[White & Case Draft of 9/21/07]
INVESTMENT AGREEMENT
INVESTMENT AGREEMENT (this "Agreement"), dated as of September [o], 2007,
between Appaloosa Management L.P., a Delaware limited partnership ("Appaloosa"),
________, a newly formed _______ (the "Purchaser"), and ▇▇▇▇ Corporation, a
Virginia corporation (the "Company") and debtor-in-possession under chapter 11
of title 11 of the United States Code (the "Bankruptcy Code") in case No.
06-10354 (BRL) (the "Chapter 11 Case"), pending in the Bankruptcy Court.
WHEREAS, the Company, together with its debtor Subsidiaries that commenced
jointly administered cases under chapter 11 of the Bankruptcy Code (such
Subsidiaries and Affiliates and the Company collectively, the "Debtor"), intends
to file with the Bankruptcy Court a chapter 11 plan of reorganization in
substantially the form attached to the Support Agreement (the "Form of Plan"),
the effectiveness of which will be conditioned on the Closing having occurred
(the "Chapter 11 Plan"); and
WHEREAS, the Company, the Unions and Appaloosa have entered into a Plan
Support Agreement (the "Support Agreement"), pursuant to which the parties to
the Support Agreement have agreed to various transactions in furtherance of the
Chapter 11 Plan; and
WHEREAS, the Chapter 11 Plan contemplates (i) a new investment (the "Series
A Investment") in the corporation that will be the successor to the Company
under the Chapter 11 Plan for purposes of Section 1145 of the Bankruptcy Code
("New ▇▇▇▇") by Purchaser, a newly formed investment company that is a
Subsidiary of Appaloosa, in 4.0% Series A Convertible Preferred Stock, par value
$0.01 per share, of New ▇▇▇▇ (the "Series A Preferred") having the terms set
forth in the Certificate of Designation attached hereto as Exhibit A and
(ii) new investments (such investments, together with the Series A Investment,
the "Investments") by Purchaser and certain institutional investors in 4.0%
Series B Convertible Preferred Stock, par value $0.01 per share, of New ▇▇▇▇
(the "Series B Preferred") and, pursuant to the Rights Offering (as defined
below) by certain investors in the Series B Preferred, in each case having the
terms set forth in the Certificate of Designation attached hereto as Exhibit A
and to be made in connection with the transactions contemplated by the Chapter
11 Plan, including without limitation, the transactions contemplated by the
Support Agreement; and
WHEREAS, subject to the entry of a Confirmation Order on the effective date
of the Chapter 11 Plan (the "Effective Date"), New ▇▇▇▇ will be authorized to
issue (i) new shares of Series A Preferred to Purchaser and (ii) Series B
Preferred to Purchaser, each Standby Purchaser (as defined below) and each
Eligible Holder (as defined below) that elects to purchase Series B Preferred in
connection with the Rights Offering (the Persons described in this clause (ii),
collectively, the "Series B Investors").
ACCORDINGLY, the parties agree as follows:
I. SHARE PURCHASE; RIGHTS OFFERING
1.1 Series A Preferred Share Purchase. On the terms and subject to
the conditions herein, at the Closing, New ▇▇▇▇ will issue and sell to
Purchaser, and Purchaser will purchase from New ▇▇▇▇, for an aggregate price of
$250,000,000 in cash (the "Series A Purchase Price"), 2,500,000 newly issued
shares of Series A Preferred representing 100% of the Series A Preferred issued
and outstanding as of immediately after the Effective Date.
1.2 Rights Offering.
(a) The Company proposes to offer and sell newly issued shares of
Series B Preferred pursuant to a rights offering (the "Rights Offering") whereby
New ▇▇▇▇ will distribute at no charge to each holder of an approved Unsecured
Claim (each, an "Eligible Holder"), including, to the extent applicable, the
Standby Purchasers, that number of rights (each, a "Right") in respect of Claims
outstanding and held of record as of the close of business on a record date to
be determined by the Board of New ▇▇▇▇ (the "Record Date") that will enable each
Eligible Holder to purchase up to its pro rata portion of (i) 3,000,000 shares
in the aggregate of Series B Preferred at a purchase price of $100.00 per share
(the "Series B Per Share Price") or $300,000,000 in the aggregate (the "Series B
Purchase Price"). "Standby Purchaser" means the Purchaser and one or more
Persons designated by Appaloosa from time to time and set forth on Schedule 1.2
hereto, as such schedule may be modified from time to time.
(b) The Rights Offering will be conducted as follows:
(i) On the terms and subject to the conditions of this Agreement and
subject to applicable law, the Company shall offer shares of
Series B Preferred for subscription by holders of Rights as set
forth in this Agreement.
(ii) As soon as practicable following the entry of an order by the
Bankruptcy Court approving the Disclosure Statement, the Company
shall issue to each Eligible Holder, Rights to purchase up to its
pro rata portion of up to 3,000,000 shares of Series B Preferred
in the aggregate and distribute simultaneously the ballot form(s)
in connection with the solicitation of acceptances of the Chapter
11 Plan (the date of such distribution, the "Rights Distribution
Date"). The Company will be responsible for effecting the
distribution of certificates representing the Rights and any
related materials to each Eligible Holder.
(iii) The Rights may be exercised during a period (the "Rights
Exercise Period") commencing on the Rights Distribution Date and
ending at the Expiration Time. The Rights shall not be
transferable. "Expiration Time" means the date and time by which
holders of claims or interests are entitled to vote on the
Chapter 11 Plan (or if
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such day is not a Business Day, the next Business Day), or such
later date and time as the Company, subject to the prior written
approval of Appaloosa, may specify in a notice provided to the
Eligible Holders before 9:00 a.m., New York City time, on the
Business Day before the then-effective Expiration Time. The
Company shall use its reasonable best efforts to cause the
effective date of the Chapter 11 Plan (the "Effective Date") to
occur as promptly as reasonably practicable after the Expiration
Time and the Confirmation Hearing. For the purpose of this
Agreement, "Business Day" means each Monday, Tuesday, Wednesday,
Thursday and Friday that is not a day on which banking
institutions in New York City are generally authorized or
obligated by law or executive order to close. Each Eligible
Holder who wishes to exercise all or a portion of its Rights
shall (i) during the Rights Exercise Period return a duly
executed document to a subscription agent reasonably acceptable
to the Company and Appaloosa (the "Subscription Agent") electing
to exercise all or a portion of the Rights held by such Eligible
Holder and (ii) pay an amount equal to the Series B Per Share
Price multiplied by the number of Series B Shares that the
Eligible Holder elects to purchase by wire transfer of
immediately available funds by a specified date reasonably in
advance of the date on which the hearing to confirm the Plan is
scheduled to commence (the "Confirmation Hearing") to an escrow
account established for the Rights Offering.
(iv) Unless otherwise required by Appaloosa, there will be no
over-subscription rights provided in connection with the Rights
Offering.
(v) As soon as reasonably practicable following the Effective Date,
the Company will issue to each Eligible Holder who validly
exercised its Rights the number of shares of Series B Preferred
to which such Eligible Holder is entitled based on such exercise.
(vi) The Company hereby agrees and undertakes to give each Standby
Purchaser by electronic facsimile transmission the certification
by an executive officer of the Company of either (i) the number
of shares of Series B Preferred elected to be purchased by
Eligible Holders pursuant to validly exercised Rights, the
aggregate purchase price therefor, the number of Unsubscribed
Shares and the aggregate Purchase Price therefor (a "Purchase
Notice") or (ii) in the absence of any Unsubscribed Shares, the
fact that there are no Unsubscribed Shares and that the
commitment set forth in Section 1.3(a)(ii) is terminated (a
"Satisfaction Notice") as soon as practicable after the
Expiration Time and, in any event, reasonably in advance of the
Closing Date (the date of transmission of confirmation of a
Purchase Notice or a Satisfaction Notice, the "Determination
Date").
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(vii)The Rights Offering will provide each Eligible Holder who
validly exercised its Rights with the right to withdraw a
previous exercise of Rights after the withdrawal deadline if
there are changes to the Chapter 11 Plan after the withdrawal
deadline that the Bankruptcy Court determines are materially
adverse to the holders of the Rights and the Bankruptcy Court
requires resolicitation of votes under Section 1126 of the
Bankruptcy Court or an opportunity to change previously cast
acceptances or rejections of the Plan.
1.3 Commitment of Standby Purchasers.
(a) On the terms and subject to the conditions set forth in this
Agreement:
(i) Purchaser agrees and, if any Standby Purchasers have been
designated by Purchaser prior to the Closing Date, each Standby Purchaser
agrees, severally and not jointly, to subscribe for and purchase, and the
Company agrees to sell and issue, on the Closing Date for the Series B Per
Share Price, for an aggregate purchase price of $200,000,000 (the "Direct
Shares Purchase Price") each Standby Purchaser's proportionate share of
2,000,000 shares of Series B Preferred, in each case as is set forth
opposite such Standby Purchaser's name on Schedule 1.3 hereto (the "Direct
Subscription Shares");
(ii) each Standby Purchaser agrees, severally and not jointly, to
purchase, on the Closing Date, and the Company agrees to sell for the
Series B Per Share Price that number of shares of Series B Preferred
issuable pursuant to the aggregate number of Rights that were not properly
exercised by the Eligible Holders thereof during the Rights Exercise
Period, in proportion to the Standby Purchaser's share of the Direct
Subscription Shares (such Shares in the aggregate, the "Unsubscribed
Shares"), rounded among the Standby Purchasers as they may determine, in
their sole discretion, to avoid fractional shares.
(iii) As soon as practicable after the Expiration Time, and in any
event reasonably in advance of the Closing Date, the Company will provide a
Purchase Notice or a Satisfaction Notice to each Standby Purchaser as
provided above, setting forth a true and accurate determination of the
aggregate number of Unsubscribed Shares, if any; provided, that on the
Closing Date, on the terms and subject to the conditions in this Agreement,
the Standby Purchasers will purchase, and the Company will sell, only such
number of Unsubscribed Shares as are listed in the Purchase Notice, without
prejudice to the rights of the Standby Purchasers to seek later an upward
or downward adjustment if the number of Unsubscribed Shares in such
Purchase Notice is inaccurate.
1.4 Purchase Price. The Series A Purchase Price, the Series B
Purchase Price and the Direct Shares Purchase Price will be payable on the
Closing Date in cash by bank wire transfer of immediately available funds to an
account of New
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▇▇▇▇ designated by the Company by written notice to Appaloosa delivered at least
two business days prior to the Closing Date.
1.5 Closing Timing. The closing of the purchase and sale of the
Series A Preferred and the Series B Preferred (the "Closing") will take place at
the offices of ▇▇▇▇▇ Day, ▇▇▇ ▇. ▇▇(▇▇) ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 10:00 a.m.
local time on the date on which all of the conditions (other than the conditions
to be satisfied concurrently with the Closing) set forth in Article V have been
satisfied or waived (or such other date, time and place to which the parties may
agree in writing). The date on which the Closing occurs is the "Closing Date."
1.6 Closing Deliveries. (a) At or prior to the Closing, Appaloosa,
Purchaser and/or the Standby Purchasers, as applicable, will deliver to New
▇▇▇▇:
(i) the Series A Purchase Price, the Series B Purchase Price or the Direct
Shares Purchase Price, as applicable, payable in accordance with Section 1.4;
(ii) a counterpart to the Shareholders Agreement in the form attached
hereto as Exhibit B (the "Shareholders Agreement"), duly executed by Appaloosa
and Purchaser;(1)
(iii) a counterpart to the Registration Rights Agreement in the form
attached hereto as Exhibit C (the "Series A Registration Rights Agreement"),
duly executed by Purchaser;(2) and
(iv) a counterpart to the Registration Rights Agreement in the form
attached hereto as Exhibit D (the "Series B Registration Rights Agreement" and,
together with the Series A Registration Rights Agreement, the "Registration
Rights Agreements").
(b) At or prior to the Closing, New ▇▇▇▇ will deliver to Purchaser
and each Standby Purchaser, as applicable:
(i) Subject to clause (c) below, validly issued stock certificates
evidencing the shares of Series A Preferred and/or Series B Preferred, as
applicable; all such shares will be delivered with any and all issue,
stamp, transfer, sales and use, or similar Taxes or duties payable in
connection with such delivery duly paid by the Company;
(ii) a counterpart to the Shareholders Agreement duly executed by New
▇▇▇▇;
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(1) Note: Document to be modified appropriately if additional purchasers are
added.
