Exhibit 2.1
EXECUTED COPY
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INVESTMENT AGREEMENT
BY AND AMONG
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ FUND III L.P.
CIBC WG ARGOSY MERCHANT FUND 2, L.L.C.
CO-INVESTMENT MERCHANT FUND 3, LLC
CONSORCIO G GRUPO ▇▇▇▇, S.A. de C.V.
DATED AS OF JUNE 11, 1999
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INVESTMENT AGREEMENT, dated as of June 11, 1999 (the "Agreement"), by
and among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & LEVY FUND III L.P., a Delaware limited partnership
("JLL"), CIBC WG ARGOSY MERCHANT FUND 2, L.L.C. ("CIBC Argosy"), CO-INVESTMENT
MERCHANT FUND 3, LLC ("CMF" and, together with JLL and CIBC Argosy, the
"Investors"), and CONSORCIO G GRUPO ▇▇▇▇, S.A. de C.V., a corporation organized
under the laws of the United Mexican States ("▇▇▇▇").
BACKGROUND
1. Upon the terms and subject to the conditions of this
Agreement, at the Closing (as hereinafter defined), ▇▇▇▇ shall cause its wholly
owned subsidiary, MCII Holdings (USA), Inc., a Delaware corporation (the
"Company"), to issue and sell, and the Investors will purchase, (i) 610,000
shares (the "Shares") of Common Stock (as hereinafter defined), which Shares
shall equal 61% of the shares of Common Stock outstanding on the Closing Date
(as hereinafter defined), and warrants (the "Warrants") to purchase up to 10% of
the Common Stock, on a fully diluted basis, for an aggregate purchase price of
$125 million and (ii) a Senior Note due 2011 of the Company (the "Company Senior
Note"), in the principal amount of $50 million, for a purchase price of $50
million. The terms of the Company Senior Note and the Warrants are set forth on
EXHIBITS A and B hereto. Such issuance, sale and purchase are referred to herein
as the "Investment."
2. At the Closing, Transportation Manufacturing Operations,
Inc., a Delaware corporation and an indirect wholly owned subsidiary of the
Company ("TMO"), will enter into a credit agreement (the "Credit Agreement")
with Canadian Imperial Bank of Commerce, as agent ("CIBC"), and a syndicate of
lenders providing for a $383 million senior credit facility.
3. At the Closing, TMO shall issue and sell $200 million of
subordinated indebtedness pursuant to a private placement (the "Private
Placement" and, together with the transactions contemplated by the Credit
Agreement, the "Financing").
4. ▇▇▇▇ shall cause the Company to use the proceeds of the
Financing to repay the Increasing Rate Notes (as hereinafter defined), the First
Chicago Facility (as hereinafter defined), the Prudential Senior Notes (as
hereinafter defined) and the Autobuses Credit Facility (as hereinafter defined).
5. Immediately prior to the Closing, ▇▇▇▇ shall acquire all of
the outstanding capital stock of each of the Transferred Subsidiaries (as
hereinafter defined).
6. Prior to the Closing, ▇▇▇▇ shall take and shall cause the
Company to take all actions necessary to effect the Charter Amendment (as
hereinafter defined), which shall, among other, things provide for the
recapitalization of the Company's 1,000 then outstanding shares of Common Stock
into 2,500,000 shares of Common Stock.
7. At the Closing, ▇▇▇▇ shall cause the Company to repurchase
from ▇▇▇▇ a number of shares of Common Stock, such that ▇▇▇▇ shall own 39% of
the Common Stock outstanding on the Closing Date, after giving effect to the
Investment, in exchange for (a) an amount in cash equal to the sum of (x) $690
million and (y) 100% of all Excess Cash (as hereinafter defined) up to a maximum
of $5 million and (z) 50% of all Excess Cash above $5 million less the sum of
(i) the total amount expended to repay in full the Increasing Rate Notes, the
First Chicago Facility and the Prudential Senior Notes, (ii) 50% of the total
amount expended to repay in full the Autobuses Credit Facility; PROVIDED,
HOWEVER, if the amount required to repay such facility is in excess of $16
million, the amount included pursuant to this clause (ii) shall be the total
amount required to repay such facility less $8 million, (iii) the total amount
required to repay in full all other then outstanding indebtedness of the Company
or the Company's Subsidiaries, other than (1) trade payables and (2) up to
$1,050,000 to repay the current outstanding indebtedness payable to Cananwill,
Inc., (iv) the amount of the Cash Shortfall (as hereinafter defined), if any,
and (v) all fees and expenses paid or payable by the Company in connection with
the Transactions (as hereinafter defined) (such amount shall be hereinafter
referred to as the "Cash Repurchase Amount"), (b) the indebtedness referred to
in Section 3.5(b) and (c) the ▇▇▇▇ Notes (as hereinafter defined).
8. ▇▇▇▇ shall use the proceeds of the Repurchase (as
hereinafter defined) to (i) repurchase and retire all of the outstanding 2002
Discount Notes (as hereinafter defined) pursuant to the terms of the 2002
Discount Notes Tender Offer (as hereinafter defined) and (ii) repurchase and
retire all of the outstanding Senior Secured Notes (as hereinafter defined)
pursuant to the terms of the Senior Secured Notes Tender Offer (as hereinafter
defined).
9. Upon consummation of the Investment, the Investors will own
61% of the outstanding Common Stock and ▇▇▇▇ will own 39% of the outstanding
Common Stock, in each case, without giving effect to the adoption of the Stock
Option Plan (as hereinafter defined) or the issuance of the Warrants. At the
Closing, ▇▇▇▇ shall cause the Company to, and the Investors, ▇▇▇▇ and certain
other stockholders will, enter into the Stockholders= Agreement (as hereinafter
defined) pursuant to which such parties will agree as to certain matters
relating to the corporate governance of the Company, and the certificate of
incorporation of the Company will be amended to include, among other things,
certain provisions relating to the conduct of the business and affairs of the
Company.
10. At the Closing, ▇▇▇▇ shall cause the Company to become a
party to this Agreement and be bound by all of the Company's obligations
hereunder.
11. Promptly following the Closing, the Company will take all
actions necessary to adopt a management stock option plan (the "Stock Option
Plan"), in form and substance to be approved by JLL, pursuant to which certain
senior executive officers of the Company and/or the Company Subsidiaries (as
hereinafter defined) would be granted options to purchase an aggregate of 20% of
the outstanding Common Stock on a fully diluted basis.
12. The Board of Directors of ▇▇▇▇ has determined that the
Investment, the Financing, the Refinancing (as hereinafter defined), the
Subsidiary Sale (as
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hereinafter defined), the Repurchase, the Contribution (as hereinafter
defined), the ▇▇▇▇ Refinancing (as hereinafter defined), the Charter
Amendment and the other transactions and transfers contemplated hereby or by
any of the exhibits hereto (collectively, the "Transactions") are in the best
interests of ▇▇▇▇, the Company and their respective stockholders and has
approved and adopted this Agreement and the Transactions.
TERMS
In consideration of the foregoing and the respective
representations, warranties, covenants and agreements of the parties set forth
in this Agreement, and intending to be legally bound, the parties hereto agree
as follows:
ARTICLE 1
CERTAIN DEFINITIONS
1.1 CERTAIN DEFINITIONS.
"Affiliate" has the meaning set forth in Rule 12b-2 under the
Exchange Act (as hereinafter defined).
"Agreement" has the meaning set forth in the Preamble.
"Amended and Restated Certificate of Incorporation" has the
meaning set forth in Section 3.8.
"Ancillary Agreements" means the Stockholders= Agreement, the
Stock Option Plan, the Credit Agreement and the Indenture (as hereinafter
defined).
"Associate" has the meaning set forth in Rule 12b-2 under the
Exchange Act.
"Audit" means any audit, assessment of Taxes (as hereinafter
defined), examination or other proceeding by the Internal Revenue Service or any
other Governmental Entity (as hereinafter defined) responsible for the
administration of any Taxes, proceeding or appeal of such proceeding relating to
Taxes.
"Autobuses" has the meaning set forth in Section 3.3.
"Autobuses Credit Facility" has the meaning set forth in
Section 3.2.
"Autopartes" has the meaning set forth in Section 3.3.
"Board" means the Board of Directors of the Company.
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"Business" shall mean the ownership or management of, or
investment in, any business or Person engaged in (a) the designing,
manufacturing, assembling or marketing of coaches of monocoque or unitized
construction configuration or (b) the distribution of replacement parts to the
intercity coach and transit bus markets.
"Business Day" means any day other than a day on which banks
in the State of New York are authorized or obligated to be closed.
"Carrocera" has the meaning set forth in Section 3.3.
"Cash Repurchase Amount" has the meaning set forth in the
"Background" section.
"Cash Shortfall" means $40 million, less cash and cash
equivalents of the Company and its Subsidiaries at 11:59 p.m. on the day next
preceding the Closing Date, (less all then outstanding bank drafts); PROVIDED,
that if such amount is a negative number, Cash Shortfall shall be zero.
"Charter Amendment" has the meaning set forth in Section 3.8.
"CIBC" has the meaning set forth in the "Background" section.
"CIBC Argosy" has the meaning set forth in the Preamble.
"Claims" has the meaning set forth in Section 10.4.
"Cleanup" means all actions required to: (a) cleanup, remove,
treat or remediate Hazardous Materials (as hereinafter defined) in the indoor or
outdoor environment; (b) prevent the Release (as hereinafter defined) or
threatened Release of Hazardous Materials; (c) perform pre-remedial studies and
investigations and post-remedial monitoring and care; and/or (d) respond to any
requests by Governmental Entities for information or documents in any way
relating to cleanup, removal, treatment or remediation or potential cleanup,
removal, treatment or remediation of Hazardous Materials in the indoor or
outdoor environment.
"Closing" has the meaning set forth in the Section 2.3.
"Closing Date" has the meaning set forth in Section 2.3.
"CMF" has the meaning set forth in the Preamble.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" has the meaning set forth in Section 2.1.
"Company" has the meaning set forth in the "Background"
section.
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"Company Contracts" has the meaning set forth in Section
4.11(a).
"Company Senior Note" has the meaning set forth in the
"Background" section.
"Company Subsidiaries" has the meaning set forth in Section
4.1(a).
"Confidentiality Agreement" has the meaning set forth in
Section 6.4.
"Consents" has the meaning set forth in Section 4.5(b).
"Contribution" has the meaning set forth in Section 3.4.
"Credit Agreement" has the meaning set forth in the
"Background" section.
"Damages" has the meaning set forth in Section 10.2.
"Date Data" has the meaning set forth in Section 4.20(c).
"Date-Sensitive System" has the meaning set forth in Section
4.20(c).
"De Minimis Claim" has the meaning set forth in Section 10.3.
"DGCL" has the meaning set forth in Section 4.4.
"▇▇▇▇" has the meaning set forth in the Preamble.
"▇▇▇▇ Notes" has the meaning set forth in Section 3.3.
"▇▇▇▇ Refinancing" has the meaning set forth in Section 3.6.
"▇▇▇▇ Subsidiaries" has the meaning set forth in Section 4.12.
"Disclosure Schedule" has the meaning set forth in Section
4.1(a).
"Environmental Claim" means any claim, action, cause of
action, investigation or notice (written or oral) by any person alleging
potential liability (including such liability for investigatory costs, Cleanup
costs, governmental response costs, natural resources damages, property damages,
personal injuries or administrative, civil, or criminal penalties) arising out
of, based on or resulting from (a) the presence, or Release or threat of Release
into the indoor or outdoor environment, of any Hazardous Materials at any
location, whether or not owned, leased or operated by the Company or any Company
Subsidiary or (b) circumstances forming the basis of any violation or alleged
violation of, or any other liability under, any Environmental Law (as
hereinafter defined).
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"Environmental Laws" means all federal, state, local and
foreign laws, statutes, ordinances, rules, regulations, orders, judgments and
decrees relating to (a) pollution or protection of human health, safety or the
environment, including laws relating to Releases or threatened Releases of
Hazardous Materials into the indoor or outdoor environment (including ambient
air, surface water, groundwater, and surface or subsurface strata), (b) the
manufacture, processing, distribution, use, treatment, storage, Release,
disposal, transport or handling of Hazardous Materials, (c) record keeping,
notification, disclosure or reporting requirements respecting Hazardous
Materials and (d) endangered or threatened species of fish, wildlife and plants
and the management or use of natural resources.
"ERISA" has the meaning set forth in Section 4.10(a).
"ERISA Affiliate" has the meaning set forth in Section
4.10(a).
"ERISA Plan" and "ERISA Plans" have the respective meanings
set forth in Section 4.10(a).
"Excess Cash" means, as of 11:59 p.m. on the date next
preceding the Closing Date, the amount of all cash and cash equivalents held by
the Company and its Subsidiaries (less all then outstanding bank drafts), less
$45 million; provided, that if such amount is a negative number, Excess Cash
shall be zero.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Expenses" means all reasonable out-of-pocket expenses
(including all fees and expenses of counsel, accountants, investment bankers,
experts and consultants to a party hereto and its Affiliates and all commitment
and other fees to financial institutions) incurred by a party or on its behalf
in connection with or related to the authorization, preparation, negotiation,
execution, delivery and performance of this Agreement, and all other matters
related to the consummation of the transactions contemplated hereby.
"Financial Statements" has the meaning set forth in Section
4.7(a).
"Financing" has the meaning set forth in the "Background"
section.
"First Chicago Facility" has the meaning set forth in Section
3.2.
"Foreign Plans" has the meaning set forth in Section 4.10.
"Forgiveness" has the meaning set forth in Section 3.5.
"GAAP" means United States generally accepted accounting
principles.
"▇▇▇▇▇ ▇▇▇▇▇▇ Family" means ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ and each
of his siblings.
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"Governmental Entity" means any nation or government, any
state or other political subdivision thereof; any entity, authority or body
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including any government authority,
agency, department, board, commission or instrumentality of the United States,
any state of the United States or any political subdivision or territory
thereof, or any nation; or any court, or legally constituted tribunal or
arbitrator.
"Hazardous Materials" means all substances defined as
hazardous substances, oils, pollutants or contaminants in the National Oil and
Hazardous Substances Pollution Contingency Plan, 40 C.F.R. Section 300.5; all
substances defined as hazardous waste or hazardous materials in Mexico's
Framework Law of Ecological Balance and Environmental Protection, published on
February 26, 1988; and any other substance or waste, pollutant, contaminant,
chemical or material regulated under any Environmental Law.
"Holdback Amount" shall have the meaning set forth in Section
3.5.
"HSR Act" has the meaning set forth in Section 4.5(b).
"Increasing Rate Notes" has the meaning set forth in Section
3.2.
"Indenture" means the Indenture of TMO relating to the notes
issued in the Private Placement.
"Intellectual Property" has the meaning set forth in Section
4.19.
"Intercompany Agreement" has the meaning set forth in Section
7.4.
"Investment" has the meaning set forth in the "Background"
section.
"Investment Consideration" has the meaning set forth in
Section 2.2.
"Investor Claims" has the meaning set forth in Section 10.2.
"Investor Group" has the meaning set forth in Section 10.2.
"Investor Group Tax Claims" has the meaning set forth in
Section 10.4.
"Investor Representatives" has the meaning set forth in
Section 6.3.
"Investors" has the meaning set forth in the "Background"
section.
"IRS" means the Internal Revenue Service of the United States.
"JLL" has the meaning set forth in the Preamble.
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"Labor Laws" has the meaning set forth in Section 4.17.
"Laws" has the meaning set forth in Section 4.5(a).
"Leased Realty" has the meaning set forth in Section 4.15(a).
"Leases" has the meaning set forth in Section 4.15(c).
"License Agreement" has the meaning set forth in Section 7.5.
"Liens" means any and all liens, charges, security interests,
encumbrances, mortgages, pledges, claims, options or restrictions of
any kind whatsoever.
