EXHIBIT 10.8
WARRANT AGREEMENT
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WARRANT AGREEMENT (the "Agreement") dated as of December 14, 1995, by
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and between Xxxx Capital V Mezzanine Fund, L.P., a Delaware limited partnership,
BCIP Trust Associates, L.P., a Delaware limited partnership, (collectively, the
"Purchasers"), and Cambridge Industries Holdings, Inc., a Delaware corporation
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("Holdings"). Capitalized terms used herein shall have the meanings given to
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such terms in Article VII hereof.
WHEREAS, on the date hereof, pursuant to that certain Senior
Subordinated Credit Agreement dated as of the date hereof (the "Credit
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Agreement") by and among the Purchasers, as lenders, Holdings and Cambridge
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Industries, Inc., a Delaware corporation and a wholly-owned subsidiary of
Holdings (the "Company"), the Purchasers are purchasing notes of the Company in
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the aggregate principal amount of $11,900,000 (the "Notes").
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WHEREAS, the Purchasers are acquiring from Holdings warrants in the
form attached as Exhibit 1 hereto (the "Class A Warrants") and warrants in the
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form attached as Exhibit 2 hereto (the "Class L Warrants" and collectively with
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the Class A Warrants, the "Warrants"), representing the right to purchase from
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Holdings Warrant Shares on the terms and conditions set forth in the Warrants.
WHEREAS, the Warrants are being issued as an inducement and partial
consideration for the Purchasers to enter into the Credit Agreement and to
purchase the Notes.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
I. Closing.
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A. Closing. The closing of the issuance of the Warrants to the
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Purchasers (the "Closing") shall take place simultaneously with the closing
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pursuant to the Credit Agreement. The date of such Closing is hereinafter
referred to as the "Closing Date."
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B. Transactions on Closing Date. At the Closing, Holdings shall
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deliver to the Purchasers the duly issued Warrants.
II. Representations and Warranties of Holdings. Holdings represents and
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warrants to the Purchasers as follows:
A. Good Standing. Holdings is a corporation duly organized, validly
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existing and in good standing under the laws of the State of Delaware.
B. Authority Relative to this Agreement. Holdings has all requisite
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corporate power and authority to enter into and perform this Agreement and to
issue and deliver the Warrants to the Purchasers. The execution, delivery and
performance by Holdings of this Agreement, including the
issuance and delivery of the Warrants to the Purchasers, have been duly
authorized by all necessary corporate action on the part of Holdings. This
Agreement has been duly executed and delivered by Holdings and is a legal, valid
and binding obligation of Holdings and is enforceable against Holdings in
accordance with its terms.
C. No Conflict or Violation. The execution and delivery of this
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Agreement by Holdings, the performance by Holdings of its terms and the issuance
and delivery of the Warrants to the Purchasers will not on the Closing Date
conflict with or result in a violation of (i) the Certificate of Incorporation
or By-Laws of Holdings as in effect on the Closing Date, or (ii) any agreement,
instrument, law, rule, regulation, order, writ, judgment or decree to which
Holdings is a party or is subject, except for such conflicts and violations
which will not, in the aggregate, have a material adverse effect on the
business, operations, assets or condition (financial or otherwise) of Holdings
and will not deprive the Purchasers of any material benefit under this
Agreement.
D. Validity of Issuance. The Warrants to be issued to the Purchasers
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pursuant to this Agreement and the Warrant Shares issued upon exercise of the
Warrants will, when issued, be duly and validly issued, fully paid and
nonassessable (assuming in the case of the Warrant Shares, payment of the
exercise price is made in accordance with the terms of the Warrants).
E. Capital Structure and Subsidiaries. As of the Closing, the
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authorized capital stock of Holdings consists of (i) 1,000 shares of Preference
Stock, par value $.01 per share, (ii) 200,000 shares of Class A Common Stock,
par value $.01 per share, of which 55,000 shares shall be issued and outstanding
and 4,723.01 shares shall be reserved for issuance upon exercise of the Class A
Warrants, (iii) 29,000 shares of Class L Common Stock, par value $.01 per share,
of which 25,000 shares shall be issued and outstanding and 1,180.75 shares shall
be reserved for issuance upon exercise of the Class L Warrants, and (iv) 45,000
shares of Class P Common Stock, par value $.01 per share.