(2) Note: Document to be modified appropriately if additional purchasers are
added.
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(iii) a counterpart to the Registration Rights Agreements duly
executed by New ▇▇▇▇; and
(iv) a copy of the New ▇▇▇▇ charter containing the Certificate of
Designations, certified by the Secretary of State of the state in which it
is incorporated.
(c) Certificates for shares of Series B Preferred purchased by
Eligible Holders will be delivered as promptly as practicable after the Closing.
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Purchaser and each Standby
Purchaser, except as disclosed (i) in, and reasonably apparent from, any report,
schedule, form or other document filed with, or furnished to, the U.S.
Securities and Exchange Commission (the "SEC") by the Company and publicly
available prior to the date of this Agreement and only as and to the extent
disclosed therein (other than any forward-looking disclosures set forth in any
risk factor section, any disclosures in any section relating to forward-looking
statements and any other similar disclosures included therein to the extent they
are primarily cautionary in nature), or (ii) in the letter, dated the date
hereof, from the Company to Purchaser specifically referencing this Agreement
and delivered prior to the execution of this Agreement and initialed by the
parties hereto (the "Company Disclosure Letter"), as follows:
2.1 Existence; Authorization, Validity and Effect of Agreement. Each
of the Company and its Significant Subsidiaries (i) is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization (to the extent the legal concept of good standing exists in such
jurisdiction), (ii) has all requisite corporate or equivalent power and
authority to own, operate or lease the properties that it purports to own,
operate or lease and to conduct its business as currently conducted and (iii) is
duly qualified or licensed as a foreign entity to do business, and is in good
standing (to the extent the legal concept of good standing exists in such
jurisdiction), in each jurisdiction where the character of its properties owned,
operated or leased or the nature of its activities makes such qualification or
licensing necessary, except in the case of clauses (i) through (iii) to the
extent that the failure to be so qualified or in good standing or to possess
requisite power and authority would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. As of the
Effective Date, New ▇▇▇▇ will be a corporation duly incorporated, validly
existing and in good standing under the laws of the state in which it is
incorporated. Subject to the entry of the Approval Order, Confirmation Order and
the occurrence of the Effective Date, (a) the Company has and New ▇▇▇▇ will have
the requisite corporate power and authority to execute and deliver this
Agreement and all agreements and documents contemplated hereby to be executed
and delivered by it, and, subject to entry of the Confirmation Order and the
expiration, or waiver by the Bankruptcy Court, of the 10-day period set forth in
Rules 6004(h) and 3020(e) of the
6
Federal Rules of Bankruptcy Procedure, respectively, to perform its obligations
hereunder and thereunder, including the issuance of the Rights and Series B
Preferred, (b) this Agreement and the consummation by the Company and New ▇▇▇▇
of the transactions contemplated hereby have been (or, in the case of New ▇▇▇▇,
will be on or prior to the Effective Date) duly authorized by all requisite
corporate action and, (c) this Agreement has been duly and validly executed and
delivered by the Company and constitutes, and the Shareholders Agreement and the
Registration Rights Agreements (together with this Agreement, referred to
collectively as the "Transaction Documents") contemplated hereby to be executed
and delivered by New ▇▇▇▇ (when executed and delivered pursuant hereto) will
constitute, the valid and binding obligations of the Company or New ▇▇▇▇, as
applicable, enforceable against the Company or New ▇▇▇▇, as applicable, in
accordance with their respective terms.
2.2 Capitalization. Immediately following the Effective Date and upon
issuance of the Shares, the Series A Preferred, Series B Preferred and New
Common Stock will be the only issued and outstanding equity securities of New
▇▇▇▇, including management incentive equity issued in accordance with the
Chapter 11 Plan. Except as provided in the Registration Rights Agreements, the
Company is not, and New ▇▇▇▇ will not be, under any third party contractual
obligation to register any of its equity securities under the Securities Act of
1933, as amended (the "Securities Act").
2.3 Validity of Shares, Etc. Each of the Shares when issued to
Purchaser in accordance with the Chapter 11 Plan and this Agreement will be duly
authorized, validly issued, fully paid, non-assessable and free of preemptive
rights of third parties, except for the preemptive rights included in Exhibit A.
At the Closing, Purchaser will acquire good and valid title to the Shares, free
and clear of any and all liens, Claims, security interests, encumbrances,
restrictions on voting or alienation or otherwise, or adverse interests, except
as may be created by Purchaser, the Transaction Documents, Exhibit A or by
applicable Securities Laws. All issued and outstanding shares of capital stock,
if any, of each Significant Subsidiary of the Company have been duly authorized
and validly issued, and are fully paid, non-assessable and free of preemptive
rights of third parties.
2.4 No Conflict; Required Filings and Consents. (a) The execution,
delivery and performance of this Agreement and the other Transaction Documents
by the Company or New ▇▇▇▇, as applicable, do not, and the consummation by the
Company and New ▇▇▇▇ of the transactions contemplated hereby and thereby,
including the distribution of the Rights, the sale, issuance and delivery of the
Series B Preferred upon exercise of the Rights, and the consummation of the
Rights Offering by the Company will not, (i) conflict with or violate the
articles of incorporation or bylaws or equivalent organizational documents of
the Company or any of its Subsidiaries or New ▇▇▇▇, as applicable (as they may
be amended or adopted pursuant to the Chapter 11 Plan, as applicable), (ii)
subject to the entry of the Confirmation Order and the occurrence of the
Effective Date, conflict with or violate any domestic or foreign statute, rule,
regulation or other legal requirement ("Law") or order, judgment, injunction or
decree ("Order") applicable to the Company or any of its Subsidiaries or New
▇▇▇▇ or by which any property or asset of the Company or any of its Subsidiaries
is (or New
7
▇▇▇▇ will be) bound or affected or (iii) subject to the entry of the
Confirmation Order and the occurrence of the Effective Date and the
implementation of the transactions contemplated by the Chapter 11 Plan and the
application of bankruptcy Law, conflict with or violate or result in a breach or
default under any contract, agreement or instrument binding upon the Company or
any of its Subsidiaries or New ▇▇▇▇, or result, except to the extent specified
in the Chapter 11 Plan, in the acceleration of, or the creation of any lien
under, any indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its Subsidiaries is (or New ▇▇▇▇
will be) a party or by which the Company or any of its Subsidiaries is (or New
▇▇▇▇ will be) bound or to which any of the property or assets of the Company or
any of its Subsidiaries is (or New ▇▇▇▇ will be) subject, except, in the case of
clauses (i) (as to Subsidiaries only), (ii) and (iii), for any such conflicts,
violations, breaches or defaults that, individually or in the aggregate, would
not have a Company Material Adverse Effect.
(b) The execution and delivery of this Agreement and the other
Transaction Documents by the Company or New ▇▇▇▇, as applicable, does not, and
the performance of this Agreement and the other Transaction Documents and the
consummation by the Company and New ▇▇▇▇ of the transactions contemplated hereby
and thereby, including the distribution of the Rights, the sale, issuance and
delivery of Series B Preferred upon exercise of the Rights, the consummation of
the Rights Offering by the Company will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any governmental
or regulatory authority, domestic or foreign, including without limitation any
quasi-governmental, supranational, statutory, environmental entity and any stock
exchange, court or arbitral body (each a "Governmental Entity"), except (i) for
(A) the applicable notification requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended, if any, and the rules and regulations
thereunder (the "HSR Act"), and any other comparable laws or regulations in any
foreign jurisdiction relating to the sale or issuance of the Shares, (B) filings
contemplated by the Registration Rights Agreements, (C) the entry of the
Approval Order and the Confirmation Order and any other Bankruptcy Court Orders
that may be required in connection with the Chapter 11 Plan and (ii) where the
failure to obtain any such consent, approval, authorization or permit, or to
make any such filing or notification, would not, individually or in the
aggregate, have a Company Material Adverse Effect.
2.5 No Undisclosed Liabilities. As of the date hereof, neither the
Company nor any of its Subsidiaries has any liabilities or obligations (absolute
or accrued, contingent or otherwise, and whether due or to become due and
whether the amount thereof is readily ascertainable or not) that are material to
the business or operations of the Company and its Subsidiaries, taken as a
whole, other than: (a) liabilities or obligations disclosed in the financial
statements of the Company included in the Company Reports filed with the SEC
prior to the date hereof; (b) liabilities or obligations under contracts to
which the Company or any of its Subsidiaries is a party; (c) liabilities of a
nature not required by GAAP to be set forth on a consolidated balance sheet of
the Company and its Subsidiaries or in the notes thereto; (d) liabilities or
obligations incurred in the ordinary course of business consistent with past
practices
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since December 31, 2006, or (e) liabilities or obligations expressly included
within the scope of another representation or warranty in this Article II or as
expressly excluded from any representation or warranty in this Article II as a
result of the scope of any materiality or similar qualification applicable to
such representation or warranty.
2.6 No Violation or Default; Compliance with Laws. Neither the
Company nor any of its Significant Subsidiaries is in violation of its charter
or by-laws or similar organizational documents. Neither the Company nor any of
its Subsidiaries is, except as a result of the Chapter 11 Case, in default, and
no event has occurred that, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any term,
covenant or condition contained in any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound or to which any of the property or assets of the Company or any of its
Subsidiaries is subject, except for any such default that has not had and would
not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. Neither the Company nor any of its Subsidiaries is, or
has been, in violation of any Law, except for any such violation that has not
had and would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
2.7 Litigation. There are no legal, governmental or regulatory
actions, suits, proceedings or, to the Knowledge of the Company, investigations
pending to which the Company or any of its Subsidiaries is or may be a party or
to which any property of the Company or any of its Subsidiaries is or may be the
subject that, individually or in the aggregate, if determined adversely to the
Company or any of its Subsidiaries, would reasonably be expected to have a
Company Material Adverse Effect, and no such actions, suits or proceedings or
investigations are pending or, to the Knowledge of the Company, threatened or
contemplated, by any governmental or regulatory authority or by others.