"Litigation" has the meaning set forth in Section 4.9.
"Material Adverse Effect" has the meaning set forth in Section
4.1(a).
"Material Contracts" has the meaning set forth in Section
4.11(a).
"MCII" has the meaning set forth in Section 3.4.
"MCII Finance" has the meaning set forth in Section 8.2.
"MCII Trucks" has the meaning set forth in Section 3.3.
"MME" has the meaning set forth in Section 3.3.
"1998 Balance Sheet" has the meaning set forth in Section
4.7(a).
"Non-Voting Common Stock" has the meaning set forth in Section
2.1.
"Owned Realty" has the meaning set forth in Section 4.15(a).
"PBGC" has the meaning set forth in Section 4.10(c).
"Permits" has the meaning set forth in Section 4.6(a).
"Permitted Liens" means (a) mechanics', carriers', workmen's,
repairmen's or other similar Liens arising or incurred in the ordinary
course of business with respect to liabilities that are not yet due or
delinquent, (b) Liens for taxes, assessments and other governmental
charges, which as to any thereof are not yet due and payable and (c)
other imperfections of title or encumbrances, if any, which
imperfections of title or other encumbrances do not materially impair
the use of the assets of, or the operation of the business of the
Company and the Company Subsidiaries as presently conducted.
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"Person" means an individual, corporation, partnership,
limited liability company, association, trust, unincorporated
organization, other entity or group (as defined in Section 13(d) of the
Exchange Act).
"Plan" and "Plans" have the respective meanings set forth in
Section 4.10(a).
"Pre-Closing Periods" has the meaning set forth in Section
10.4.
"Pre-Closing Straddle Period" has the meaning set forth in
Section 10.4.
"Private Placement" has the meaning set forth in the
"Background" section.
"Promissory Note" has the meaning set forth in Section 10.6.
"Prudential Senior Notes" has the meaning set forth in Section
3.2.
"Real Property" has the meaning set forth in Section 4.14(c).
"Refinancing" has the meaning set forth in Section 3.2.
"Related Party Agreement" has the meaning set forth in Section
4.13.
"Release" means any release, spill, emission, discharge,
leaking, pumping, injection, deposit, disposal, dispersal, leaching or
migration into the indoor or outdoor environment (including ambient
air, surface water, groundwater, and surface or subsurface strata) or
into or out of any property, including the movement of Hazardous
Materials through or in the air, surface water, groundwater, soil or
property.
"Repurchase" has the meaning set forth in Section 3.5.
"SEC" has the meaning set forth in Section 4.23.
"SEC Reports" has the meaning set forth in Section 4.23.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Secured Notes" has the meaning set forth in Section
3.6.
"Senior Secured Notes Tender Offer" has the meaning set forth
in Section 3.6.
"Shares" has the meaning set forth in the "Background"
section.
"Stock Option Plan" has the meaning set forth in the
"Background" Section.
"Stockholders' Agreement" has the meaning set forth in Section
3.7.
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"Straddle Period" has the meaning set forth in Section 10.4.
"Subsequent SEC Reports" has the meaning set forth in Section
4.23.
"Subsidiary" or "Subsidiaries" of any Person means any
corporation, partnership, limited liability company, joint venture or
other entity of which such Person (either alone or through or together
with any other Person pursuant to any agreement, arrangement, contract
or other commitment) owns, directly or indirectly, 50% or more of the
stock or other equity interests the holders of which are generally
entitled to vote for the election of the board of directors or other
governing body of such corporation or other legal entity.
"Subsidiary Sale" has the meaning set forth in Section 3.3.
"Tax Returns" means all federal, state, local and foreign tax
returns, declarations, estimates, statements, reports, schedules,
forms, and information returns and other documents (including any
related supporting information) and any amended Tax Return required to
be filed with respect to Taxes.
"Taxes" means all federal, state, local and foreign taxes,
assessments, charges, duties and fees or similar charges of any kind whatsoever
(whether imposed directly or through withholding), including income, excise,
property, sales, use (or any similar taxes), transfer, franchise, payroll,
withholding, social security, as well as other contributions payable to
Governmental Entities in Mexico as a consequence of employment, business license
fees, or other taxes, including any interest, penalties and additions imposed
with respect to such amounts.
"Territory" shall mean the Western Hemisphere.
"TMO" has the meaning set forth in the "Background" section.
"Transactions" has the meaning set forth in the "Background"
section.
"Transferred Subsidiaries" has the meaning set forth in
Section 3.3.
"2002 Discount Notes" has the meaning set forth in Section
3.6.
"2002 Discount Notes Tender Offer" has the meaning set forth
in Section 3.6.
"Unaudited Financial Statements" has the meaning set forth in
Section 4.7(a).
"Universal" has the meaning set forth in Section 3.3.
"Universal Mexico" has the meaning set forth in Section 3.3.
"Voting Common Stock" has the meaning set forth in Section
2.1.
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"Warrants" has the meaning set forth in the "Background"
section.
"Working Capital" has the meaning set forth in Section 6.3 of
the DISCLOSURE SCHEDULE.
"Year 2000 Compliant" has the meaning set forth in Section
4.20(c).
ARTICLE 2
THE INVESTMENT
2.1 INVESTMENT IN THE SHARES.
(1) Upon the terms and subject to the conditions of this
Agreement, at the Closing, ▇▇▇▇ shall cause the Company to issue, sell, convey,
assign, transfer and deliver to (i) JLL the number of shares of voting common
stock, par value $0.01 per share (the "Voting Common Stock"), the principal
amount of the Company Senior Note and the number of Warrants set forth opposite
JLL's name on SCHEDULE I hereto, (ii) CIBC Argosy, the number of shares of
Voting Common Stock and Non-Voting Common Stock, the principal amount of the
Company Senior Note and the number of Warrants set forth opposite CIBC Argosy's
name on SCHEDULE I hereto and (iii) CMF, the number of shares of Voting Common
Stock and Non-Voting Common Stock, the principal amount of the Company Senior
Note and the number of Warrants set forth opposite CMF's name on SCHEDULE I
hereto, and the Investors shall purchase, acquire and accept from the Company,
all right, title and interest in and to such securities, free and clear of any
and all Liens.
(2) Notwithstanding anything to the contrary contained
herein, the maximum number of shares of Voting Common Stock issued to CIBC
Argosy and CMF, in the aggregate, shall not exceed 4.99% of the Voting Common
Stock then outstanding. In the event that the number of shares of Voting Common
Stock issuable to CIBC Argosy and CMF exceeds 4.99%, ▇▇▇▇ shall cause the
Company to issue a share of its convertible non-voting common stock, par value
$0.01 per share (the "Non-Voting Common Stock" and, together with the Voting
Common Stock, the "Common Stock") for each share of Voting Common Stock over
4.99% otherwise issuable to CIBC Argosy and CMF.
2.2 INVESTMENT CONSIDERATION. Upon the terms and subject to the
conditions of this Agreement, in consideration of the aforesaid issuance, sale,
conveyance, assignment, transfer and delivery of the Shares, the Company Senior
Note and the Warrants, at the Closing, (a) JLL shall pay to the Company $150
million in cash, (b) CIBC Argosy shall pay to the Company $22.5 million in cash
and (c) CMF shall pay to the Company $2.5 million in cash (collectively, the
"Investment Consideration").
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2.3 CLOSING. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, at 10:00 a.m.,
Eastern Standard Time, on a date to be specified by the parties (the "Closing
Date"), which (subject to the satisfaction or, to the extent permitted by
applicable law, waiver of the conditions set forth in Article VIII hereof) shall
be no later than the second Business Day following satisfaction or, to the
extent permitted by law, waiver of the conditions set forth in Section 8.1
hereof or at such other place, date and time as shall be agreed upon in writing
by all of the parties hereto.
2.4 DELIVERIES BY THE COMPANY. Prior to or at the Closing, ▇▇▇▇
shall cause the Company to deliver or cause to be delivered the following:
(1) to the Investors, the Agreement duly executed by the
Company;
(2) to the Investors, certificates representing the
Shares, the Company Senior Note and the Warrants and any other documents that
are necessary to transfer good and valid title to such securities to the
Investors, free and clear of any and all Liens;
(3) to the Investors and ▇▇▇▇, resolutions of the Board
and stockholders, as required by applicable law, approving the Charter
Amendment, the Financing, the Refinancing, the Investment, and the execution by
the Company of the Ancillary Agreements to which it is a party;
(4) to the Investors and ▇▇▇▇, duplicate originals of
the Amended and Restated Certificate of Incorporation, each duly executed and
suitable for filing;
(5) to the Investors and ▇▇▇▇, each of the Ancillary
Agreements to which it is a party, duly executed by the Company;
(6) to the Investors, the legal opinions of counsel to
▇▇▇▇ and the Company; and
(7) all other documents, certificates, instruments and
writings required to be delivered by the Company at or prior to the Closing
pursuant to this Agreement or otherwise required in connection herewith.
2.5 DELIVERIES BY THE INVESTORS. Prior to or at the Closing,
the Investors shall deliver or cause to be delivered the following:
(1) to the Company, (i) JLL shall deliver $150 million
in cash, (ii) CIBC Argosy shall deliver $22.5 million in cash and (iii) CMF
shall deliver $2.5 million in cash, in each case, by wire transfer of
immediately available funds to a bank account designated in writing by the
Company at least three Business Days prior to the Closing Date;
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(2) to ▇▇▇▇ and the Company, the Stockholders'
Agreement, duly executed by each Investor;
(3) to ▇▇▇▇ and the Company, the certificates of a
general partner or authorized signatory of each Investor referred to in Sections
8.3 (a) and 8.3 (b); and
(4) all other documents, certificates, instruments and
writings required to be delivered by the Investors at or prior to the Closing
pursuant to this Agreement or otherwise required in connection herewith.
2.6 DELIVERIES BY ▇▇▇▇. Prior to or at the Closing, ▇▇▇▇ shall
deliver or cause to be delivered the following:
(1) to the Investors and the Company, the Stockholders'
Agreement, duly executed by ▇▇▇▇;
(2) to the Investors, the certificates of the Chief
Executive Officer of ▇▇▇▇ referred to in Sections 8.2 (a) and 8.2 (b); and
(3) all other documents, certificates, instruments and
writings required to be delivered by ▇▇▇▇ at or prior to the Closing pursuant to
this Agreement or otherwise in connection herewith.
2.7 SIMULTANEOUS TRANSACTIONS. All of the Transactions are
intended by the parties to be consummated simultaneously; and if any Transaction
is not consummated as provided herein, the parties shall take all actions
necessary to dissolve and invalidate all other Transactions as if none of the
Transactions had been consummated.
ARTICLE 3
RELATED TRANSACTIONS
3.1 FINANCING. At the Closing, TMO shall enter into the Credit
Agreement with CIBC and/or other financial institutions and will consummate the
Private Placement and shall receive the funds thereunder, which shall be used to
fund, among other things, the Repurchase, the Refinancing and the payment of all
Expenses relating to the Transactions.
3.2 REFINANCING. At the Closing, TMO shall use the proceeds
under the Credit Agreement and the funds received in the Private Placement
together with the Investment Consideration to (a) repurchase and retire all of
the Outstanding Senior Subordinated Increasing Notes due December 31, 1999 (the
"Increasing Rate Notes") issued pursuant to the Note Purchase Agreement, dated
as of April 19, 1999, between TMO, the subsidiaries of TMO named therein, and
the purchasers named therein, (b) repay all of the outstanding principal and
premium, if any, together with accrued interest and fees and all amounts related
to outstanding
13
letters of credit, under the Credit Agreement, dated as of September 30,
1996, by and among TMO, the lenders set forth therein and NBD Bank, as
administrative agent, as amended prior to the date hereof (the "First Chicago
Facility"), and shall take all actions necessary to terminate the First
Chicago Facility, (c) repurchase and retire all of the outstanding 9.02%
Senior Notes due November 15, 2002 (the "Prudential Senior Notes") issued
pursuant to the Note Agreement, dated as of November 15, 1994, among TMO and
the purchasers named therein, (d) repay all of the outstanding principal and
premium, if any, together with accrued interest and fees, under the Credit
Agreement, dated as of May 25, 1998, by and between Banco Nacionale de
Comercio Exterior, Sociedad Nacional de Credito and Autobuses, as amended
(the "Autobuses Credit Facility"), and shall take, or shall cause Autobuses
to take, all actions necessary to terminate the Autobuses Credit Facility,
and (e) except as set forth in Section 3.2(e) of the DISCLOSURE SCHEDULE,
repay all of the outstanding principal and premium, if any, together with
accrued interest and fees under all other indebtedness of the Company or any
Company Subsidiary (collectively, the "Refinancing"); it being understood
that notwithstanding the foregoing, only the greater of (i) 50% of the total
amount expended to repay the Autobuses Credit Facility or (ii) in the event
that the amount expended to repay the Autobuses Credit Facility exceeds $16
million, such amount less $8 million, shall be utilized for purposes of
calculating the Cash Repurchase Amount.
3.3 SUBSIDIARY SALE. Prior to the Closing, ▇▇▇▇ or one of its
Subsidiaries (other than the Company or any Company Subsidiary) shall acquire
from (a) ▇▇▇▇ Autobuses, S.A. de C.V., a subsidiary of the Company
("Autobuses"), (i) all of the outstanding capital stock of Autopartes
Hidalguenses, S.A. de C.V. ("Autopartes") owned by Autobuses and (ii) all of the
outstanding capital stock of Carroceria ▇▇▇▇▇▇▇, ▇.▇. de C.V. ("Carrocera")
owned by Autobuses, (b) MCII Trucks, Inc., a wholly owned subsidiary of the
Company ("MCII Trucks"), all of the outstanding capital stock of Mexicana de
Manufacturas Especiales, S.A. de C.V. ("MME") owned by MCII Trucks, and (c)
Universal Coach Parts, Inc., an indirect wholly owned subsidiary of the Company
("Universal"), all of the outstanding capital stock of Universal Coach Parts
Mexico, S.A. de C.V. ("Universal Mexico" and, together with Autopartes,
Carrocera and MME, the "Transferred Subsidiaries") owned by Universal
(collectively, the "Subsidiary Sale"), in each case, in exchange for the
issuance by ▇▇▇▇ of a promissory note in the amount set forth in Section 3.3 of
the DISCLOSURE SCHEDULE (collectively, the "▇▇▇▇ Notes").
3.4 CONTRIBUTION OF AUTOBUSES. Prior to the Closing, ▇▇▇▇ shall
take, and shall cause the Company to take, all actions necessary to contribute
99.99% of the capital stock of Autobuses to TMO and .01% of the capital stock of
Autobuses to Motor Coach Industries International, Inc. ("MCII") so that
Autobuses shall become a direct subsidiary of TMO (the "Contribution").
3.5 REPURCHASE FROM ▇▇▇▇. At the Closing, ▇▇▇▇ shall cause the
Company to acquire from ▇▇▇▇ 2,110,000 shares of its Common Stock, in exchange
for (a) the Cash Repurchase Amount, (b) the indebtedness due the Company or any
Company Subsidiary by ▇▇▇▇ or any of its Subsidiaries to the extent set forth in
Section 3.5 of the DISCLOSURE SCHEDULE and (c) the ▇▇▇▇ Notes (the
"Repurchase"). The parties acknowledge and agree that $1.5 million of the Cash
Repurchase Amount (the "Holdback Amount") shall be retained by the Company at
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Closing and used to pay all fees and expenses payable by the Company in
connection with the Transactions and not paid at or prior to the Closing. The
Holdback Amount, less any fees and expenses paid therefrom, shall be delivered
to ▇▇▇▇ no later than 90 days following the Closing.
