, made within 15 days following the
receipt of any such written notice (which request shall specify the maximum
number of Registrable Securities intended to be disposed of by such Holder and
the intended method of distribution thereof), the Company shall, subject to
Sections 2.2(b), 2.3 and 2.6 hereof, use its commercially reasonable efforts
to cause all such Registrable Securities, the holders of which have so
requested the registration thereof, to be included in the registration
statement with the securities which the Company at the time proposes to
register to permit the sale or other disposition by the Holders (in accordance
with the intended method of distribution thereof) of the Registrable
Securities to be so registered. No registration of Registrable Securities
effected under this Section 2.2(a) shall relieve the Company of its
obligations to effect Demand Registrations under Section 2.1 hereof.
(b) If, at any time after giving written notice of its intention to
register any equity securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register or to delay registration of
such equity securities, the Company may, at its election, give written notice
of such determination to all Holders of record of Registrable Securities and
(i) in the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection with such
abandoned registration, without prejudice, however, to the rights of Holders
under Section 2.1, and (ii) in the case of a determination to delay such
registration of its equity securities, shall be permitted to delay the
registration of such Registrable Securities for the same period as the delay
in registering such other equity securities.
(c) Any Holder shall have the right to withdraw its request for
inclusion of its Registrable Securities in any registration statement pursuant
to this Section 2.2 by giving written notice to the Company of its request to
withdraw; provided, however, that (i) such request must be made in writing
prior to the earlier of the execution of the underwriting agreement or the
execution of the custody agreement with respect to such registration and (ii)
such withdrawal shall be irrevocable and, after making such withdrawal, a
Holder shall no longer have any right to include Registrable Securities in the
registration as to which such withdrawal was made.
2.3 Allocation of Securities Included in Registration Statement.
(a) If any requested registration made pursuant to Section 2.1
involves an underwritten offering and the lead managing underwriter of such
offering (the "Manager") shall advise the Company that, in its view, the
number of securities requested to be included in such registration by the
Holders of Registrable Securities or any other persons (including those shares
of Common Stock requested by the Company to be included in such registration)
exceeds the largest number (the "Section 2.3(a) Sale Number") that can be sold
in an orderly manner in such offering within a price range acceptable to the
Majority Participating Holders, the Company shall use its commercially
reasonable efforts to include in such registration:
(i) first, all Registrable Securities and Goldman Registrable
Securities requested to be included in such registration by the holders
thereof; provided, however, that, if the number of such Registrable Securities
and Goldman Registrable Securities exceeds the Section 2.3(a) Sale Number, the
number of such Registrable Securities and Goldman Registrable Securities (not
to exceed the Section 2.3(a) Sale Number) to be included in such registration
shall be allocated on a pro rata basis among all holders requesting that
Registrable Securities and Goldman Registrable Securities be included in such
registration, based on the number of Registrable Securities and Goldman
Registrable Securities then owned by each such holder requesting inclusion in
relation to the number of Registrable Securities and Goldman Registrable
Securities owned by all holders requesting inclusion; and
(ii) second, to the extent that the number of securities to be
included pursuant to clause (i) of this Section 2.3(a) is less than the
Section 2.3(a) Sale Number, the remaining shares to be included in such
registration shall be allocated on a pro rata basis among all holders
requesting that securities be included in such registration pursuant to the
exercise of Additional Piggyback Rights ("Piggyback Shares"), based on the
aggregate number of Piggyback Shares then owned by each holder requesting
inclusion in relation to the aggregate number of Piggyback Shares owned by all
holders requesting inclusion, up to the Section 2.3(a) Sale Number; and
(iii) third, to the extent that the number of securities to be
included pursuant to clauses (i) and (ii) of this Section 2.3(a) is less than
the Section 2.3(a) Sale Number, any securities that the Company proposes to
register, up to the Section 2.3(a) Sale Number.
If, as a result of the proration provisions of this Section 2.3(a),
any Holder shall not be entitled to include all Registrable Securities in a
registration that such Holder has requested be included, such Holder may elect
to withdraw his request to include Registrable Securities in such registration
or may reduce the number requested to be included; provided, however, that (x)
such request must be made in writing prior to the earlier of the execution of
the underwriting agreement or the execution of the custody agreement with
respect to such registration and (y) such withdrawal shall be irrevocable and,
after making such withdrawal, such Holder shall no longer have any right to
include Registrable Securities in the registration as to which such withdrawal
was made.
(b) If any registration pursuant to Section 2.2 involves an
underwritten offering that was initially proposed by the Company after the
date hereof as a primary registration of its securities and the Manager shall
advise the Company that, in its view, the number of securities requested to be
included in such registration exceeds the number (the "Section 2.3(b) Sale
Number") that can be sold in an orderly manner in such registration within a
price range acceptable to the Company, the Company shall include in such
registration:
(i) first, all Common Stock that the Company proposes to register for
its own account;
(ii) second, to the extent that the number of securities to be
included pursuant to clause (i) of this Section 2.3(b) is less than the
Section 2.3(b) Sale Number, the remaining shares to be included in such
registration shall be allocated on a pro rata basis among all holders
requesting that Registrable Securities or Goldman Registrable Securities be
included in such registration, based on the aggregate number of Registrable
Securities and Goldman Registrable Securities then owned by each holder
requesting inclusion in relation to the aggregate number of Registrable
Securities and Goldman Registrable Securities owned by all holders requesting
inclusion, up to the Section 2.3(b) Sale Number;
(iii) third, to the extent that the number of securities to be
included pursuant to clauses (i) and (ii) of this Section 2.3(b) is less than
the Section 2.3(b) Sale Number, the remaining shares to be included in such
registration shall be allocated on a pro rata basis among all holders
requesting that Piggyback Shares be included in such registration pursuant to
the exercise of Additional Piggyback Rights, based on the aggregate number of
Piggyback Shares then owned by each holder requesting inclusion in relation to
the aggregate number of Piggyback Shares owned by all holders requesting
inclusion, up to the Section 2.3(b) Sale Number.
If, as a result of the proration provisions of this Section 2.3(b),
any Holder shall not be entitled to include all Registrable Securities in a
registration that such Holder has requested be included, such Holder may elect
to withdraw his request to include Registrable Securities in such registration
or may reduce the number requested to be included; provided, however, that (x)
such request must be made in writing prior to the earlier of the execution of
the underwriting agreement or the execution of the custody agreement with
respect to such registration and (y) such withdrawal shall be irrevocable and,
after making such withdrawal, such Holder shall no longer have any right to
include Registrable Securities in the registration as to which such withdrawal
was made.
(c) If any registration pursuant to Section 2.2 involves an
underwritten offering that was initially proposed by holders of securities of
the Company that have the right to require such registration pursuant to an
agreement entered into by the Company in accordance with Section 4.7 hereof
("Additional Demand Rights") and the Manager shall advise the Company that, in
its view, the number of securities requested to be included in such
registration exceeds the number (the "Section 2.3(c) Sale Number") that can be
sold in an orderly manner in such registration within a price range acceptable
to the Company, the Company shall include in such registration:
(i) first, all securities requested to be included in such
registration by the holders of Additional Demand Rights ("Additional
Registrable Securities"), the Holders and the Goldman Holders; provided,
however, that, if the number of such Additional Registrable Securities,
Registrable Securities and Goldman Registrable Securities exceeds the Section
2.3(c) Sale Number, the number of such Additional Registrable Securities,
Registrable Securities and Goldman Registrable Securities (not to exceed the
Section 2.3(c) Sale Number) to be included in such registration shall be
allocated on a pro rata basis among all holders of Additional Registrable
Securities, Registrable Securities and Goldman Registrable Securities
requesting that Additional Registrable Securities, Registrable Securities or
Goldman Registrable Securities, as the case may be, be included in such
registration, based on the number of Additional Registrable Securities,
Registrable Securities or Goldman Registrable Securities, as the case may be,
then owned by each such holders requesting inclusion in relation to the number
of Additional Registrable Securities, Registrable Securities or Goldman
Registrable Securities, as the case may be, owned by all of such holders
requesting inclusion;
(ii) second, to the extent that the number of securities to be
included pursuant to clause (i) of this Section 2.3(c) is less than the
Section 2.3(c) Sale Number, any Common Stock that the Company proposes to
register for its own account, up to the Section 2.3(c) Sale Number, and
(iii) third, to the extent that the number of securities to be
included pursuant to clauses (i), and (ii) of this Section 2.3(c) is less than
the Section 2.3(c) Sale Number, the remaining shares to be included in such
registration shall be allocated on a pro rata basis among all holders
requesting that Piggyback Shares be included in such registration pursuant to
the exercise of Additional Piggyback Rights, based on the aggregate number of
Piggyback Shares then owned by each holder requesting inclusion in relation to
the aggregate number of Piggyback Shares owned by all holders requesting
inclusion, up to the Section 2.3(c) Sale Number.
If, as a result of the proration provisions of this Section 2.3(c),
any Holder shall not be entitled to include all Registrable Securities in a
registration that such Holder has requested be included, such Holder may elect
to withdraw his request to include Registrable Securities in such registration
or may reduce the number requested to be included; provided, however, that (x)
such request must be made in writing prior to the earlier of the execution of
the underwriting agreement or the execution of the custody agreement with
respect to such registration and (y) such withdrawal shall be irrevocable and,
after making such withdrawal, such Holder shall no longer have any right to
include Registrable Securities in the registration as to which such withdrawal
was made.
(d) Notwithstanding Section 2.3(c), if at any time any registration
pursuant to Section 2.2 involves an underwritten offering that was initially
proposed by the Goldman Holders and the Manager shall advise the Company that,
in its view, the number of securities requested to be included in such
registration exceeds the number (the "Section 2.3(d) Sale Number") that can be
sold in an orderly manner in such registration within a price range acceptable
to the Company, the Company shall include in such registration:
(i) first, all Registrable Securities and Goldman Registrable
Securities requested to be included in such registration by the holders
thereof; provided, however, that, if the number of such Registrable Securities
and Goldman Registrable Securities exceeds the Section 2.3(d) Sale Number, the
number of such Registrable Securities and Goldman Registrable Securities (not
to exceed the Section 2.3(d) Sale Number) to be included in such registration
shall be allocated on a pro rata basis among all holders requesting that
Registrable Securities and Goldman Registrable Securities be included in such
registration, based on the number of Registrable Securities and Goldman
Registrable Securities then owned by each such holder requesting inclusion in
relation to the number of Registrable Securities and Goldman Registrable
Securities owned by all holders requesting inclusion; and
(ii) second, to the extent that the number of securities to be
included pursuant to clause (i) of this Section 2.3(d) is less than the
Section 2.3(d) Sale Number, the remaining shares to be included in such
registration shall be allocated on a pro rata basis among all holders
requesting that securities be included in such registration pursuant to the
exercise of Piggyback Shares, based on the aggregate number of Piggyback
Shares then owned by each holder requesting inclusion in relation to the
aggregate number of Piggyback Shares owned by all holders requesting
inclusion, up to the Section 2.3(d) Sale Number; and
(iii) third, to the extent that the number of securities to be
included pursuant to clauses (i) and (ii) of this Section 2.3(d) is less than
the Section 2.3(d) Sale Number, any securities that the Company proposes to
register, up to the Section 2.3(d) Sale Number.
If, as a result of the proration provisions of this Section 2.3(d),
any Holder shall not be entitled to include all Registrable Securities in a
registration that such Holder has requested be included, such Holder may elect
to withdraw his request to include Registrable Securities in such registration
or may reduce the number requested to be included; provided, however, that (x)
such request must be made in writing prior to the earlier of the execution of
the underwriting agreement or the execution of the custody agreement with
respect to such registration and (y) such withdrawal shall be irrevocable and,
after making such withdrawal, such Holder shall no longer have any right to
include Registrable Securities in the registration as to which such withdrawal
was made.