2.8 Labor Relations. (a) The Company is not a party to, and has no
obligations under, any collective bargaining agreement or other agreement,
unexpired, or expired in circumstances where the Company has a continuing
statutory obligation to maintain the existing terms and conditions of employment
as specified in the expired contract, with any labor organization governing
wages, hours or other terms and conditions of employment of any current
employees of the Company at any facility currently operated by the Company in
the United States and Canada, that is, individually or in the aggregate,
material to the Company and its Subsidiaries, taken as a whole; (b) there are no
current organizational activities, demands for recognition or petitions for
representation by a labor organization seeking to represent employees of the
Company or any Subsidiary that would reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect; (c) no
grievance, arbitration, litigation, complaint or charge, or, to the Knowledge of
the Company, investigations relating to labor or employment matters is pending
or, to the Knowledge of the Company, threatened against the Company or any of
its Subsidiaries which, except as would not reasonably be
9
expected to have, individually or in the aggregate, a Company Material Adverse
Effect; (d) the Company and each of its Subsidiaries has complied and is in
compliance in all respects with all applicable laws (domestic and foreign),
agreements, contracts, and policies relating to employment, employment
practices, wages, hours, and terms and conditions of employment and is not
engaged in any unfair labor practice as defined by the National Labor Relations
Board (or any foreign equivalent), in each case except where the failure to
comply would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect; and (e) the Company has complied
and is in compliance in all material respects with its obligations pursuant to
the Worker Adjustment and Retraining Notification Act of 1988 ("WARN Act") (and
any similar state or local law) to the extent applicable, and all material other
employee notification and bargaining obligations arising under any collective
bargaining agreement or statute, in each case except to the extent the failure
to comply would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
2.9 Title to Intellectual Property. The Company and its Subsidiaries
own all right, title and interest in and to, or possess valid and enforceable
rights to use, all material patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service ▇▇▇▇ registrations,
copyrights, licenses, software and know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures) and other intellectual property rights (collectively,
"Intellectual Property") used in the conduct of their respective businesses, the
failure to own or possess which would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. All
registrations with and applications to governmental or regulatory authorities in
respect of such Intellectual Property are (i) to the Knowledge of the Company,
valid and (ii) in full force and effect, (iii) have not lapsed, expired or been
abandoned, and (iv) are not the subject of any opposition filed with the United
States Patent and Trademark Office or any other applicable Intellectual Property
registry other than in the ordinary course of business and, in each case in
clauses (i) through (iv), except as would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. The
consummation of the transaction contemplated hereby and by the Chapter 11 Plan
will not result in the loss or impairment of any rights to use such Intellectual
Property or obligate Purchaser to pay any royalties or other amounts to any
third party in excess of the amounts that would have been payable by the Company
and its Subsidiaries absent the consummation of the Investments, except as would
not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. The Company and its Subsidiaries have taken reasonable
security measures to protect the confidentiality and value of its and their
material trade secrets (or other Intellectual Property for which the value is
dependent upon its confidentiality), and no such material trade secrets have
been misappropriated, except to the extent that such misappropriation would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. The Company and its Subsidiaries are not in default
(and no event has occurred so that, with the giving of notice or lapse of time
or both, they will be in default) under any contract relating to such
Intellectual Property except as would not reasonably be expected to have,
individually or in the
10
aggregate, a Company Material Adverse Effect. To the Knowledge of the Company,
no Intellectual Property rights of the Company or its Subsidiaries are being
infringed by any other Person, except as would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect. To
the Knowledge of the Company, the conduct of the businesses of the Company and
its Subsidiaries does not and will not conflict in any respect with any
intellectual property rights of others, and the Company and its Subsidiaries
have not received any notice of any claim of infringement or conflict with any
such rights of others, in each case, which would be reasonably expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
2.10 Title to Real and Personal Property. The Company and its
Subsidiaries have good and marketable fee simple, leasehold or subleasehold
title to all real property owned, leased or subleased by the Company and its
Subsidiaries, and for all real property currently used, and good title to all
other tangible and intangible properties (other than Intellectual Property
covered by Section 2.9) owned by them, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind ("Liens"), except for such Liens or failure to have
title as, individually and in the aggregate, would not reasonably be expected to
have a Company Material Adverse Effect. All of the leases and subleases for real
property to which the Company or its Subsidiaries are a party are in full force
and effect and enforceable by the Company or such Subsidiary in accordance with
their terms, and, to the Knowledge of the Company, neither the Company nor any
Subsidiary has received any notice of any claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any Subsidiary under
any of the leases or subleases mentioned above or under any documents affecting
any fee owned property, or affecting or questioning the rights of the Company or
such Subsidiary to the continued possession of any owned, leased or subleased
property by under any such lease or sublease or under any documents affecting
any fee owned property, or for the continued operations of the Company's
business as currently operated in any material respect on any owned, leased or
subleased property, except for any such matter as would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
2.11 No Undisclosed Relationships. As of the date hereof, no
relationship, direct or indirect, exists between or among the Company or any of
its Subsidiaries, on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company or any of its Subsidiaries, on the other,
that is required by the Exchange Act to be described in the Company Reports and
that are not so described, except for the transactions pursuant to this
Agreement and pursuant to Company Plans.
2.12 Licenses and Permits. The Company and its Subsidiaries have and
are in compliance with all licenses, certificates, permits, approvals,
franchises or other authorizations required to be obtained from a Governmental
Authority necessary for the ownership or lease of their respective properties or
for the conduct of their respective businesses as now conducted, which if
violated or not obtained would reasonably be expected to have, individually or
in the aggregate, a Company Material
11
Adverse Effect. Neither the Company nor any Subsidiary has finally been denied
any application for any such license, permit, franchise or other governmental
authorization.
2.13 Compliance with Environmental Laws. (a) Except as would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect, the Company and its Subsidiaries have complied and are
in compliance with any and all applicable federal, state, local and foreign
laws, rules, regulations, decisions and orders, including all civil and common
law, relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, "Environmental Laws"); (b) during the three years prior to the
date of this Agreement, to the Knowledge of the Company, the Company and its
Subsidiaries have not received notice from any governmental authority or other
Person of any actual or potential liability for the investigation or remediation
of any disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, or for any violation of Environmental Laws that
would in any such case reasonably be expected to result in, individually or in
the aggregate, a material liability of the Company and its Subsidiaries, taken
as a whole; (c) except as would not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect, to the Knowledge of the
Company, there are no facts, circumstances or conditions relating to the past or
present business or operations of the Company, its Subsidiaries or any of their
predecessors (including the disposal of any hazardous or toxic substances or
wastes, pollutants or contaminants), or to any real property currently or
formerly owned or operated by the Company, its Subsidiaries or any of their
predecessors, that would reasonably be expected to give rise to any claim,
proceeding or action, or to any liability, under any Environmental Law; (d) to
the Knowledge of the Company, neither the Company nor any of its Subsidiaries is
required or reasonably expected to incur material capital expenditures during
the current and the subsequent five fiscal years to reach or maintain compliance
with existing or reasonably anticipated Environmental Laws except as would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect; and (e) the disclosure in the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 2007, as reproduced in
Section 2.13 of the Company Disclosure Letter, was, to the Knowledge of the
Company, true and correct in all material respects based on the assumptions set
forth therein and as of May 10, 2007. To the Knowledge of the Company, no
changes in the facts underlying these asbestos-related disclosures (as opposed
to the assumptions made) have occurred since May 10, 2007, that would,
individually or in the aggregate, reasonably be expected to result in a
liability that is material to the Company and its Subsidiaries, taken as a
whole.
2.14 Tax Matters. Except as would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect: (a) the
Company has timely filed or caused to be timely filed (taking into account any
applicable extension of time within which to file) with the appropriate taxing
authorities all material tax returns, statements, forms and reports (including
elections, declarations, disclosures, schedules, estimates and information Tax
Returns) for Taxes ("Tax Returns") that are required to be filed by, or with
respect to, the Company and its Subsidiaries; (b) the Tax Returns
12
accurately reflect all liability for Taxes of the Company and its Subsidiaries
for the periods covered thereby; (c) all material Taxes and Tax liabilities due
by or with respect to the income, assets or operations of the Company and its
Subsidiaries have been timely paid in full or accrued and fully provided for in
accordance with GAAP on the financial statements of the Company included in the
Company Reports; (d) neither the Company nor any of its Subsidiaries has
received any written notices from any Taxing authority relating to any issue
that has not been adequately provided for in accordance with GAAP in the
financial statements of the Company included in the Company Reports; (e) all
material Taxes which the Company and each or any of its Subsidiaries is (or was)
required by law to withhold or collect in connection with amounts paid or owing
to any employee, independent contractor, creditor, stockholder or other third
party have been duly withheld or collected, and have been timely paid to the
proper authorities to the extent due and payable; (f) neither the Company nor
any of its Subsidiaries has been included in any "consolidated," "unitary" or
"combined" Tax Return provided for under the law of the United States, any
foreign jurisdiction or any state or locality with respect to Taxes for any
taxable period for which the statute of limitations has not expired (other than
a group of which the Company and/or its Subsidiaries are the only members); and
(g) the Company is not a party to any agreement other than certain Change In
Control Agreements described in the Company Reports filed prior to the date
hereof that would require the Company or any affiliate thereof to make any
material payment that would constitute an "excess parachute payment" for
purposes of Sections 280G and 4999 of the Code.
2.15 Compliance With ERISA.
(a) Correct and complete copies of the following documents, with
respect to all U.S. domestic benefit and compensation plans, programs,
contracts, commitments, practices, policies and arrangements, whether written or
oral, that are maintained or contributed to (or with respect to which an
obligation to contribute has been undertaken) or with respect to which any
potential liability is borne by the Company or any of its Subsidiaries,
including, but not limited to, "employee benefit plans" within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and deferred compensation, stock option, stock purchase, restricted
stock, stock appreciation rights, stock based, incentive and bonus plans, but
excluding any employee benefit plans within the meaning of Section 3(3) of ERISA
which ▇▇▇▇▇ GmbH or its subsidiaries or affiliates have agreed to assume (the
"Company Plans"), have been delivered or made available to Appaloosa and
Purchaser by the Company, to the extent applicable: (i) all material Company
Plan documents, together with all amendments and attachments thereto (including,
in the case of any Company Plan not set forth in writing, a written description
thereof); (ii) all material trust documents, declarations of trust and other
documents establishing other funding arrangements, and all amendments thereto
and the latest financial statements thereof; (iii) the most recent annual report
on Internal Revenue Service ("IRS") Form 5500 for the past year and all
schedules thereto; (iv) the most recent IRS determination letter; (v) summary
plan descriptions and summaries of material modifications; and (vi) the most
recently prepared actuarial valuation report.
13
(b) Except as has not had and would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect (i)
each Company Plan, other than any "multiemployer plans" within the meaning of
Section 3(37) of ERISA ("Multiemployer Plans"), is in compliance with ERISA, the
Internal Revenue Code of 1986, as amended (the "Code") and other applicable
laws; (ii) each Company Plan that is intended to be a qualified plan under
Section 401(a) of the Code is so qualified and has received a favorable
determination letter from the IRS covering all Tax law changes prior to the
Economic Growth and Tax Relief Reconciliation Act of 2001 or has applied to the
IRS for such favorable determination within the applicable remedial amendment
period under Section 401(b) of the Code, and the Company is not aware of any
circumstances likely to result in the loss of the qualification of such Company
Plan under Section 401(a) of the Code; (iii) no liability under Subtitle C or D
of Title IV of ERISA has been incurred during the previous three years by the
Company or any of its Subsidiaries with respect to any ongoing, frozen or
terminated "single-employer plan," within the meaning of Section 4001(a)(15) of
ERISA ("Single-Employer Plan") currently or previously maintained or contributed
to (or with respect to which an obligation to contribute has been undertaken) by
the Company or any of its Subsidiaries, or the Single-Employer Plan of any
entity which is considered one employer with the Company under Section 4001 of
ERISA or Section 414 of the Code (a "Company ERISA Affiliate"); (iv) the Company
and its Subsidiaries have not incurred any withdrawal liability (including any
contingent or secondary withdrawal liability) with respect to a Multiemployer
Plan under Subtitle E of Title IV of ERISA (regardless of whether based on
contributions of a Company ERISA Affiliate) that has not been satisfied in full
and no condition or circumstance has existed that presents a risk of the
occurrence of any withdrawal from or the partition, termination, reorganization
or insolvency of any such Multiemployer Plan; (v) no notice of a "reportable
event," within the meaning of Section 4043 of ERISA has occurred after January
1, 2005 for any Company Plan or by any Single Employer Plan of a Company ERISA
Affiliate; (vi) all contributions required to be made under the terms of any tax
qualified Company Plan have been timely made or have been reflected in the
financial statements of the Company included in the Company Reports filed prior
to the date hereof; and (vii) there has been no amendment to, announcement by
the Company or any of its Subsidiaries relating to, or change in employee
participation or coverage under, any Company Plan which would increase the
expense of maintaining such plan above the level of the expense incurred
therefor for the most recent fiscal year.
(c) (i) Neither any Company Plan nor any Single-Employer Plan of a
Company ERISA Affiliate has an "accumulated funding deficiency" (whether or not
waived) within the meaning of Section 412 of the Code or Section 302 of ERISA
and neither the Company nor any of its Subsidiaries nor any Company ERISA
Affiliate has applied for or obtained a funding waiver; and (ii) neither the
Company nor any of its Subsidiaries has provided, or is required to provide,
security to any Company Plan or to any Single-Employer Plan of a Company ERISA
Affiliate pursuant to Section 401(a)(29) of the Code.
(d) Except as has not and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect, (i) no
claim,
14
lawsuit, arbitration or other action has been instituted against the Company
Plans (other than routine claims for benefits, and appeals of such claims), the
Company, any Subsidiary, any director, officer, or employee thereof, any of the
assets of any trust of the Company Plans, or, to the Company's knowledge, any
fiduciary of a Company Plan with respect to a Company Plan, and (ii) no
"prohibited transaction," within the meaning of Section 4975 of the Code or
Section 406 of ERISA, for which no exemption is available, has occurred with
respect to any Company Plan or its related trust.
(e) Except as would not, individually or in the aggregate, reasonably
be expected to have a Company Material Adverse Effect, (i)(A) all material
company benefit plans maintained primarily for the benefit of employees
principally employed in jurisdictions listed in Schedule 2.15(e) (the "Non-U.S.
Benefit Plans") have been maintained in all material respects in accordance with
their terms and all applicable legal requirements, (B) if any Non-U.S. Benefit
Plan is intended to qualify for special tax treatment, such Non-U.S. Benefit
Plan meets all requirements to the extent necessary to obtain such treatment,
and (C) the fair market value of the assets of each Non-U.S. Benefit Plan
required to be funded, the liability of each insurer for any Non-U.S. Benefit
Plan required to be funded, and the book reserve established for any Non-U.S.