3.6 ▇▇▇▇ REFINANCING. ▇▇▇▇ shall use the proceeds of the
Repurchase to (a) repurchase and retire all of the outstanding Senior Secured
Discount Notes due November 1, 2002 (the "2002 Discount Notes") issued pursuant
to the Indenture, dated as of April 30, 1996, among ▇▇▇▇, the Company and IBJ
▇▇▇▇▇▇▇▇▇ Bank & Trust Company, as Trustee, pursuant to the Offer to Purchase
and Consent Solicitation Statement, dated May 14, 1999, by ▇▇▇▇ (the "2002
Discount Notes Tender Offer") or, in the case of 2002 Discount Notes not
purchased in the 2002 Discount Notes Tender Offer, through a redemption of such
notes, and (b) repurchase and retire all of the outstanding Senior Secured
Guaranteed Notes due January 15, 2000 (the "Senior Secured Notes") issued
pursuant to the Indenture, dated as of July 22, 1998, among ▇▇▇▇, ▇▇▇▇ Trucks
(USA), L.L.C. and U.S. Bank Trust National Association, as Trustee, pursuant to
the Offer to Purchase and Consent Solicitation, dated May 14, 1999, by ▇▇▇▇ (the
"Senior Secured Notes Tender Offer") or, in the case of Senior Secured Notes not
purchased in the Senior Secured Notes Tender Offer, through a redemption of such
notes (collectively, the "▇▇▇▇ Refinancing").
3.7 STOCKHOLDERS' AGREEMENT. At the Closing, the Company, the
Investors, ▇▇▇▇ and certain other stockholders of the Company shall enter into a
stockholders' agreement, substantially in the form attached hereto as EXHIBIT C
(the "Stockholders' Agreement").
3.8 CHARTER AMENDMENT. Prior to the Closing, ▇▇▇▇ shall take
and shall cause the Company to take all actions necessary to cause the Amended
and Restated Certificate of Incorporation of the Company, substantially in the
form attached hereto as EXHIBIT D (the "Amended and Restated Certificate of
Incorporation"), to be filed with the Secretary of State of the State of
Delaware (the "Charter Amendment").
3.9 STOCK OPTION PLAN. Following the Closing, ▇▇▇▇ shall cause
the Company to take all corporate action (including any action of its Board and
stockholders) required under applicable law to approve and adopt the Stock
Option Plan substantially on the terms attached hereto as EXHIBIT E.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇
▇▇▇▇ hereby represents and warrants to the Investors that:
4.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(1) The Company and each Company Subsidiary is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization, has all requisite
corporate power and corporate authority to own,
15
lease and operate its properties and to carry on its business as now being
conducted, and is duly qualified and in good standing to do business in each
jurisdiction in which the nature of the business conducted by it or the
ownership, lease or operation of its properties makes such qualification
necessary, other than where the failure to be so duly qualified and in good
standing would not have a Material Adverse Effect. The term "Material Adverse
Effect," as used in this Agreement, means any condition, event, circumstance,
change or effect that, individually or in the aggregate, could reasonably be
expected to result in a material adverse effect on the business, assets,
results of operations, condition (financial or otherwise) or prospects of,
the Company and the Company Subsidiaries, taken as a whole. Section 4.1(a) of
the DISCLOSURE SCHEDULE attached hereto and made a part hereof (the
"Disclosure Schedule") sets forth a true, correct and complete listing of
each current and former Subsidiary and current Affiliate of the Company. As
used herein, the term "Company Subsidiaries" shall mean all Subsidiaries of
the Company, as of the date hereof, other than the Transferred Subsidiaries.
Except as set forth in Section 4.1(a) of the DISCLOSURE SCHEDULE, neither the
Company nor any Company Subsidiary owns, directly or indirectly, any capital
stock or other equity interests in or of any Person.
(2) ▇▇▇▇ is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and corporate authority to
own, lease and operate its properties and to carry on its business as now being
conducted.
4.2 CERTIFICATES OF INCORPORATION AND BY-LAWS; CORPORATE
RECORDS. The Company has furnished to the Investors a true, correct and complete
copy of the certificate or articles of incorporation and the by-laws or similar
charter and organizational documents, in each case as amended or restated, of
the Company and each Company Subsidiary. ▇▇▇▇ has furnished to the Investors a
true, correct and complete copy of its deed of incorporation and its by-laws or
other similar charter and organizational documents, in each case as amended or
restated. Neither ▇▇▇▇, the Company nor any Company Subsidiary is in violation
of any provision of its certificate or articles of incorporation or by-laws, or
similar charter or organizational documents. The Company has made available to
the Investors for inspection the true, correct and complete minute books, stock
record book and stock ledger of the Company and each Company Subsidiary.
4.3 CAPITALIZATION; TITLE TO SHARES.
(1) Immediately prior to the filing of the Charter
Amendment, the authorized capital stock of the Company consists of 1,000 shares
of Common Stock of which 1,000 shares are issued and outstanding and held by
▇▇▇▇. No shares of Common Stock are held in the treasury of the Company. Each of
the issued and outstanding shares of capital stock of the Company has been duly
authorized and validly issued, and is fully paid and nonassessable, and free of
preemptive rights. Upon payment by the Investors of the Investment Consideration
and the issuance to the Investors of the Shares at the Closing, such Shares will
be duly authorized, validly issued, fully paid and nonassessable and free of
preemptive rights.
16
(2) Except as set forth in Section 4.3(b) of the
DISCLOSURE SCHEDULE, ▇▇▇▇ has good and valid title to all the Shares held by it,
free and clear of any and all Liens.
(3) Section 4.3(c) of the DISCLOSURE SCHEDULE sets forth
a true, correct and complete list for each Company Subsidiary; its jurisdiction
of organization; its authorized, issued and outstanding capital stock or other
equity interests; the percentage of such capital stock or other equity interests
owned by the Company or any Company Subsidiary, and the identity of such owner;
and the identity of the owners of such capital stock or other equity interests
that are not owned by the Company or any Company Subsidiary. Each issued and
outstanding share of capital stock or other equity interests of each Company
Subsidiary has been duly authorized and validly issued, and is fully paid and
nonassessable, and free of preemptive rights. Except as set forth in Section
4.3(c) of the DISCLOSURE SCHEDULE, all such shares of capital stock or other
equity interests of each Company Subsidiary as are owned by the Company or any
Company Subsidiary are owned free and clear of any and all Liens.
(4) Except pursuant to the Transactions or as set forth
in Section 4.3(d) of the DISCLOSURE SCHEDULE: (i) there are no options, warrants
or other rights (including registration rights), agreements, arrangements or
commitments to which the Company or any Company Subsidiary is a party relating
to the issued or unissued capital stock or other equity interests of the Company
or any Company Subsidiary or obligating the Company or any Company Subsidiary to
grant, issue or sell any shares of the capital stock or other equity interests
of the Company or any Company Subsidiary; (ii) there are no obligations,
contingent or otherwise, of the Company or any Company Subsidiary to (A)
repurchase, redeem or otherwise acquire any shares of the capital stock or other
equity interests of the Company or any Company Subsidiary, or (B) provide funds
to, or make any investment in (in the form of a loan, capital contribution or
otherwise), or provide any guarantee with respect to the obligations of the
Company, any Company Subsidiary or any other Person; (iii) neither the Company
nor any Company Subsidiary, directly or indirectly, owns, or has agreed to
purchase or otherwise acquire, the capital stock or other equity interests of,
or any interest convertible into or exchangeable or exercisable for such capital
stock or such equity interests, of any Person (other than a Company Subsidiary);
(iv) there are no agreements, arrangements, contracts or other commitments of
any character (contingent or otherwise) pursuant to which any Person is or may
become entitled to receive any payment based on the revenues, earnings or other
performance measurements, or calculated in accordance therewith, of the Company
or any Company Subsidiary; and (v) there are no voting trusts, proxies or other
agreements or understandings to which the Company or any Company Subsidiary is a
party or by which the Company or any Company Subsidiary is bound with respect to
the voting of any shares of capital stock or other equity interests of the
Company or any Company Subsidiary.
4.4 AUTHORITY.
(a) Each of ▇▇▇▇ and the Company has all requisite
corporate power and authority to execute and deliver this Agreement and each of
the Ancillary Agreements to which it is a party, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery by ▇▇▇▇ of this
17
Agreement and each of the Ancillary Agreements to which it is a party, the
performance by ▇▇▇▇ of this Agreement and each of the Ancillary Agreements to
which it is a party and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate
action on the part of ▇▇▇▇ and no other action or corporate proceeding, other
than the approval of its stockholders, on the part of ▇▇▇▇ is necessary to
authorize this Agreement or any of the Ancillary Agreements or to consummate
the Transactions contemplated hereby or thereby. This Agreement has been duly
executed and delivered by ▇▇▇▇ and each of the Ancillary Agreements will be
duly executed and delivered by ▇▇▇▇ to which it is a party. This Agreement
constitutes, and each of the Ancillary Agreements to which ▇▇▇▇ is a party,
when duly executed and delivered by ▇▇▇▇, will constitute, the valid and
binding obligation of each of ▇▇▇▇, enforceable against each of ▇▇▇▇ and the
Company to the extent it is a party thereto, in accordance with its terms,
subject to approval by Dina's stockholders which will be obtained on June 15,
1999. Section 203 of the Delaware General Corporation Law (the "DGCL") is
inapplicable to the Transactions, including the Investments.
(b) The execution and delivery by the Company of this
Agreement and each of the Ancillary Agreements to which it is a party, the
performance by the Company of this Agreement and each of the Ancillary
Agreements to which it is a party and the consummation of the transactions
contemplated hereby and thereby will be duly authorized by all necessary
corporate action on the part of the Company, including, to the extent required,
by its stockholders, and no other action or corporate proceeding on the part of
the Company will be necessary to authorize this Agreement or any of the
Ancillary Agreements or to consummate the Transactions contemplated hereby or
thereby. This Agreement and each of the Ancillary Agreements to which it is a
party will be duly executed and delivered by the Company. This Agreement and
each of the Ancillary Agreements to which the Company is a party, when duly
executed and delivered by the Company, will constitute the valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
4.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(1) Except as set forth in Section 4.5(a) of the
DISCLOSURE SCHEDULE, the execution and delivery by ▇▇▇▇ of this Agreement and
each of the Ancillary Agreements to which it is a party does not, and the
performance by ▇▇▇▇ of this Agreement and each of the Ancillary Agreements to
which it is a party and the consummation of the transactions contemplated hereby
and thereby will not, (i) conflict with or violate the certificate or articles
of incorporation or by-laws or similar charter or organizational documents, in
each case as amended or restated, of ▇▇▇▇, (ii) conflict with or violate any
material federal, state, local or foreign law (including NAFTA and all
applicable Canadian and Mexican laws, rules and regulations), statute,
ordinance, rule, regulation, order, judgment or decree (collectively, "Laws")
applicable to ▇▇▇▇, or by or to which its properties or assets is bound or
subject or (iii) result in any breach of, or constitute a default (or an event
that with notice or lapse of time or both would constitute a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, or require payment under, or result in the creation of a Lien
on any of the assets or properties of ▇▇▇▇, the Company, or any Company
Subsidiary under any Material Contract.
18
(2) Except as set forth in Section 4.5(b) of the
DISCLOSURE SCHEDULE, the execution and delivery by the Company of this Agreement
and each of the Ancillary Agreements to which it is a party, the performance by
the Company of this Agreement and each of the Ancillary Agreements to which it
is a party and the consummation of the transactions contemplated hereby and
thereby will not, (i) conflict with or violate the certificate or articles of
incorporation or by-laws or similar charter or organizational documents, in each
case as amended or restated, of the Company or any Company Subsidiary, (ii)
conflict with or violate any material Laws applicable to the Company, or any
Company Subsidiary or by or to which any of their respective properties or
assets is bound or subject or (iii) result in any breach of, or constitute a
default (or an event that with notice or lapse of time or both would constitute
a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or require payment under, or result in the
creation of a Lien on any of the assets or properties of the Company, or any
Company Subsidiary under any Material Contract.
(3) The execution and delivery by each of ▇▇▇▇ and the
Company of this Agreement and each of the Ancillary Agreements to which it is a
party does not, and the performance by each of ▇▇▇▇ and the Company of this
Agreement and each of the Ancillary Agreements to which it is a party and the
consummation of the transactions contemplated hereby and thereby will not,
require the Company, any Company Subsidiary or ▇▇▇▇ to obtain any consent,
approval, authorization or permit of, or to make any filing with or notification
to ("Consent"), any Governmental Entity, or any third party, except for (i)
applicable requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended (the "HSR Act"), and under any applicable foreign laws
regulating competition, (ii) the filing and recording of the Amended and
Restated Certificate of Incorporation, as required by the DGCL, and (iii) the
Consents listed in Section 4.5(c) of the DISCLOSURE SCHEDULE.
4.6 PERMITS; COMPLIANCE.
(1) Except as set forth in Section 4.6(a) of the
DISCLOSURE SCHEDULE, the Company and each Company Subsidiary is in possession of
all material franchises, grants, authorizations, licenses, permits, easements,
variances, exemptions, consents, certificates, approvals and orders necessary to
own, lease and operate its properties and to carry on its business as now being
conducted (other than those required under Environmental Laws, which are
governed by Section 4.14 hereof) (collectively, the "Permits"), and there is no
claim, action, suit, proceeding or investigation pending or, to the knowledge of
▇▇▇▇ or the Company, threatened regarding suspension or cancellation of any of
the Permits. None of the Permits will lapse, terminate or expire as a result of
the consummation of the transactions contemplated hereby.
(2) Except as set forth in Section 4.6(b) of the
DISCLOSURE SCHEDULE, the Company, each Company Subsidiary and each Transferred
Subsidiary is, and has been since August 4, 1994, in compliance in all material
respects with (i) all Laws applicable to it or to which any of its properties or
assets is bound or subject and (ii) the Permits. Since August 4, 1994, neither
the Company nor any Company Subsidiary has received from any Governmental
19
Entity any written notification with respect to any possible conflict,
default or violation of any Laws or any Permit.
(3) All coaches and other products manufactured or
produced by the Company or the Company Subsidiaries meet all applicable
requirements of Law.
4.7 FINANCIAL STATEMENTS; UNDISCLOSED LIABILITIES.
(1) The Company has previously delivered to the
Investors (i) the audited combined balance sheets of the Company and its
consolidated subsidiaries for each year in the three-year period ended December
31, 1998 (the audited balance sheet for the year ended December 31, 1998 being
hereinafter referred to as the "1998 Balance Sheet") and the audited combined
statements of revenues, expenses and retained earnings and audited combined
statements of cash flows of the Company and its consolidated subsidiaries for
each such year (collectively, the "Financial Statements") and (ii) the unaudited
combined balance sheets of the Company and its consolidated subsidiaries as of
March 30, 1999 and the unaudited combined statements of revenues, expenses and
retained earnings and unaudited combined statements of cash flows of the Company
and its consolidated subsidiaries for the three-month period ended March 30,
1999 (collectively, the "Unaudited Financial Statements"). Each of the Financial
Statements and the Unaudited Financial Statements (including any related notes
thereto) has been prepared in accordance with GAAP applied on a consistent basis
throughout the periods involved and fairly presents, in all material respects,
the financial position, results of operations and cash flows of the Company and
the Company Subsidiaries as of the respective dates and for the periods
indicated therein.
(2) Neither the Company nor any Company Subsidiary has
incurred any material liability or obligation (whether direct or indirect,
fixed, contingent or otherwise) other than (i) such as have been reflected on
the 1998 Balance Sheet, (ii) such as have been incurred in the ordinary course
of business consistent with past practice since the date of the 1998 Balance
Sheet or (iii) such as have been set forth in Section 4.7(b) of the DISCLOSURE
SCHEDULE.