2.4 Registration Procedures. If and whenever the Company is required
by the provisions of this Agreement to use its commercially reasonable efforts
to effect or cause the registration of any Registrable Securities under the
Securities Act as provided in this Agreement, the Company shall, as
expeditiously as possible:
(a) prepare and file with the SEC a registration statement on an
appropriate registration form of the SEC for the disposition of such
Registrable Securities in accordance with the intended method of disposition
thereof, which form shall be selected by the Company and shall comply as to
form in all material respects with the requirements of the applicable form and
include all financial statements required by the SEC to be filed therewith,
and the Company shall use its commercially reasonable efforts to cause such
registration statement to become and remain effective (provided, however, that
before filing a registration statement or prospectus or any amendments or
supplements thereto, or comparable statements under securities or blue sky
laws of any jurisdiction, the Company will furnish to one counsel for the
Holders participating in the planned offering (selected by the Majority
Participating Holders, in the case of a registration pursuant to Section 2.1,
and selected by the lead managing underwriter, in the case of a registration
pursuant to Section 2.2) and the lead managing underwriter, if any, copies of
all such documents proposed to be filed (including all exhibits thereto),
which documents will be subject to the reasonable review and reasonable
comment of such counsel, and the Company shall not file any registration
statement or amendment thereto or any prospectus or supplement thereto to
which the holders of a majority of the Registrable Securities covered by such
registration statement or the underwriters, if any, shall reasonably object);
(b) prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective for such period
as any seller of Registrable Securities pursuant to such registration
statement shall request and to comply with the provisions of the Securities
Act with respect to the sale or other disposition of all Registrable
Securities covered by such registration statement in accordance with the
intended methods of disposition by the seller or sellers thereof set forth in
such registration statement;
(c) furnish, without charge, to each seller of such Registrable
Securities and each underwriter, if any, of the securities covered by such
registration statement such number of copies of such registration statement,
each amendment and supplement thereto (in each case including all exhibits),
and the prospectus included in such registration statement (including each
preliminary prospectus) in conformity with the requirements of the Securities
Act, and other documents, as such seller and underwriter may reasonably
request in order to facilitate the public sale or other disposition of the
Registrable Securities owned by such seller (the Company hereby consenting to
the use in accordance with all applicable law of each such registration
statement (or amendment or post-effective amendment thereto) and each such
prospectus (or preliminary prospectus or supplement thereto) by each such
seller of Registrable Securities and the underwriters, if any, in connection
with the offering and sale of the Registrable Securities covered by such
registration statement or prospectus);
(d) use its commercially reasonable efforts to register or qualify
the Registrable Securities covered by such registration statement under such
other securities or "blue sky" laws of such jurisdictions as any sellers of
Registrable Securities or any managing underwriter, if any, shall reasonably
request in writing, and do any and all other acts and things which may be
reasonably necessary or advisable to enable such sellers or underwriter, if
any, to consummate the disposition of the Registrable Securities in such
jurisdictions, except that in no event shall the Company be required to
qualify to do business as a foreign corporation in any jurisdiction where it
would not, but for the requirements of this paragraph (d), be required to be
so qualified, to subject itself to taxation in any such jurisdiction or to
consent to general service of process in any such jurisdiction;
(e) promptly notify each Holder selling Registrable Securities
covered by such registration statement and each managing underwriter, if any:
(i) when the registration statement, any pre-effective amendment, the
prospectus or any prospectus supplement related thereto or post-effective
amendment to the registration statement has been filed and, with respect to
the registration statement or any post-effective amendment, when the same has
become effective; (ii) of any request by the SEC or state securities authority
for amendments or supplements to the registration statement or the prospectus
related thereto or for additional information; (iii) of the issuance by the
SEC of any stop order suspending the effectiveness of the registration
statement or the initiation of any proceedings for that purpose; (iv) of the
receipt by the Company of any notification with respect to the suspension of
the qualification of any Registrable Securities for sale under the securities
or blue sky laws of any jurisdiction or the initiation of any proceeding for
such purpose; (v) of the existence of any fact of which the Company becomes
aware which results in the registration statement, the prospectus related
thereto or any document incorporated therein by reference containing an untrue
statement of a material fact or omitting to state a material fact required to
be stated therein or necessary to make any statement therein not misleading;
and (vi) if at any time the representations and warranties contemplated by any
underwriting agreement, securities sale agreement, or other similar agreement,
relating to the offering shall cease to be true and correct in all material
respects; and, if the notification relates to an event described in clause
(v), the Company shall promptly prepare and furnish to each such seller and
each underwriter, if any, a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to the purchasers of
such Registrable Securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein in the light of the
circumstances under which they were made not misleading;
(f) comply with all applicable rules and regulations of the SEC, and
make generally available to its security holders, as soon as reasonably
practicable after the effective date of the registration statement (and in any
event within 16 months thereafter), an earnings statement (which need not be
audited) covering the period of at least twelve consecutive months beginning
with the first day of the Company's first calendar quarter after the effective
date of the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(g) (i) cause all such Registrable Securities covered by such
registration statement to be listed on the New York Stock Exchange or the
principal securities exchange on which similar securities issued by the
Company are then listed (if any), if the listing of such Registrable
Securities is then permitted under the rules of such exchange, or (ii) if no
similar securities are then so listed, to either cause all such Registrable
Securities to be listed on a national securities exchange or to secure
designation of all such Registrable Securities as a Nasdaq National Market
"national market system security" within the meaning of Rule 11Aa2-1 of the
Exchange Act or, failing that, secure Nasdaq National Market authorization for
such shares and, without limiting the generality of the foregoing, take all
actions that may be required by the Company as the issuer of such Registrable
Securities in order to facilitate the managing underwriter's arranging for the
registration of at least two market makers as such with respect to such shares
with the National Association of Securities Dealers, Inc. (the "NASD");
(h) provide and cause to be maintained a transfer agent and registrar
for all such Registrable Securities covered by such registration statement not
later than the effective date of such registration statement;
(i) enter into such customary agreements (including, if applicable,
an underwriting agreement) and take such other actions as the holders of a
majority of the Registrable Securities participating in such offering shall
reasonably request in order to expedite or facilitate the disposition of such
Registrable Securities (it being understood that the Holders of the
Registrable Securities which are to be distributed by any underwriters shall
be parties to any such underwriting agreement and may, at their option,
require that the Company make to and for the benefit of such Holders the
representations, warranties and covenants of the Company which are being made
to and for the benefit of such underwriters);
(j) use its commercially reasonable efforts to obtain an opinion from
the Company's counsel and a "cold comfort" letter from the Company's
independent public accountants in customary form and covering such matters as
are customarily covered by such opinions and "cold comfort" letters delivered
to underwriters in underwritten public offerings, which opinion and letter
shall be reasonably satisfactory to the underwriter, if any, and furnish to
each Holder participating in the offering and to each underwriter, if any, a
copy of such opinion and letter addressed to such Holder or underwriter;
(k) deliver promptly to each Holder participating in the offering and
each underwriter, if any, copies of all correspondence between the SEC and the
Company, its counsel or auditors and all memoranda relating to discussions
with the SEC or its staff with respect to the registration statement, other
than those portions of any such memoranda which contain information subject to
attorney-client privilege with respect to the Company, and, upon receipt of
such confidentiality agreements as the Company may reasonably request, make
reasonably available for inspection by any seller of such Registrable
Securities covered by such registration statement, by any underwriter, if any,
participating in any disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent retained by any such
seller or any such underwriter, all pertinent financial and other records,
pertinent corporate documents and properties of the Company, and cause all of
the Company's officers, directors and employees to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such registration statement;
(l) use its commercially reasonable efforts to obtain the withdrawal
of any order suspending the effectiveness of the registration statement;
(m) provide a CUSIP number for all Registrable Securities, not later
than the effective date of the registration statement;
(n) make reasonably available its employees and personnel for
participation in "road shows" an other marketing efforts and otherwise provide
reasonable assistance to the underwriters (taking into account the needs of
the Company's businesses and the requirements of the marketing process) in the
marketing of Registrable Securities in any underwritten offering;
(o) promptly prior to the filing of any document which is to be
incorporated by reference into the registration statement or the prospectus
(after the initial filing of such registration statement) provide copies of
such document to counsel for the selling holders of Registrable Securities and
to each managing underwriter, if any, and make the Company's representatives
reasonably available for discussion of such document and make such changes in
such document concerning the selling holders prior to the filing thereof as
counsel for such selling holders or underwriters may reasonably request;
(p) furnish to the Holder participating in the offering and the
managing underwriter, without charge, at least one signed copy, and to each
other Holder participating in the offering, without charge, at least one
photocopy of a signed copy, of the registration statement and any
post-effective amendments thereto, including financial statements and
schedules, all documents incorporated therein by reference and all exhibits
(including those incorporated by reference);
(q) cooperate with the sellers of Registrable Securities and the
managing underwriter, if any, to facilitate the timely preparation and
delivery of certificates not bearing any restrictive legends representing the
Registrable Securities to be sold, and cause such Registrable Securities to be
issued in such denominations and registered in such names in accordance with
the underwriting agreement prior to any sale of Registrable Securities to the
underwriters or, if not an underwritten offering, in accordance with the
instructions of the sellers of Registrable Securities at least three business
days prior to any sale of Registrable Securities and instruct any transfer
agent and registrar of Registrable Securities to release any stop transfer
orders in respect thereof;
(r) take all such other commercially reasonable actions as are
necessary or advisable in order to expedite or facilitate the disposition of
such Registrable Securities; and
(s) take no direct or indirect action prohibited by Regulation M
under the Exchange Act; provided, however, that to the extent that any
prohibition is applicable to the Company, the Company will take such action as
is necessary to make any such prohibition inapplicable.
The Company may require as a condition precedent to the Company's
obligations under this Section 2.4 that each seller of Registrable Securities
as to which any registration is being effected furnish the Company such
information in writing regarding such seller and the distribution of such
Registrable Securities as the Company may from time to time reasonably request
provided that such information is necessary for the Company to consummate such
registration and shall be used only in connection with such registration.
Each seller of Registrable Securities agrees that upon receipt of any
notice from the Company of the happening of any event of the kind described in
clause (v) of paragraph (e) of this Section 2.4, such seller will discontinue
such seller's disposition of Registrable Securities pursuant to the
registration statement covering such Registrable Securities until such
seller's receipt of the copies of the supplemented or amended prospectus
contemplated by paragraph (e) of this Section 2.4 and, if so directed by the
Company, will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in such seller's possession of the
prospectus covering such Registrable Securities that was in effect at the time
of receipt of such notice. In the event the Company shall give any such
notice, the applicable period mentioned in paragraph (b) of this Section 2.4
shall be extended by the number of days during such period from and including
the date of the giving of such notice to and including the date when each
seller of any Registrable Securities covered by such registration statement
shall have received the copies of the supplemented or amended prospectus
contemplated by paragraph (e) of this Section 2.4.
If any such registration statement or comparable statement under
"blue sky" laws refers to any Holder by name or otherwise as the Holder of any
securities of the Company, then such Holder shall have the right to require
(i) the insertion therein of language, in form and substance reasonably
satisfactory to such Holder and the Company, to the effect that the holding by
such Holder of such securities is not to be construed as a recommendation by
such Holder of the investment quality of the Company's securities covered
thereby and that such holding does not imply that such Holder will assist in
meeting any future financial requirements of the Company, or (ii) in the event
that such reference to such Holder by name or otherwise is not in the judgment
of the Company, as advised by counsel, required by the Securities Act or any
similar federal statute or any state "blue sky" or securities law then in
force, the deletion of the reference to such Holder.
2.5 Registration Expenses.
(a) The Company shall pay all Expenses (x) with respect to any Demand
Registration whether or not it becomes effective or remains effective for the
period contemplated by Section 2.4(b) and (y) with respect to any registration
effected under Section 2.2.
(b) Notwithstanding the foregoing, (x) the provisions of this Section
2.5 shall be deemed amended to the extent necessary to cause these expense
provisions to comply with "blue sky" laws of each state in which the offering
is made and (y) in connection with any registration hereunder, each Holder of
Registrable Securities being registered shall pay all underwriting discounts
and commissions and any transfer taxes, if any, attributable to the sale of
such Registrable Securities, pro rata with respect to payments of discounts
and commissions in accordance with the number of shares sold in the offering
by such Holder, and (z) the Company shall, in the case of all registrations
under this Article 2, be responsible for all its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties).
2.6 Certain Limitations on Registration Rights. In the case of any
registration under Section 2.1 pursuant to an underwritten offering, or, in
the case of a registration under Section 2.2, if the Company has determined to
enter into an underwriting agreement in connection therewith, all securities
to be included in such registration shall be subject to an underwriting
agreement and no Person may participate in such registration unless such
Person agrees to sell such Person's securities on the basis provided therein
and, subject to Section 3.1 hereof, completes and executes all reasonable
questionnaires, and other documents (including custody agreements and powers
of attorney) which must be executed in connection therewith, and provides such
other information to the Company or the underwriter as may be necessary to
register such Person's securities.
2.7 Limitations on Sale or Distribution of Other Securities. (a) Each
seller of Registrable Securities agrees that, (i) to the extent requested in
writing by a managing underwriter, if any, of any registration effected
pursuant to Section 2.1, not to sell, transfer or otherwise dispose of,
including any sale pursuant to Rule 144 under the Securities Act, any Common
Stock, or any other equity security of the Company or any security convertible
into or exchangeable or exercisable for any equity security of the Company
(other than as part of such underwritten public offering) during the time
period reasonably requested by the managing underwriter, not to exceed 90 days
(and the Company hereby also so agrees (except that the Company may effect any
sale or distribution of any such securities pursuant to a registration on Form
S-4 (if reasonably acceptable to such managing underwriter) or Form S-8, or
any successor or similar form which is then in effect or upon the conversion,
exchange or exercise of any then outstanding Common Stock Equivalent) to use
its commercially reasonable efforts to cause each holder of any equity
security or any security convertible into or exchangeable or exercisable for
any equity security of the Company purchased from the Company at any time
other than in a public offering so to agree), and (ii) to the extent requested
in writing by a managing underwriter of any underwritten public offering
effected by the Company for its own account it will not sell any Common Stock
(other than as part of such underwritten public offering) during the time
period reasonably requested by the managing underwriter, which period shall
not exceed 90 days.
(b) The Company hereby agrees that, if it shall previously have
received a request for registration pursuant to Section 2.1 or 2.2, and if
such previous registration shall not have been withdrawn or abandoned, the
Company shall not sell, transfer, or otherwise dispose of, any Common Stock,
or any other equity security of the Company or any security convertible into
or exchangeable or exercisable for any equity security of the Company (other
than as part of such underwritten public offering, a registration on Form S-4
or Form S-8 or any successor or similar form which is then in effect or upon
the conversion, exchange or exercise of any then outstanding Common Stock
Equivalent), until a period of 90 days shall have elapsed from the effective
date of such previous registration; and the Company shall so provide in any
registration rights agreements hereafter entered into with respect to any of
its securities.
2.8 No Required Sale. Nothing in this Agreement shall be deemed to
create an independent obligation on the part of any Holder to sell any
Registrable Securities pursuant to any effective registration statement.
2.9 Indemnification. (a) In the event of any registration of any
securities of the Company under the Securities Act pursuant to this Article 2,
the Company will, and hereby agrees to, indemnify and hold harmless, to the
fullest extent permitted by law, each Holder of Registrable Securities, its
directors, officers, fiduciaries, employees, stockholders, members or general
and limited partners (and the directors, officers, employees and stockholders
thereof), each other Person who participates as an underwriter or a Qualified
Independent Underwriter, if any, in the offering or sale of such securities,
each officer, director, employee, stockholder, fiduciary, managing director,
agent, affiliates, consultants, representatives, successors, assigns or
partner of such underwriter or Qualified Independent Underwriter, and each
other Person, if any, who controls such Holder or any such underwriter within
the meaning of the Securities Act, from and against any and all losses,
claims, damages or liabilities, joint or several, actions or proceedings
(whether commenced or threatened) and expenses (including reasonable fees of
counsel and any amounts paid in any settlement effected with the Company's
consent, which consent shall not be unreasonably withheld or delayed) to which
each such indemnified party may become subject under the Securities Act or
otherwise in respect thereof (collectively, "Claims"), insofar as such Claims
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in any registration statement under
which such securities were registered under the Securities Act or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) any
untrue statement or alleged untrue statement of a material fact contained in
any preliminary, final or summary prospectus or any amendment or supplement
thereto, together with the documents incorporated by reference therein, or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or
(iii) any violation by the Company of any federal, state or common law rule or
regulation applicable to the Company and relating to action required of or
inaction by the Company in connection with any such registration, and the
Company will reimburse any such indemnified party for any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such Claim as such expenses are incurred;
provided, however, that the Company shall not be liable to any such
indemnified party in any such case to the extent such Claim arises out of or
is based upon any untrue statement or alleged untrue statement of a material
fact or omission or alleged omission of a material fact made in such
registration statement or amendment thereof or supplement thereto or in any
such prospectus or any preliminary, final or summary prospectus in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of such indemnified party specifically for use therein. Such
indemnity and reimbursement of expenses shall remain in full force and effect
regardless of any investigation made by as on behalf of such indemnified party
and shall survive the transfer of such securities by such Holder.