Benefit Plan, together with any accrued contributions, is sufficient to provide
for the accrued benefit obligations under each Non-U.S. Benefit Plan and
(ii) neither the Company nor any Company subsidiary is or has (x) a debt that is
or has become due under Section 75 of the Pensions ▇▇▇ ▇▇▇▇; (y) been a party to
an act or deliberate failure to act (or knowingly assisted) to prevent the
recovery of any amount of debt due under Section 75 of the Pensions Act of 1995;
or (z) is or has been an associate of or connected with (as set out in Sections
38 and 51 of the Pensions Act 2004) any person who is an employer in relation to
any occupational pension scheme other than the company's pension schemes
disclosed on Schedule 2.15(e).
2.16 SEC Filings; Financial Statements. The Company has timely filed,
all Company Reports required to be filed by it with the SEC since January 1,
2006. All Company Reports, as of their respective dates (a) complied in all
material respects with the applicable requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules and regulations
thereunder and (b) did not 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 made therein, in the light of the circumstances under which they
were made, not misleading. The representation in the preceding sentence does not
apply to (a) any statement or omission in (i) any Company Report filed prior to
the date of this Agreement that was superseded by a subsequent Company Report
filed prior to the date of this Agreement or (ii) any Company Report filed after
the date of this Agreement that is superseded by a subsequent Company Report
filed prior to the Closing Date or (b) any projections, forecasts, estimates and
forward-looking information included in the Company Reports. The consolidated
financial statements of the Company included in any Company Reports were
prepared in accordance with accounting principles generally accepted in the
United States ("GAAP") applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and fairly presented the
consolidated financial position of the Company and its Subsidiaries, as of the
dates thereof (subject, in the case of any
15
unaudited statements, to the absence of footnotes and to normal year-end audit
adjustments). No Subsidiary of the Company is currently required to file any
periodic reports with the SEC under the Exchange Act.
Each Company Report containing financial statements that has been
filed with the SEC by the Company was accompanied by the certifications required
to be filed or furnished by the Company's principal executive officer and
principal financial officer pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and, at the time
of filing or submission of each such certification, such certification was true
and accurate in all material respects.
2.17 Insurance. The Company and its Subsidiaries have insurance
covering their respective properties, operations, personnel and businesses,
including business interruption insurance, which insurance is in amounts and
insures against such losses and risks as are customary for companies whose
businesses are similar to the Company and its Subsidiaries, except where such
failure would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has received notice of any termination or threatened termination of
any of such policies and such policies are in full force and effect.
2.18 No Brokers. The Company has not entered into any contract,
arrangement or understanding with any Person or firm that may result in the
obligation of the Company or Purchaser to pay any investment banker's or
finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement, the consummation of
the Investments, or otherwise in connection with the Rights Offering, except
that the Company has retained ▇▇▇▇▇▇, Buckfire & Co., LLC as its financial
advisor. The Company, New ▇▇▇▇ or one of their Subsidiaries will pay all amounts
owed pursuant to the foregoing arrangements.
2.19 State Takeover Statutes. The Company Board has approved this
Agreement and the transactions described herein and such approval is sufficient
to render inapplicable to this Agreement and such transactions the restrictions
of Article 14 of the Virginia Stock Corporation Act (the "VSCL"), and,
accordingly such Article 14 does not apply to any such transactions. The Company
has opted out of Article 14.1 of the VSCL in Section 10.1 of its bylaws. There
is no other provision of the VSCL or the Company's bylaws or charter under which
special voting or waiting period requirements would become applicable to this
Agreement and the transactions described herein, or under which Appaloosa,
Purchaser or any Standby Purchaser or any Eligible Holder would not have rights
possessed by other stockholders of the Company.
2.20 Rights Plan Amendment. The Company has taken all action, if any,
necessary or appropriate so that the execution of this Agreement and the
consummation of the purchase of shares of Series A Preferred and Series B
Preferred pursuant to this Agreement, and the acquisition of New Common Stock
upon conversion of such shares, do not and will not result in the ability of any
Person to exercise any Rights (as defined in the Rights Agreement) under the
Rights Agreement
16
or enable or require any Rights to separate from the Shares to which they are
attached or to be triggered or to become exercisable.
2.21 No Additional Representations. Except as and to the extent
expressly set forth in this Agreement (together with the schedules hereto and
the agreements and certificates contemplated hereby), the Company makes no
representations or warranties whatsoever, and disclaims all liability and
responsibility for any representation, warranty, statement made or information
communicated (orally or in writing) to Appaloosa or Purchaser (including, but
not limited to, the information memorandum furnished to Appaloosa or Purchaser
in connection with their consideration of an investment in the Company and any
opinion, information or advice which may have been provided to Appaloosa or
Purchaser or any of their respective Affiliates, by any officer, stockholder,
director, employee, engineering or accounting firm, legal counsel or any other
agent, consultant or representative of such party, as applicable).
III. REPRESENTATIONS AND WARRANTIES OF APPALOOSA AND PURCHASER
Appaloosa and Purchaser represent and warrant to the Company, except as
disclosed in the letter dated the date hereof from Appaloosa to the Company
specifically referencing this Agreement and initialed by the parties hereto, as
follows:
3.1 Existence; Authorization, Validity and Effect of Agreement.
Appaloosa is a limited partnership and Purchaser is a ________ duly [formed],
validly existing and in good standing under the laws of the State of Delaware.
Purchaser is a Subsidiary of Appaloosa. Appaloosa and Purchaser have all
requisite power and authority to execute and deliver this Agreement and all
agreements and documents contemplated hereby and thereby to be executed by it.
This Agreement and the consummation by Appaloosa and Purchaser of the
transactions contemplated hereby have been duly and validly authorized by all
requisite action. This Agreement constitutes, and all Transaction Documents
contemplated hereby to be executed and delivered by Appaloosa or Purchaser (when
executed and delivered pursuant hereto) will constitute, the valid and binding
obligations of Appaloosa or Purchaser, as the case may be, enforceable against
each of them in accordance with their respective terms.
3.2 No Conflict; Required Filings and Consents. (a) The execution,
delivery and performance of this Agreement and the other Transaction Documents
by Appaloosa and Purchaser do not, and the consummation by Appaloosa and
Purchaser of the transactions contemplated hereby and thereby will not, (i)
conflict with or violate the organizational documents of Appaloosa or Purchaser,
(ii) conflict with or violate any Law or Order applicable to Appaloosa or
Purchaser or by which any property or asset of Appaloosa or Purchaser is bound
or affected or (iii) conflict with or violate or result in a breach or default
under any contract, agreement or instrument binding upon Appaloosa or Purchaser,
except, in the case of clauses (ii) and (iii), for any such conflicts,
violations, breaches or defaults that, individually or in the aggregate, would
not reasonably be expected to have a Purchaser Material Adverse Effect.
17
(b) The execution and delivery of this Agreement and the other
Transaction Documents by Appaloosa and Purchaser does not, and the performance
of this Agreement and the consummation of the transactions contemplated hereby
and thereby by them will not, require any consent, approval, authorization or
permit of, or filing with or notification to, any Governmental Entity, except
(i) for (A) applicable requirements, if any, of the Exchange Act, and (B) the
applicable notification requirements of the HSR Act, and (ii) where failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not, individually or in the aggregate,
reasonably be expected to have a Purchaser Material Adverse Effect.
3.3 No Undisclosed Agreements. Appaloosa and Purchaser have disclosed
to the Company the terms of all agreements, arrangements and understandings,
whether oral or written, between Appaloosa and any of its Affiliates or their
respective officers, directors or employees, on the one hand, and any other
Person that involve or relate to the Company, any of its Subsidiaries, the
Unions, or the Company's creditors or their respective officers, directors,
employees or representatives, on the other hand. Appaloosa and Purchaser have
provided to the Company true and correct copies of all such agreements,
arrangements and understandings that are in written form.
3.4 No Brokers. Appaloosa and Purchaser have not entered into any
contract, arrangement or understanding with any Person or firm that may result
in the obligation of the Company, New ▇▇▇▇ or any of their Subsidiaries to pay
any investment banker's or finder's fees, brokerage or agent's commissions or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby, any such
amounts to be the sole liability of Appaloosa or Purchaser.
3.5 Sufficient Funds. Appaloosa and Purchaser will have sufficient
funds available to pay the Series A Purchase Price and the Series B Purchase
Price in cash at the Closing.
3.6 Investment Intent. Other than the Series B Preferred that will be
purchased by Standby Purchasers pursuant to Article I, Appaloosa and Purchaser
are purchasing the shares of Series A Preferred and Series B Preferred to be
purchased by them for their own account and for investment purposes, and neither
of them intends to redistribute the Shares (except in a transaction or
transactions exempt from registration under the federal and state securities
laws or pursuant to an effective registration statement under such laws).
Appaloosa and Purchaser acknowledge that the Shares have not been and will not,
when issued, be registered under the Securities Act, or any state blue sky or
Securities Laws and that the transfer of the Shares may be subject to compliance
with such Laws unless an exemption is available pursuant to section 1145 of the
Bankruptcy Code (in addition to the restrictions set forth in the Shareholders
Agreement).
18
3.7 Investor Sophistication. Appaloosa and Purchaser are
sophisticated investors and each has such knowledge and experience in financial,
business and investment matters as to be capable of evaluating the merits and
risks of an investment in the Shares. Appaloosa was not organized for the
specific purpose of acquiring the Shares. Appaloosa and Purchaser are not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
3.8 Ownership of Company Securities/ Related Businesses. As of the
date of this Agreement, none of Appaloosa, Purchaser or any of their
Subsidiaries, Affiliates or affiliated funds (a) beneficially own any Claims,
indebtedness or equity securities of the Company or any direct or indirect
options, warrants or other rights to acquire, or any security convertible into
or exchangeable for, any indebtedness or equity securities of the Company, or
(b) have an equity interest greater than 10% in any Person that owns, Controls
or operates a business engaged in any of the following: (i) the supply of
components for automobiles or trucks, including but not limited to drivetrain
products (including front and rear axles, transfer cases and gearboxes,
differential and torque couplings, driveshafts, propshafts and drivetrain
systems), chassis products (including front and rear suspension systems and
modules, chassis systems, steering components and suspension components),
structural products (including cradles, frames, sub-frames and side-rails), or
engine components (including sealing systems and thermal management products);
(ii) the supply of components for off-highway vehicles (including
single-reduction drive and non-drive axles, steering and rigid planetary axles,
transaxles, driveshafts, transfer cases and gearboxes, powershaft transmissions,
torque converters, brakes, and electronic controls); or (iii) replacement
components for sale in the independent aftermarket or for original equipment
service (including replacement parts of any of the components listed above,
transmissions, universal joints, brakes and gaskets).
3.9 No Additional Representations. Appaloosa and Purchaser acknowledge
that they and their representatives have received or been afforded the
opportunity to review prior to the date hereof all written materials that the
Company was requested to deliver or make available, as the case may be, to
Appaloosa pursuant to this Agreement on or prior to the date hereof. Appaloosa
and Purchaser acknowledge that they and their representatives have been
permitted access to the books and records, Tax Returns, contracts, insurance
policies (or summaries thereof) and other properties and assets of the Company
and its Subsidiaries that they and their representatives have desired or
requested to see or review. Neither Appaloosa nor Purchaser has Knowledge of any
facts or circumstances that could reasonably be expected to constitute a breach
of the representations and warranties of the Company in Article II of this
Agreement.
IV. COVENANTS
4.1 Approval Motion; Approval Order. The Company shall use its
reasonable best efforts to cause the Bankruptcy Court to enter a final order of
the Bankruptcy Court (the "Approval Order") approving and authorizing the
Company to enter into this Agreement and authorizing the various fees contained
herein and
19
approving and authorizing the Support Agreement and that, subject to
Section 4.9, to issue such Approval Order and to cause such Approval Order to
contain a process specified therein that is reasonably acceptable to the
Creditors' Committee, the Company and Appaloosa, whereby Persons who have
submitted a bona fide proposal for an Alternative Investment, Alternative
Majority Investment, Alternative Transaction or Alternative Stand-Alone Plan
(each, an "Alternative Proposal") would be granted access to Company information
after signing a confidentiality agreement having terms no less favorable to the
Company or more favorable to the recipient thereunder than the respective terms
of the Confidentiality Agreement (an "Acceptable Confidentiality Agreement"),
would be required to submit a definitive Alternative Proposal to the Company on
or before the deadlines specified in the Approval Order. Nothing in this Section
4.1 or the Approval Order will be deemed to limit Section 4.10 or the Company's
right to terminate this Agreement pursuant to any of Sections 6.2(f), (g), (h)
or (i) or the exercise of its fiduciary duties with respect to the Plan Support
Agreement.