4.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth
in Section 4.8 of the DISCLOSURE SCHEDULE since the date of the 1998 Balance
Sheet (a) the Company and each Company Subsidiary has conducted its respective
business only in the ordinary course consistent with past practice, (b) neither
the Company nor any Company Subsidiary has engaged in or taken any action which
would be prohibited by Section 6.2 if taken after the date hereof, and (c) there
has not occurred, nor has there been any change or event which would have, or
could reasonably be expected to have, a Material Adverse Effect.
4.9 ABSENCE OF LITIGATION. Except as set forth in Section 4.9
of the DISCLOSURE SCHEDULE, (a) as of May 15, 1999, there was no claim, action,
suit, proceeding or investigation of any kind, at law or in equity (including
actions or proceedings seeking injunctive relief), by or before any Governmental
Entity or by or on behalf of any third party ("Litigation") pending or, to the
knowledge of ▇▇▇▇ or the Company, threatened against the Company, any Company
20
Subsidiary or ▇▇▇▇ or affecting any of their respective businesses, assets or
rights, or which questions the validity of this Agreement or any action taken or
to be taken by the Company or any Company Subsidiary, and, to the knowledge of
▇▇▇▇ or the Company, there is no valid basis for such action, proceeding or
investigation, and (b) none of the Company, any Company Subsidiary or ▇▇▇▇ is a
party or subject to or in default under any judgment, order or decree of any
Governmental Entity. ▇▇▇▇ shall cause the Company to update Section 4.9 of the
DISCLOSURE SCHEDULE promptly from time to time after the date hereof, and up to
and including the Closing Date, to disclose any additional Litigation then
existing. None of the claims, actions, suits, proceedings or investigations
listed in Section 4.9 of the DISCLOSURE SCHEDULE, if adversely determined, or
the judgments, orders or decrees set forth in Section 4.9 of the DISCLOSURE
SCHEDULE (or subsequently disclosed) would have a Material Adverse Effect or
materially impair the ability of ▇▇▇▇ or the Company to consummate the
Transactions. There is no judgment, order, decree or other agreement in effect
which would limit the ability of the Company or any Company Subsidiary to
conduct its business in substantially the same manner as it is presently
conducted.
4.10 EMPLOYEE BENEFIT PLANS; ERISA.
(1) Section 4.10(a) of the DISCLOSURE SCHEDULE contains
a true, correct and complete list of each bonus, deferred compensation,
incentive compensation, stock purchase, stock option, severance or termination
pay, hospitalization or other medical, life or other insurance, supplemental
unemployment benefits, profit-sharing, pension, or retirement plan, program,
agreement or arrangement, and each other employee benefit plan, program,
agreement or arrangement, sponsored, maintained or contributed to or required to
be contributed to by the Company or any Company Subsidiary or by any trade or
business, whether or not incorporated (an "ERISA Affiliate"), that together with
the Company or any Company Subsidiary would be deemed a "single employer" within
the meaning of Section 4001 of the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder
("ERISA"), for the benefit of any employee or terminated employee of the
Company, any Company Subsidiary or any ERISA Affiliate, whether formal or
informal (individually a "Plan" and collectively the "Plans"). Section 4.10(a)
of the DISCLOSURE SCHEDULE identifies each of the Plans that is an "employee
benefit plan," as that term is defined in Section 3(3) of ERISA (such plans
being hereinafter referred to individually as an "ERISA Plan" and collectively
as the "ERISA Plans"). Neither the Company nor any Company Subsidiary nor any
ERISA Affiliate has any formal plan or commitment, whether legally binding or
not, to create any additional Plan or modify or change any existing Plan in a
way that would affect any employee or terminated employee of the Company, any
Company Subsidiary or any ERISA Affiliate, nor has any intention to do any of
the foregoing been communicated to any employee or terminated employee of the
Company, any Company Subsidiary or any ERISA Affiliate.
(2) With respect to each of the Plans, the Company has
heretofore made available to the Investors true, correct and complete copies of
each of the following documents: (i) a copy of the Plan (including all
amendments thereto); (ii) a copy of the annual report, if required under ERISA
or other applicable laws, with respect to each such Plan for the last two years;
(iii) a copy of the actuarial report, if required under ERISA or other
applicable
21
laws, with respect to each such Plan for the last two years; and (iv)
the most recent determination letter received from the IRS or other taxing
authority with respect to each Plan that is intended to be qualified under
Section 401 of the Code or other applicable Laws relating to Taxes.
(3) Except as set forth in Section 4.10(c) of the
DISCLOSURE SCHEDULE, no ERISA Plan is subject to Title IV of ERISA. No liability
under Title IV of ERISA has been incurred by the Company, any Company Subsidiary
or any ERISA Affiliate that has not been satisfied in full, and no condition
exists that presents a material risk to the Company, any Company Subsidiary or
any ERISA Affiliate of incurring a liability under Title IV of ERISA, other than
liability for premiums due the Pension Benefit Guaranty Corporation ("PBGC")
(which premiums have been paid when due). The PBGC has not instituted any
proceeding to terminate any ERISA Plan and, to the knowledge of the Company and
▇▇▇▇, no condition exists that presents a material risk that any such proceeding
will be instituted.
(4) Except as set forth in Section 4.10(d) of the
DISCLOSURE SCHEDULE, no ERISA Plan is a "multiemployer plan," as such term is
defined in Section 3(37) of ERISA, nor is any ERISA Plan a plan described in
Section 4063(a) of ERISA. If any ERISA Plan is a "multiemployer pension plan,"
(i) neither the Company, any Company Subsidiary nor any ERISA Affiliate has made
or suffered a "complete withdrawal" or a "partial withdrawal," as such terms are
respectively defined in sections 4203 and 4205 of ERISA (or any liability
resulting therefrom has been satisfied in full), (ii) no event has occurred that
presents a material risk of a partial withdrawal, (iii) neither the Company, any
Company subsidiary nor any ERISA Affiliate has any contingent liability under
section 4204 of ERISA, and (iv) no circumstances exist that must present a
material risk that any such plan will go into reorganization. If any ERISA Plan
is a "multiemployer pension plan," the aggregate withdrawal liability of the
Company, Company Subsidiaries and ERISA Affiliates, computed as if a complete
withdrawal by the Company, Company Subsidiaries and ERISA Affiliates had
occurred under each such Plan on the date hereof, would not be material to the
Company.
(5) Each Plan has been operated and administered in
accordance with its terms and applicable Law in all material respects,
including, but not limited to, ERISA, the Code and other applicable Laws
relating to Taxes.
(6) (i) Each ERISA Plan which is intended to be
"qualified" within the meaning of Section 401(a) of the Code or other applicable
Laws relating to Taxes is so qualified and the trusts maintained thereunder are
exempt from taxation under Section 501(a) of the Code or other applicable Laws
relating to Taxes; and (ii) each Plan that is intended to satisfy the
requirements of Section 501(c)(9) of the Code or other applicable Laws relating
to Taxes has so satisfied such requirements.
(7) No amounts payable under any of the Plans will fail
to be deductible for federal or other income tax purposes by virtue of Section
280G of the Code or other applicable Laws relating to Taxes.
22
(8) Except as listed and described in Section 4.10(h) of
the DISCLOSURE SCHEDULE, no Plan provides benefits, including death or medical
benefits (whether or not insured), with respect to current or former employees
of the Company, any Company Subsidiary or any ERISA Affiliate beyond their
retirement or other termination of service except as required by applicable law.
(9) Except as listed and described in Section 4.10(i) of
the DISCLOSURE SCHEDULE, neither the performance by the Company or ▇▇▇▇ of this
Agreement or any of the Ancillary Agreements nor the consummation of the
Transactions will (i) entitle any current or former director, officer or
employee of the Company or any ERISA Affiliate to severance pay, unemployment
compensation or any other payment, or (ii) accelerate the time of payment or
vesting, or increase the amount of compensation due any such director, officer
or employee.
(10) There are no pending, threatened or anticipated
claims by or on behalf of any Plan, by any employee or beneficiary covered under
any such Plan, or otherwise involving any such Plan (other than routine claims
for benefits).
(11) Notwithstanding the foregoing provisions of this
Section 4.10, Section 4.10(k) of the DISCLOSURE SCHEDULE lists each Plan
maintained outside the United States (collectively, the "Foreign Plans"), and
the Investors hereby acknowledge that the foregoing provisions of Section 4.10
(c), (d), (e), (f) and (g) do not apply to such Foreign Plans. With respect to
each Foreign Plan, to the extent applicable: (i) such plan is, and has been,
established, registered, qualified, administered and invested in compliance with
all applicable Laws and labor agreements, and no events have occurred or
conditions exist that could jeopardize such status; (ii) such plan is in
material compliance and has been maintained in all material respects in
accordance with its terms or rules and applicable Law or any applicable labor
agreement, all documents that are required to be filed have been filed, and all
tax approvals and clearances have been obtained; (iii) all required
contributions have been made; all required premiums have been paid (each in a
timely fashion in accordance with the terms of such plan and all applicable Laws
and labor agreements); there are no going concern unfunded actuarial
liabilities, past service unfunded liabilities or solvency deficiencies
respecting any such plan; no Taxes penalties or fees are owing under any such
plan; (iv) no government audit or similar proceeding is pending nor have any
governmental assessments been issued; and (v) no event has occurred that could
reasonably be expected to cause any Governmental Entity (without the consent of
the Company) to wind-up or terminate such plan, in whole or in part, or which
could reasonably be expected to adversely affect the tax status thereof, and
there are no outstanding defaults or violations under such plan by the Company
nor does the Company have any knowledge of any default or violation by any other
party to such plan.
4.11 CONTRACTS.
(1) Section 4.11(a) of the DISCLOSURE SCHEDULE sets
forth a true, correct and complete list of any and all agreements, arrangements,
contracts, commitments and understandings, whether oral or written, to which the
Company or any Company Subsidiary is a party or by which any of their respective
assets is bound ("Company Contracts"), other than such
23
Company Contracts (I) as may be terminated at any time without penalty by any
party thereto upon notice of thirty days or less or (II) as involve
obligations of the Company or the Company Subsidiaries in any twelve-month
period of $50,000 or less; PROVIDED, HOWEVER, that notwithstanding the
foregoing, for purposes of this Section 4.11, only Company Contracts of the
type described in Section 4.11(a)(ix) that provide for payments to or from
the Company in excess of $5 million are required to be disclosed. The Company
Contracts listed in Section 4.11(a) of the DISCLOSURE SCHEDULE are
collectively referred to herein as the "Material Contracts." Notwithstanding
the foregoing, each of the following Company Contracts is set forth on
Section 4.11(a) of the DISCLOSURE SCHEDULE:
(1) employment agreements, consulting agreements
and severance agreements;
(2) collective bargaining agreements and other
Company Contracts with any labor union;
(3) covenants not to compete or restrictive
covenants;
(4) Company Contracts relating to the acquisition
by the Company or any of the Company Subsidiaries of any other business
or Person, whether by merger, consolidation or other business combination
or by the acquisition of the equity securities, or a material portion of
the assets of, such business or Person;
(5) Company Contracts providing for the sale,
transfer or other disposition of any equity securities of any of the
Company Subsidiaries or any material assets of the Company or any of the
Company Subsidiaries;
(6) Company Contracts under which the Company or
any Company Subsidiary has borrowed or loaned money (to the extent
outstanding or in existence at any time since December 31, 1998), or any
mortgage, note, bond, indenture or other evidence of indebtedness or any
guarantee of indebtedness, including any lease or receivable financing
arrangements;
(7) all Leases or other Company Contracts
relating to any real property interests of the Company or any Company
Subsidiary;
(8) joint venture agreements, partnership
agreements, stockholder agreements or similar agreements;
(9) all Company Contracts with customers or
suppliers of the Company or any Company Subsidiary, in each case, with a
term extending beyond December 31, 1999 which provide for aggregate
payments in excess of $5 million;
24
(10) all Company Contracts with any Governmental
Entity (other than those relating to the sale of parts or products in the
ordinary course of business); and
(11) all Company Contracts with Affiliates or
Associates of ▇▇▇▇, the Company or any Company Subsidiary.
(2) Neither the Company nor any Company Subsidiary or,
to the knowledge of ▇▇▇▇ or the Company, any other party thereto is in default
under any Material Contract and, to the knowledge of ▇▇▇▇ and the Company, no
event has occurred which, with the passage of time or the giving of notice or
both, would constitute such a default. Each Material Contract is in full force
and effect. Except as set forth in Section 4.11(b) of the DISCLOSURE SCHEDULE,
each Material Contract will remain in full force and effect (without imposition
of any material restriction, adverse condition, limitation, cost or penalty to
the Company or any Company Subsidiary), notwithstanding the consummation of the
Transactions. None of the Material Contracts is the subject of any pending or,
to the knowledge of the Company or ▇▇▇▇, threatened Litigation. The Company has
provided the Investors with copies of all written Material Contracts.
4.12 TAXES.
(1) The Company, each Company Subsidiary and each
Transferred Subsidiary (collectively, the "▇▇▇▇ Subsidiaries") has (i) duly
filed all Tax Returns required to be filed by it within the time and in the
manner prescribed by Law, and (ii) paid on a timely basis all Taxes shown to be
due on such Tax Returns. All of such Tax Returns are true, complete and correct
in all material respects.
(2) Except as set forth in Section 4.12(b) of the
DISCLOSURE SCHEDULE, no deficiencies for any Taxes have been proposed, asserted
or assessed against the Company or any ▇▇▇▇ Subsidiary by any taxing authority
with respect to liabilities for Taxes which have not been fully paid or finally
settled.
(3) The Company and each ▇▇▇▇ Subsidiary has established
adequate reserves in accordance with GAAP for all Taxes not yet due and payable.
(4) Except as set forth in Section 4.12(d) of the
DISCLOSURE SCHEDULE, no Tax Return of the Company or any ▇▇▇▇ Subsidiary is
currently under Audit by the IRS or any other Taxing authority and no notice of
any such Audit has been received. There are no outstanding agreements or waivers
extending the statute of limitations applicable to any taxable year or Tax
Return of the Company or any ▇▇▇▇ Subsidiary.
(5) Except as set forth in Section 4.12(e) of the
Disclosure Schedule, there are no Liens for Taxes on any assets of the Company
or any ▇▇▇▇ Subsidiary (other than statutory liens for current Taxes not yet
due).
25
(6) Except as set forth in Section 4.12(f) of the
DISCLOSURE SCHEDULE, neither the Company nor any ▇▇▇▇ Subsidiary is a party to
any agreement providing for the allocation or apportionment of any liability for
Taxes, payments of Taxes or Tax benefits or refunds.
4.13 RELATED PARTY AGREEMENTS.
(1) Except as set forth in Section 4.13(a)(i) of the
DISCLOSURE SCHEDULE, since August 4, 1994, no director, officer or employee of
the Company or any Company Subsidiary, or any Affiliate or Associate of any such
director, officer or employee (including all members of the ▇▇▇▇▇ ▇▇▇▇▇▇ Family
and all entities owned by such persons) is or has been a party to any agreement,
arrangement, contract or other commitment to which the Company or any Company
Subsidiary is or was a party or by which any of their respective assets or
properties is or was bound ("Related Party Agreement"), or has or has had a
material interest in any agreement, arrangement, contract or other commitment,
asset or property (real or personal), tangible or intangible, owned by, used in
or pertaining to the business of the Company or any Company Subsidiary. Except
as set forth in Section 4.13(a)(ii) of the DISCLOSURE SCHEDULE, each of the
Related Party Agreements (including all agreements between the Company or any
Company Subsidiary, on the one hand, and ▇▇▇▇, on the other hand) will terminate
at or prior to the Closing without any payment by or liability (including any
liability for Taxes) to the Company or any Company Subsidiary.