(b) Each Holder of Registrable Securities that are included in the
securities as to which any registration under Section 2.1 or 2.2 is being
effected shall, severally and not jointly, indemnify and hold harmless (in the
same manner and to the same extent as set forth in paragraph (a) of this
Section 2.9) to the extent permitted by law the Company, its officers and
directors, each Person controlling the Company within the meaning of the
Securities Act and all other prospective sellers and their respective
directors, officers, fiduciaries, managing directors, employees, agents,
affiliates, consultants, representatives, successors, assigns, general and
limited partners, stockholders and respective controlling Persons with respect
to any untrue statement or alleged untrue statement of any material fact in,
or omission or alleged omission of any material fact from, such registration
statement, any preliminary, final or summary prospectus contained therein, or
any amendment or supplement thereto, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company or its representatives by or on
behalf of such Holder specifically for use therein and reimburse such
indemnified party for any legal or other expenses reasonably incurred in
connection with investigating or defending any such Claim as such expenses are
incurred; provided, however, that the aggregate amount which any such Holder
shall be required to pay pursuant to this Section 2.9(b) and Sections 2.9(c),
(e) and (f) shall in no case be greater than the amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities pursuant
to the registration statement giving rise to such claim. Such indemnity and
reimbursement of expenses shall remain in full force and effect regardless of
any investigation made by or on behalf of such indemnified party and shall
survive the transfer of such securities by such Holder.
(c) Indemnification similar to that specified in the preceding
paragraphs (a) and (b) of this Section 2.9 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration or other qualification of securities
under any state securities and "blue sky" laws.
(d) Any Person entitled to indemnification under this Agreement shall
notify promptly the indemnifying party in writing of the commencement of any
action or proceeding with respect to which a claim for indemnification may be
made pursuant to this Section 2.9, but the failure of any such Person to
provide such notice shall not relieve the indemnifying party of its
obligations under the preceding paragraphs of this Section 2.9, except to the
extent the indemnifying party is materially prejudiced thereby and shall not
relieve the indemnifying party from any liability which it may have to any
such Person otherwise than under this Article 2. In case any action or
proceeding is brought against an indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate therein and, unless in the reasonable opinion of
outside counsel to the indemnified party a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, to
assume the defense thereof jointly with any other indemnifying party similarly
notified, to the extent that it chooses, with counsel reasonably satisfactory
to such indemnified party, and after notice from the indemnifying party to
such indemnified party that it so chooses, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by such indemnified party in connection with the defense thereof
other than reasonable costs of investigation; provided, however, that (i) if
the indemnifying party fails to take reasonable steps necessary to defend
diligently the action or proceeding within 20 days after receiving notice from
such indemnified party; or (ii) if such indemnified party who is a defendant
in any action or proceeding which is also brought against the indemnifying
party reasonably shall have concluded that there may be one or more legal
defenses available to such indemnified party which are not available to the
indemnifying party; or (iii) if representation of both parties by the same
counsel is otherwise inappropriate under applicable standards of professional
conduct, then, in any such case, the indemnified party shall have the right to
assume or continue its own defense as set forth above (but with no more than
one firm of counsel for all indemnified parties in each jurisdiction, except
to the extent any indemnified party or parties reasonably shall have concluded
that there may be legal defenses available to such party or parties which are
not available to the other indemnified parties or to the extent representation
of all indemnified parties by the same counsel is otherwise inappropriate
under applicable standards of professional conduct) and the indemnifying party
shall be liable for any expenses therefor. No indemnifying party shall,
without the written consent of the indemnified party, which consent shall not
be unreasonably withheld, effect the settlement or compromise of, or consent
to the entry of any judgment with respect to, any pending or threatened action
or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(A) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (B) does not include a
statement as to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(e) If for any reason the foregoing indemnity is unavailable or is
insufficient to hold harmless an indemnified party under Sections 2.9(a), (b)
or (c), then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of any Claim in such proportion
as is appropriate to reflect the relative fault of the indemnifying party, on
the one hand, and the indemnified party, on the other hand, with respect to
such offering of securities. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the indemnifying party or the
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. If, however, the allocation provided in the second preceding
sentence is not permitted by applicable law, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative faults but
also the relative benefits of the indemnifying party and the indemnified party
as well as any other relevant equitable considerations. The parties hereto
agree that it would not be just and equitable if contributions pursuant to
this Section 2.9(e) were to be determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to in the preceding sentences of this Section 2.9(e).
The amount paid or payable in respect of any Claim shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such Claim. No Person guilty of
fraudulent misrepresentation (within the meaning of section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. Notwithstanding anything in this
section 2.9(e) to the contrary, no indemnifying party (other than the Company)
shall be required pursuant to this section 2.9(e) to contribute any amount in
excess of the net proceeds received by such indemnifying party from the sale
of Registrable Securities in the offering to which the losses, claims, damages
or liabilities of the indemnified parties relate, less the amount of any
indemnification payment made by such indemnifying party pursuant to Sections
2.9(b) and (c).
(f) The indemnity and contribution agreements contained herein shall
be in addition to any other rights to indemnification or contribution which
any indemnified party may have pursuant to law or contract and shall remain
operative and in full force and effect regardless of any investigation made or
omitted by or on behalf of any indemnified party and shall survive the
transfer of the Registrable Securities by any such party.
(g) The indemnification and contribution required by this Section 2.9
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
3. Underwritten Offerings.
3.1 Requested Underwritten Offerings. If requested by the
underwriters for any underwritten offering by the Investors pursuant to a
registration requested under Section 2.1, the Company shall enter into a
customary underwriting agreement with the underwriters. Such underwriting
agreement shall be satisfactory in form and substance to the Majority
Participating Holders and shall contain such representations and warranties
by, and such other agreements on the part of, the Company and such other terms
as are generally prevailing in agreements of that type, including, without
limitation, indemnities and contribution agreements on substantially the same
terms as those contained herein. Any Holder participating in the offering
shall be a party to such underwriting agreement and may, at its option,
require that any or all of the representations and warranties by, and the
other agreements on the part of, the Company to and for the benefit of such
underwriters shall also be made to and for the benefit of such Holder and that
any or all of the conditions precedent to the obligations of such underwriters
under such underwriting agreement be conditions precedent to the obligations
of such Holder; provided, however, that the Company shall not be required to
make any representations or warranties with respect to written information
specifically provided by a selling Holder for inclusion in the registration
statement. Each such Holder shall not be required to make any representations
or warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such Holder, its ownership
of and title to the Registrable Securities, and its intended method of
distribution; and any liability of such Holder to any underwriter or other
Person under such underwriting agreement shall be limited to liability arising
from breach of its representations and warranties and shall be limited to an
amount equal to the proceeds (net of expenses and underwriting discounts and
commissions) that it derives from such registration.
3.2 Piggyback Underwritten Offerings. In the case of a registration
pursuant to Section 2.2 hereof, if the Company shall have determined to enter
into an underwriting agreement in connection therewith, any Registrable
Securities to be included in such registration shall be subject to such
underwriting agreement. Any Holder participating in such registration may, at
its option, require that any or all of the representations and warranties by,
and the other agreements on the part of, the Company to and for the benefit of
such underwriters shall also be made to and for the benefit of such Holder and
that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to the
obligations of such Holder. Each such Holder shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding
such Holder, its ownership of and title to the Registrable Securities, and its
intended method of distribution; and any liability of such Holder to any
underwriter or other Person under such underwriting agreement shall be limited
to liability arising from breach of its representations and warranties and
shall be limited to an amount equal to the proceeds (net of expenses and
underwriting discounts and commissions) that it derives from such
registration.
4. General.
4.1 Adjustments Affecting Registrable Securities. The Company agrees
that it shall not effect or permit to occur any combination or subdivision of
shares of Common Stock, Series A Convertible Preferred Stock or Series B
Convertible Preferred Stock which would adversely affect the ability of any
Holder of any Registrable Securities to include such Registrable Securities in
any registration contemplated by this Agreement or the marketability of such
Registrable Securities in any such registration. The Company agrees that it
will take all reasonable steps necessary to effect a subdivision of shares if
in the reasonable judgment of (a) the Majority Participating Holders or (b)
the managing underwriter for the offering in respect of such Demand
Registration Request, such subdivision would enhance the marketability of the
Registrable Securities. Each Holder agrees to vote all of its shares of
capital stock in a manner, and to take all other actions necessary, to permit
the Company to carry out the intent of the preceding sentence including,
without limitation, voting in favor of an amendment to the Company's
Certificate of Incorporation in order to increase the number of authorized
shares of capital stock of the Company.
4.2 Rule 144. The Company covenants that (i) so long as it remains
subject to the reporting provisions of the Exchange Act, it will timely file
the reports required to be filed by it under the Securities Act or the
Exchange Act (including, but not limited to, the reports under Sections 13 and
15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 under
the Securities Act), and (ii) will take such further action as any Holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (A) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (B) any similar rule or regulation hereafter adopted by
the SEC. Upon the request of any Holder of Registrable Securities, the Company
will deliver to such Holder a written statement as to whether it has complied
with such requirements.
4.3 Nominees for Beneficial Owners. If Registrable Securities are
held by a nominee for the beneficial owner thereof, the beneficial owner
thereof may, at its option, be treated as the Holder of such Registrable
Securities for purposes of any request or other action by any Holder or
Holders of Registrable Securities pursuant to this Agreement (or any
determination of any number or percentage of shares constituting Registrable
Securities held by any Holder or Holders of Registrable Securities
contemplated by this Agreement), provided that the Company shall have received
assurances reasonably satisfactory to it of such beneficial ownership.
4.4 Amendments and Waivers. The terms and provisions of this
Agreement may be modified or amended, or any of the provisions hereof waived,
temporarily or permanently, in a writing executed and delivered by the Company
and each of the Holders. No waiver of any of the provisions of this Agreement
shall be deemed to or shall constitute a waiver of any other provision hereof
(whether or not similar). No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof.
4.5 Notices. All notices, requests, consents and other communications
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or sent by telecopy, nationally
recognized overnight courier or first class registered or certified mail,
return receipt requested, postage prepaid, addressed to such party at the
address set forth below or such other address as may hereafter be designated
in writing by such party to the other parties:
(i) if to the Company, to:
Hexcel Corporation
Two Stamford Plaza
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Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Senior Vice President, General Counsel and Secretary
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
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Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. Coco, Esq. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
(ii) if to the Investors:
Berkshire Partners LLC ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
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Attention: ▇▇. ▇▇▇▇▇▇ ▇. Small
and:
Greenbriar Equity Group LLC
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(T) (▇▇▇) ▇▇▇-▇▇▇▇
(F) (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
with a copy to:
Ropes & ▇▇▇▇
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Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq. and ▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇, Esq.
All such notices, requests, consents and other communications shall be deemed
to have been given when received.
4.6 Miscellaneous.
(a) This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and the respective successors,
personal representatives and assigns of the parties hereto, whether so
expressed or not. If any Person shall acquire Registrable Securities from any
Holder, in any manner, whether by operation of law or otherwise, but in
compliance with the Stockholders Agreement, such Person shall promptly notify
the Company and such Registrable Securities acquired from such Holder shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities such Person shall be entitled to receive the
benefits of and be conclusively deemed to have agreed to be bound by and to
perform all of the terms and provisions of this Agreement. Any such successor
or assign shall agree in writing to acquire and hold the Registrable
Securities acquired from such Holder subject to all of the terms hereof. If
any Holder shall acquire additional Registrable Securities, such Registrable
Securities shall be subject to all of the terms, and entitled to all the
benefits, of this Agreement.
(b) This Agreement (with the documents referred to herein or
delivered pursuant hereto), together with the Stock Purchase Agreement and the
Stockholders Agreement, embodies the entire agreement and understanding
between the parties hereto and supersedes all prior agreements and
understandings relating to the subject matter hereof.
(c) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF DELAWARE (WITHOUT GIVING EFFECT TO CONFLICT OF
LAWS PRINCIPLES THEREOF).
(d) With respect to any suit, action or proceeding ("Proceeding")
arising out of or relating to this Agreement each of the parties hereto hereby
irrevocably (i) submits to the exclusive jurisdiction of the United States
District Court for the Southern District of New York or the Court of Chancery
located in the State of Delaware, County of Newcastle (the "Selected Courts")
and waives any objection to venue being laid in the Selected Courts whether
based on the grounds of forum non conveniens or otherwise and hereby agrees
not to commence any such Proceeding other than before one of the Selected
Courts; provided, however, that a party may commence any Proceeding in a court
other than a Selected Court solely for the purpose of enforcing an order or
judgment issued by one of the Selected Courts and (ii) consents to service of
process in any Proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, or by recognized international express
carrier or delivery service, to the Company or the Investors at their
respective addresses referred to in Section 4.5 hereof; provided, however,
that nothing herein shall affect the right of any party hereto to serve
process in any other manner permitted by law.
(e) WITH RESPECT TO ANY PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY, TO THE EXTENT NOT
PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, WAIVES, AND COVENANTS THAT
IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO
TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, AND AGREES THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH
ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR
AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY IN
ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR ANY OF
THE CONTEMPLATED TRANSACTIONS WILL INSTEAD BE TRIED IN A COURT OF COMPETENT
JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
(f) The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof. All section
references are to this Agreement unless otherwise expressly provided.