4.2 Plan and Disclosure Statement. Subject to Section 4.9, the Company
shall authorize, execute, file with the Bankruptcy Court and seek confirmation
of, a Chapter 11 Plan (and a related disclosure statement (the "Disclosure
Statement")) the terms of which are consistent with this Agreement, the Support
Agreement, the Form of Plan and with such other terms that, to the extent they
have a material impact on Purchaser's proposed investment in the Company, are
reasonably satisfactory to Appaloosa and Purchaser. The Company shall (a)
provide to Appaloosa and Purchaser and their counsel a copy of the Chapter 11
Plan and Disclosure Statement, and any amendments thereto, and a reasonable
opportunity to review and comment on such documents prior to such documents
being filed with the Bankruptcy Court, and (b) duly consider in good faith any
comments consistent with this Agreement, the Support Agreement and the Form of
Plan, and any other reasonable comments of Appaloosa and Purchaser and their
counsel. In addition, the Company shall (y) provide to Appaloosa and Purchaser
and their counsel a copy of the Confirmation Order and a reasonable opportunity
to review and comment on such order prior to such order being filed with the
Bankruptcy Court and (z) duly consider in good faith any comments consistent
with this Agreement, the Support Agreement and the Form of Plan, and any other
reasonable comments of Appaloosa and Purchaser and their counsel.
4.3 Rights Agreement. Subject to compliance by Purchaser and Appaloosa
with Section 2.1 and 2.2 of the Shareholders Agreement, the Company shall take
all action to ensure that the offering of Rights pursuant to the Rights
Offering, the purchase of shares of Series A Preferred and Series B Preferred
pursuant to this Agreement, and the acquisition of New Common Stock upon
conversion of such shares, will not result in the ability of any Person to
exercise any Rights (as defined in the Rights Agreement) under the Rights
Agreement or enable or require any Rights to separate from the Shares to which
they are attached or to be triggered or to become exercisable.
4.4 Employment Agreements. The Company and Appaloosa will use
reasonable best efforts to ensure that the individuals negotiating the
employment agreements for the persons listed on Schedule 4.4, as contemplated by
the Chapter 11 Plan, will consult with Appaloosa during that negotiation and
that such employment
20
agreements shall be in form and substance reasonably acceptable to Appaloosa,
all subject to approval by the Board of Directors of New ▇▇▇▇ on the Effective
Date. Without limiting the foregoing, the employment agreements entered into by
the Company with the Executive Chairman, the Chief Executive Officer and the
Chief Financial Officer shall provide that (i) upon any termination of
employment, the Executive Chairman, the Chief Executive Officer and/or the Chief
Financial Officer shall resign as a director to the extent applicable (and such
employment agreements shall require delivery at the time such agreements are
entered into of an executed irrevocable resignation that becomes effective upon
such termination) and (ii) the right to receive any payments or other benefits
upon termination of employment shall be conditioned upon such resignation. Such
agreements shall further provide that if, for any reason, the Executive
Chairman, the Chief Executive Officer or the Chief Financial Officer does not
resign or the irrevocable resignation is determined to be ineffective, then the
holders of the Series A Preferred may remove the Executive Chairman, the Chief
Executive Officer or the Chief Financial Officer as a director, subject to
applicable law.
4.5 Conduct of Business by Company Pending the Closing. The Company
covenants and agrees that, during the period from the date of this Agreement to
the Closing Date, (i) except as expressly required or permitted by this
Agreement, the Support Agreement or the Chapter 11 Plan, as required by Law or
order of the Bankruptcy Court or as set forth in Section 4.5 of the Company
Disclosure Letter or otherwise with the prior written consent of Purchaser
(which will not be unreasonably withheld or delayed), the business of the
Company and its Subsidiaries shall be conducted in the usual and ordinary course
of business consistent in all material respects with past practices, and the
Company shall use its commercially reasonable efforts to (a) preserve
substantially intact its current business organization and (b) preserve in all
material respects its present relationships with suppliers, lessors, employees,
customers, and other Persons with which it has significant business relations,
and (ii) it will promptly give written notice to Appaloosa with particularity
upon having Knowledge of any matter that may constitute a breach of any of the
Company's representations, warranties, agreements or covenants contained in this
Agreement that would reasonably be expected to result in a failure of a
condition in Section 5.3(b) or 5.3(c). Without limiting the generality of the
foregoing, the Company shall not, and it shall cause its Subsidiaries not to,
between the date of this Agreement and the Closing Date, except as expressly
required or permitted by this Agreement, the Support Agreement or the Chapter 11
Plan, as required by Law or order of the Bankruptcy Court or as set forth in
Section 4.5 of the Company Disclosure Letter, directly or indirectly, do, or
irrevocably commit to do, any of the following without the prior written consent
of Appaloosa or Purchaser, which will not be unreasonably withheld or delayed:
(a) amend or otherwise change the Company's charter or bylaws or,
unless the Company Board determines in good faith, after consultation with its
outside counsel, that its fiduciary duties require it, amend or grant any waiver
under the Rights Agreement;
21
(b) except for intercompany transactions, issue, deliver, grant, sell
or dispose of any of the Company's or its Subsidiaries capital stock or any
securities convertible into, or any rights, warrants or options to acquire, any
such capital stock at less than fair market value;
(c) declare, set aside, make or pay any dividend or other
distribution, whether payable in cash, stock, property or otherwise, with
respect to any of its capital stock (other than dividends or distributions by
any wholly owned Subsidiary to its parent);
(d) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any shares of capital stock of the
Company or any Subsidiary or any securities convertible into or exercisable for
any such shares of its capital stock or securities;
(e) acquire any shares or equity interests in any corporation,
partnership, Person or other business organization or division thereof, or a
substantial portion of the assets thereof, except (i) immaterial acquisitions in
the ordinary course of business consistent with past practice and (ii) other
acquisitions involving not in excess of $50 million in any transaction;
(f) (i) incur, create or assume any indebtedness for borrowed money
(including by issuance of debt securities) other than borrowings in the ordinary
course of business consistent with past practices under the Company's or any
Subsidiary's existing or any amended or replacement credit facilities or
(ii) other than in the ordinary course of business consistent with past
practices or for guarantees of Subsidiary obligations to the extent permitted
under the Company's applicable credit agreements, issue any debt securities or
warrants or other rights to acquire any debt securities of the Company or any
Subsidiary, or assume, guarantee or endorse, or otherwise as an accommodation
become responsible for, the obligations or indebtedness for borrowed money of
any Person, or make any loans or advances or, except in connection with an
acquisition permitted under clause (e) above, make any capital contributions to,
or investments in, any other Person;
(g) except as may be required as a result of a change in law or in
GAAP or audit practices, make any material change to any of the financial
accounting methods, practices or principles used by it;
(h) adopt or authorize a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its Significant Subsidiaries (other than
as provided for under the Chapter 11 Plan or as otherwise expressly permitted
under this Agreement);
(i) sell, lease, license, mortgage, pledge, ▇▇▇▇▇ ▇ ▇▇▇▇, mortgage,
pledge, security interest, charge, claim or other encumbrance of any kind or
nature on or otherwise encumber or dispose of any of its properties or assets,
except (i) in the
22
ordinary course of business consistent with past practice and (ii) other
transactions involving not in excess of $50 million in any 12-month period;
(j) settle or dismiss any Litigation threatened against, relating to
or involving the Company and any Subsidiary in connection with any business,
asset or property of the Company and any Subsidiary, other than in the ordinary
course of business consistent with past practices but not, in any individual
case, in excess of $50 million or in a manner that would prohibit or materially
restrict the Company from operating as it has historically (including as of the
date of this Agreement);
(k) (A) make any material Tax election, (B) enter into any settlement
or compromise of any material Tax liability, (C) file any amended Tax Return
with respect to any material Tax, (D) change any annual Tax accounting period,
(E) enter into any closing agreement relating to any material Tax, or (F)
surrender any right to claim a material Tax refund other than in the ordinary
course of business consistent with past practices; or
(l) enter into any new, or amend or supplement any existing,
collective bargaining agreement, which is inconsistent with the Chapter 11 Plan,
this Agreement or the Support Agreement.
4.6 Access. From the date hereof to the Closing Date, the Company
will (i) allow all designated officers, attorneys, accountants and other
representatives of Appaloosa and Purchaser reasonable access at reasonable times
during normal business hours to the officers, key employees, accountants and
other representatives of the Company and its Subsidiaries and the books and
records of the Company and its Subsidiaries and (ii) furnish to Appaloosa and
Purchaser and their counsel, financial advisors, auditors and other authorized
representatives such financial and operating data and other information as such
Persons may reasonably request. All information provided pursuant to this
Section 4.6 will be subject to the Confidentiality Agreement.
4.7 Publicity. The initial press release relating to this Agreement
will be in the form of a joint press release previously agreed between Appaloosa
and Purchaser and the Company. Thereafter, the Company (or New ▇▇▇▇, as
applicable), Appaloosa and Purchaser will, subject to their respective legal
obligations (including requirements of stock exchanges and other similar
regulatory bodies), consult with each other, and use reasonable efforts to agree
upon the text of any press release, before issuing any such press release or
otherwise making public statements with respect to the transactions contemplated
hereby and in making any filings with any Governmental Entity or with any
national securities exchange with respect thereto.
4.8 HSR Act; Other Regulatory Filings. The Company and Appaloosa will
or will cause the Person within which the Company and Purchaser are included,
pursuant to the HSR Act and rules and regulations promulgated thereunder, to (i)
promptly, but in no event later than twenty business days after the date of the
Approval Order, file any and all Notification and Report Forms required under
the HSR Act with the Federal Trade Commission (the "FTC") and the Antitrust
Division of the
23
Department of Justice (the "Antitrust Division") and use their respective
reasonable efforts to respond as promptly as practicable to all reasonable
inquiries received from the FTC or the Antitrust Division for additional
information or documentation, (ii) use reasonable best efforts to cause the
expiration or termination of any applicable waiting periods under the HSR Act,
(iii) use reasonable best efforts to cooperate with each other in (x)
determining whether any filings are required to be made with, or consents,
permits, authorizations, waivers, clearances, approvals, and expirations or
terminations of waiting periods are required to be obtained from any
Governmental Entities in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and
(y) timely making all such filings and timely obtaining all such consents,
permits, authorizations or approvals, (iii) supply to any Governmental Entity as
promptly as reasonably practicable any additional information or documentary
material that may reasonably be requested pursuant to any Antitrust Law or by
such Governmental Entity, and (iv) use reasonable best efforts to take, or cause
to be taken, all other actions and do, or cause to be done, all other things
necessary, proper or advisable to consummate and make effective the Investments,
including using reasonable best efforts to (A) take such further action as may
be necessary to resolve such objections, if any, as the FTC, Antitrust Division,
state antitrust enforcement authorities or competition authorities of any other
nation or other jurisdiction or any other Person may assert under any Antitrust
Law with respect to the Investments, and (B) avoid or eliminate each and every
impediment under any Law that may be asserted by any Governmental Entity with
respect to the Investments so as to enable the Closing to occur no later than
May 1, 2008; provided that, neither the Company nor any of its Subsidiaries
will, nor will Appaloosa or any of its Subsidiaries or Affiliates, be obligated
to, become subject to, or consent or agree to or otherwise take any action with
respect to, any requirement, condition, understanding, agreement or order of a
Governmental Entity to sell, to hold separate or otherwise dispose of, or to
conduct, restrict, operate, invest or otherwise change the assets or business of
the Company or any of its Subsidiaries or Appaloosa or any of its Subsidiaries
or Affiliates (any of the foregoing, a "Restrictive Action"), as the case may
be, unless such requirement, condition, understanding, agreement or order is
binding on the Company or Appaloosa, its Subsidiaries or Affiliates,
respectively, only in the event that the Closing occurs; provided, further, that
in no event will Appaloosa be required to take any Restrictive Action with
respect to any portfolio companies (whether Controlled by Appaloosa or
otherwise) of Appaloosa or any of its affiliated funds (other than the Company).