(2) Except as set forth in Section 4.13(b) of the
DISCLOSURE SCHEDULE, no Intellectual Property, proprietary technology or
know-how of the Company or any Company Subsidiary has been sold, licensed or
transferred or otherwise conveyed to ▇▇▇▇, any member of the ▇▇▇▇▇ ▇▇▇▇▇▇ Family
or any of their respective Affiliates.
4.14 ENVIRONMENTAL MATTERS.
(1) Except as set forth in Section 4.14(a) of the
DISCLOSURE SCHEDULE, (i) since August 4, 1994, the Company and each Company
Subsidiary has been in compliance, and is presently in compliance, in all
material respects, with all applicable Environmental Laws (which compliance
includes the possession by each such Person of all material Permits and other
governmental authorizations required under applicable Environmental Laws, and
compliance with the terms and conditions thereof), and, to the knowledge of the
Company and ▇▇▇▇ after due inquiry, there are no circumstances that may prevent
or interfere with such full compliance in the future; (ii) since August 4, 1994,
neither the Company nor any Company Subsidiary has received any communication
(written or oral), whether from a Governmental Entity, citizens group, employee
or otherwise, that alleges that any such Person is not in such compliance; and
(iii) all Permits and other governmental authorizations currently held by the
Company and any Company Subsidiary pursuant to applicable Environmental Laws are
in full force and effect and no appeal or any other proceeding is pending to
revoke any such Permit or governmental authorization.
(2) Except as set forth in Section 4.14(b) of the
DISCLOSURE SCHEDULE, there is no Environmental Claim pending or, to the
knowledge of the Company and ▇▇▇▇,
26
threatened against the Company, any Company Subsidiary or any Person whose
liability for any Environmental Claim has been retained or assumed by the
Company or any Company Subsidiary, whether by agreement or by operation of
law.
(3) Except as set forth in Section 4.14(c) of the
DISCLOSURE SCHEDULE: (i) neither the Company nor any Company Subsidiary has nor,
to the knowledge of the Company and ▇▇▇▇, has any other Person, Released,
placed, deposited, discharged, stored or buried, dumped or disposed of Hazardous
Materials in, on, beneath, from or adjacent to any real property now or at any
time owned, leased or operated by the Company or any Company Subsidiary or any
of their respective predecessors in interest (as used in this Section 4.14, the
"Real Property").
(4) Except as set forth in Section 4.14(d) of the
DISCLOSURE SCHEDULE, there are no past or present actions, activities,
circumstances, conditions, events or incidents, including the Release, emission,
discharge, presence or disposal of any Hazardous Materials that could form the
basis of any claim against the Company or any Company Subsidiary, under any
Environmental Law.
(5) Except as set forth in Section 4.14(e) of the
DISCLOSURE SCHEDULE, all underground storage tanks owned, operated, or leased by
the Company and which are subject to regulation under the United States Resource
Conservation and Recovery Act (or equivalent state or local law regulating
underground storage tanks) meet the technical standards prescribed at Title 40
C.F.R. Part 280 which became effective December 22, 1998 (or any applicable
state or local law requirements which are more stringent than such technical
standards or which become effective before such date).
(6) The Company has delivered or otherwise made
available for inspection to the Investors true, correct and complete copies and
results of any reports, studies, analyses, tests monitoring, or voluntary
environmental audits possessed or initiated by the Company or any Company
Subsidiary pertaining to Hazardous Materials in, on, beneath or adjacent to the
Real Property or pertaining to compliance by any such Person with or liability
under applicable Environmental Laws.
4.15 REAL PROPERTY.
(1) Section 4.15(a) of the DISCLOSURE SCHEDULE sets
forth a true, correct and complete list of all real property to which the
Company or any Company Subsidiary has legal or equitable title (the "Owned
Realty") or in which the Company or any Company Subsidiary has a valid and
subsisting leasehold or other interest (the "Leased Realty"), and sets forth for
each such Owned Realty and Leased Realty the title or interest held by the
Company or any Company Subsidiary.
(2) The Company or one of the Company Subsidiaries has
good, valid and marketable fee title to the Owned Realty, free and clear of any
and all Liens (except (i) Permitted Liens, (ii) easements and encroachments of
record, (iii) zoning, building and other similar restrictions, and (iv)
unrecorded easements, covenants, rights of way or other restrictions,
27
none of which unrecorded items, individually or in the aggregate, materially
impair the use or materially detract from the value of the property to which
they relate).
(3) The Company or one of the Company Subsidiaries
possesses a valid and subsisting leasehold interest in the Leased Realty
pursuant to the leases listed in Section 4.15(c) of the DISCLOSURE SCHEDULE (the
"Leases"), free and clear of any and all Liens (except Permitted Liens, and
easements and encroachments that do not, individually or in the aggregate,
materially impair the use or materially detract from the value of the property
to which they relate). Each Lease is valid and enforceable against each party
thereto in accordance with its terms and there is not under any Lease any
existing default by the Company or any Company Subsidiary or, to the knowledge
of the Company or ▇▇▇▇, any other party thereto, or any condition, event or act
which, with notice or lapse of time or both, would constitute such a default.
4.16 PERSONAL PROPERTY. Except as set forth in Section 4.16 of
the DISCLOSURE SCHEDULE, (a) the Company or one of the Company Subsidiaries has
good and valid title to, or a valid and enforceable right to use, all personal
property (whether tangible or intangible) reflected on the 1998 Balance Sheet
and all personal property acquired by the Company or any Company Subsidiary
since the date of the 1998 Balance Sheet (except such personal property as has
been disposed of in the ordinary course of business since such date), in each
case, free and clear of any and all Liens except Permitted Liens.
4.17 LABOR MATTERS. Except as set forth in Section 4.11 or 4.17
of the DISCLOSURE SCHEDULE, (a) neither the Company nor any Company Subsidiary
is a party to (i) any collective bargaining agreement or similar agreement with
any labor organization or employee association, (ii) any other written contract
concerning employment, or (iii) any binding oral contract concerning employment;
(b) no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is pending and, to the knowledge of ▇▇▇▇ or the
Company, no such grievance or proceeding is threatened; (c) since August 4,
1994, there has not been, nor is there pending or, to the knowledge of ▇▇▇▇ or
the Company, threatened (i) any material labor dispute between the Company or
any Company Subsidiary and any labor organization, or any strike, slowdown, work
stoppage or other similar organized disruptive labor activity involving any
employee of, or affecting the Company or any Company Subsidiary or (ii) any
union organizing or election activity involving any employee of the Company or
any Company Subsidiary; (d) neither the Company nor any Company Subsidiary is
engaged in any unfair labor practice, and there is no unfair labor practice
charge pending or, to the knowledge of the Company or ▇▇▇▇, threatened against
the Company or any Company Subsidiary before the National Labor Relations Board
or any other Governmental Entity; and (e) neither the Company nor any Company
Subsidiary has received notice of the intent of any Governmental Entity
responsible for the enforcement of any federal, state, local or foreign laws
regarding labor, employment and employment practices, conditions of employment,
occupational safety and health and wages and hours, including any bargaining or
other obligations under the National Labor Relations Act or the Federal Labor
Law of Mexico (collectively, "Labor Laws"), to conduct an investigation with
respect to or relating to the Company or any Company Subsidiary and no such
investigation is in progress.
28
4.18 INSURANCE POLICIES.
(1) The properties, assets, directors, officers,
employees, business and operations of the Company and each Company Subsidiary
are insured by policies against such risks, casualties and contingencies and of
such types and amounts as are customary for the size and scope of their
respective businesses as now being conducted; all such policies are in full
force and effect and all premiums due and payable for such policies have been or
are being timely paid; and all such policies (or extensions, renewals or
replacements thereof on comparable terms) in such amounts will continue to be
outstanding and in full force and effect without interruption following
consummation of the Transactions.
(2) In the event that the Company self insures against
any risk, casualty or contingency set forth in paragraph (a) above, the
Financial Statements contain adequate reserves for such risk, casualty or
contingency in light of the size and scope of the business as it is now being
conducted.
4.19 INTELLECTUAL PROPERTY. The Company or the Company
Subsidiaries own or have a valid and enforceable right to use all copyrights,
trade names, trademarks, service marks, trade secrets, designs, licenses,
patents and other intellectual property rights (including pending applications
for any of the foregoing) (collectively referred to herein as "Intellectual
Property") used in or necessary to the conduct by the Company and the Company
Subsidiaries of their respective businesses as now being conducted. Section
4.19(a) of the DISCLOSURE SCHEDULE sets forth a true, correct and complete list
of the copyrights, trade names, trademarks, service marks, licenses (to and by
the Company or any Company Subsidiary) and patents included among the
Intellectual Property. There is no claim presently pending nor, since August 4,
1994, has there been any claim made or, to Dina's or the Company's knowledge,
threatened, that (a) the operations of the Company or any Company Subsidiary
infringe upon or conflict with the rights of any other person in respect of any
Intellectual Property, or (b) any of such Intellectual Property is invalid or
unenforceable. Except as set forth in Section 4.19(b) of the DISCLOSURE
SCHEDULE, to the knowledge of ▇▇▇▇ and the Company, no other Person is
infringing upon any rights of the Company or the Company Subsidiaries in any
Intellectual Property.
4.20 YEAR 2000.
(1) As of the date of this Agreement and except as set
forth in Section 4.20(a) of the DISCLOSURE SCHEDULE, all Date Data and
Date-Sensitive Systems used by the Company and any Company Subsidiary are Year
2000 Compliant; and
(2) As used in this Agreement, (i) "Date Data" means any
data of any type that includes date information or which is otherwise derived
from, dependent on or related to date information; (ii) "Date-Sensitive System"
means any software, microcode or hardware system or component, including any
electronic or electronically controlled system or component, that uses or
processes any Date Data and that is installed, in development or on order by the
Company or any Company Subsidiary for their internal use or for the use of third
parties, or
29
which the Company or any Company Subsidiary sell, lease, license, assign or
otherwise provide to any third party; and (iii) "Year 2000 Compliant" means
(A) with respect to Date Data, that such data is in proper format and
accurate for all dates, including for those before, on and after December 31,
1999, and (B) with respect to Date-Sensitive Systems, that each such system
accurately processes all Date Data, including for dates before, on and after
December 31, 1999, without loss of any functionality or performance,
including but not limited to calculating, comparing, sequencing, storing and
displaying such Date Data (including all leap year considerations), when used
as a stand-alone system or in combination with other software or hardware.
4.21 CERTAIN BUSINESS PRACTICES. None of ▇▇▇▇, the Company nor
any Company Subsidiary or any director, officer or, to the knowledge of ▇▇▇▇ or
the Company, employee of ▇▇▇▇, the Company or any Company Subsidiary has (a)
used any funds for unlawful contributions, gifts, entertainment or other
unlawful expense relating to political activity, (b) made any unlawful payment
to foreign or domestic governmental officials or employees or to foreign or
domestic political parties or campaigns or violated any provisions of the
Foreign Corrupt Practices Act of 1977, as amended, or (c) made any other
unlawful payment.
4.22 TRANSFERRED SUBSIDIARIES. None of the Transferred
Subsidiaries had any assets or liabilities, except for the assets and
liabilities set forth in Section 4.22 of the DISCLOSURE SCHEDULE. The Subsidiary
Sale will not result in any Tax or other liability being incurred by or imposed
on the Company or any Company Subsidiary.
4.23 SEC REPORTS. Since January 1, 1996, ▇▇▇▇ and the Company
have filed all reports, statements, prospectuses and other filings required to
be filed by it with the Securities and Exchange Commission (the "SEC") under the
rules and regulations of the SEC. As of their respective dates, such reports,
statements, prospectuses and other filings (collectively, the "SEC Reports")
filed with the SEC prior to the date of this Agreement (a) complied, and each
SEC Report filed with the SEC on or after the date of this Agreement
(collectively, the "Subsequent SEC Reports") will comply, as to form in all
material respects with the applicable requirements of the Securities Act and the
Exchange Act and, in each case, the rules and regulations promulgated thereunder
and (b) did not, and each Subsequent SEC Report will not, at the time of filing,
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. None of
the SEC Reports, the tender offer materials used in connection with the 2002
Discount Notes Tender Offer, the Senior Secured Notes Tender Offer, or the
Offering Memorandum used in connection with the Private Placement contains any
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. None of
the Company Subsidiaries is required to file any reports, statements,
prospectuses or other filings with the SEC.
4.24 SOLVENCY MATTERS. At the Closing Date and after giving
effect to any changes in Dina's assets and liabilities as a result of the
Transactions, (i) the fair value of Dina's assets will exceed Dina's stated
liabilities (including matured, unmatured, liquidated, unliquidated, absolute,
fixed and identified contingent liabilities); (ii) the present fair saleable
value of
30
Dina's assets will be greater than the amount that would be required to
pay Dina's probable liability on its existing debts as such debts become
absolute and matured; (iii) ▇▇▇▇ will be able to pay its debts as they mature
following the consummation of the Transactions; and (iv) the capital remaining
in ▇▇▇▇ after the consummation of the Transactions will not be unreasonably
small for the conduct of the business in which ▇▇▇▇ is engaged.
4.25 BROKERS. Except (a) for the fees payable to CIBC and (b) as
set forth in Section 4.25 of the DISCLOSURE SCHEDULE, no broker, finder or
investment banker, including any director, officer, employee, Affiliate or
Associate of the Company or any Company Subsidiary, is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company or any Company Subsidiary.
4.26 EXPENSES. Set forth in Section 4.26 of the DISCLOSURE
SCHEDULE is a true, correct and complete list of all Expenses paid or to be paid
by the Company in connection with the Transactions pursuant to Section 9.3
hereof.
4.27 FULL DISCLOSURE. Neither ▇▇▇▇ nor the Company has failed to
disclose to the Investors any facts material to the business, results of
operations, assets, liabilities, financial condition or prospects of the Company
or the Company Subsidiaries. To the knowledge of ▇▇▇▇ and the Company, no
representation or warranty by ▇▇▇▇ or the Company contained in this Agreement
and no statement contained in any document (including financial statements and
the Disclosure Schedule), certificate, or other writing furnished or to be
furnished by ▇▇▇▇ or the Company to the Investors or any of their
representatives pursuant to the provisions hereof or in connection with the
Transactions, contains or will contain any untrue statement of material fact or
omits or will omit to state any material fact necessary, in light of the
circumstances under which it was made, in order to make the statements herein or
therein not misleading.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each of the Investors hereby severally represents and warrants to
the Company and ▇▇▇▇ that:
5.1 ORGANIZATION. Such Investor is duly organized, validly
existing and in good standing under the laws of the state of its organization,
and has all requisite power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted.
5.2 AUTHORITY; ENFORCEABILITY. Such Investor has all requisite
power and authority to execute and deliver this Agreement and each of the
Ancillary Agreements to which it is a party, to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby. The execution and delivery by such Investor of this
31
Agreement and each of the Ancillary Agreements to which such Investor is a
party and the performance by such Investor of this Agreement and each of the
Ancillary Agreements to which it is a party and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary action by such Investor and no other proceeding on the part of such
Investor is necessary to authorize this Agreement or any of the Ancillary
Agreements to which it is a party or to consummate the transactions
contemplated hereby or thereby. This Agreement has been duly executed and
delivered by such Investor and each of the Ancillary Agreements to which such
Investor is a party will be duly executed and delivered by it. This Agreement
constitutes, and each of the Ancillary Agreements to which each Investor is a
party, when duly executed and delivered by such Investor, will constitute,
the valid and binding obligation of such Investor, enforceable against such
Investor in accordance with its terms.