(g) This Agreement may be executed in any number of counterparts,
each of which shall be an original, but all of which together shall constitute
one instrument.
(h) Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
(i) The parties hereto agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with its specific terms or was otherwise breached. It is
accordingly agreed that the parties hereto shall be entitled to an injunction
or injunctions and other equitable remedies to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
of the Selected Courts, this being in addition to any other remedy to which
they are entitled at law or in equity. Any requirements for the securing or
posting of any bond with respect to such remedy are hereby waived by each of
the parties hereto. Each party further agrees that, in the event of any action
for an injunction or other equitable remedy in respect of such breach or
enforcement of specific performance, it will not assert the defense that a
remedy at law would be adequate.
(j) Each party hereto shall do and perform or cause to be done and
performed all such further acts and things and shall execute and deliver all
such other agreements, certificates, instruments, and documents as any other
party hereto reasonably may request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
4.7 No Inconsistent Agreements. Subject to the provisions of any
agreement set forth on Schedule 4.7 hereof, the rights granted to the Holders
of Registrable Securities hereunder do not in any way conflict with and are
not inconsistent with any other agreements to which the Company is a party or
by which it is bound. Without the prior written consent of Holders of a
majority of the then outstanding Registrable Securities, the Company will not,
on or after the date of this Agreement, enter into any agreement with respect
to its securities which is inconsistent with the rights granted in this
Agreement or otherwise conflicts with the provisions hereof or provides terms
and conditions which are more favorable to, or less restrictive on, the other
party thereto than the terms and conditions contained in this Agreement are
(insofar as they are applicable) to the Holders, other than (i) the Goldman
Registration Rights Agreement and (ii) any lock-up agreement with the
underwriters in connection with any registered offering effected hereunder,
pursuant to which the Company shall agree not to register for sale, and the
Company shall agree not to sell or otherwise dispose of, Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock,
for a specified period following the registered offering. The Company further
agrees that if any other registration rights agreement entered into after the
date of this Agreement with respect to any of its securities contains terms
which are more favorable to, or less restrictive on, the other party thereto
than the terms and conditions contained in this Agreement are (insofar as they
are applicable) to the Holders, then the terms and conditions of this
Agreement shall immediately be deemed to have been amended without further
action by the Company or any of the Holders of Registrable Securities so that
the Holders shall each be entitled to the benefit of any such more favorable
or less restrictive terms or conditions.
IN WITNESS WHEREOF, the parties hereto have duly executed this
agreement as of the date first above written.
HEXCEL CORPORATION
By: ___________________
Name:
Title:
BERKSHIRE FUND V,
LIMITED PARTNERSHIP
By: Fifth Berkshire Associates LLC
its general partner
By: __________________
Name:
Title:
BERKSHIRE FUND VI,
LIMITED PARTNERSHIP
By: Sixth Berkshire Associates LLC
its general partner
By: __________________
Name:
Title:
BERKSHIRE INVESTORS LLC
By: ___________________
Name:
Title:
GREENBRIAR CO-INVESTMENT PARTNERS, L.P.
By: Greenbriar Holdings LLC
its general partner
By: __________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Member
GREENBRIAR EQUITY FUND, L.P.
By: Greenbriar Equity Capital, L.P.,
its general partner
By: Greenbriar Holdings LLC
its general partner
By: __________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Member
EXHIBIT E
FORM OF CERTIFICATE OF AMENDMENT OF THE
RESTATED CERTIFICATE OF INCORPORATION OF
HEXCEL CORPORATION
____________________________
Pursuant to Section 242
of the General Corporation Law
of the State of Delaware
____________________________
Hexcel Corporation, a Delaware Corporation (the "Corporation") does hereby
certify as follows:
FIRST: Article 4 of the Corporation's Restated Certificate of Incorporation is
hereby amended to read in its entirety as set forth below:
4. CAPITALIZATION.
The total number of shares which the Corporation is authorized to
issue is 220,000,000, consisting of 20,000,000 shares of Preferred
Stock, without par value (hereinafter in this Certificate of
Incorporation called the "Preferred Stock"), and 200,000,000 shares
of Common Stock with a par value of $0.01 per share (hereinafter in
this Certificate called the "Common Stock").
SECOND: The foregoing amendment was duly adopted in accordance with Section
242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, Hexcel Corporation has caused this Certificate to be duly
executed in its corporate name this ___ day of ___, 2003.
HEXCEL CORPORATION
By: ______________________
Name:
Title
Exhibit F
BYLAWS OF HEXCEL CORPORATION
A DELAWARE CORPORATION
AMENDED AND RESTATED AS OF [ ] , 2003
OFFICES
1. PRINCIPAL EXECUTIVE OFFICE. The principal executive office of the
Corporation is hereby fixed and located at ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇. The Board of Directors is hereby granted full power and authority
to change the place of said principal executive office from time to time.
2. OTHER OFFICES. The registered office of the Corporation in the
State of Delaware is hereby fixed and located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, c/o The Corporation Trust Company. The Board of
Directors is hereby granted full power and authority to change the place of
said registered office within the State of Delaware from time to time. The
Corporation may also have offices in such other places in the United States or
elsewhere as the Board of Directors may from time to time designate or as the
business of the Corporation may from time to time require.
STOCKHOLDERS
3. PLACE OF MEETINGS. Stockholders' meetings shall be held at such
place, whether within or without the State of Delaware, as the Board of
Directors shall, by resolution, designate.
4. ANNUAL MEETINGS. Annual meetings of stockholders shall be held on
such dates and at such times as shall be designated from time to time by the
Board of Directors and stated in the notice of such annual meeting. At such
annual meetings directors shall be elected and such other business as may be
properly brought before such meeting shall be conducted.
Written notice of each annual meeting shall be mailed to or delivered
to each stockholder of record entitled to vote thereat not less than ten (10)
days nor more than sixty (60) days before the date of such annual meeting.
Such notice shall specify the place, the day, and the hour of such meeting,
and the matters which the Board of Directors intends to present for action by
the stockholders.
Except to the extent, if any, specifically provided to the contrary
in the Certificate of Incorporation or these Bylaws, to be properly brought
before an annual meeting, all business must be either (a) specified in the
notice of annual meeting (or any supplement thereto) given by or at the
direction of the Board of Directors, (b) otherwise properly brought before the
annual meeting by or at the direction of the Board of Directors or (c)
otherwise properly brought before the annual meeting by a stockholder of
record who complies with the notice procedures set forth below. In addition to
any other applicable requirements, for business (including the nomination of a
person or persons for election to the Board of Directors) to be properly
brought before any annual meeting by a stockholder, the stockholder must have
given timely notice thereof, in proper form, to the Secretary of the
Corporation. To be timely, a stockholder's notice must be delivered to or
mailed and received at the principal executive offices of the Corporation not
less than sixty (60) nor more than ninety (90) days prior to the anniversary
date of the immediately preceding annual meeting; provided, however, that in
the event the annual meeting is called for a date that is not within thirty
(30) days before or after such anniversary date, notice by the stockholder in
order to be timely must be so received not later than the close of business on
the tenth (10th) day following the date on which notice of the date of the
annual meeting was mailed or otherwise made public. To be in proper form, a
stockholder's notice to the Secretary must be in writing and must set forth
with respect to each matter the stockholder proposes to bring before the
annual meeting (a) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such business at the
annual meeting, (b) the name and record address of the stockholder proposing
such business, (c) the class or series and number of shares of the capital
stock of the Corporation that are owned beneficially or of record by the
stockholder, (d) as to each person whom the stockholder proposes to nominate
for election to the Board of Directors, (i) the name, age, business address
and residence address of the person, (ii) the principal occupation or
employment of the person and (iii) the class or series and number of shares of
capital stock of the Corporation that are owned beneficially or of record by
the person, (e) a description of all arrangements or understandings between
such stockholder and any other person or persons (including their name(s)) in
connection with the proposal of such business (or the nomination of any person
or persons for election to the Board of Directors) by any stockholder and any
material interest of such stockholder in such business (or nomination), (f)
any other information that would be required to be disclosed in a proxy
statement or other filing required to be made in connection with the
solicitation of proxies for the proposal (or the election of a person or
persons to the Board of Directors) pursuant to the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder if such
stockholder were engaged in such a solicitation and (g) a representation that
such stockholder or a representative thereof intends to appear in person at
the annual meeting to bring such business before the meeting (or nominate a
person or persons for election to the Board of Directors). Any such notice
relating to the nomination of a person or persons for election to the Board of
Directors must be accompanied by a written consent of each proposed nominee to
being named as a nominee and to serve as a director if elected.
The Chairman of the annual meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the provisions of this Section 4 and any
such business not properly brought before the meeting shall not be transacted
at the meeting.
5. SPECIAL MEETINGS. Special meetings of the stockholders may be
called at any time and for any purpose or purposes by the Board of Directors,
the Chairman of the Board, the Chief Executive Officer or by a committee of
the Board of Directors which has been duly designated by the Board of
Directors and whose powers and authority, as provided in a resolution of the
Board of Directors or in these Bylaws, include the power to call such
meetings. If and to the extent that any special meeting of stockholders may be
called by any other person or persons specified in any provision of the
Certificate of Incorporation or any amendment thereto, or any certificate
filed under Section 151(g) of the General Corporation Law of the State of
Delaware (the "GCL") designating the number of shares of Preferred Stock to be
issued and the rights, preferences, privileges and restrictions granted to and
imposed on the holders of such designated Preferred Stock, then such special
meeting may also be called by such person or persons in the manner, at the
times and for the purposes so specified. Except in special cases where other
express provision is made by statute, notice of such special meeting shall be
given in the same manner as for an annual meeting of stockholders. Such notice
shall also specify the general nature of the business to be transacted at the
meeting, and no business shall be transacted at the special meeting except as
specified in such notice (or any supplement thereto).
6. ADJOURNED MEETINGS AND NOTICE THEREOF. Any stockholders' meeting,
annual or special, whether or not a quorum is present, may be adjourned from
time to time by the chairman of such meeting or by the vote of a majority of
the shares present in person or represented by proxy at such meeting, but in
the absence of a quorum no other business may be transacted at such meeting.
Notice of an adjourned meeting need not be given if (a) the meeting
is adjourned for thirty (30) days or less, (b) the time and place of the
adjourned meeting are announced at the meeting at which the adjournment is
taken, and (c) no new record date is fixed for the adjourned meeting.
Otherwise, notice of the adjourned meeting shall be given as if the adjourned
meeting were a new meeting.
7. VOTING. Except as otherwise provided by applicable law, the
Certificate of Incorporation, any certificate filed under Section 151(g) of
the GCL or these Bylaws, a stockholder shall be entitled to one vote for each
share held of record on the record date fixed for the determination of the
stockholders entitled to notice of and to vote at a meeting or, if no such
date is fixed, the date determined in accordance with applicable law. If any
share is entitled to more or less than one vote on any matter, all references
herein to a majority or other proportion of shares shall refer to a majority
or other proportion of the voting power of shares entitled to vote on such
matter.
8. QUORUM. A majority of the outstanding shares entitled to vote,
represented in person or by proxy, shall constitute a quorum for the
transaction of business. No business may be transacted at a meeting in the
absence of a quorum other than the adjournment of such meeting, except that if
a quorum is present at the commencement of a meeting, business may be
transacted until the meeting is adjourned even though the withdrawal of
stockholders results in less than a quorum being present in person or by proxy
at such meeting. If a quorum is present at a meeting, the affirmative vote of
a majority of the shares present or represented by proxy at the meeting and
entitled to vote on any matter shall be the act of the stockholders unless the
vote of a larger number is required by applicable law, the Certificate of
Incorporation or these Bylaws. If a quorum is present at the commencement of a
meeting but the withdrawal of stockholders results in less than a quorum being
present in person or by proxy at such meeting, the affirmative vote of a
majority of the shares required to constitute a quorum shall be the act of the
stockholders unless the vote of a larger number is required by applicable law,
the Certificate of Incorporation or these Bylaws.
9. PROXIES. A stockholder may be represented at any meeting of
stockholders by a written proxy signed by the person entitled to vote or by
such person's duly authorized attorney-in-fact. A proxy must bear a date
within three (3) years prior to the meeting, unless the proxy specifies a
different length of time. A revocable proxy is revoked by a writing delivered
to the Secretary of the Corporation stating that the proxy is revoked or by a
subsequent proxy executed by, or by attendance at the meeting and voting in
person by, the person executing the proxy.
10. CHAIRMAN AND SECRETARY AT MEETINGS. At any meeting of
stockholders, the Chairman of the Board of Directors, or in his absence, a
person designated by the Board of Directors, shall preside at and act as
chairman of the meeting. The Secretary, or in his absence a person designated
by the chairman of the meeting, shall act as secretary of the meeting.
11. INSPECTORS. The Board of Directors may, in advance of any meeting
of stockholders, appoint one or more inspectors to act at such meeting or any
adjournment thereof. Each inspector, before entering upon the discharge of his
duties, shall take and sign an oath to faithfully execute the duties of
inspector. The inspector(s) shall determine the number of shares of capital
stock of the Corporation outstanding and the voting power of each, the number
of shares present or represented by proxy at the meeting, the existence of a
quorum, the validity and effect of proxies, and shall receive votes, ballots
or consents, count and tabulate all votes, ballots or consents, determine the
results of any election or vote, and do such acts as are proper to conduct the
election or vote with fairness to all stockholders. At the request of the
chairman of the meeting, the inspectors shall make a written report of any
matters determined by them. No director or candidate for the office of
director shall act as an inspector of an election of directors.
12. LIST OF STOCKHOLDERS. The Secretary of the Corporation shall
prepare and make, at least ten (10) days before every meeting of the
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten (10) days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at
the time and place of the meeting during the whole time thereof, and may be
inspected by any stockholder who is present.
DIRECTORS
13. POWERS. Subject to any limitations contained in the Certificate
of Incorporation, these Bylaws or the GCL as to actions to be authorized or
approved by the stockholders, and subject to the duties of directors as
prescribed by these Bylaws, all corporate powers shall be exercised by or
under the ultimate direction of, and the business and affairs of the
Corporation shall be managed by, or under the ultimate direction of, the Board
of Directors.