4.9 Reasonable Efforts to Close. The parties agree to use their
reasonable efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other parties in doing,
all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the transactions contemplated by this
Agreement, including without limitation using reasonable efforts to cause the
conditions to Closing to be satisfied as promptly as practicable. Each of
Purchaser and the Company agrees that it will consult with the other with
respect to the obtaining of all approvals of any and all third parties and
Governmental Entities necessary or advisable to consummate the transactions
contemplated by this Agreement, and each party will keep the other reasonably
apprised of the status of any material matters relating to completion of the
transactions
24
contemplated herein. Appaloosa will cause Purchaser to perform its
obligations in this Agreement.
4.10 Notification of Alternative Investment. Nothing in this Agreement
will be deemed to preclude the Company from furnishing information with respect
to the Company and its Subsidiaries to any Person making an Alternative Proposal
or participating in discussions or negotiations with the Person making an
Alternative Proposal; provided, that the Company will not disclose any material
non-public information to such Person without entering into an Acceptable
Confidentiality Agreement. If the Company Board determines in good faith (after
consultation with its outside legal counsel and its independent financial
advisor or advisors) that the terms of an Alternative Investment proposal are
superior to the terms of this Agreement and the Investments, taking into account
all legal, financial, regulatory and other aspects of such Alternative
Investment, the likely time to consummation of the Alternative Investment and
the termination rights of the Unions set forth in the Union Settlement
Agreement, then the Company must promptly, but in no event more than one
business day, after such Company Board determination provide written notice to
Appaloosa (the "Notice of Alternative Investment") advising it that it has
received a proposal for an Alternative Investment, specifying the material terms
and conditions of such proposal and indicating that the Company Board intends to
consider whether to terminate this Agreement pursuant to Section 6.2(f).
Appaloosa will have five business days from its receipt of the Notice of
Alternative Investment (the "Match Period") to make an offer to amend the terms
of this Agreement and the Investments in response thereto.
4.11 Takeover Statutes and Charter. The Company and the Company Board
have taken, or with respect to New ▇▇▇▇, will prior to Closing take, all action
necessary (a) to ensure that no state takeover statute or similar statute or
regulation is or becomes applicable to this Agreement or any transaction
contemplated hereby or by the Chapter 11 Plan, the Support Agreement or the Form
of Plan, (b) if any state takeover statute is or may become applicable to the
transactions contemplated by this Agreement, the Chapter 11 Plan, the Support
Agreement or the Form of Plan, to grant such approvals and take such actions as
are necessary so that such transactions may be consummated as promptly as
practicable on the terms contemplated by this Agreement, the Chapter 11 Plan,
the Support Agreement or the Form of Plan and otherwise to act to eliminate or
minimize the effects of such statute or regulation on such transactions and
(iii) to ensure that this Agreement or any transaction contemplated hereby or by
the Chapter 11 Plan, the Support Agreement or the Form of Plan are approved for
purposes of Article 14 of the VSCA.
V. CONDITIONS TO CLOSING
5.1 Conditions to Each Party's Obligations. The respective
obligations of Appaloosa and Purchaser, on the one hand, and ▇▇▇▇ and New ▇▇▇▇,
on the other hand, to consummate the transactions contemplated by this Agreement
are subject to
25
the fulfillment (or waiver by all parties to the extent permitted by Law) at or
prior to the Closing Date of the following conditions:
(a) All conditions precedent to the effectiveness of the Chapter 11
Plan shall have been satisfied or waived pursuant to the provisions therein.
(b) The waiting period (and any extension thereof) if any, applicable
to the issuance and sale of the Shares under all applicable Antitrust Laws shall
have been terminated or expired.
(c) No Order or Law enacted, entered, promulgated, enforced or issued
by any court of competent jurisdiction or other Governmental Entity or other
legal restraint or prohibition preventing the consummation of the transactions
contemplated by this Agreement shall be in effect.
(d) The Bankruptcy Court shall have issued the Approval Order.
(e) The Union Settlement Agreement shall not have been terminated and
shall have been approved by the Bankruptcy Court.
5.2 Conditions to Obligations of the Company. The obligations of the
Company to consummate the transactions contemplated by this Agreement are
subject to the satisfaction or waiver, at or prior to the Closing of the
following conditions:
(a) That all closing deliveries set forth in Section 1.5(a) hereof
shall have been delivered to New ▇▇▇▇.
(b) All representations and warranties of Appaloosa and Purchaser in
Article III must be true and correct in all respects on the Closing Date, except
as would not have or reasonably be expected to have a Purchaser Material Adverse
Effect.
(c) All covenants in Article IV required to be performed by Appaloosa
or Purchaser herein must have been complied with in all material respects.
(d) A confirmation order (the "Confirmation Order") approving the
Chapter 11 Plan in a form reasonably acceptable to the Company consistent with
the Form of Plan in all respects shall have been entered by the Bankruptcy
Court.
(e) The Chapter 11 Plan, including the plan documents attached
thereto, shall be in a form reasonably acceptable to the Company consistent with
the Form of Plan and shall have been implemented in all material respects in a
manner acceptable to the Company.
(f) The Company or New ▇▇▇▇, as the case may be, must have received
from Appaloosa a certificate of an executive officer of Appaloosa (without
personal liability) certifying to the satisfaction of the conditions set forth
in Sections 5.2(b) and 5.2(c) above.
26
5.3 Conditions to Obligations of Purchaser. The obligations of
Purchaser to consummate the transactions contemplated by this Agreement are
subject to the satisfaction or waiver, at or prior to the Closing of the
following conditions:
(a) All closing deliveries set forth in Section 1.6(b) hereof must
have been delivered to Purchaser.
(b) All representations and warranties of the Company and New ▇▇▇▇ in
Article II must be true and correct in all respects on the Closing Date, except
as would not have or reasonably be expected to have a Company Material Adverse
Effect.
(c) All covenants in Article IV required to be performed by the
Company or New ▇▇▇▇, as the case may be, must have been complied with in all
material respects.
(d) No Company Material Adverse Effect shall have occurred between
the date hereof and the Closing.
(e) The Confirmation Order approving the Chapter 11 Plan in a form
reasonably acceptable to Appaloosa consistent with the Form of Plan in all
respects shall have been entered by the Bankruptcy Court on or before February
28, 2008.
(f) The Company shall have obtained exit financing with parties and
on market terms that are reasonably acceptable to Appaloosa and shall have
consulted with Appaloosa regarding such parties and terms.
(g) The Chapter 11 Plan and the related disclosure statement shall
have been filed with the Bankruptcy Court no later than ________, 2007.
(h) The Chapter 11 Plan, including the plan documents attached
thereto, shall be in a form acceptable to Appaloosa and shall have been
implemented in all material respects in a manner acceptable to Appaloosa
consistent with this Agreement and the Form of Plan.
(i) Appaloosa must have received from the Company or New ▇▇▇▇, as the
case may be, a certificate of an executive officer of the Company or New ▇▇▇▇,
as the case may be, (without personal liability) certifying to such executive's
Knowledge the satisfaction of the conditions set forth in Sections 5.3(b), (c)
and (d) above.
(j) New Dana's charter or amendments to the Company's charter, as
applicable, shall have been filed with the Secretary of State of the state in
which it is incorporated, which charter or amendments, and the bylaws of New
▇▇▇▇ in effect as of the Closing Date, shall be in form and substance reasonably
acceptable to Purchaser and Appaloosa and consistent with this Agreement and the
Exhibits hereto, necessary to implement the transactions contemplated by this
Agreement, the Chapter 11 Plan, the Support Agreement and the Form of Plan;
provided, however, that the terms of the Series A Preferred and Series B
Preferred included in the New ▇▇▇▇ charter shall in any event be in the form of
Exhibit A, and Appaloosa shall have received from the
27
Company or New ▇▇▇▇, as the case may be, a certificate of the Secretary of the
Company or New ▇▇▇▇, as the case may be, certifying as to such charter and
bylaws.
(k) Effective upon the Closing, the New ▇▇▇▇ Board shall consist of
nine directors, (i) three of whom shall be designated by Appaloosa, (ii) three
of whom shall be designated by representatives of the unsecured creditor's
committee (the "Creditors' Committee") appointed in the Chapter 11 Case, each of
whom shall be an Independent Director, (iii) one of whom shall be the Chief
Executive Officer of the Company, (iv) one of whom shall be the Executive
Chairman (as defined in the Shareholders Agreement) and (v) one of whom shall be
selected by the Standby Purchasers other than Appaloosa, and reasonably
acceptable to Appaloosa. At least two-thirds of the members of the New ▇▇▇▇
Board shall be Independent Directors.
(l) The Rights Offering shall have been conducted in all material
respects in accordance with this Agreement and the Disclosure Statement and the
Expiration Time shall have occurred.
(m) Each of the Standby Purchasers shall have received a Purchase
Notice from the Company, dated as of the Determination Date, certifying as to
the number of Unsubscribed Shares to be purchased or a Satisfaction Notice.
(n) There shall not have occurred any material strike or labor
stoppage or slowdown at the Company or General Motors, Chrysler, Ford Motor
Company or any of their respective Subsidiaries.
5.4 Frustration of Closing Conditions. No party hereto may rely,
either as a basis for not consummating the Investments or terminating this
Agreement and abandoning the Investments, on the failure of any condition set
forth in Section 5.1, 5.2 or 5.3, as the case may be, to be satisfied if such
failure was caused by such party's breach in any material respect of any
provision of this Agreement or failure to use all reasonable best efforts to
consummate the Investments and the other transactions contemplated hereby.
VI. TERMINATION AND WAIVER
6.1 Termination by Mutual Consent. This Agreement may be terminated
at any time prior to the Closing Date by the mutual consent of Appaloosa and the
Company.
6.2 Other Termination Rights. This Agreement may also be terminated:
(a) by either Appaloosa or the Company, if the Effective Date has not
occurred on or before May 1, 2008; provided, however, that no party may
terminate this Agreement pursuant to this Section 6.2(a) if such party has
failed in any material respect to fulfill any of its obligations under this
Agreement;
28
(b) by either Appaloosa or the Company, if any Governmental Entity
has issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the consummation of the purchase
of Shares by Purchaser or any of the other transactions contemplated by this
Agreement and such order, decree or ruling or other action has become final and
nonappealable;
(c) by either Appaloosa or the Company, if the Chapter 11 Case is
dismissed or converted to a case under Chapter 7 of the Bankruptcy Code or a
Chapter 11 trustee is appointed;
(d) by Appaloosa, if there has been a default or breach by the
Company of its representations and warranties, covenants or agreements set forth
in this Agreement, or in connection with the transactions contemplated hereby,
which default or breach is incapable of being cured or, if capable of being
cured has not been cured within 60 days following receipt by the Company from
Appaloosa of written notice of such default or breach (specifying in reasonable
detail the claimed default or breach and demand of its cure or satisfaction) and
which default or breach would result in a failure of the condition set forth in
Section 5.3(f) or (g), as applicable or if, pursuant to an order of the
Bankruptcy Court, the Debtor no longer has the exclusive right to file a plan of
reorganization; provided, however, that Appaloosa will not have the right to
terminate this Agreement pursuant to this Section 6.2(d) if it or Purchaser is
in material breach of any representations, warranties, covenants or agreements
hereunder;
(e) by the Company, if there has been a default or breach by
Appaloosa or Purchaser of its representations and warranties, covenants or
agreements set forth in this Agreement, or in connection with the transactions
contemplated hereby, which default or breach is incapable of being cured or, if
capable of being cured has not been cured within 60 days following receipt by
Appaloosa from the Company of written notice of such default or breach
(specifying in reasonable detail the claimed default or breach and demand of its
cure or satisfaction) and which default or breach would result in a failure of
the condition set forth in Section 5.2(d) or (e), as applicable; provided,
however, that the Company will not have the right to terminate this Agreement
pursuant to this Section 6.2(e) if it is in material breach of any
representations, warranties, covenants or agreements hereunder;
(f) by the Company, in the event that the Company Board approves an
Alternative Investment (whether pursuant to a binding letter of intent or
definitive agreements) after determining in good faith (after consultation with
its outside legal counsel and its independent financial advisor or advisors)
that the terms of such Alternative Investment are superior to the terms of this
Agreement and the Investments, taking into account all legal, financial,
regulatory and other aspects of such Alternative Investment, the likely time to
consummation of the Alternative Investment, the termination rights of the Unions
set forth in the Union Settlement Agreement and any amendments to this Agreement
and the Investments proposed by Appaloosa during the Match Period; provided,
however, that in order for the termination of this Agreement pursuant to this
Section 6.2(f) to be effected, the Company shall first have complied in all
material respects with the provisions of Section 4.10;
29
(g) by the Company, in the event that the Company Board approves an
Alternative Majority Investment (whether pursuant to a binding letter of intent
or definitive agreements) after determining in good faith (after consultation
with its outside legal counsel and its independent financial advisor or
advisors) that the terms of such Alternative Majority Investment are more
favorable to the bankruptcy estate of the Debtor than the Chapter 11 Plan and
the Investments, taking into account all legal, financial, regulatory and other
aspects of such Alternative Majority Investment, the likely time to consummation
of the Alternative Majority Investment and the termination rights of the Unions
set forth in the Union Settlement Agreement;
(h) by the Company, in the event that the Company Board approves an
Alternative Transaction (whether pursuant to a binding letter of intent or
definitive agreements) after determining in good faith (after consultation with
its outside legal counsel and its independent financial advisor or advisors)
that the terms of such Alternative Transaction are more favorable to the
bankruptcy estate of the Debtor than the Chapter 11 Plan and the Investments,
taking into account all legal, financial, regulatory and other aspects of such
Alternative Transaction, the likely time to consummation of the Alternative
Transaction and the termination rights of the Unions set forth in the Union
Settlement Agreement; and
(i) by the Company, in the event that the Company Board approves an
Alternative Stand-Alone Plan after determining in good faith (after consultation
with its outside legal counsel and its independent financial advisor or
advisors) that the terms of an Alternative Stand-Alone Plan are more favorable
to the bankruptcy estate of the Debtor than the Chapter 11 Plan and the
Investments, taking into account all legal, financial, regulatory and other
aspects of such Alternative Stand-Alone Plan, the likely time to consummation of
the Alternative Stand-Alone Plan and the termination rights of the Unions set
forth in the Union Settlement Agreement.