5.3 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(1) The execution and delivery of this Agreement by such
Investor does not, and the execution and delivery by such Investor of any of the
Ancillary Agreements to which such Investor is a party will not, and the
performance by each Investor of this Agreement and the Ancillary Agreements to
which it is a party, and the consummation of the transactions contemplated
hereby and thereby will not, (i) conflict with or violate the organizational
documents of such Investor, (ii) conflict with or violate any Laws applicable to
such Investor or by or to which any of its properties or assets is bound or
subject or (iii) result in any breach of or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or give
to others any rights of termination, amendment, acceleration or cancellation of,
or require payment under, or result in the creation of a Lien on any of the
properties or assets of such Investor, pursuant to any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which such Investor is a party or by which it or any
of its properties or assets is bound or subject.
(2) The execution and delivery of this Agreement by such
Investor does not, and the execution and delivery by such Investor of any of the
Ancillary Agreements to which it is a party will not, and the performance by
such Investor of this Agreement and the Ancillary Agreements to which it is a
party and the consummation of the transactions contemplated hereby and thereby
will not, require such Investor to obtain any Consent of any Governmental Entity
or third party except for applicable requirements of the HSR Act, and under any
applicable foreign laws regulating competition.
5.4 AVAILABILITY OF FUNDS. At the Closing, such Investor will
have sufficient funds to consummate its portion of the Investment.
5.5 ACQUISITION OF THE SHARES FOR INVESTMENT. Such Investor is
acquiring the Shares for investment purposes only and not with any present
intention of distributing or selling the Shares in violation of federal or state
securities laws. Such Investor shall not sell, transfer, offer for sale, pledge,
hypothecate or otherwise dispose of the Shares in violation of any federal or
state securities laws.
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5.6 BROKERS. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of such Investor.
ARTICLE 6
COVENANTS
6.1 AFFIRMATIVE COVENANTS. ▇▇▇▇ hereby covenants and agrees
that, prior to the Closing, unless otherwise expressly contemplated by this
Agreement or consented to in writing by the Investors, the Company and each of
the Company Subsidiaries will:
(1) operate its business only in the usual and ordinary
course, consistent with past practice;
(2) preserve intact its business organizations, maintain
its rights and franchises, retain the services of its respective officers and
key employees and maintain its relationships and goodwill with its respective
customers and suppliers and others with which it has business relationships;
(3) maintain and keep its properties and assets in as
good repair and condition as at present, ordinary wear and tear excepted, and
maintain inventories in quantities consistent with its customary business
practice;
(4) expend such funds, including making capital
expenditures in accordance with the annual budget of the Company and the Company
Subsidiaries, as may be necessary or desirable to operate the business of the
Company and the Company Subsidiaries in the ordinary course, consistent with
past practice; and
(5) keep in full force and effect insurance and bonds
comparable in amount and scope of coverage to that maintained on the date
hereof.
6.2 NEGATIVE COVENANTS OF THE COMPANY. ▇▇▇▇ hereby covenants
that, except as expressly contemplated by this Agreement or consented to in
writing by the Investors, from the date of this Agreement until the Closing,
neither the Company nor any Company Subsidiary will do any of the following:
(1) (i) increase the compensation payable to or to
become payable to any of its directors, officers or employees (other than
pursuant to employment agreements or in the ordinary course of business
consistent with past practice); (ii) grant any severance or termination pay to
(other than pursuant to its normal severance policy as in effect on the date of
this Agreement), or enter into any employment or severance agreement with, any
director, officer or employee; (iii) establish, adopt, enter into or amend any
Plan, except as may be required by applicable Law; or (iv) lend, pay or
contribute any funds to any of its directors, officers,
33
employees, Affiliates or Associates (other than compensation payable in the
ordinary course of business consistent with past practice);
(2) except for the Repurchase, (i) redeem, purchase or
otherwise acquire any shares of its capital stock or any securities or
obligations convertible into or exchangeable for any shares of its capital
stock, or any options, warrants or conversion or other rights to acquire any
shares of its capital stock or any such securities or obligations; (ii) effect
any reorganization or recapitalization; or (iii) split, combine or reclassify
any of its capital stock or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution for, shares of its
capital stock;
(3) issue, deliver, award, grant or sell, or authorize
or propose the issuance, delivery, award, grant or sale of, any shares of any
class of its capital stock, any securities convertible into or exercisable or
exchangeable for any such shares, or any rights, warrants or options to acquire,
any such shares;
(4) except for the Charter Amendments, propose or adopt
any amendments to its certificate or articles of incorporation or as to its
by-laws, or any similar charter or organizational documents;
(5) except for the Subsidiary Sale and the Financing,
sell, lease, exchange, mortgage, pledge, transfer or otherwise dispose of, or
agree to sell, lease, exchange, mortgage, pledge, transfer or otherwise dispose
of, any of its assets (other than in the ordinary course of business consistent
with past practice);
(6) release any third party from its obligations under
any existing confidentiality agreements;
(7) (i) change any of its methods of accounting in
effect at December 31, 1998, or (ii) make or rescind any express or deemed
election relating to Taxes, (iii) settle or compromise any Tax related
Litigation, Audit or controversy, or (iv) change any of its methods of reporting
income or deductions for federal income tax purposes from those employed in the
preparation of the federal income tax returns for the taxable year ended
December 31, 1998, except as may be required by law or changes in GAAP;
(8) except for the Financing, incur any obligation for
borrowed money or purchase money indebtedness, whether or not evidenced by a
note, bond, debenture or similar instrument (other than in the ordinary course
of business);
(9) enter into any Company Contract for a term in excess
of one year and providing for aggregate payments to or from the Company in
excess of $5 million; or
(10) agree in writing or otherwise to do any of the
foregoing.
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6.3 OTHER COVENANTS. ▇▇▇▇ hereby covenants and agrees that, at
the Closing, (a) the Company shall have Working Capital (as defined in Section
6.3 of the DISCLOSURE SCHEDULE), before giving effect to the Transactions, equal
to at least $283 million, which Working Capital shall be calculated in
accordance with Section 6.3 of the DISCLOSURE SCHEDULE, and (b) Autobuses, after
giving effect to the Transactions, shall have a net worth, calculated in
accordance with GAAP, equal to at least $1 million.
6.4 ACCESS AND INFORMATION. ▇▇▇▇ shall and shall cause the
Company and each Company Subsidiary to, provide to the Investors and their
partners, employees, accountants, consultants, legal counsel, agents and other
representatives (collectively, the "Investor Representatives") (a) access at
reasonable times to the officers, employees, agents, properties, offices and
other facilities of the Company and each Company Subsidiary and to the books and
records thereof and furnish promptly to the Investors and the Investor
Representatives such information concerning the business, properties, contracts,
records and personnel of the Company and each Company Subsidiary (including
financial, marketing, operating and other data and information) as may be
requested, from time to time, by the Investors and (b) such cooperation as the
Investors shall reasonably request in completing its due diligence
investigation.
6.5 EXCLUSIVITY. From the date of this Agreement until the
earlier of the Closing Date and the date upon which this Agreement is terminated
pursuant to Section 9.1, ▇▇▇▇ shall not, nor shall ▇▇▇▇ permit the Company or
any of the Company Subsidiaries or any of their respective directors, officers,
representatives, Affiliates or Associates to, (a) initiate contact, solicit,
encourage or disclose, directly or indirectly, any information concerning the
Company's or any Company Subsidiary's business or properties to, (b) afford any
access to the Company's or any Company Subsidiary's personnel, offices,
facilities, properties, books and records to, or (c) enter into any discussions
or negotiations or agreements with, any person or entity in connection with any
possible proposal for the acquisition of all or any substantial portion of the
stock, assets or business of the Company or any Company Subsidiary.
6.6 SUPPLEMENTAL DISCLOSURE. ▇▇▇▇ shall and shall cause the
Company from time to time prior to the Closing to supplement or amend the
DISCLOSURE SCHEDULE with respect to (a) any matter that existed as of the date
of this Agreement and should have been set forth or described in the DISCLOSURE
SCHEDULE and (b) any matter hereafter arising which, if existing as of the date
of this Agreement, would have been required to be set forth or described in the
DISCLOSURE SCHEDULE; PROVIDED, HOWEVER, that no such supplement or amendment
shall affect the representations, warranties, covenants or agreements of the
parties or the conditions to the obligations of the parties under this Agreement
and; PROVIDED, FURTHER, that following the Closing, any such supplement or
amendment pursuant to clause (b) above shall have been deemed to have been made
as of the date hereof.
ARTICLE 7
ADDITIONAL AGREEMENTS
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7.1 APPROPRIATE ACTION; CONSENTS; FILINGS. ▇▇▇▇ and the
Investors shall, and ▇▇▇▇ shall cause each of the Company and the Company
Subsidiaries to, use its reasonable efforts to (a) take, or cause to be taken,
all appropriate action, and do, or cause to be done, all things necessary,
proper or advisable under applicable Law or otherwise to consummate and make
effective the Transactions, (b) obtain from any Governmental Entities or third
parties any Consents required to be obtained or made by the Investors, ▇▇▇▇, the
Company or any Company Subsidiary in connection with the authorization,
execution and delivery of this Agreement and the Ancillary Agreements and the
consummation of the Transactions and (c) make all necessary filings, and
thereafter make any other required submissions, with respect to this Agreement
required under the HSR Act and any other applicable Law; PROVIDED that ▇▇▇▇ and
the Investors shall cooperate with each other in connection with the making of
all such filings, including providing copies of all such documents to the
nonfiling party and its advisors prior to filing and furnishing all information
required for any application or other filing to be made pursuant to the rules
and regulations of any applicable Law in connection with the Transactions.
7.2 PUBLIC ANNOUNCEMENTS. ▇▇▇▇ and the Investors shall not, and
▇▇▇▇ shall cause the Company and each Company Subsidiary not to, issue any
public report, statement or press release or otherwise make any public statement
regarding this Agreement or the transactions contemplated hereby, from the date
hereof through the Closing, without the prior written consent of the other
parties hereto, unless otherwise required by applicable Law, in which case such
party shall advise the other parties hereto and discuss the contents before
issuing any such report, statement or press release. Notwithstanding the
foregoing, ▇▇▇▇ acknowledges and agrees that the Investors are permitted to make
a public announcement in connection with the execution of this Agreement.
7.3 COVENANT NOT TO COMPETE; NO RAID.
(1) ▇▇▇▇ acknowledges that the Investors and the Company
would be irreparably damaged if the knowledge of ▇▇▇▇ concerning the business
and affairs, trade secrets or confidential information of the Company or the
Company Subsidiaries were disclosed or utilized on behalf of any Person which is
in, or contemplates entering into, competition in any respect, directly or
indirectly, with the Company or the Company Subsidiaries. In furtherance of this
Section 7.3 and to secure the interests of the Investors hereunder, ▇▇▇▇ hereby
covenants and agrees that, from and after the Closing and until the third
anniversary of the date that Dina's ownership of the Company, directly or
indirectly, falls below 10%, without the prior written consent of the Investors,
▇▇▇▇ shall not, directly or indirectly, (A) participate in the ownership,
management, operation or control of, or be connected with or employed by, or act
as a consultant for, or have any financial interest in or aid or knowingly
assist any other Person in the conduct of, any business or entity which (1)
engages in any aspect of the Business, (2) is contemplating engaging in such
Business or (3) provides any services that compete with those services provided
by the Company or the Company Subsidiaries, in the case of (1), (2) and (3),
anywhere within the Territory or (B) hire any officer or other employee of the
Company or any Company Subsidiary or solicit or direct anyone else to solicit
any officer or other employee of the Company or any Company Subsidiary (1) to
terminate his or her employment or other relationship with the Company or any
Company Subsidiary; or (2) to seek or accept employment or
36
other affiliation with any other entity (other than any solicitation directed
at the public in general in publications available to the public in general).
(2) From and after the Closing Date, except as set forth
in Section 7.3(b) of the DISCLOSURE SCHEDULE, neither ▇▇▇▇ nor any Investor will
use for its benefit or disclose to any person, any proprietary information of
the Company or the Company Subsidiaries or proprietary information with respect
to customers, suppliers, employees or financial affairs of the Company or the
Company Subsidiaries, or any other confidential matter with respect to any
aspect of the Business.
(3) ▇▇▇▇ acknowledges and agrees that if it were to
breach any provision of this Section 7.3, any remedy at law would be inadequate
and that the Investors, in addition to seeking monetary damages in connection
with any such breach, shall be entitled to specific performance, and injunctive
and other equitable relief, without the necessity of posting any bond or other
security, to prevent or restrain a breach of this Section 7.3 or to enforce the
provisions hereof.
(4) The Company hereby covenants and agrees that from
and after the Closing and until the date that Dina's ownership of the Company,
directly or indirectly, falls below 10%, without the prior written consent of
▇▇▇▇, neither the Company nor any Investor shall, directly or indirectly, hire
any officer or other employee of ▇▇▇▇ or any of its subsidiaries or solicit or
direct anyone else to solicit any officer or employee of ▇▇▇▇ or any subsidiary
of ▇▇▇▇ (i) to terminate his employment or other relationship with ▇▇▇▇ or any
subsidiary of ▇▇▇▇ or (ii) to seek or accept employment or other affiliation
with any other entity (other than any solicitation directed at the public in
general in publications available to the public in general).
(5) ▇▇▇▇, the Company and the Investors intend that the
provisions of this Section 7.3 be enforced to the fullest extent permissible
under the laws applied in each jurisdiction in which enforcement is sought. If
any provision of this Section 7.3, or any part hereof, shall be held by a court
of competent jurisdiction to be invalid or unenforceable, this Section 7.3 shall
be amended to revise the scope of such provision to make it enforceable, if
possible, or to delete such provision or such part.
7.4 INTERCOMPANY AGREEMENTS. At the Closing, ▇▇▇▇ shall and
shall cause the Company to enter into the intercompany agreements, substantially
on the terms set forth in EXHIBIT F (the "Intercompany Agreements").
7.5 LICENSE AGREEMENT. At the Closing, ▇▇▇▇ shall and shall
cause the Company to enter into a license agreement, substantially in the form
attached hereto as EXHIBIT G (the "License Agreement"), providing for the grant
by ▇▇▇▇ to the Company of a perpetual, exclusive, royalty-free and worldwide
right and license to use the name "▇▇▇▇" in connection with the Business.
37
7.6 EMPLOYMENT AGREEMENT. At the Closing, ▇▇▇▇ shall cause TMO
to enter into an employment agreement with ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ on terms
reasonably satisfactory to TMO, the Investors and ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇.
7.7 NAME CHANGES. At the Closing, ▇▇▇▇ shall cause (a) MCII to
file an amendment to its certificate of incorporation changing its name and (b)
TMO to file an amendment to its certificate of incorporation changing its name
to "Motor Coach Industries International, Inc."
7.8 DIRECTORS' & OFFICERS' INSURANCE. From and after the
Closing, the Company will maintain directors and officers liability insurance in
such amounts as is reasonably determined by the Board.
ARTICLE 8
CLOSING CONDITIONS
8.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY UNDER THIS
AGREEMENT. The respective obligations of each party to consummate the
Transactions, including the Investment, shall be subject to the satisfaction at
or prior to the Closing of the following conditions, any or all of which may be
waived, in whole or in part, to the extent permitted by applicable Law, by each
party hereto:
(1) NO ORDER. No Governmental Entity, including any
federal or state court of competent jurisdiction, shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive order,
judgment, decree, injunction or other order (whether temporary, preliminary or
permanent) which is in effect and which has the effect of making the
Transactions contemplated hereby illegal or otherwise restrains consummation of
the Transactions.
(2) HSR ACT. Any applicable waiting period under the HSR
Act shall have expired or been terminated.