14. CERTAIN DEFINITIONS. For purposes of these Bylaws:
An "AFFILIATE" of any Person means any other Person that directly or
indirectly, through one or more intermediaries, Controls, is Controlled by, or
is under common Control with, such first Person. "CONTROL" has the meaning
specified in Rule 12b-2 under the Exchange Act as in effect on [ ], 2003.
Any person shall be deemed to "BENEFICIALLY OWN", to have "BENEFICIAL
OWNERSHIP" of, or to be "BENEFICIALLY OWNING" any securities (which securities
shall also be deemed "BENEFICIALLY OWNED" by such Person) that such Person is
deemed to "beneficially own" within the meaning of Rules 13d-3 and 13d-5 under
the Exchange Act, as in effect on [ ], 2003; provided, that, except for the
rights set forth in Section 3.02 of the Governance Agreement or in Section
3.02 of the Stockholders Agreement, any Person shall be deemed to Beneficially
Own any securities that such Person has the right to acquire, whether or not
such right is exercisable immediately.
"BERKSHIRE/GREENBRIAR ADDITIONAL SHARES" means, as of any date of
determination, shares of the Corporation's Common Stock the Beneficial
Ownership of which may be acquired by the Berkshire/Greenbriar Investors
pursuant to grants of stock options or other stock-based awards to the
Berkshire/Greenbriar Directors by the Corporation pursuant to any stock option
or stock incentive plan approved by the Board of Directors of the Corporation,
including without limitation the Hexcel Incentive Stock Plan.
"Berkshire/Greenbriar DIRECTORS" means Berkshire/Greenbriar Nominees
who are elected or appointed to serve as members of the Board of Directors.
"Berkshire/Greenbriar INVESTORS" means any of (i) Berkshire Fund V,
Limited Partnership, a Massachusetts limited partnership ("Berkshire V"), (ii)
Berkshire Fund VI, Limited Partnership, a Massachusetts limited partnership
("Berkshire VI"), (iii) Berkshire Investors LLC, a Massachusetts limited
liability company ("Berkshire Investors"), (iv) Berkshire Fund V Investment
Corp., a Massachusetts corporation ("Berkshire V Investment Corp.") (for so
long as it Beneficially Owns Voting Securities), (v) Berkshire Fund VI
Investment Corp., a Massachusetts corporation ("Berkshire VI Investment
Corp.") (for so long as it Beneficially Owns Voting Securities), (vi)
Greenbriar Co-Investment Partners, L.P., a Delaware limited partnership
("Greenbriar Co-Investment"), (vii)Greenbriar Equity Fund, L.P., a Delaware
limited partnership ("Greenbriar Fund"), or (viii) any investment entity
controlled or under common control with either of Berkshire Partners LLC or
Greenbriar Equity Group, LLC; provided, however, that any such Person
specified in clause (viii) that desires to acquire Voting Securities in
accordance with the Stockholders Agreement shall, as a condition to acquiring
any such Voting Securities, execute a joinder agreement in which it shall
agree to be bound by the provisions of the Stockholders Agreement to the same
extent as the Berkshire/Greenbriar Investors and shall thereafter be deemed to
be an "Investor" for all purposes of the Stockholders Agreement unless such
Person does not hold any Voting Securities.
"BERKSHIRE/GREENBRIAR NOMINEES" means such Persons as are so
designated by the Berkshire/Greenbriar Investors, as such designations may
change from time to time, to serve as members of the Board of Directors
pursuant to Sections 17 and 18.
"BUYOUT TRANSACTION" means a tender offer, merger or any similar
transaction that offers holders of Voting Securities (other than, if
applicable, the Person proposing such transaction) the opportunity to dispose
of the Voting Securities Beneficially Owned by such holders or otherwise
contemplates the acquisition by any Person or Group of Voting Securities that
would result in Beneficial Ownership by such Person or Group of a majority of
the Voting Securities outstanding, or a sale of all or substantially all of
the Corporation's assets.
"COMMON STOCK" means the common stock of the Corporation, par value
$0.01 per share, and any equity securities issued or issuable in exchange for
or with respect to such common stock by way of a stock dividend, stock split
or combination of shares or in connection with a reclassification,
recapitalization, merger, consolidation or other reorganization.
"CONVERTIBLE PREFERRED STOCK" means, collectively, the Series A
Convertible Preferred Stock and the Series B Convertible Preferred Stock.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"GOLDMAN ADDITIONAL SHARES" means, as of any date of determination,
up to 255,381 shares of Common Stock (as equitably adjusted to reflect any
stock split, combination, reorganization, recapitalization, reclassification
or other similar event involving the Common Stock), in the aggregate, (i) the
Beneficial Ownership of which may be acquired inadvertently from time to time
by The ▇▇▇▇▇▇▇ Sachs Group, Inc. or its Affiliates acting in connection with
their activities as a broker or dealer registered under Section 15 of the
Exchange Act or as an asset manager (excluding Affiliates formed for the
purpose of effecting principal transactions) or (ii) the Beneficial Ownership
of which may be acquired by the Goldman Investors pursuant to grants of stock
options or other stock-based awards to the Goldman Directors by the
Corporation pursuant to any stock option or stock incentive plan approved by
the Board of Directors of the Corporation, including without limitation the
Hexcel Incentive Stock Plan; provided, that if and for so long as The ▇▇▇▇▇▇▇
▇▇▇▇▇ Group, Inc. and its Affiliates collectively Beneficially Own less than
30% of the Total Voting Power of the Corporation, the maximum number of
Goldman Additional Shares shall be 400,000 (as equitably adjusted to reflect
any stock split, combination, reorganization, recapitalization,
reclassification or other similar event involving the Common Stock).
"GOLDMAN DIRECTORS" means Goldman Nominees who are elected or
appointed to serve as members of the Board of Directors.
"GOLDMAN INVESTORS" means any of (i) the LXH Investors, (ii) the
Limited Partnerships, or (iii) The ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, Inc. or any direct or
indirect Subsidiary of the ▇▇▇▇▇▇▇ Sachs Group, Inc. formed for the purpose of
effecting principal transactions; provided, however, that any such Person
specified in clause (iii) that desires to acquire Voting Securities in
accordance with the Governance Agreement shall, as a condition to acquiring
any such Voting Securities, execute a joinder agreement in which it shall
agree to be bound by the provisions of the Governance Agreement to the same
extent as the Goldman Investors and shall thereafter be deemed to be an
"Investor" for all purposes of the Governance Agreement unless such Person
does not hold any Voting Securities.
"GOLDMAN NOMINEES" means such Persons as are so designated by the
Goldman Investors, as such designations may change from time to time, to serve
as members of the Board of Directors pursuant to Sections 17 and 18.
"GOVERNANCE AGREEMENT" means the Amended and Restated Governance
Agreement, dated as of [ ], 2003, among LXH, L.L.C., a Delaware limited
liability company ("LXH"), LXH II, L.L.C., a Delaware limited liability
company ("LXH II" and together with LXH, the "LXH Investors"), GS Capital
Partners 2000 L.P., a Delaware limited partnership ("GS 2000"), GS Capital
Partners 2000 Offshore, L.P., a Cayman Islands exempted limited partnership
("GS 2000 Offshore"), GS Capital Partners 2000 Employee Fund, L.P., a Delaware
limited partnership ("GS 2000 Employee"), GS Capital Partners 2000 GmbH & Co.
Beteiligungs KG, a German limited partnership ("GS ▇▇▇▇ ▇▇▇▇▇▇▇"), Stone
Street Fund 2000, L.P., a Delaware limited partnership ("Stone Street" and,
collectively with GS 2000, GS 2000 Offshore, GS 2000 Employee and GS ▇▇▇▇
▇▇▇▇▇▇▇, the "Limited Partnerships"), and the Corporation.
"GOVERNMENTAL ENTITY" means any court, administrative agency,
regulatory body, commission or other governmental authority, board, bureau or
instrumentality, domestic or foreign and any subdivision thereof.
"GROUP" has the meaning set forth in Section 13(d) of the Exchange
Act as in effect on [ ], 2003.
"HEXCEL INCENTIVE STOCK PLAN" means the Hexcel Corporation Incentive
Stock Plan, as amended and restated through [ ], 2003 and any subsequent
amendment thereto or replacement thereof approved by the Board of Directors of
the Corporation.
"INDEPENDENT DIRECTOR" means a director of the Corporation who is not
an Investors' Director and who (i) is not and has never been an officer,
employee, partner or director of any of the Investors or their respective
Affiliates or associates (as defined in Rule 12b-2 under the Exchange Act), in
each case other than the Corporation and (ii) has no affiliation or
compensation, consulting or contractual relationship with any of the Investors
or their respective Affiliates or associates (in each case other than the
Corporation) such that a reasonable person would regard such director as
likely to be unduly influenced by any of such Persons or any of their
respective Affiliates or associates (in each case other than the Corporation).
"INITIAL BERKSHIRE/GREENBRIAR SHARES" means (i) the 77,875 shares of
Series A Convertible Preferred Stock purchased by the Berkshire/Greenbriar
Investors pursuant to the Stock Purchase Agreement, dated December 18, 2002,
by and among the Corporation and the Berkshire/Greenbriar Investors (the
"Berkshire/Greenbriar Purchase Agreement"), (ii) the 77,875 shares of Series B
Convertible Preferred Stock purchased by the Berkshire/Greenbriar Investors
pursuant to the Berkshire/Greenbriar Purchase Agreement and (iii) any shares
of the Corporation's Common Stock issuable upon conversion of the shares of
Series A Convertible Preferred Stock or Series B Convertible Preferred Stock
(as equitably adjusted to reflect any stock split, combination,
reorganization, recapitalization, reclassification or other similar event
involving the Common Stock or Convertible Preferred Stock, as applicable).
"INITIAL GOLDMAN SHARES" means (i) the 47,125 shares of Series A
Convertible Preferred Stock purchased by the Limited Partnerships pursuant to
the Stock Purchase Agreement, dated December 18, 2002, by and among the
Corporation and the Limited Partnerships (the "Goldman Purchase Agreement"),
(ii) the 47,125 shares of Series B Convertible Preferred Stock purchased by
the Limited Partnerships pursuant to the Goldman Purchase Agreement and (iii)
any shares of the Corporation's Common Stock issuable upon conversion of the
shares of Series A Convertible Preferred Stock or Series B Convertible
Preferred Stock (as equitably adjusted to reflect any stock split,
combination, reorganization, recapitalization, reclassification or other
similar event involving the Common Stock or Convertible Preferred Stock, as
applicable).
"INVESTORS" means the Berkshire/Greenbriar Investors and the Goldman
Investors.
"INVESTORS' DIRECTORS" means Berkshire/Greenbriar Directors and
Goldman Directors.
"INVESTORS' NOMINEES" means Berkshire/Greenbriar Nominees and Goldman
Nominees.
"NON-BERKSHIRE/GREENBRIAR DIRECTOR" means a director of the
Corporation who is not a Berkshire/Greenbriar Director and who (i) is not and
has never been an officer, employee, partner or director of any of the
Berkshire/Greenbriar Investors or their Affiliates or associates (as defined
in Rule 12b-2 under the Exchange Act), in each case other than the
Corporation, and (ii) has no affiliation or compensation, consulting or
contractual relationship with any of the Berkshire/Greenbriar Investors or
their Affiliates or associates (in each case other than the Corporation) such
that a reasonable person would regard such director as likely to be unduly
influenced by any of such Persons or any of their Affiliates or associates (in
each case other than the Corporation)
"NON-GOLDMAN DIRECTOR" means a director of the Corporation who is not
a Goldman Director and who (i) is not and has never been an officer, employee,
partner or director of any of the Goldman Investors or their Affiliates or
associates (as defined in Rule 12b-2 under the Exchange Act), in each case
other than the Corporation, and (ii) has no affiliation or compensation,
consulting or contractual relationship with any of the Goldman Investors or
their Affiliates or associates (in each case other than the Corporation) such
that a reasonable person would regard such director as likely to be unduly
influenced by any of such Persons or any of their Affiliates or associates (in
each case other than the Corporation)
"NYSE" means the New York Stock Exchange.
"ORIGINAL GOLDMAN SHARES" means the [14,563,668] shares of Common
Stock Beneficially Owned by the Goldman Investors on [ ], 2003 (as equitably
adjusted to reflect any stock split, combination, reorganization,
recapitalization, reclassification or other similar event involving the Common
Stock).
"PERSON" means any individual, Group, corporation, firm, partnership,
joint venture, trust, business association, organization, Governmental Entity
or other entity.
"SERIES A CONVERTIBLE PREFERRED STOCK" means the Series A Convertible
Preferred Stock, without par value, of the Corporation.
"SERIES B CONVERTIBLE PREFERRED STOCK" means the Series B Convertible
Preferred Stock, without par value, of the Corporation.
"SIGNIFICANT SUBSIDIARY" has the meaning set forth in Rule 1-02 of
Regulation S-X under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder as in effect on [ ], 2003.
"STOCKHOLDERS AGREEMENT" means the Stockholders Agreement, dated as
of [ ], 2003, among the Berkshire/Greenbriar Investors and the Corporation.
"SUBSIDIARY" means, with respect to any Person, as of any date of
determination, any other Person as to which such Person owns, directly or
indirectly, or otherwise controls, more than 50% of the voting shares or other
similar interests.
"TOTAL VOTING POWER OF THE CORPORATION" means the total number of
votes that may be cast in the election of directors of the Corporation if all
Voting Securities outstanding or treated as outstanding pursuant to the final
two sentences of this definition were present and voted at a meeting held for
such purpose. The percentage of the Total Voting Power of the Corporation
Beneficially Owned by any Person is the percentage of the Total Voting Power
of the Corporation that is represented by the total number of votes that may
be cast in the election of directors of the Corporation by Voting Securities
Beneficially Owned by such Person. In calculating such percentage, each share
of Convertible Preferred Stock shall be outstanding or shall be treated as
outstanding for all purposes of this Agreement without regard to the Person
holding such share until such time as such share of Convertible Preferred
Stock is redeemed or repurchased by the Company or converted into Common Stock
in accordance with the Certificate of Designations of the Series A Convertible
Preferred Stock or the Certificate of Designations of the Series B Convertible
Preferred Stock, as applicable. In calculating such percentage, the Voting
Securities Beneficially Owned by any Person that are not outstanding but are
subject to issuance upon exercise or exchange of rights of conversion or any
options, warrants or other rights Beneficially Owned by such Person shall be
deemed to be outstanding for the purpose of computing the percentage of the
Total Voting Power of the Corporation represented by Voting Securities
Beneficially Owned by such Person, but shall not be deemed to be outstanding
for the purpose of computing the percentage of the Total Voting Power of the
Corporation represented by Voting Securities Beneficially Owned by any other
Person.