6.3 Effect of Termination. (a) Any termination of this Agreement by
Appaloosa pursuant to this Article VI will be deemed to be a termination on
behalf of itself and Purchaser.
(b) A termination under Section 6.1 will be effective upon the date
of the mutual agreement to terminate this Agreement pursuant thereto.
(c) In order to terminate this Agreement pursuant to Section 6.2
hereof by Appaloosa or the Company, written notice thereof must promptly be
given to the other party specifying the provision hereof pursuant to which such
termination is made, and the effective date of such termination will be as
follows (with respect to each applicable paragraph of Section 6.2, the
"Termination Effective Date" thereof):
(i) with respect to a termination under Section 6.2(a), (b), (c), (d)
or (e), such termination will become effective upon notice of the exercise
of such termination right, in accordance with Section 8.1;
30
(ii) with respect to a termination under Section 6.2(f), (g) or (h),
notwithstanding the prior delivery of a notice of the Company's exercise of
such termination right, such termination will become effective only upon
the earlier to occur of (A) the approval by the Bankruptcy Court of the
Alternative Investment, the Alternative Majority Investment or the
Alternative Transaction, respectively, (B) the 30th day after the
applicable Company Board approval giving rise to such termination right, as
described in Section 6.2(f), (g) or (h), and (C) the Company's written
notice to Appaloosa that it wishes the termination to be effective at a
specified earlier date, respectively; provided, however, that in the event
the Bankruptcy Court enters an order denying the Company's motion to
approve such Alternative Investment, Alternative Majority Investment or
Alternative Transaction, as applicable, prior to such 30th day (or, if
earlier, the date of such Company notice), the Company's termination notice
relating thereto will automatically and without further action be deemed to
have been withdrawn and such termination will not become effective for any
purposes under this Agreement; and
(iii)with respect to a termination under Section 6.2(i),
notwithstanding the prior delivery of a notice of the Company's exercise of
such termination right, such termination will become effective only upon
the entry of an order by the Bankruptcy Court approving the disclosure
statement relating to such Alternative Stand-Alone Plan or such earlier
date on which the Company give written notice to Appaloosa that it wishes
the termination to be effective at a specified earlier date.
(d) Upon the effectiveness of the termination of this Agreement
pursuant to Section 6.3(c), this Agreement will become void and have no effect,
and there will be no liability hereunder on the part of Appaloosa, Purchaser or
the Company or New ▇▇▇▇; provided, however, that Section 4.7 and Article VIII
and all obligations to pay any fees pursuant to Article VII, if any, will
survive any such effectiveness or termination as set forth therein; provided
further, however, that nothing in this Section 6.3 will relieve Appaloosa or
Purchaser of liability for any breach of this Agreement. The Confidentiality
Agreement will, except as provided herein, remain in effect during the term of
this Agreement and following its termination pursuant to its terms; provided,
however, that such agreement will automatically terminate as of the Closing.
Notwithstanding that a termination of this Agreement pursuant to Section 6.2(f),
(g), (h) or (i) is not yet effective, upon delivery by the Company of notice of
termination pursuant to one of those Sections, the Company's obligations to
pursue the Chapter 11 Plan and to otherwise use reasonable efforts to
consummate, and take actions in furtherance of, the transaction contemplated by
this Agreement and the Chapter 11 Plan will be suspended until such termination
either becomes effective or is withdrawn pursuant to the applicable provision of
Section 6.2; provided, however, that during such suspension period, the Company
will not voluntarily take any action, directly or indirectly, that would
preclude continued compliance with its obligations hereunder should the
termination be so withdrawn.
31
VII. FEES AND EXPENSES
7.1 Termination Fee / Expenses. Subject to Section 7.3, in the event
that this Agreement is terminated pursuant to (i) Section 6.2(a) then the
Company will be obligated to pay Purchaser, as liquidated damages, a payment of
$2.5 million or (ii) Section 6.2(c) or (d), then the Company will be obligated
to pay Purchaser, as liquidated damages, a payment of $3.5 million (any payment
to be made under clause (i) or (ii) above, a "Termination Fee") plus an
additional amount equal to the reasonable out-of-pocket costs and expenses
incurred by Appaloosa and Purchaser in connection with this Agreement and the
transactions contemplated hereby, in an amount not to exceed $4.0 million (the
"Purchaser Expenses"). Any such payments pursuant to this Section 7.1 will be
earned and payable by the Company to Purchaser immediately upon the Termination
Effective Date of the applicable termination.
7.2 Commitment Fee. Subject to Section 7.3, in consideration of the
Standby Purchasers' commitment to purchase any Unsubscribed Shares pursuant to
the terms of this Agreement, on the Effective Date, the Company will pay to
Purchaser a commitment fee in an aggregate amount equal to $10.0 million (the
"Commitment Fee"), plus an additional amount equal to the Purchaser Expenses.
7.3 No Duplication of Payments. Notwithstanding any other provision
hereof, Purchaser shall be entitled to only one payment of each of the following
fees and expenses: (a) Purchaser Expenses, (b) a Termination Fee and (c) a
Commitment Fee , as applicable, pursuant to Section 7.1 or 7.2.
7.4 Superpriority Administration Expense Claims. The liquidated
damages payments payable pursuant to Section 7.1 and 7.2 will be superpriority
allowed administrative expense claims having priority over all other
administrative claims other than any such claims of the Debtors' post-petition
lenders in their capacity as such.
7.5 Liquidated Damages. Appaloosa and Purchaser agree that it would
be impractical and extremely difficult to determine the extent of any damages to
Appaloosa and Purchaser that might result from a breach by the Company of any
representation, warranty, covenant or agreement of this Agreement or the Support
Agreement. Therefore, the parties acknowledge and agree that any payment to
Purchaser made pursuant this Article VII will be paid as liquidated damages and
the parties' good faith estimate of the actual potential damages to Purchaser
and Appaloosa for any such breach. Purchaser and Appaloosa agree to accept such
amounts as satisfaction in full of any claim or demand that Purchaser or
Appaloosa may have against the Company, its Affiliates, employees, officers,
directors, agents, successors and assigns because of such breach.
32
VIII. GENERAL PROVISIONS
8.1 Notices. Any notice or other communication required to be given
hereunder will be in writing, and sent by reputable courier service (with proof
of service), by hand delivery, or by email or facsimile (followed on the same
day by delivery by courier service (with proof of delivery) or by hand
delivery), addressed as follows:
If to Appaloosa or Purchaser:
Appaloosa Management L.P.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Email: ▇.▇▇▇▇▇@▇▇▇▇.▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
White & Case LLP
Wachovia Financial Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇)
▇▇▇▇▇▇ ▇▇▇▇ (▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇)
Fax: (▇▇▇) ▇▇▇-▇▇▇▇/5766
And
White & Case LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇ (▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇)
Fax: ▇▇▇-▇▇▇-▇▇▇▇
If to the Company or New ▇▇▇▇:
▇▇▇▇ Corporation (or the name of New ▇▇▇▇)
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel and Secretary
Email:
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
33
With copies to:
▇▇▇▇▇ Day
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Email: ▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as any party will specify by written notice so given,
and such notice will be deemed to have been delivered as of the date so
telecommunicated or personally delivered.
8.2 Assignment; Binding Effect. Neither this Agreement nor any of the
rights, interests or obligations hereunder will be assigned by any party hereto
(whether by operation of Law or otherwise) without the prior written consent of
the other party, except that (a) Appaloosa will have the right to assign any of
the rights and obligations of Appaloosa hereunder to any Standby Purchaser who
executes and delivers to the Company an Assumption Agreement, provided, that any
such assignment will not relieve Appaloosa from any of its obligations hereunder
and (b) the Company will, effective as of the Effective Date, assign all of its
rights and obligations under this Agreement to New ▇▇▇▇. Any assignment not
granted in accordance with the foregoing will be null and void. Subject to the
first and last sentence of this Section 8.2, this Agreement will be binding upon
and will inure to the benefit of the parties hereto and their respective
successors and assigns. Notwithstanding anything contained in this Agreement to
the contrary, (A) the Company's and New Dana's obligations hereunder are subject
to approval by the Bankruptcy Court of the transactions contemplated hereby and
under the other Transaction Documents and (B) nothing in this Agreement,
expressed or implied, is intended to confer on any Person other than the parties
hereto or their respective heirs, successors, executors, administrators and
assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
8.3 Entire Agreement. This Agreement, the Company Disclosure Letter,
and any documents delivered by the parties in connection herewith or therewith,
including the Transaction Documents, the Support Agreement and the
Confidentiality Agreement constitute the entire agreement among the parties with
respect to the subject matter hereof and supersede all prior agreements and
understandings among the parties with respect thereto. The Confidentiality
Agreement and Support Agreement remain in full force and effect.
34
8.4 Amendment. Subject to applicable law, including but not limited
to the requirements of the Bankruptcy Code and the orders of the Bankruptcy
Court, this Agreement may only be amended by an instrument in writing signed on
behalf of each of the parties hereto.
8.5 Governing Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York, without regard to its
conflict of laws principles.
8.6 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
will be an original, but all such counterparts will together constitute one and
the same instrument. Each counterpart may consist of a number of copies hereof
each signed by less than all, but together signed by all of the parties hereto.
A facsimile copy of a signature page will be deemed to be an original signature
page.
8.7 Headings. Headings of the Articles and Sections of this Agreement
are for the convenience of the parties only, and will be given no substantive or
interpretive effect whatsoever.