III. Representations and Warranties of the Purchasers. The Purchasers
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each hereby represent and warrant severally and not jointly to Holdings as
follows:
A. Investment Intention. Each Purchaser is acquiring its Warrant, and
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if the Warrant is exercised, the Warrant Shares, for investment solely for its
own account and not with a view to, or for resale in connection with, the
distribution or other disposition thereof. Such Purchaser agrees and
acknowledges that it will not, directly or indirectly, offer, transfer or sell
its Warrant or any Warrant Shares, or solicit any offers to purchase or acquire
the Warrant or any Warrant Shares, unless the transfer or sale is (i) pursuant
to an effective registration statement under the Securities Act of 1933, as
amended, and the rules and regulations thereunder (the "Securities Act") and has
been registered under any applicable state securities or "blue sky" laws or (ii)
pursuant to an exemption from registration under the Securities Act and
applicable state securities or "blue sky" laws.
B. Legends. (a) Each Purchaser acknowledges that each Warrant and each
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Warrant Share will contain a legend substantially to the following effect:
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THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR
STATE SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO THE
COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
Upon reasonable request of Holdings in connection with any transfer of
the Warrant or the Warrant Shares (other than a transfer pursuant to a public
offering registered under the Securities Act, pursuant to Rule 144 or Rule 144A
promulgated under the Securities Act (or any similar rules then in effect), or
to an affiliate of the Purchasers), the Purchasers will deliver, if requested by
Holdings, an opinion of counsel knowledgeable in securities laws reasonably
satisfactory to Holdings to the effect that such transfer may be effected
without registration under the Securities Act. Holdings agrees to issue
certificates evidencing the Warrant Shares that do not contain such legend upon
receipt of an opinion of counsel, which opinion and counsel shall be reasonably
satisfactory to Holdings, to the effect that such legend no longer applies to
Warrant Shares.
(b) Each Purchaser acknowledges that each Warrant and each Warrant
Share will contain a legend substantially to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
TRANSFER AND VOTING RESTRICTIONS PURSUANT TO A STOCKHOLDERS AGREEMENT DATED
AS OF NOVEMBER 17, 1995 AMONG THE ISSUER OF SUCH SECURITIES (THE "COMPANY")
AND CERTAIN OF THE COMPANY'S STOCKHOLDERS. A COPY OF SUCH STOCKHOLDERS
AGREEMENT WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER HEREOF UPON
WRITTEN REQUEST.
This legend may be removed upon termination of the Stockholders
Agreement.
C. Additional Investment Representations. Each Purchaser is an
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"accredited investor" as such term is defined in Rule 501 promulgated under the
Securities Act.
IV. Inspection Rights. So long as the Purchasers own at least 50% of any
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class of Warrant Shares issued on the date hereof (assuming, for purposes of
this Article IV, full exercise of the Warrants), Holdings shall permit one
representative of any holder of the Warrants or the Warrant Shares selected by
the holders of the majority of the Warrant Shares (assuming for purposes of
this section that the Warrants have been fully exercised), upon reasonable
notice and during normal business hours and such other times as any such holder
may reasonably request, to (i) visit and inspect any of the properties of
Holdings and its subsidiaries (ii) examine the corporate and financial records
of Holdings and its subsidiaries and make copies thereof or extracts therefrom
and (iii) discuss the affairs, finances and accounts of any such corporations
with the directors,
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officers, key employees and independent accountants of Holdings and its
subsidiaries (it being understood that such representative will keep all non-
public information confidential).