"VOTING SECURITIES" means the Common Stock, the Convertible Preferred
Stock and any other securities of the Corporation or any Subsidiary of the
Corporation entitled to vote generally in the election of directors of the
Corporation or such Subsidiary of the Corporation.
15. NUMBER OF DIRECTORS. (a) Except as provided in Subsection 6.1 of
the Certificate of Incorporation and subject to compliance with Section 17,
the authorized number of directors of this Corporation shall be not less than
three (3) nor more than fifteen (15), with the exact number of directors
within such range specified in subsection (b) below, or, if not so specified,
with the exact number of directors within such range fixed from time to time
by resolution of the Board of Directors.
(b) It is hereby specified that this Corporation shall have ten (10)
directors, one of whom shall be designated the Chairman of the Board. The
Chairman of the Board shall be designated by a majority of the members of the
Board of Directors.
16. ELECTION. (a) Directors shall hold office until the annual
meeting next following their election and until their successors are
nominated, elected and qualified pursuant to these Bylaws; subject, however,
to their prior resignation, death or removal as provided by the Certificate of
Incorporation, these Bylaws or applicable law.
Subject to the Certificate of Incorporation and Subsections (b), (c),
(d) and (e) hereof, any vacancies in the Board of Directors for any reason,
and any newly created directorships resulting from any increase in the number
of directors, may be filled by the Board of Directors, acting by a majority of
the directors then in office, even if less than a quorum; and any directors so
chosen shall hold office until the next election of the class for which such
directors shall have been chosen, and until their successors shall be elected
and qualified or until their earlier death, resignation or removal.
(b) If at any time a member of the Board of Directors resigns
(pursuant to this Section 16 or otherwise) or is removed in accordance with
applicable law or these By-laws, a new member shall be designated to replace
such member until the next election of directors. If, consistent with Section
17, the replacement director is to be (i) a Berkshire/Greenbriar Director, the
party that designated such Berkshire/Greenbriar Director shall designate the
replacement Berkshire/Greenbriar Director or (ii) a Goldman Director, the
party that designated such Goldman Director shall designate the replacement
Goldman Director. Except as set forth in paragraph (d) below, if consistent
with Section 17, the replacement director is to be a Director other than an
Investors' Director, the remaining Independent Directors shall designate the
replacement director.
(c) Subject to paragraph (d) below, if at any time (i) the number of
Berkshire/Greenbriar Nominees entitled to be nominated to the Board of
Directors in accordance with these Bylaws in an election of directors
presented to stockholders would decrease, within 10 days thereafter the
Berkshire/Greenbriar Investors shall cause a sufficient number of
Berkshire/Greenbriar Directors to resign from the Board of Directors so that
the number of Berkshire/Greenbriar Directors on the Board of Directors after
such resignation(s) equals the number of Berkshire/Greenbriar Nominees that
the Berkshire/Greenbriar Investors would have been entitled to designate had
an election of directors taken place at such time. The Berkshire/Greenbriar
Investors shall also cause a sufficient number of Berkshire/Greenbriar
Directors to resign from any relevant committees of the Board of Directors so
that such committees are comprised in the manner contemplated by Section 19
after giving effect to such resignations, or (ii) the number of Goldman
Nominees entitled to be nominated to the Board of Directors in accordance with
these Bylaws in an election of directors presented to stockholders would
decrease, within 10 days thereafter the Goldman Investors shall cause a
sufficient number of Goldman Directors to resign from the Board of Directors
so that the number of Goldman Directors on the Board of Directors after such
resignation(s) equals the number of Goldman Nominees that the Goldman
Investors would have been entitled to designate had an election of directors
taken place at such time. The Goldman Investors shall also cause a sufficient
number of Goldman Directors to resign from any relevant committees of the
Board of Directors so that such committees are comprised in the manner
contemplated by Section 19 after giving effect to such resignations. Any
vacancies created by the resignations required by this Subsection (c) shall be
filled by Independent Directors.
(d) If at any time the percentage of the Total Voting Power of the
Corporation Beneficially Owned by the Berkshire/Greenbriar Investors or the
Goldman Investors decreases as a result of an issuance of Voting Securities by
the Corporation (other than any of the issuances described in the last
sentence of this Section 16(d)), such Investors may notify the Corporation
that such Investors intend to acquire a sufficient amount of additional Voting
Securities necessary to maintain their then current level of Board of
Directors representation within 90 days. In such event, until the end of such
period (and thereafter if such Investors in fact restore their percentage of
the Total Voting Power of the Corporation during such period and provided that
such Investors continue to maintain the requisite level of Beneficial
Ownership of Voting Securities in accordance with Section 17) the Board of
Directors shall continue to have the number of Berkshire/Greenbriar Directors
or Goldman Directors, as applicable, that corresponds to the percentage of the
Total Voting Power of the Corporation Beneficially Owned by such Investors
prior to such issuance of Voting Securities by the Corporation.
Notwithstanding any provision in the Governance Agreement or the Stockholders
Agreement to the contrary, the provisions of this Section 16(d) shall not
apply to any issuance of Voting Securities (x) upon conversion of any
convertible securities which are either outstanding on [ ], 2003 (including,
without limitation, issuances of securities upon any payment of dividends on,
redemption of, or otherwise payable with respect to the Series A Convertible
Preferred Stock or Series B Convertible Preferred Stock) or approved by the
Board of Directors or a duly authorized committee of the Board of Directors
after [ ], 2003 in accordance with Section 2.06 of the Governance Agreement
and with Section 2.06 of the Stockholders Agreement or (y) pursuant to
employee or director stock option or incentive compensation or similar plans
outstanding as of [ ], 2003 or, subsequent to [ ], 2003, approved by the Board
of Directors or a duly authorized committee of the Board of Directors.
(e) Whenever the holders of any one or more classes or series of
Preferred Stock issued by the Corporation shall have the right, voting
separately by class or series, to elect directors at any annual or special
meeting of stockholders, the election, term of office, filling of vacancies,
removal and other features of such directorships shall be governed by the
terms of the Certificate of Incorporation applicable thereto, and by the terms
of any certificate filed pursuant to Section 151(g) of the GCL designating
such class or series and the rights, preferences, privileges and restrictions
granted to and imposed on the holders of such designated Preferred Stock.
17. BOARD REPRESENTATION. (a) (i) For so long as the
Berkshire/Greenbriar Investors Beneficially Own 15% or more of the Total
Voting Power of the Corporation, subject to Sections 16(d) and 17(a)(iv), the
Corporation shall exercise all authority under applicable law to cause any
slate of directors presented to stockholders for election to the Board of
Directors to consist of such nominees that, if elected, would result in the
Board of Directors consisting of two Berkshire/Greenbriar Directors and eight
Non-Berkshire/Greenbriar Directors (including at least five Independent
Directors); provided, however, that in the event the Total Voting Power of the
Corporation Beneficially Owned by the Berkshire/Greenbriar Investors at any
time is below 15% of the Total Voting Power of the Corporation, the
Berkshire/Greenbriar Investors shall have no further right to nominate two
Directors pursuant to this Section 17(a)(i); provided, further, that if the
Berkshire/Greenbriar Investors, directly or indirectly, during the term of the
Stockholders Agreement shall have sold, transferred or otherwise disposed of,
on a cumulative basis, Beneficial Ownership of shares of Common Stock and/or
Convertible Preferred Stock together representing 66?% or more of the Total
Voting Power of the Corporation represented by the Initial
Berkshire/Greenbriar Shares as of [ ], 2003, to Persons who are not
Berkshire/Greenbriar Investors, then the Corporation shall exercise all
authority under applicable law to cause any slate of directors presented to
stockholders for election to the Board of Directors to consist of such
nominees that, if elected, would result in the Board of Directors consisting
of one Berkshire/Greenbriar Director and nine Non-Berkshire/Greenbriar
Directors (including at least six Independent Directors).
(ii) For so long as the Berkshire/Greenbriar Investors
Beneficially Own less than 15% but at least 10% of the Total Voting
Power of the Corporation, subject to Sections 16(d) and 17(a)(iv),
the Corporation shall exercise all authority under applicable law to
cause any slate of directors presented to stockholders for election
to the Board of Directors to consist of such nominees that, if
elected, would result in the Board of Directors consisting of one
Berkshire/Greenbriar Director and nine Non-Berkshire/Greenbriar
Directors (including at least six Independent Directors); provided,
however, that in the event the Total Voting Power of the Corporation
Beneficially Owned by the Berkshire/Greenbriar Investors at any time
is below 10% of the Total Voting Power of the Corporation, the
Berkshire/Greenbriar Investors shall have no further right to
nominate one Berkshire/Greenbriar Director pursuant to this Section
17(a)(ii).
(iii) Berkshire/Greenbriar Additional Shares shall not be
included in any calculation of the Berkshire/Greenbriar Investors'
Beneficial Ownership of the Total Voting Power of the Corporation
under these Bylaws.
(iv) Notwithstanding anything in these By-Laws, the
Corporation may increase the size of the Board of Directors through
the appointment of one or more additional independent directors (as
such term is used in the NYSE listing requirements) in order to
comply with any applicable law, regulation or NYSE rule; provided,
that, in the event of any such change, the Corporation will use its
commercially reasonable best efforts to give the Berkshire/Greenbriar
Investors the right to nominate, as nearly as possible, that
proportion of the directors as permitted by the terms of Sections
17(a)(i) and 17(a)(ii). Any director appointed to the Board of
Directors pursuant to the first clause of this Section 17(a)(iv)
shall be selected by a majority of the Independent Directors and
shall be an Independent Director. Each of the Berkshire/Greenbriar
Investors shall perform any and all actions as reasonably requested
by the Corporation in order for the Board of Directors to be changed
pursuant to this Section 7(a)(iv).
(b)(i) For so long as the Goldman Investors Beneficially Own
20% or more of the Total Voting Power of the Corporation, subject to
Sections 16(d) and 17(b)(vi), the Corporation shall exercise all
authority under applicable law to cause any slate of directors
presented to stockholders for election to the Board of Directors to
consist of such nominees that, if elected, would result in the Board
of Directors consisting of three Goldman Directors and seven
Non-Goldman Directors (including at least five Independent
Directors); provided, however, that if the Goldman Investors,
directly or indirectly, during the term of the Governance Agreement
shall have sold, transferred or otherwise disposed of, on a
cumulative basis, Beneficial Ownership of shares of Common Stock
and/or Convertible Preferred Stock together representing 33 ?% or
more of the Total Voting Power of the Corporation represented by the
aggregate number of Original Goldman Shares and Initial Goldman
Shares as of [ ], 2003 to Persons that are not Goldman Investors,
then the Corporation shall exercise all authority under applicable
law to cause any slate of directors presented to stockholders for
election to the Board of Directors to consist of such nominees that,
if elected, would result in the Board of Directors consisting of two
Goldman Directors and eight Non-Goldman Directors (including at least
six Independent Directors)
(ii) For so long as the Goldman Investors Beneficially Own
less than 20% but at least 15% of the Total Voting Power of the
Corporation, subject to Sections 16(d) and 17(b)(vi), the Corporation
shall exercise all authority under applicable law to cause any slate
of directors presented to stockholders for election to the Board of
Directors to consist of such nominees that, if elected, would result
in the Board of Directors consisting of two Goldman Directors and
eight Non-Goldman Directors (including at least six Independent
Directors); provided, however, that if the Goldman Investors,
directly or indirectly, during the term of the Governance Agreement
shall have sold, transferred or otherwise disposed of, on a
cumulative basis, Beneficial Ownership of shares of Common Stock
and/or Convertible Preferred Stock together representing 66?% or more
of the Total Voting Power of the Corporation represented by the
aggregate number of Original Goldman Shares and Initial Goldman
Shares as of the [ ], 2003 to Persons that are not Goldman Investors,
then the Corporation shall exercise all authority under applicable
law to cause any slate of directors presented to stockholders for
election to the Board of Directors to consist of such nominees that,
if elected, would result in the Board of Directors consisting of one
Goldman Director and nine Non-Goldman Directors (including at least
seven Independent Directors).
(iii) For so long as the Goldman Investors Beneficially Own
less than 15% but at least 10% of the Total Voting Power of the
Corporation, subject to Sections 16(d) and 17(b)(vi), the Corporation
shall exercise all authority under applicable law to cause any slate
of directors presented to stockholders for election to the Board of
Directors to consist of such nominees that, if elected, would result
in the Board of Directors consisting of one Goldman Director and nine
Non-Goldman Directors (including at least seven Independent
Directors).
(iv) In order to determine (x) the number of Goldman
Nominees to be included in any slate of directors to be presented to
stockholders for election to the Board of Directors and (y) the
percentage of the Total Voting Power of the Corporation Beneficially
Owned by the Goldman Investors for purposes of Section 20, the
Goldman Investors shall be deemed to Beneficially Own a percentage of
the Total Voting Power of the Corporation that is no more than (1)
39.3% of the Total Voting Power of the Corporation less (2) the
percentage of the Total Voting Power of the Corporation represented
by any Voting Securities disposed of, directly or indirectly, by the
Goldman Investors to Persons that are not Goldman Investors since [
], 2003.
(v) The Goldman Additional Shares shall not be included in
any calculation of the Goldman Investors' Beneficial Ownership of the
Total Voting Power of the Corporation under these Bylaws.