8.8 Certain Definitions/Interpretations. (a) For purposes of this
Agreement:
(i) "Assumption Agreement" means an agreement in writing in
substantially the form of Exhibit A to the Shareholders Agreement pursuant
to which the party thereto agrees to be bound by the terms and provisions
of this Agreement;
(ii) An "Affiliate" of any Person means another Person that, directly
or indirectly, through one or more intermediaries, Controls, is Controlled
by, or is under Common Control with, such first Person; provided that as
such term is used in this Agreement, Appaloosa and Purchaser will not be
considered to be Affiliates of the Company;
(iii)"Alternative Investment" means an investment proposed by any
Person or group of Persons (other than a party to this Agreement or its
Affiliates) (a "Third Party Investor") that would result in any direct or
indirect acquisition or purchase by such Third Party Investor of beneficial
ownership of less than 50% of the equity securities of New ▇▇▇▇ entitled to
vote generally in the election of directors calculated on a fully-diluted
basis, taking into account any securities convertible into, exchangeable
for or exercisable for any such securities (whether immediately or
otherwise) on an as-converted, exchanged or exercised basis, that would be
an alternative to the Investments;
(iv) "Alternative Majority Investment" means an investment proposed by
any Third Party Investor, other than an Alternative Investment, that would
result in any direct or indirect acquisition or purchase by such Third
Party Investor of beneficial ownership of at least 50% of the equity
securities of New ▇▇▇▇ entitled
35
to vote generally in the election of directors calculated on a
fully-diluted basis, taking into account any securities convertible into,
exchangeable for or exercisable for any such securities (whether
immediately or otherwise) on an as-converted, exchanged or exercised basis,
that would be an alternative to the Investments; ;
(v) "Alternative Transaction" means a proposed transaction, other
than an Alternative Investment or Alternative Majority Investment, between
the Company and a Third Party Investor, involving the sale of all or
substantially all of the assets of Debtor as a going concern and not as a
liquidation;
(vi) "Alternative Stand-Alone Plan" means any plan of reorganization
for the Company, not involving any Alternative Investment, Alternative
Majority Investment or Alternative Transaction, proposed by the Debtor
without any party providing equity financing;
(vii)"Antitrust Laws" means the ▇▇▇▇▇▇▇ Antitrust Act, as amended, the
▇▇▇▇▇▇▇ Act of 1914, as amended, the HSR Act, the Federal Trade Commission
Act of 1914, as amended, Council Regulation (EC) No. 139/2004 of 20 January
2004 on the control of concentrations between undertakings, as amended, and
all other Laws and Orders that are designed or intended to prohibit,
restrict or regulate actions having the purpose or effect of monopolization
or restraint of trade, whether foreign or domestic;
(viii) "Bankruptcy Court" means the United States Bankruptcy Court for
the Southern District of New York;
(ix) "Certificate of Designation" means the Articles of Serial
Designation of 4.0% Series A Convertible Preferred Stock and 4.0% Series B
Convertible Preferred Stock in the form of Exhibit A;
(x) "Claims" means claims (as such term is defined under section 101
of the Bankruptcy Code) against the Company or any rights to acquire such
claims;
(xi) "Company Board" means the board of directors of the Company;
(xii)"Company Material Adverse Effect" means any change, effect, event
or condition that has had or could reasonably be expected to have a
material adverse effect (a) on the business, results of operations or
financial condition of the Company, New ▇▇▇▇ and their Subsidiaries, taken
as a whole, or (b) that would prevent the Company from timely consummating
the transactions contemplated hereby in all material respects; provided,
however, that the definition of Company Material Adverse Effect will not
include facts, circumstances, events, changes, effects or occurrences
(i) generally affecting the industry in which the Company and its
Subsidiaries or their customers operate, or the economy or the financial,
credit or securities markets, in the United States or other countries in
which the Company or its Subsidiaries operate, including
36
effects on such industries, economy or markets resulting from any
regulatory and political conditions or developments in general, or any
outbreak or escalation of hostilities, declared or undeclared acts of war
or terrorism (other than any of the foregoing that causes any damage or
destruction to or renders physically unusable or inaccessible any facility
or property of the Company or any of its Subsidiaries); (ii) reflecting or
resulting from changes in law or GAAP (or authoritative interpretations
thereof); (iii) resulting from actions of the Company or any of its
Subsidiaries that Appaloosa has expressly requested in writing or to which
Appaloosa has expressly consented to in writing; (iv) to the extent
resulting from the announcement of the Investments and the transactions
contemplated thereby, including any lawsuit related thereto or any loss or
threatened loss of or adverse change or threatened adverse change, in each
case resulting therefrom, in the relationship of the Company or its
Subsidiaries with its customers, suppliers, employees or others; (v)
resulting from changes in the market price or trading volume of the
Company's securities, provided that the exceptions in this clause (v) are
strictly limited to any such change or failure in and of itself and will
not prevent or otherwise affect a determination that any fact,
circumstance, event, change, effect or occurrence underlying such change or
such failure has resulted in, or contributed to a Company Material Adverse
Change; (vi) resulting from the suspension of trading in securities
generally on any U.S. national securities exchange; or (vii) resulting from
changes in the pool of claims (as such term is defined in Section 1.01(5)
of the Bankruptcy Code); except to the extent that, with respect to clauses
(i) and (ii), the impact of such fact, circumstance, event, change, effect
or occurrence is disproportionately adverse to the Company and its
Subsidiaries, taken as a whole, as compared to other Persons engaged in the
industries in which the Company and its Subsidiaries compete;
(xiii) "Company Reports" means all forms and reports filed by the
Company with the SEC after January 1, 2006, and any such forms or reports
filed by the Company with the SEC after the date of this Agreement and
until the Closing Date, in each case under Sections 12(b) or 12(g) of the
Exchange Act and the rules and regulations promulgated thereunder;
(xiv) "Confidentiality Agreement" means that agreement by and between
Appaloosa and the Company, dated as of July 21, 2007;
(xv) "Control" (including the terms "Controlling", "Controlled by" and
under "Common Control with") means possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract, or
otherwise;
(xvi) "Independent Director" has the meaning given such term in
Exhibit B;
(xvii) "Knowledge" means the actual knowledge after reasonable inquiry
of any of the Company's executive officers in the case of the Company and,
in
37
the case of Purchaser, means the actual knowledge of Appaloosa's executive
officers after reasonable inquiry;
(xviii) "Litigation" means any complaint, action, suit, proceeding,
arbitration or other alternate dispute resolution procedure, demand,
investigation or inquiry, whether civil, criminal or administrative;
(xix) "New Common Stock" means the common stock of New ▇▇▇▇ issued
pursuant to the Plan;
(xx) "New ▇▇▇▇ Board" means the board of directors of New ▇▇▇▇; (xxi)
"Person" means any individual, firm, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity;
(xxii) "Purchaser Material Adverse Effect" means any change, effect,
event or condition that has prevented or materially delayed or could
reasonably be expected to prevent or materially delay Appaloosa's or
Purchaser's ability to consummate the transactions contemplated hereby;
(xxiii) "Rights Agreement" means the Rights Agreement, dated as of
April 25, 1996, as amended, between the Company and The Bank of New York,
successor to Mellon Investor Services LLC (formerly Chemical Mellon
Shareholder Services, L.L.C.), as Rights Agent;
(xxiv) "Securities Laws" means, collectively, the Securities Act, the
Exchange Act, and any state securities and "blue sky" laws;
(xxv) "Significant Subsidiary" has the meaning set forth in Rule
1-02(w) of Regulation S-X promulgated by the SEC;
(xxvi) "Subsidiary" when used with respect to any Person, means any
corporation or other organization, whether incorporated or unincorporated,
of which such Person directly or indirectly owns or Controls more than 50%
of the securities or other interests having by their terms ordinary voting
power to elect a majority of the board of directors or others performing
similar functions;
(xxvii) "Taxes or Tax" means all federal, state, local and foreign
taxes arising after the date on which the Debtor filed the Chapter 11 Case,
in the case of the Debtor, and arising at anytime in the case of Persons
other than the Debtor, (including income or profits taxes, alternative or
add-on minimum taxes, profits or excess profits taxes, premium taxes,
occupation taxes, excise taxes, sales taxes, use taxes, gross receipts
taxes, franchise taxes, ad valorem taxes, severance taxes, capital levy
taxes, prohibited transaction taxes, transfer taxes, value added taxes,
employment and payroll-related taxes (including employee withholding or
employer payroll tax, FICA or FUTA), real or personal property taxes,
business license taxes, occupation taxes, stamp taxes or duties,
38
withholding or back up withholding taxes, import duties and other
governmental charges and assessments), of any kind whatsoever, including
charges, interest, additions to tax and penalties with respect thereto, it
being agreed that the foregoing shall include any transferee or secondary
liability for a Tax and any liability assumed by agreement or arising as a
result of being or ceasing to be a member of any affiliated group or being
included or required to be included in any Tax Return;
(xxviii) "Unions" means, the United Steelworkers of America and the
International Union, UAW; and
(xxix) "Union Settlement Agreement" means the Settlement Agreements by
and between the Company and the Unions.
(xxx) "Unsecured Claims" means unsecured nonpriority Claims other
than: (i) subject to Appaloosa's reasonable approval as to the size of the
claims contained in such class, convenience class claims, and (ii) subject
to Appaloosa's reasonable approval, (a) asbestos personal injury claims,
(b) intercompany claims, (c) ▇▇▇▇ Credit Corporation claims and (d) any
claims of the non-union retirees represented by the Official Committee of
Non-Union Retirees.
(b) When a reference is made in this Agreement to an Article,
Section, Exhibit or Annex, such reference will be to an Article or Section of,
or an Annex or Exhibit to, this Agreement unless otherwise indicated. Whenever
the words "include," "includes" or "including" are used in this Agreement, they
will be deemed to be followed by the words "without limitation." The words
"hereof," "herein" and "hereunder" and words of similar import when used in this
Agreement will refer to this Agreement as a whole and not to any particular
provision of this Agreement. All terms used herein with initial capital letters
have the meanings ascribed to them herein and all terms defined in this
Agreement will have such defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein. The
definitions contained in this Agreement are applicable to the singular as well
as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is referred
to herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. References to a Person are also to its
permitted successors and assigns. As the context requires, all references to the
"Company" contained herein shall be references to "New ▇▇▇▇" after the Closing.
8.9 No Survival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Closing.
39
8.10 Waivers. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including without limitation any investigation by or
on behalf of any party, will be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties, covenants
or agreements contained in this Agreement. The waiver by any party hereto of a
breach of any provision hereunder will not operate or be construed as a waiver
of any prior or subsequent breach of the same or any other provision hereunder.
At any time prior to the Closing Date, any party hereto may (a) extend the time
for the performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto, and (c) waive
compliance with any of the agreements or conditions contained herein. Any such
extension or waiver will be valid only if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
8.11 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction will, as to that 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. If any provision of this
Agreement is so broad as to be unenforceable, the provision will be interpreted
to be only so broad as is enforceable.
8.12 Jurisdiction; Consent to Service of Process. (a) Each party
hereby irrevocably and unconditionally submits, for itself and its property, to
the exclusive jurisdiction of the Bankruptcy Court, and any appellate court from
any such court, in any suit, action or proceeding arising out of or relating to
this Agreement or the transactions contemplated hereby, or for recognition or
enforcement of any judgment resulting from any such suit, action or proceeding,
and each party hereby irrevocably and unconditionally agrees that all claims in
respect of any such suit, action or proceeding may be heard and determined in
the Bankruptcy Court.
(b) It will be a condition precedent to each party's right to bring
any such suit, action or proceeding that such suit, action or proceeding, in the
first instance, be brought in the Bankruptcy Court, and if each such court
refuses to accept jurisdiction with respect thereto, such suit, action or
proceeding may be brought in any other court with jurisdiction.
(c) No party may move to (i) transfer any such suit, action or
proceeding from the Bankruptcy Court to another jurisdiction, (ii) consolidate
any such suit, action or proceeding brought in the Bankruptcy Court with a suit,
action or proceeding in another jurisdiction, or (iii) dismiss any such suit,
action or proceeding brought in the Bankruptcy Court for the purpose of bringing
the same in another jurisdiction.
(d) Each party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, (i) any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or
40
relating to this Agreement in the Bankruptcy Court, (ii) the defense of an
inconvenient forum to the maintenance of such suit, action or proceeding in any
such court, and (iii) the right to object, with respect to such suit, action or
proceeding, that such court does not have jurisdiction over such party. Each
party irrevocably consents to service of process in any manner permitted by law.
8.13 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF
OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
8.14 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement will be
construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof will arise favoring or disfavoring any party by virtue of the
authorship of any of the provisions of this Agreement.
[Remainder of page intentionally blank]
41
IN WITNESS WHEREOF, the parties have executed this Agreement and caused the
same to be duly delivered on their behalf on the day and year first written
above.
▇▇▇▇ CORPORATION
By:
---------------------------
Name:
Title:
APPALOOSA MANAGEMENT, L.P.
By:
---------------------------
Name:
Title: Authorized Person
[PURCHASER]
By:
---------------------------
Name:
Title: Authorized Person
List of Exhibits
Exhibit A - Form of Certificate of Designation
Exhibit B - Form of Shareholders Agreement
Exhibit C - Form of Series A Registration Rights Agreement
Exhibit D - Form of Series B Registration Rights Agreement
Exhibit E - Form of Market Maker Agreement Referenced in Exhibit A
2