V. Management Rights.
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A. VCOC Status. Holdings acknowledges that Xxxx Capital V Mezzanine
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Fund, L.P. (the "MezFund") is a "venture capital operating company" as such
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term is used in the "plan assets" regulation (29 CFR 2510.3-101) issued by the
Department of Labor under the Employee Retirement Income Security Act of 1974,
as amended, and that the MezFund's investment in the Notes and Warrants is
intended to be a "venture capital investment" within the meaning of regulation
29 CFR 2510.3-101(d)(3)(i). Holdings further acknowledges that the contractual
provisions, contained in this Section V and elsewhere in this Agreement and the
other Documents (as defined in the Credit Agreement) provide the MezFund with
the opportunity and right to substantially participate in, or substantially
influence the conduct of, the management of Holdings.
B. Participation Rights. Upon reasonable notice to Holdings' chief
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executive officer and chief financial officer, as long as the MezFund holds a
Warrant, Holdings agrees to cause such of Holdings' key executive officers as
are designated by the MezFund to meet with representatives of the MezFund at
mutually convenient times and locations in order to discuss the conduct of
Holdings' business and affairs, and to receive the MezFund's recommendations and
advice in connection therewith. It is anticipated that such meetings and
discussions will occur periodically (but not, in general, more than once in any
30-day period absent unusual circumstances) as requested by the MezFund. Such
meetings and discussions may, at the MezFund's option, be conducted in person or
by use of telephonic means.
C. Attendance Rights. Holdings and the Company shall give the
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MezFund (so long as the MezFund holds any Warrant) written notice of each
meeting of its board of directors and each committee thereof at least three
business days prior to the date of each such meeting, and Holdings and the
Company shall permit a representative of the MezFund to attend as an observer
all meetings of their boards of directors and all committees thereof. Such
representative shall be entitled to receive all written materials and other
information (including, without limitation, copies of meeting minutes) given to
directors in connection with such meetings at the same time such materials and
information are given to the directors. If Holdings or the Company proposes to
take any action by written consent in lieu of a meeting of its board of
directors or of any committee thereof, Holdings or the Company, as applicable,
shall give written notice thereof to such representative prior to the effective
date of such consent describing in reasonable detail the nature and substance of
such action. Holdings or the Company, as applicable, shall pay the reasonable
out-of-pocket expenses of the representative incurred in connection with
attending such board and committee meetings.
D. Holdings' Rights. Without limiting the generality of the
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foregoing, nothing contained in this Section V will obligate or require Holdings
(or any of its officers, directors, agents or employees) to (i) engage or
participate in any inequitable conduct or (ii) breach, or participate in any
breach of, any duty or obligation owed to any Person.
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VI. Other Documents. Holdings and the Purchasers acknowledge that at the
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Closing, each Purchaser will execute counterparts and become parties to the
Stockholders Agreement and the Registration Rights Agreement dated as of
November 17, 1995 by and among Holdings, certain of the Purchasers and certain
stockholders of Holdings, as the same may be amended, restated or modified from
time to time, in accordance with the terms thereof.
VII. Miscellaneous
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A. Definitions. For the purposes of this Agreement, the following
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terms shall have the following meanings:
"Common Stock" means collectively, Holdings' Class A Common Stock, par
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value $.01 per share, Holdings' Class L Common Stock, par value $.01 per share,
and Holdings' Class P Common Stock, par value $.01 per share, or any securities
into which such Common Stock is hereafter converted or exchanged.
"Stockholders Agreement" means the Stockholders Agreement dated as of
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November 17, 1995 by and among Holdings, certain of the Purchasers and certain
other stockholders of Holdings, as may be amended, restated or modified from
time to time.
"Warrant Shares" means shares of the Common Stock obtained or
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obtainable upon exercise of the Warrants; provided, that if there is a change
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such that the securities issuable upon exercise of the Warrants are issued by an
entity other than Holdings or there is a change in the class of securities so
issuable, then the term "Warrant Shares" shall mean shares of the security
issuable upon exercise of the Warrants if such security is issuable in shares,
or shall mean the equivalent units in which such security is issuable if such
security is not issuable in shares.