(vi) Notwithstanding anything in these By-Laws, the
Corporation may increase the size of the Board of Directors through
the appointment of one or more additional independent directors (as
such term is used in the NYSE listing requirements) in order to
comply with any applicable law, regulation or NYSE rule; provided,
that, in the event of any such change, the Corporation will use its
commercially reasonable best efforts to give the Goldman Investors
the right to nominate, as nearly as possible, that proportion of the
directors as permitted by the terms of Sections 17(b)(i), 17(b)(ii)
and 17(b)(iii). Any director appointed to the Board of Directors
pursuant to the first clause of this Section 17(b)(vi) shall be
selected by a majority of the Independent Directors and shall be an
Independent Director. Each of the Goldman Investors shall perform any
and all actions as reasonably requested by the Corporation in order
for the Board of Directors to be changed pursuant to this Section
17(b)(vi).
18. DESIGNATION OF SLATE. Any Berkshire/Greenbriar Nominees or
Goldman Nominees that are included in a slate of directors pursuant to Section
17 shall be designated by the Berkshire/Greenbriar Investors, in accordance
with the Stockholders Agreement, on the one hand, or the Goldman Investors, in
accordance with the Governance Agreement, on the other hand, respectively. Any
Non-Berkshire/Greenbriar Director nominees and any Non-Goldman Director
nominees who are to be included in any slate of directors pursuant to Section
17 shall be designated by majority vote of the then incumbent Directors who
are not Investors' Directors (including the Chairman of the Board if he or she
is an Independent Director). The Corporation's nominating committee, if any
(or if there is no such nominating committee, the Board of Directors or any
other duly authorized committee thereof) shall nominate each person so
designated.
19. COMMITTEE MEMBERSHIP. (i) So long as the Berkshire/Greenbriar
Investors shall be entitled to designate two Berkshire/Greenbriar Nominees for
election to the Board of Directors, the finance, compensation, nominating,
audit and any other committee of the Board of Directors shall consist of at
least one Berkshire/Greenbriar Director; provided, however, that if no
Berkshire/Greenbriar Director is eligible for membership on an above-listed
committee under then-applicable listing standards of the NYSE or any other
applicable law, rule or regulation, then such committee of the Board of
Directors shall include a Berkshire/Greenbriar Director only when so permitted
by the listing standards of the NYSE or any other applicable law, rule or
regulation; provided, further, that the Corporation shall exercise all
authority under applicable law, rule and regulation to permit the inclusion of
any Berkshire/Greenbriar Director designated by the Berkshire/Greenbriar
Investors on such committee, including, without limitation, causing an
increase in the number of directors on such committee and (ii) so long as the
Goldman Investors shall be entitled to designate two or more Goldman Nominees
for election to the Board of Directors, the finance, compensation, nominating,
audit and any other committee of the Board of Directors shall consist of at
least one Goldman Director; provided, however, that if no Goldman Director is
eligible for membership on an above-listed committee under then-applicable
listing standards of the NYSE or any other applicable law, rule or regulation,
then such committee of the Board of Directors shall include a Goldman Director
only when so permitted by the listing standards of the NYSE or any other
applicable law, rule or regulation; provided, further, that the Corporation
shall exercise all authority under applicable law, rule and regulation to
permit the inclusion of any Goldman Director designated by the Goldman
Investors on such committee, including, without limitation, causing an
increase in the number of directors on such committee. To the extent that (i)
Berkshire/Greenbriar Directors are not eligible for membership on the finance
committee, compensation committee, nominating committee, audit committee
and/or other committees of the Board of Directors, the Berkshire/Greenbriar
Investors shall be entitled to designate a representative to attend and
observe such committee meetings, provided that the observation is not
prohibited by applicable listing standards, laws, rules or regulations, and
(ii) Goldman Directors are not eligible for membership on the finance
committee, compensation committee, nominating committee, audit committee
and/or other committees of the Board of Directors, the Goldman Investors shall
be entitled to designate a representative to attend and observe such committee
meetings, provided that the observation is not prohibited by applicable
listing standards, laws, rules or regulations.
20. APPROVALS. The Board of Directors shall not authorize, approve or
ratify any of the following actions without the approval of (i) a majority of
the Berkshire/Greenbriar Investors' Directors for so long as and at any time
the Berkshire/Greenbriar Investors Beneficially Own 15% or more of the Total
Voting Power of the Corporation, and, if the Berkshire/Greenbriar Investors'
percentage Beneficial Ownership of the Total Voting Power of the Corporation
is reduced below 15% by an issuance of Voting Securities by the Corporation,
no such authorization, approval or ratification shall be given by the Board of
Directors without the approval of a majority of the Berkshire/Greenbriar
Directors (x) until 10 business days after the Corporation notifies the
Berkshire/Greenbriar Investors in writing of such issuance, and (y) if the
Berkshire/Greenbriar Investors shall have notified the Corporation within 10
business days after their receipt of a written notification of such issuance
that the Berkshire/Greenbriar Investors, pursuant to the option granted to the
Berkshire/Greenbriar Investors by Section 3.02 of the Stockholders Agreement,
intend to acquire a sufficient amount of Voting Securities within such 90-day
period referred to therein, so that the Berkshire/Greenbriar Investors will
Beneficially Own at least 15% of the Total Voting Power of the Corporation by
the end of such 90-day period subject to Section 16(d), during the 90-day
period following an issuance of Voting Securities by the Corporation that
causes the Berkshire/Greenbriar Investors to Beneficially Own less than 15% of
the Total Voting Power of the Corporation and (ii) a majority of the Goldman
Directors for so long as and at any time (subject to the provisions of
Sections 17(b)(vi)) the Goldman Investors Beneficially Own 15% or more of the
Total Voting Power of the Corporation and, if the Goldman Investors'
percentage Beneficial Ownership of the Total Voting Power of the Corporation
is reduced below 15% by an issuance of Voting Securities by the Corporation,
no such authorization, approval or ratification shall be given by the Board of
Directors without the approval of a majority of the Goldman Directors (x)
until 10 business days after the Corporation notifies the Goldman Investors in
writing of such issuance, and (y) if the Goldman Investors shall have notified
the Corporation within 10 business days after their receipt of a written
notification of such issuance that the Goldman Investors, pursuant to the
option granted to the Goldman Investors by Section 3.02 of the Governance
Agreement, intend to acquire a sufficient amount of Voting Securities within
such 90-day period referred to therein, so that the Goldman Investors will
Beneficially Own at least 15% of the Total Voting Power of the Corporation by
the end of such 90-day period subject to Section 16(d), during the 90-day
period following an issuance of Voting Securities by the Corporation that
causes the Goldman Investors to Beneficially Own less than 15% of the Total
Voting Power of the Corporation:
(a) any merger, consolidation, acquisition or other business
combination involving the Corporation or any Subsidiary of the Corporation
(other than a Buyout Transaction) if the value of the consideration to be paid
or received by the Corporation and/or its stockholders in any such individual
transaction or in such transaction when added to the aggregate value of the
consideration paid or received by the Corporation and/or its stockholders in
all other such transactions approved by the Board of Directors during the
immediately preceding 12 months exceeds the greater of (x) $75 million or (y)
11% of the Corporation's total consolidated assets;
(b) any sale, transfer, assignment, conveyance, lease or other
disposition or any series of related dispositions of any assets, business or
operations of the Corporation or any of its Subsidiaries (other than a Buyout
Transaction) if the value of the assets, business or operations so disposed
during the immediately preceding 12 months exceeds the greater of (x) $75
million or (y) 11% of the Corporation's total consolidated assets; or
(c) any issuance by the Corporation or any Significant Subsidiary of
the Corporation of equity or equity-related securities (other than (i)
pursuant to customary employee or director stock option or incentive
compensation or similar plans approved by the Board of Directors or a duly
authorized committee of the Board of Directors, (ii) pursuant to transactions
solely among the Corporation and its wholly owned Subsidiaries (including any
Subsidiaries which would be wholly owned by the Corporation but for the
issuance of directors' or shareholders' qualifying shares), (iii) upon
conversion of convertible securities or upon exercise of warrants or options,
which convertible securities, warrants or options are either outstanding on [
], 2003 (including, without limitation, issuances of securities upon any
payment of dividends on, redemption of, or otherwise payable with respect to
the Series A Convertible Preferred Stock or the Series B Convertible Preferred
Stock), or approved by the Board of Directors or a duly authorized committee
of the Board of Directors after [ ], 2003, in accordance with Section 2.06 of
the Governance Agreement and Section 2.06 of the Stockholders Agreement, or
(iv) in connection with any mergers, consolidations, acquisitions or other
business combinations involving the Corporation or any Subsidiary of the
Corporation which are approved by the Board of Directors or a duly authorized
committee of the Board of Directors in accordance with Section 2.06 of the
Governance Agreement and Section 2.06 of the Stockholders Agreement (if either
is applicable)) for which the consideration received by the Corporation for
such transactions during the immediately preceding 12 months exceeds $25
million.
21. NONEXCLUSIVITY. The Goldman Investors' and the
Berkshire/Greenbriar Investors' rights under Sections 14, 15, 16, 17, 18, 19,
and 20 shall not be deemed exclusive of any rights related to similar matters
to which the Goldman Investors and the Berkshire/Greenbriar Investors may be
entitled under these Bylaws, the Certificate of Incorporation, any agreement
(including the Governance Agreement and the Stockholders Agreement) or
otherwise.
22. QUORUM AND REQUIRED VOTE. Six (6) of the directors then in
office, including at least two Independent Directors, shall constitute a
quorum for the transaction of business. Except as otherwise provided by the
Certificate of Incorporation or these Bylaws, every act or decision done or
made by a majority of the directors present at a meeting duly held at which a
quorum is present is the act of the Board of Directors. Subject to Section
3.03 of the Governance Agreement and Section 3.03 of the Stockholders
Agreement, as applicable, for so long as there are any Goldman Directors or
Berkshire/Greenbriar Investors Directors serving on the Board of Directors,
the Board of Directors shall not authorize, approve or ratify any action, at a
meeting of the Board of Directors, by written consent or otherwise, without
the approval of a minimum of six (6) members of the Board of Directors, of
which at least two (2) of such six (6) members shall be Independent Directors,
or in the event that the Board of Directors shall consist of less than six (6)
members due to vacancies on the Board of Directors, the approval of all
members of the Board of Directors, shall be required for authorization,
approval or ratification of any action.
23. REMOVAL. Except as provided in the Certificate of Incorporation
and in Section 16 hereof, a director may be removed from office at any time,
with or without cause, by the affirmative vote of the holders of a majority of
the outstanding shares entitled to vote at an election of directors. No
reduction in the number of directors shall have the effect of removing any
director prior to the expiration of his term.
24. RESIGNATION. Any director may resign by giving written notice to
the Chairman of the Board, the Chief Executive Officer, the Secretary or the
Board of Directors. Such resignation shall be effective when given unless the
notice specifies a later time. The resignation shall be effective regardless
of whether it is accepted by the Corporation.
25. COMPENSATION. If the Board of Directors so resolves, the
directors, including the Chairman of the Board, shall receive compensation and
expenses of attendance at meetings of the Board of Directors and committees of
the Board of Directors. Nothing herein shall preclude any director from
serving the Corporation in another capacity and receiving compensation for
such service.
26. COMMITTEES. Subject to Section 19, the Board of Directors may, by
resolution adopted by a majority of the authorized number of directors,
designate one or more committees, each consisting of two or more directors, to
serve at the pleasure of the Board of Directors. In the absence or
disqualification of any member of a committee of the Board of Directors, the
other members thereof present at any meeting and not disqualified from voting,
whether or not he or they constitute a quorum, may, subject to Section 19,
unanimously appoint another member of the Board of Directors to act in the
place of such absent or disqualified member. The Board of Directors may,
subject to Section 19, designate one or more directors as alternate members of
a committee who may replace any absent member at any meeting of the committee.
To the extent permitted by resolution of the Board of Directors, a committee
may exercise all of the authority of the Board of Directors to the extent
permitted by Section 141(c) of the GCL.
27. TIME AND PLACE OF MEETINGS AND TELEPHONE MEETINGS . Immediately
following each annual meeting of stockholders (or at such other time and place
as may be determined by the Board of Directors), the Board of Directors shall
hold a regular meeting for purposes of organizing the Board of Directors,
electing officers, appointing committees and transacting other business. The
Board of Directors may establish by resolution the times, if any, that other
regular meetings of the Board of Directors shall be held. All meetings of
directors shall be held at the principal executive office of the Corporation
or at such other place, whether within or without the State of Delaware, as
shall be designated in the notice for the meeting or in a resolution of the
Board of Directors. Directors may participate in a meeting through use of
conference telephone or similar communications equipment, so long as all
directors participating in such meeting can hear each other.
28. CALL. Meetings of the Board of Directors, whether regular or
special, may be called by the Chairman of the Board, the Chief Executive
Officer, the Secretary or any two directors.
29. NOTICE. Regular meetings of the Board of Directors may be held
without notice if the date and time of such meetings have been fixed by the
Board of Directors. Special meetings shall be held upon four days' notice by
mail, 24 hours notice delivered personally or by telephone, telegraph or
confirmed fax or on such shorter notice as the person or persons calling such
meeting may deem necessary or appropriate under the circumstances. Regular
meetings shall be held upon similar notice if notice is required for such
meetings. Neither a notice nor a waiver of notice need specify the purpose of
any regular or special meeting. Notice sent by mail, telegram or fax shall be
addressed to a director at his business or home address/fax number as shown
upon the records of the Corporation, or at such other address/fax number as
the director specifies in writing delivered to the Corporation, or if such an
address/fax number is not so shown on such records and no written instructions
have been received from the director, at the place at which meetings of
directors are regularly held. Such mailing, telegraphing, delivery or
transmittal, as above provided, shall be due, legal and personal notice to
such director. If a meeting is adjourned for more than 24 hours, notice of the
adjourned meeting shall be given prior to the time of such meeting to the
directors who were not present at the time of the adjournment.
30. MEETING WITHOUT REGULAR CALL AND NOTICE. The transaction of
business at any meeting of the Board of Directors, however called and noticed
or wherever held, is as valid as though transacted at a meeting duly held
after regular call and notice if a quorum is present and if, either before or
after the meeting, each of the directors not present signs a written waiver of
notice, a consent to holding the meeting or an approval of the minutes of the
meeting. For such purposes, a director shall not be considered present at a
meeting if, although in attendance at the meeting, the director protests the
lack of notice prior to the meeting or at its commencement.