8.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE INVESTORS. The
obligations of the Investors to consummate the Transactions, including the
Investment, are subject to the satisfaction at or prior to the Closing of the
following conditions, any or all of which may be waived, in whole or in part, to
the extent permitted by applicable Law, by the Investors:
(1) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of ▇▇▇▇ contained in this Agreement that are not
qualified as to materiality shall be true, correct and complete in all material
respects on the date hereof and as of the Closing Date, as though made on and as
of the Closing Date (except to the extent expressly made as of a
38
specific date, in which case, to such date), and each of the representations
and warranties of ▇▇▇▇ contained in this Agreement that are qualified as to
materiality shall be true, correct and complete in all respects on the date
hereof and as of the Closing Date, as though made on and as of the Closing
Date (except to the extent expressly made as of a specific date, in which
case, to such date). The Investors shall have received a certificate of the
Chief Executive Officer of ▇▇▇▇ to such effect.
(2) AGREEMENTS AND COVENANTS. ▇▇▇▇ shall have performed
or complied in all material respects with all agreements and covenants required
by this Agreement to be performed or complied with by it on or prior to the
Closing Date. The Investors shall have received a certificate of the Chief
Executive Officer of ▇▇▇▇ to such effect.
(3) CONSENTS AND APPROVALS; PERMITS. All material
Consents or waivers thereof, and Permits, required to consummate the
Transactions, shall have been obtained from all Governmental Entities and third
parties.
(4) CERTAIN CHANGES. There shall not have occurred since
December 31, 1998, any change or event in the business, assets, results of
operations, condition (financial or otherwise) or prospects of the Company or
any Company Subsidiary, taken as a whole, which has had or could reasonably be
expected to have a Material Adverse Effect.
(5) LEGAL OPINIONS. The Investors shall have received
the opinions of counsel to ▇▇▇▇ and the Company, reasonably satisfactory to the
Investors, dated the Closing Date, addressed to the Investors, in form and
substance to be mutually agreed upon by the parties.
(6) STOCKHOLDERS' AGREEMENT. The Company and ▇▇▇▇ shall
have executed and delivered to the Investors, the Stockholders' Agreement, which
Stockholders' Agreement shall be in full force and effect, and the valid and
binding obligation of each of ▇▇▇▇ and the Company.
(7) FINANCING. (i) TMO shall have completed the
Financing on terms reasonably acceptable to the Investors and the Credit
Agreement shall be in full force and effect, and the valid and binding
obligation of each party thereto; and (ii) the Company shall have received funds
pursuant to the Financing in an amount sufficient to enable it to consummate the
Transactions, including the Refinancing, and to pay all fees and expenses of the
Company related to the Transactions.
(8) BOARD OF DIRECTORS. The Company shall have taken all
actions necessary to expand the Board to seven directors. Messrs. ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇ shall be elected to serve as
directors. In addition, such individuals shall have been appointed to serve as
directors on the Board of Directors of each Company Subsidiary, to the extent
permitted by applicable law.
39
(9) DUE DILIGENCE. The satisfactory completion by the
Investors and the Investor Representatives of a due diligence investigation of
the Company and the Company Subsidiaries covering business, financial,
accounting, legal, regulatory and other matters; the Investors agree to promptly
notify ▇▇▇▇ of any issues that come to its attention during such investigation
that are likely to cause the Investors not to proceed with the Investment and
the Investors further agree to notify ▇▇▇▇ promptly upon its determination not
to proceed with the Investment.
(10) REFINANCING. TMO shall have consummated the
Refinancing on terms reasonably acceptable to the Investors.
(11) ▇▇▇▇ REFINANCING. ▇▇▇▇ shall have consummated the
▇▇▇▇ Refinancing, including the repurchase and retirement of at least 90% of the
outstanding 2002 Discount Notes pursuant to the 2002 Discount Notes Tender Offer
and shall have called for redemption and deposited in escrow sufficient funds to
redeem all of the 2002 Discount Notes remaining outstanding.
(12) CHARTER AMENDMENT. The Company shall have filed the
Amended and Restated Certificate of Incorporation with the Secretary of State of
the State of Delaware.
(13) INTERCOMPANY AGREEMENTS. The Company and ▇▇▇▇ shall
have executed and delivered to the Investors, the Intercompany Agreements, which
Intercompany Agreements shall be in full force and effect and the valid and
binding obligation of each of ▇▇▇▇ and the Company.
(14) AGREEMENT OF THE ▇▇▇▇▇ ▇▇▇▇▇▇ FAMILY. The members of
the ▇▇▇▇▇ ▇▇▇▇▇▇ Family shall have delivered to the Investors an agreement
providing for, among other things, (i) their agreement to cooperate with JLL in
connection with any proposed sale or dissolution of MCII Financial Services Inc.
("MCII Finance"), including an agreement to sell all shares of capital stock of
MCII Finance owned by the ▇▇▇▇▇ ▇▇▇▇▇▇ Family to a third party as determined by
JLL and the ▇▇▇▇▇ ▇▇▇▇▇▇ Family or to vote all of their shares of MCII Finance
in favor of a dissolution thereof as determined by JLL and the ▇▇▇▇▇ ▇▇▇▇▇▇
Family, (ii) a noncompetition agreement on substantially the terms set forth in
Section 7.3 and (iii) their agreement to act in the best interests of the
Company, including with respect to the Mexican operations of the Company and all
shared service arrangements.
(a) Except as set forth in Section 4.8(b) of the
DISCLOSURE SCHEDULE, since the date of the 1998 Balance Sheet, the Company has
not declared or paid any dividend on, or made any other distribution in respect
of, outstanding shares of capital stock, except for the declaration and payment
of any dividends by a wholly owned Company Subsidiary to the Company or to
another wholly owned Company Subsidiary;
8.3 ADDITIONAL CONDITIONS TO OBLIGATIONS OF ▇▇▇▇. The
obligations of ▇▇▇▇ to consummate the Transactions are subject to the
satisfaction at or prior to the Closing of the
40
following conditions, any or all of which may be waived, in whole or in part,
to the extent permitted by applicable Law, by ▇▇▇▇:
(1) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of the Investors contained in this Agreement that
are not qualified as to materiality shall be true, correct and complete in all
material respects on the date hereof and as of the Closing Date, as though made
on and as of the Closing Date (except to the extent expressly made as of a
specific date, in which case, to such date), and each of the representations and
warranties of the Investors contained in this Agreement that are qualified as to
materiality shall be true, correct and complete in all respects on the date
hereof and as of the Closing Date, as though made on and as of the Closing Date
(except to the extent expressly made as of a specific date, in which case, to
such date). ▇▇▇▇ shall have received a certificate of (i) a general partner of
JLL and (ii) an authorized signatory of each of CIBC Argosy and CMF to such
effect.
(2) AGREEMENTS AND COVENANTS. The Investors shall have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by the Investors on
or prior to the Closing Date. ▇▇▇▇ shall have received a certificate of (i) a
general partner of JLL and (ii) an authorized signatory of each of CIBC Argosy
and CMF to such effect.
(3) FINANCING. TMO shall have completed the Financing
and shall have received funds under the Credit Agreement in an amount sufficient
to enable it to consummate the Transactions.
(4) REFINANCING. TMO shall have consummated the
Refinancing.
(5) ▇▇▇▇ REFINANCING. ▇▇▇▇ shall have consummated the
▇▇▇▇ Refinancing, including the repurchase and retirement of at least 90% of the
outstanding 2002 Discount Notes pursuant to the 2002 Discount Notes Tender Offer
and shall have called for redemption and deposited in escrow sufficient funds to
redeem all of the 2002 Discount Notes remaining outstanding.
(6) STOCKHOLDERS' AGREEMENT. Each Investor shall have
executed and delivered to ▇▇▇▇ and the Company the Stockholders' Agreement,
which Stockholders' Agreement shall be in full force and effect, and the valid
and binding obligation of each Investor. (1)
ARTICLE 9
TERMINATION
9.1 TERMINATION. This Agreement may be terminated by giving
written notice at any time prior to the Closing as follows:
(1) by mutual consent of the Investors and ▇▇▇▇;
41
(2) by either the Investors or ▇▇▇▇, if there shall be
any order which is final and nonappealable preventing the consummation of the
Transactions;
(3) by the Investors or ▇▇▇▇, at any time after July 15,
1999; PROVIDED, HOWEVER, that the right to terminate this Agreement under this
Section 9.1(c) shall not be available to (i) ▇▇▇▇, if ▇▇▇▇ has breached any of
its respective representations, warranties or covenants hereunder in any
material respect and such breach has been the cause of or resulted in the
failure of the Closing to occur on or before such date or (ii) the Investors, if
the Investors have breached any of their representations, warranties or
covenants hereunder in any material respect and such breach has been the cause
of or resulted in the failure of the Closing to occur on or before such date;
(4) by the Investors, if ▇▇▇▇ shall have breached or
violated in any material respect any of its representations, warranties or
covenants set forth in this Agreement, and such breach or violation shall not
have been cured within thirty (30) days after written notice thereof has been
given by the Investors to the party alleged to be in breach; or
(5) by ▇▇▇▇, if the Investors shall have breached or
violated in any material respect any of their representations, warranties or
covenants set forth in this Agreement, and such breach or violation shall not
have been cured within thirty (30) days after notice thereof has been given by
▇▇▇▇ to the Investors.
The right of any party hereto to terminate this Agreement
pursuant to this Section 9.1 shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any party hereto, any
person controlling any such party or any of their respective officers or
directors, whether prior to or after the execution of this Agreement.
9.2 EFFECT OF TERMINATION. In the event of the termination of
this Agreement pursuant to Section 9.1, this Agreement shall forthwith become
null and void, there shall be no liability on the part of the Investors or ▇▇▇▇
any of their respective partners, officers, directors, Subsidiaries, Affiliates
or Associates to any other party and all rights and the obligations of any party
hereto shall cease, except that nothing herein shall relieve any party hereto
from liability for any wilful breach of this Agreement. Notwithstanding anything
to the contrary contained herein, the obligations provided in Sections 6.4 and
9.3 and in the Confidentiality Agreement shall survive any termination of this
Agreement.
9.3 FEES, EXPENSES AND OTHER PAYMENTS. All Expenses incurred by
the parties hereto shall be borne solely and entirely by the party which has
incurred such Expenses; PROVIDED, HOWEVER, that, in the event that the
Transactions are consummated, ▇▇▇▇ shall cause the Company to pay all of the
Expenses (including all Taxes related to the Transactions) of all parties
hereto.
ARTICLE 10
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SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
10.1 SURVIVAL OF REPRESENTATIONS. The representations and
warranties in this Agreement and in any other document delivered in connection
herewith shall survive the Closing solely for purposes of this Article X and
shall terminate upon the second anniversary of the Closing Date, except that the
representations and warranties set forth in (a) Section 4.12 hereof shall
survive the Closing and shall terminate on the first anniversary following the
expiration of all applicable statute of limitations (including any extensions
thereof) and (b) Section 4.14 hereof shall survive the Closing and shall
terminate on the third anniversary of the Closing Date.
10.2 DINA'S AGREEMENT TO INDEMNIFY. Upon the terms and subject
to the conditions of this Article X, ▇▇▇▇ agrees to indemnify, defend and hold
harmless the Investors, the Company and the Company Subsidiaries and their
respective directors, officers, partners, employees, agents, representatives,
Affiliates and Associates (collectively, the "Investor Group"), at any time
after consummation of the Closing, subject to the provisions of Section 10.3,
from and against all demands, claims, actions or causes of action, assessments,
losses, damages, Taxes, liabilities, costs and expenses, including, without
limitation, interest, penalties and attorneys' fees and expenses (collectively,
"Damages"), asserted against, resulting to, imposed upon or incurred by any
member of the Investor Group, directly or indirectly, (a) by reason of or
resulting from a breach of any representation or warranty of ▇▇▇▇ contained in
or made pursuant to this Agreement (without regard to any materiality
qualification contained in any representation or warranty) or any facts or
circumstances constituting such a breach, (b) by reason of or resulting from a
breach of any covenant or agreement of ▇▇▇▇ contained in or made pursuant to the
Agreement, (c) relating to or arising out of the Transactions or any action
taken by ▇▇▇▇ arising out of the Transactions or relating thereto (including the
restructuring of Systemas y Services G), (d) relating to product liability
incurred by the Company prior to the Closing Date, whether or not disclosed to
the Investors, (e) relating to any and all litigation (including litigation
arising out of the Transactions or Dina's actions in connection therewith)
incurred by the Company prior to the Closing Date, whether or not disclosed to
the Investors, (f) relating to any material obligation or liability involving
the Company and based upon acts or omissions occurring prior to the Closing
Date, and not set forth in the DISCLOSURE SCHEDULE, PROVIDED, HOWEVER, that
liabilities incurred in the ordinary course of business consistent with past
practice since the date of the 1998 Balance Sheet shall be excluded, (g)
relating to the Transferred Subsidiaries and (h) relating to any Environmental
Claim that is related in any way to the Company or any Company Subsidiary or any
previous owner's or operator's management, use, control, ownership or operation
of the Company or any Company Subsidiary or of any plant, facility, or real
property, regardless of whether formerly or currently owned or leased by the
Company or any Company Subsidiary, as well as all on-site and off-site
activities involving Hazardous Materials, and that occurred, existed, arises out
of conditions or circumstances that occurred or existed, or was caused, in whole
or in part, on or before the Closing Date, whether or not such matter is
described in the Disclosure Schedule (collectively, "Investor Claims").
Notwithstanding the foregoing, Damages shall not include
any amounts expended by the Company or any Company Subsidiary to satisfy any
insurance deductible or
43
self-insured retention in the nature of a deductible relating to the matter
for which Damages are claimed and, to the extent applicable, Damages shall be
determined after giving effect to any amount reserved with respect to such
matter on the 1998 Balance Sheet. For purposes of this Article X, Damages
shall be determined after giving effect to (i) all insurance proceeds
received by the Company with respect to such Claim and (ii) all Tax
deductions and credits actually realized by the time of the computation of
the indemnity amount pursuant to this Article X and resulting directly from
(a) the event giving rise to the indemnity under this Article X or (b) the
incurrence of any Tax liability indemnified under this Article X. Further,
Damages, for purposes of this Section 10.2, shall exclude any indemnity for
Taxes; it being understood that all indemnity for Taxes shall be governed
exclusively by Section 10.4 hereof.
10.3 DINA'S LIMITATION OF LIABILITY.
(1) The liability of ▇▇▇▇ to indemnify the Investor
Group for a breach of any representation or warranty pursuant to Section 10.2(a)
shall be limited to Investor Claims as to which the Investor Group has given
▇▇▇▇ written notice thereof on or prior to the date upon which such
representation or warranty terminates, as set forth in Section 10.1, without
regard to whether any Damages have actually been sustained. No Investor Claim or
series of related Investor Claims for Damages for less than $50,000 shall be
brought by the Investor Group (each, a "De Minimis Claim"). The provisions for
indemnity contained in Section 10.2(a) hereof shall be effective only after the
aggregate amount of all Investor Claims pursuant to Section 10.2(a) for which
▇▇▇▇ is liable (excluding De Minimis Claims) exceeds $5.0 million (without
regard to any materiality qualification contained in any representation or
warranty), and then only to the extent of such excess.
(2) As directed by the Investor Group, ▇▇▇▇ shall
promptly pay the amount of indemnification obligations set forth in Section 10.2
to the person or entity that incurs the Damage.
(3) The liability of ▇▇▇▇ for all Investor Claims
pursuant to Section 10.2 shall not exceed an aggregate of $50 million, less all
amounts paid with respect to Investor Group Tax Claims made pursuant to Section
10.4.