B. Notices. All notices and other communications provided for herein
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shall be dated and in writing and shall be deemed to have been duly given (i)
when delivered, if delivered personally, sent by registered or certified mail,
return receipt requested and postage prepaid, or sent via nationally recognized
overnight courier or via facsimile with confirmation of receipt and (ii) when
received if delivered otherwise, to the party to whom it is directed:
Holdings:
Cambridge Industries Holdings, Inc.
000 Xxxxxx Xxxxx Xxxxx
Xxxxxxx Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Facsimile No.: (000) 000-0000
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with a copy to:
Jaffe, Raitt, Heuer & Xxxxx
Xxx Xxxxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxx X. Xxxxx
Facsimile No.: (000) 000-0000
Purchasers:
x/x Xxxx Xxxxxxx, Xxx.
Xxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxxx
Xxxx Xxxxxx
Xxxxxx Xxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Learner
Facsimile No.: (000) 000-0000
or to such other address as either party hereto shall have specified by notice
in writing to the others.
C. Assignment. This Agreement and all the provisions hereof shall be
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binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns, except that neither this Agreement
nor any rights or obligations hereunder shall be assigned by Holdings without
the prior written consent of the Purchasers.
D. Amendment. This Agreement may be amended only by a written
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instrument signed by Holdings and the Purchasers.
E. Waiver. Any party hereto may (a) extend the time for the
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performance of any of the obligations or other acts of the other party hereto,
(b) waive any inaccuracies in the represent ations and warranties contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions herein. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid as to such party if
set forth in an instrument in writing signed by such party.
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F. Severability. In the event that any one or more of the provisions
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hereof, or the application thereof in any circumstances, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired, it being intended
that all rights, powers and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
G. Applicable Law. The corporate law of the State of Delaware shall
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govern all issues and questions concerning the relative rights of the Purchasers
and Holdings. All other issues and questions concerning the construction,
validity, interpretation and enforceability of this Agreement and the exhibits
and schedules hereto shall be governed by and construed in accordance with, the
laws of the State of New York, without giving effect to any choice of law or
conflict of law provisions (whether of the State of New York or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York.
H. Expenses. All reasonable fees and expenses incurred by the
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Purchasers in connection with the preparation of this Agreement and the
transactions referred to herein, including the reasonable fees of the
Purchasers' counsel, shall be paid by Holdings, whether or not the issuance of
the Warrants, the execution and delivery of the Credit Agreement or any other
transaction contemplated hereby is consummated.
I. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which together shall be deemed to be one and the same
agreement.
J. Descriptive Headings. The headings in this Agreement are for
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convenience of reference only and shall not limit or otherwise affect the
meaning of the terms contained herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement to
be signed and attested by its duly authorized officers under its corporate seal
and to be dated as of the date hereof.
CAMBRIDGE INDUSTRIES HOLDINGS, INC.
By: /s/ Xxxxx Xxxxxx
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Its: Secretary/Treasurer
XXXX CAPITAL V MEZZANINE FUND, L.P.
By: Xxxx Capital V Mezzanine Partners, L.P.
Its: General Partner
By: Xxxx Capital Investors V, Inc.
Its: General Partner
By:
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Its: Managing Director
BCIP TRUST ASSOCIATES, L.P.
By:
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Its: General Partner
IN WITNESS WHEREOF, the parties hereto have caused this Warrant Agreement to
be signed and attested by its duly authorized officers under its corporate seal
and to be dated as of the date hereof.
CAMBRIDGE INDUSTRIES HOLDINGS, INC.
By:
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Its:
XXXX CAPITAL V MEZZANINE FUND, L.P.
By: Xxxx Capital V Mezzanine Partners, L.P.
Its: General Partner
By: Xxxx Capital Investors V, Inc.
Its: General Partner
By: [SIGNATURE APPEARS HERE]
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Its: Managing Director
BCIP TRUST ASSOCIATES, L.P.
By: [SIGNATURE APPEARS HERE]
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Its: General Partner