31. ACTION WITHOUT MEETING. Any action required or permitted to be
taken by the Board of Directors may be taken without a meeting, if all of the
members of the Board of Directors individually or collectively consent in
writing to such action. In addition, all directors (including those who are
not members of a particular committee) shall receive notice of, and shall be
entitled to attend, all meetings of any committee of the Board of Directors.
Only those directors who are members of a particular committee shall be
entitled to vote at meetings thereof.
32. COMMITTEE MEETINGS. The principles set forth in Sections 27
through 31 of these Bylaws shall also apply to committees of the Board of
Directors and to actions taken by such committees.
33. HONORARY ADVISORS TO THE BOARD. The Board of Directors may
appoint one or more Honorary Advisors, who shall hold such position for such
period, shall have such authority and perform such duties as the Board of
Directors may specify, subject to change at any time by the Board of
Directors. An Honorary Advisor to the Board of Directors shall not be a
director for any purpose or with respect to any provision of the Certificate
of Incorporation, these Bylaws or of the GCL, and shall have no vote as a
director. However, an Honorary Advisor to the Board of Directors may receive
such compensation and expense reimbursement as the Board of Directors shall
from time to time determine.
OFFICERS
34. TITLES AND RELATION TO BOARD OF DIRECTORS. The officers of the
Corporation shall include a Chief Executive Officer, a President and a
Secretary. The Board of Directors may also choose a Chairman of the Board, one
or more Vice Chairmen of the Board, a Chief Operating Officer, a Chief
Financial Officer, a General Counsel, a Treasurer, and one or more Vice
Presidents (who may be designated Executive or Senior Vice Presidents),
Assistant Secretaries, Assistant Treasurers or other officers. All officers
shall perform their duties and exercise their powers subject to the direction
of the Chief Executive Officer and the overriding direction of the Board of
Directors. If there shall occur a vacancy in any office, in the absence of the
appointment of a replacement by the Board of Directors, the Chief Executive
Officer shall have the right and power to appoint a Secretary, a Treasurer, a
Chief Operating Officer, a Chief Financial Officer, a General Counsel, one or
more additional Vice Presidents (who may be designated Executive or Senior
Vice Presidents), one or more Assistant Secretaries and one or more Assistant
Treasurers, all of whom shall serve at the pleasure of the Board of Directors,
and shall perform their duties and exercise their powers subject to the
direction of the Chief Executive Officer and the overriding direction of the
Board of Directors. Any number of offices may be held simultaneously by the
same person.
35. ELECTION, TERM OF OFFICE AND VACANCIES. At its regular annual
meeting, the Board of Directors shall choose the officers of the Corporation.
The officers shall hold office until their successors are chosen, except that
the Board of Directors may remove any officer at any time. Subject to Section
34 of these Bylaws, if an office becomes vacant for any reason, the vacancy
shall be filled by the Board of Directors.
36. RESIGNATION. Any officer may resign at any time upon written
notice to the Corporation without prejudice to the rights, if any, of the
Corporation under any contract to which the officer is a party. Such
resignation shall be effective when given unless the notice specifies a later
time. The resignation shall be effective regardless of whether it is accepted
by the Corporation.
37. COMPENSATION. The Board of Directors shall fix the compensation
of the Chairman of the Board, any Vice Chairman, the Chief Executive Officer
and the President and may fix the salaries of other employees of the
Corporation including the other officers. If the Board of Directors does not
fix the salaries of the other officers, the Chief Executive Officer shall fix
such salaries.
38. CHAIRMAN OF THE BOARD. The Chairman of the Board shall, if
present, preside at all meetings of the Board of Directors, and exercise and
perform such other powers and duties as may be from time to time assigned to
him by the Board of Directors or prescribed by these Bylaws.
39. CHIEF EXECUTIVE OFFICER. Unless otherwise determined by the Board
of Directors, the Chief Executive Officer shall be deemed general manager of
the Corporation. The Chief Executive Officer shall effectuate orders and
resolutions of the Board of Directors and exercise such other powers and
perform such other duties as the Board of Directors shall from time to time
prescribe.
40. PRESIDENT AND VICE PRESIDENTS. Unless otherwise determined by the
Board of Directors, in the absence or disability of the Chief Executive
Officer, the President, and in the absence or disability of the President, the
Vice President (who may be designated Executive or Senior Vice President), if
any, or if more than one, the Vice Presidents (who may be designated Executive
or Senior Vice Presidents) in order of their rank as fixed by the Board of
Directors or, if not so ranked, the Vice President (who may be designated
Executive or Senior Vice President) designated by the Board of Directors,
shall perform all the duties of the Chief Executive Officer, and when so
acting shall have all the powers of, and be subject to all the restrictions
upon, the Chief Executive Officer. The President and Vice Presidents (who may
be designated Executive or Senior Vice Presidents) shall have such other
powers and perform such other duties as from time to time may be prescribed
for them by the Board of Directors or these Bylaws.
41. SECRETARY. The Secretary (or in his absence an Assistant
Secretary or, if there be no Assistant Secretaries, another person designated
by the Board of Directors) shall have the following powers and duties:
(a) RECORD OF CORPORATE PROCEEDINGS. The Secretary shall attend all
meetings of the Board of Directors and its committees and shall record all
votes and the minutes of such meetings in a book to be kept for that purpose
at the principal executive office of the Corporation or at such other place as
the Board of Directors may determine. The Secretary shall keep at the
Corporation's principal executive office the original or a copy of these
Bylaws, as amended from time to time.
(b) RECORD OF SHARES. Unless a transfer agent is appointed by the
Board of Directors to keep a share register, the Secretary shall keep at the
principal executive office of the Corporation a share register showing the
names of the stockholders and their addresses, the number and class of shares
held by each, the number and date of certificates issued, and the number and
date of cancellation of each certificate surrendered for cancellation.
(c) NOTICES. The Secretary shall give such notices as may be required
by law or these Bylaws.
(d) ADDITIONAL POWERS AND DUTIES. The Secretary shall exercise such
other powers and perform such other duties as the Board of Directors or the
Chief Executive Officer shall from time to time prescribe.
42. TREASURER. Unless otherwise determined by the Board of Directors,
the Treasurer of the Corporation shall be its chief financial officer, and
shall have custody of the corporate funds and securities and shall keep
adequate and correct accounts of the Corporation's properties and business
transactions. The Treasurer shall disburse such funds of the Corporation as
may be ordered by the Board of Directors or by one or more persons authorized
by the Board of Directors, taking proper vouchers for such disbursements, and
when requested shall render to the Chief Executive Officer, the Board of
Directors and, if applicable, the Chief Financial Officer, an account of all
transactions and the financial condition of the Corporation and shall exercise
such other powers and perform such other duties as the Board of Directors, the
Chief Executive Officer or, if applicable, the Chief Financial Officer shall
prescribe.
43. OTHER OFFICERS AND AGENTS. Such other officers and agents as the
Board of Directors may choose shall perform such duties and have such powers
as from time to time may be assigned to them by the Board of Directors. The
Board of Directors may delegate to any other officer of the Corporation the
power to choose such other officers and to prescribe their respective duties
and powers.
SHARES
44. CERTIFICATES. Every stockholder shall be entitled to have a
certificate or certificates certifying the number and class of shares of the
capital stock of the Corporation owned by him. All such certificates shall be
signed in the manner prescribed in the GCL. Any signature on such certificates
may be a facsimile signature. The Board of Directors shall have the power to
appoint one or more transfer agents and/or registrars for the transfer or
registration of certificates of stock of any class, and may require stock
certificates to be countersigned or registered by one or more of such transfer
agents and/or registrars.
45. TRANSFERS OF SHARES OF CAPITAL STOCK. Transfers of shares shall
be made only upon the transfer books of the Corporation, kept at the office of
the Corporation or transfer agents and/or registrars designated by the Board
of Directors. Before any new certificate is issued, the old certificate shall
be surrendered for cancellation.
46. STOCKHOLDERS OF RECORD. Only stockholders of record shall be
entitled to be treated by the Corporation as the holders in fact of the shares
standing in their respective names and the Corporation shall not be bound to
recognize any equitable or other claim to or interest in any share of any
other person, whether or not it shall have express or other notice thereof,
except as expressly provided by law.
47. LOST, STOLEN OR DESTROYED CERTIFICATES. The Corporation may cause
a new stock certificate to be issued in place of any certificate previously
issued by the Corporation alleged to have been lost, stolen or destroyed. The
Corporation may, at its discretion and as a condition precedent to such
issuance, require the owner of such certificate to deliver an affidavit
stating that such certificate was lost, stolen or destroyed, or to give the
Corporation a bond or other security sufficient to indemnify it against any
claim that may be made against it, including any expense or liability, on
account of the alleged loss, theft or destruction or the issuance of a new
certificate.
48. STOCKHOLDERS RECORD DATE. In order that the Corporation may
determine the stockholders entitled to notice of and to vote at any meeting of
stockholders or any adjournment thereof, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock
or for the purpose of any other lawful action, the Board of Directors may fix
a record date, which shall be not more than sixty (60) days nor less than ten
(10) days before the date of such meeting. A determination of stockholders of
record entitled to notice of and to vote at a meeting of stockholders shall
apply to any adjournment of the meeting, provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting, and shall fix a
new record date for such adjourned meeting if the adjourned meeting is to take
place more than thirty (30) days from the date set for the original meeting.
49. DIVIDENDS. Subject to the provisions of the Certificate of
Incorporation and the GCL, the Board of Directors may, out of funds legally
available therefor, declare dividends upon the stock of the Corporation.
Before the declaration of any dividend, the Board of Directors may set apart,
out of any funds of the Corporation available for dividends, such sum or sums
as from time to time in its discretion may be deemed proper for working
capital or as a reserve fund to meet contingencies or for such other purposes
as shall be deemed conducive to the interests of the Corporation.
AMENDMENTS
50. ADOPTION OF AMENDMENTS. The Board of Directors is authorized and
empowered from time to time in its discretion to make, alter, amend or repeal
these Bylaws, except as such power may be restricted or limited by the GCL;
provided, however, that the provisions set forth in Sections 14, 16(a)-(d),
17, 18, 19, 20 or this Section 50 shall not be amended or repealed unless the
Investors shall have consented thereto in writing. Notwithstanding the
foregoing (i) those provisions of Sections 14, 16(b)-(d), 17, 18, 19, 20 and
the proviso in the preceding sentence of this Section 50 pertaining to the
Berkshire/Greenbriar Investors shall be automatically repealed and cease to
have any force or effect on the date upon which the Berkshire/Greenbriar
Investors' rights under the Stockholders Agreement terminate pursuant to the
terms of such agreement and (ii) those provisions of Sections 14, 16(b)-(d),
17, 18, 19, 20 and the proviso in the preceding sentence of this Section 50
pertaining to the Goldman Investors shall be automatically repealed and cease
to have any force or effect on the date upon which the Goldman Investors'
rights under the Governance Agreement terminate pursuant to the terms of such
agreement
51. RECORD OF AMENDMENTS. Whenever an amendment or new bylaw is
adopted, it shall be copied in the book to be kept for that purpose at the
principal executive office of the Corporation or at such other place as the
Board of Directors may determine. If any bylaw is repealed, the fact of repeal
with the date of the meeting at which the repeal was enacted or written
consent with respect thereto was filed shall be stated in said book.
CORPORATE SEAL
52. FORM OF SEAL. The corporate seal shall be circular in form, and
shall have inscribed thereon the name of the Corporation, the date of its
incorporation and the word "Delaware".
MISCELLANEOUS
53. CHECKS, DRAFTS, ETC. All checks, drafts, or other orders for
payment of money, notes, or other evidences of indebtedness, issued in the
name of or payable by or to the Corporation, shall be signed or endorsed by
the Chief Executive Officer, the President, the Chief Financial Officer, the
Treasurer or such other person or persons as may from time to time be so
authorized in accordance with a resolution of the Board of Directors.
54. CONTRACTS, ETC.; HOW EXECUTED. Except as otherwise provided in
these Bylaws, the Chief Executive Officer, the President, any Vice President
(who may be designated Executive or Senior Vice President) or Treasurer, or
such other officer or officers as may from time to time be so authorized in
accordance with a resolution of the Board of Directors, shall have the power
and authority to sign and execute on behalf of the Corporation deeds,
conveyances and contracts, and any and all other documents requiring execution
by the Corporation. The Board of Directors may authorize any other officer or
officers, or agent or agents, to enter into any contract or execute any
instrument in the name of and on behalf of the Corporation, and such authority
may be general or confined to specific instances.
55. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The Chief
Executive Officer, the President or any Vice President (who may be designated
Executive or Senior Vice President) or the Secretary or Assistant Secretary of
the Corporation are authorized to vote, represent, and exercise on behalf of
the Corporation all rights incident to any and all shares of any other
corporation or corporations standing in the name of the Corporation. The
authority herein granted to said officers to vote or represent on behalf of
the Corporation any and all shares held by the Corporation in any other
corporation or corporations may be exercised either by such officers in person
or by any other person authorized so to do by proxy or power of attorney duly
executed by said officers.
56. INSPECTION OF BYLAWS. The Corporation shall keep in its principal
office for the transaction of business the original or a copy of these Bylaws
as amended or otherwise altered to date, certified by the Secretary, which
shall be open to inspection by the stockholders at all reasonable times during
office hours.
57. FISCAL YEAR. The fiscal year of the Corporation shall be fixed by
resolution of the Board of Directors.
58. CONSTRUCTION AND DEFINITIONS. Unless the context otherwise
requires, the general provisions, rules and construction, and definitions
contained in the GCL shall govern the construction of these Bylaws. Without
limiting the generality of the foregoing, the masculine gender includes the
feminine and neuter, the singular number includes the plural and the plural
number includes the singular, and the term "person" includes a corporation or
other entity or organization as well as a natural person.
59. SEVERABILITY. If any provision of these Bylaws is determined to
be invalid, void, illegal or unenforceable, the remaining provisions of these
Bylaws shall continue to be valid and enforceable and shall in no way be
affected, impaired or invalidated thereby.