10.4 DINA'S AGREEMENT TO INDEMNIFY FOR TAXES.
(1) Subject to Sections 10.6 and 10.7, ▇▇▇▇ and the
Transferred Subsidiaries agree to indemnify, defend and hold harmless the
Investor Group, the Company and the Company Subsidiaries at any time after the
consummation of the Closing from and against all Damages asserted against,
resulting to, imposed on, sustained, incurred or suffered by, or asserted
against any member of the Investor Group, the Company or any of the Company
Subsidiaries, directly or indirectly, by reason of or resulting from any and all
Taxes of ▇▇▇▇, any affiliate of ▇▇▇▇, the Transferred Subsidiaries, the Company
and the Company Subsidiaries with respect to or pursuant to (i) the
Transactions, (ii) the breach of any representation or warranty contained in
Section 4.12 hereof and (iii) except to the extent such Tax is expressly set
forth in Schedule 10.4(a)(ii) as set forth below, (a) all taxable periods ending
on or before the Closing
44
Date (such periods referred to as "Pre-Closing Periods"); (b) any taxable
period beginning before the Closing Date and ending after the Closing Date
(such periods referred to as "Straddle Periods"), but only with respect to
the portion of such Straddle Period ending on the Closing Date as determined
in the manner provided in Sections 10.4(b) and 10.4(c) hereof (such portion,
a "Pre-Closing Straddle Period"); (c) Treasury Regulation Section 1.1502-6
(or any comparable provision under state, local or foreign law or regulation
imposing several liability upon members of a consolidated, combined,
affiliated, unitary or similar group) for any Pre-Closing Period or
Pre-Closing Straddle Period (collectively, "Investor Group Tax Claims" and,
together with the Investor Claims, the "Claims"). No later than ten (10) days
prior to the Closing Date, ▇▇▇▇ shall prepare, or cause to be prepared,
Schedule 10.4(a)(ii), which shall set forth by type of Tax specific entries
for Taxes incurred (or accrued in accordance with GAAP) in the ordinary
course of business by the Company and the Company Subsidiaries consistent
with past practice since the date of the 1998 Balance Sheet up to the Closing
Date; upon completion, ▇▇▇▇ shall submit such Schedule to the Investor Group
for the Investor Group's review and approval, which shall not be unreasonably
withheld.
(2) In the case of any Straddle Period, except as
provided in Section 10.4(c) below, the liability for Taxes of the Company and
the Company Subsidiaries for the Pre-Closing Straddle Period shall be computed
on a "closing of the books" method, as if such taxable period ended on and
included the Closing Date; PROVIDED, HOWEVER, that items determined based on
time, such as depreciation, shall be deemed to be the amount of the Straddle
Period multiplied by a fraction the numerator of which is the number of days in
the Straddle Period ending on and including the Closing Date and the denominator
of which is the number of days in the Straddle Period.
(3) In the case of any real property, personal property
and intangible property Taxes for a Straddle Period, the liability for Taxes of
the Company and the Company Subsidiaries for the Pre-Closing Straddle Period
shall be deemed to be the amount of such Taxes for the Straddle Period
multiplied by a fraction the numerator of which is the number of days in the
Straddle Period ending on and including the Closing Date and the denominator of
which is the number of days in the Straddle Period.
(4) As directed by the Investor Group, ▇▇▇▇ shall
promptly pay the amount of indemnification obligations set forth in Section
10.4(a), (b) and (c) to the person or entity that the Investor Group directs
▇▇▇▇ to pay in writing.
(5) To the extent applicable, Damages pursuant to this
Section 10.4 shall be determined after reduction for any amount reserved with
respect to the matter for which Damages are claimed on the 1998 Balance Sheet.
(6) The liability of ▇▇▇▇ for all Investor Group Tax
Claims shall not exceed an aggregate of $70 million less all amounts paid with
respect to Investor Claims made pursuant to Section 10.2.
10.5 CONDITIONS OF INDEMNIFICATION.
45
(1) In the event any member of the Investor Group has a
reasonable good faith basis for asserting a Claim for Damages, such party shall
give prompt written notice to the other parties hereto, briefly setting forth
the basis of the Claim and the amount thereof (or, if not then determinable, a
reasonable good faith estimate of the amount thereof) in reasonable detail.
(2) The obligations and liabilities of ▇▇▇▇ with respect
to Claims made by third parties shall be subject to the following terms and
conditions:
(1) The indemnified party will give ▇▇▇▇ prompt
notice of any such Claim as set forth in subsection (a) above, and ▇▇▇▇
shall have the right to undertake the defense thereof by representatives
chosen by it;
(2) If ▇▇▇▇, within a reasonable time after
notice of any such Claim, fails to defend the indemnified party against
which such Claim has been asserted, the indemnified party shall (upon
further notice to ▇▇▇▇) have the right to undertake the defense,
compromise or settlement of such Claim on behalf of and for the account
and risk of ▇▇▇▇ subject to the right of ▇▇▇▇ to assume the defense of
such Claim at any time prior to settlement, compromise or final
determination thereof;
(3) If, in the opinion of the indemnified party's
legal counsel (which shall be reasonably acceptable to ▇▇▇▇), a conflict
of interest with respect to any Claim exists between the indemnified
party against which a Claim has been asserted and ▇▇▇▇, then such
indemnified party shall have the right to retain its own counsel with
respect to such Claim; PROVIDED that the reasonable fees and expenses of
such counsel shall be at the expense of ▇▇▇▇; and
(4) Anything in this Article X to the contrary
notwithstanding, (A) if there is a reasonable probability that a Claim
may materially and adversely affect the indemnified party other than as a
result of money damages or other money payments, the indemnified party
shall have the right, at its own cost and expense, to defend, compromise
or settle such Claim; PROVIDED, HOWEVER, that if such Claim is settled
without Dina's consent, the indemnified party shall be deemed to have
waived all rights hereunder against ▇▇▇▇ for money damages arising out of
such Claim, and (B) ▇▇▇▇ shall not, without the written consent of the
indemnified party, settle or compromise any Claim or consent to the entry
of any judgment which does not include as an unconditional term thereof
the giving by the claimant or the plaintiff to the indemnified party a
release from all liability in respect to such Claim.
10.6 TRANSFER OF COMMON STOCK AS SATISFACTION OF INDEMNIFICATION
OBLIGATIONS.
46
(1) In the event that ▇▇▇▇ is unable to pay in cash the
amount of any Damages for which it is liable pursuant to this Article X, ▇▇▇▇
and the Investors shall cause the Company to issue to the Investors, in
proportion to the Investors' ownership interests in the Company (immediately
after the Closing), that number of shares of Common Stock having a value equal
to 61% of the amount of the Damages payable by ▇▇▇▇ (or the Transferred
Subsidiaries), rounded to the nearest whole share. ▇▇▇▇ shall be deemed to have
remitted the same number of shares of Common Stock to the Company for
cancellation and the Company shall cancel such number of shares
contemporaneously therewith. The value of each share of Common Stock to be
transferred pursuant to this Section 10.6 shall be equal to the then fair market
value of the Common Stock as agreed by the Investors and ▇▇▇▇ or, if not so
agreed, by a third party valuation firm selected by JLL and reasonably
acceptable to ▇▇▇▇. In the event that Dina's indemnification obligations are
satisfied pursuant to this Section 10.6, the limitations on Dina's liability set
forth in Sections 10.3(c) and 10.4(f) hereof shall be determined with reference
to the then fair market value of the shares of Common Stock actually transferred
pursuant hereto. Shares of Common Stock issued to CIBC Argosy or CMF shall be
Non-Voting Common Stock to the extent necessary to comply with Section 2.1(b)
hereof.
(2) Notwithstanding the foregoing, and subject to the
terms of the Company's then outstanding agreements, in the event that ▇▇▇▇ is
unable to pay in cash the amount of any Damages for which it is liable pursuant
to this Article X, ▇▇▇▇ shall be permitted to satisfy up to $10 million of such
obligation by delivery of a promissory note to the Company (the "Promissory
Note"). The Promissory Note shall have a principal amount equal to the indemnity
obligation to be satisfied (but in no event more than $10 million), mature upon
the sale or transfer of more than 50% of the voting power of the then
outstanding Common Stock to any person or entity other than the Investors and
shall bear interest at the rate of 10% per annum and shall be prepayable at any
time without penalty. Interest on the Promissory Note shall be payable, in cash
or in-kind, semi-annually in arrears. The Promissory Note shall be secured by a
pledge to the Company of a number of shares of Common Stock owned by ▇▇▇▇ equal
to the principal amount of the Promissory Note (the "Pledged Shares"). The value
of each share of Common Stock to be pledged shall be equal to the fair market
value of the Common Stock as of the issuance of such Promissory Note as agreed
by the Investors and ▇▇▇▇ or, if not so agreed, by a third party valuation firm
selected by JLL and reasonably acceptable to ▇▇▇▇. In the event of a default
under the Promissory Note, the Company shall be entitled to retain all of the
Pledged Shares.
10.7 ADJUSTMENT TO INVESTMENT CONSIDERATION. Any payments by
▇▇▇▇ pursuant to this Article X shall be deemed an adjustment to the Investment
Consideration paid by the Investors, and not as income subject to Tax.
ARTICLE 11
GENERAL PROVISIONS
47
11.1 NOTICES. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
on the date delivered, if delivered personally, on the third business day after
being mailed by registered or certified mail (postage prepaid, return receipt
requested) or on the next business day after being sent by reputable overnight
courier (delivery prepaid), in each case, to the parties at the following
addresses, or on the date sent and confirmed by electronic transmission to the
telecopier number specified below (or at such other address or telecopier number
for a party as shall be specified by notice given in accordance with this
Section):
(1) If to JLL:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇ Fund III L.P.
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & Levy
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(2) if to CIBC Argosy or CMF:
c/o CIBC World Markets Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇; ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(3) If to ▇▇▇▇:
Consorcio G Grupo ▇▇▇▇, S.A. de C.V.
48
Tlacoquemecatl ▇▇. ▇▇
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ D.F., Mexico
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: ▇▇▇-(▇▇▇)-▇▇▇-▇▇▇▇
with copies to:
Winston & ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: M. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
MCII Holdings (USA), Inc.
▇/▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, Inc.
▇▇ ▇. ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
11.2 AMENDMENT. This Agreement may be amended by the parties
hereto at any time; PROVIDED, HOWEVER, that this Agreement may not be amended
except by a written instrument signed by all parties hereto.
11.3 WAIVER. At any time prior to the Closing, the Investors, on
the one hand, and ▇▇▇▇, on the other hand, may (a) extend the time for the
performance of any of the obligations or other acts of the other party hereto,
(b) waive any inaccuracies in the representations and warranties of the other
party contained herein or in any document delivered pursuant hereto and (c)
waive compliance by the other party with any of the agreements or conditions
contained herein. Any such extension or waiver shall be valid only if set forth
in a written instrument signed by the party or parties to be bound thereby.
11.4 HEADINGS. The headings and captions contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
11.5 SEVERABILITY. If any term or other provision of this
Agreement, or any portion thereof, is invalid, illegal or incapable of being
enforced by any rule of law or public policy, all other terms and provisions of
this Agreement, or remaining portion thereof, shall nevertheless remain in full
force and effect so long as the economic or legal substance of the Transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any such term or other provision, or any
portion thereof, is invalid,
49
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in an acceptable manner to the end that
the Transactions contemplated hereby are consummated to the fullest extent
possible.
11.6 ENTIRE AGREEMENT. This Agreement (together with the
Exhibits attached hereto and the DISCLOSURE Schedule) and the Confidentiality
Agreement constitute the entire agreement of the parties hereto and supersede
all prior agreements and undertakings, both written and oral, between or among
the parties, or any of them, with respect to the subject matter hereof.
11.7 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned, directly or indirectly, by
any party hereto without the prior written consent of the other parties hereto;
PROVIDED, HOWEVER, that notwithstanding the foregoing, JLL may, without such
prior written consent, assign a portion of the Investment to one or more third
parties or entities reasonably acceptable to ▇▇▇▇, provided that no such
assignment shall relieve JLL from any of its obligations hereunder.
11.8 PARTIES IN INTEREST. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and its respective
successors and permitted assigns, and no provision of this Agreement, express or
implied, is intended to or shall confer upon any other person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement.
11.9 FAILURE OR DELAY NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
11.10 SPECIFIC PERFORMANCE. Each party hereto acknowledges that
money damages would be both incalculable and an insufficient remedy for any
breach of this Agreement by such party and that any such breach would cause the
Investors, on the one hand, and ▇▇▇▇ on the other hand, irreparable harm.
Accordingly, each party hereto also agrees that, in the event of any breach or
threatened breach of the provisions of this Agreement by such party, the
Investors, on the one hand, and ▇▇▇▇, on the other hand, shall be entitled to
equitable relief without the requirement of posting a bond or other security,
including in the form of injunctions and orders for specific performance, in
addition to all other remedies available to such other parties at law or in
equity.
11.11 GOVERNING LAW. This Agreement shall be governed by the laws
of the State of New York, without regard to the principles of conflicts of law
thereof. Each Investor and ▇▇▇▇ hereby agree and consent to be subject to the
jurisdiction of the United States District Court for the Southern District of
New York and the jurisdiction of the courts of the State of New York located in
the Borough of Manhattan in the City of New York (collectively, the "Courts")
50
in any suit, action or proceeding seeking to enforce any provision of, or
based on any matter arising out of or in connection with, this Agreement or
the transactions contemplated hereby. Each Investor and ▇▇▇▇ hereby
irrevocably consent to the service of any and all process in any such suit,
action or proceeding by the delivery of such process to such party at the
address and in the manner provided in Section 11.1. ▇▇▇▇ has appointed The
Corporation Trust Company, ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as
its authorized agent (the "▇▇▇▇ Authorized Agent"), upon which process may be
served in any suit, action or proceeding based on this Agreement which may be
instituted in any Court, by any Investor, and ▇▇▇▇ expressly accept the
jurisdiction of any such Court in respect of any such suit, action or
proceeding. Such appointment shall be irrevocable. ▇▇▇▇ represents and
warrants that the Dina Authorized Agent, has agreed to act as said agent for
service of process, and ▇▇▇▇ agrees to take any and all action, including the
filing of any and all documents and instruments, which may be necessary to
continue such appointment in full force and effect. Service of process upon
the ▇▇▇▇ Authorized Agent and written notice of such service to ▇▇▇▇ shall be
deemed, in every respect, effective service of process upon ▇▇▇▇.
11.12 COUNTERPARTS. This Agreement may be executed in
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
11.13 INTERPRETATION. As used in this Agreement, (a) the term
"including" means "including, without limitation" and "including, but not
limited to," (b) the word "or" is not exclusive, unless the context otherwise
requires and (c) the words "to the knowledge of the Company" or "to the
Company's knowledge" means the actual knowledge, after due inquiry, of the
officers of the Company or any Company Subsidiary. All references in this
Agreement to "dollars" or "$" shall mean United States Dollars.
[SIGNATURE PAGE FOLLOWS]
51
IN WITNESS WHEREOF, the parties hereto have caused this
Investment Agreement to be executed as of the date first written above.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ & LEVY FUND III L.P.
By: JLL ASSOCIATES III, LLC,
its General Partner
By: ___________________________________
Managing Member
CIBC WG ARGOSY MERCHANT FUND 2, L.L.C.
By: ___________________________________
Name:
Title:
CO-INVESTMENT MERCHANT FUND 3, LLC
By: ___________________________________
Name:
Title:
CONSORCIO G GRUPO ▇▇▇▇, S.A. de C.V.
By: ____________________________________
Name:
Title:
IN WITNESS WHEREOF, the Company has caused this Investment
Agreement to be executed as of this ___ day of June, 1999.
MCII HOLDINGS (USA), INC.
By: ____________________________________
Name:
Title:
SCHEDULE I
Name of Investor Shares of Voting Shares of Nonvoting Principal Amount of Warrants
Common Stock Common Stock Company Senior Notes
JLL 522,855.4 - $42,857,000 122,448.45
CIBC Argosy 43,200 35,230.14 6,428,500 18,367.12
CMF 4,800 3,914.46 714,500 2,041.43
----- -------- ------- --------
570,855.4 39,144.6 $50,000,000 142,857
