CERTIFICATE
OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
SERIES
E REDEEMABLE PREFERRED STOCK
OF
WABASH
NATIONAL CORPORATION
* * * *
Adopted
in accordance with the provisions of Section 151(g) of the
General
Corporation Law of the State of Delaware
* * * *
Richard
J. Giromini, being the
President and Chief
Executive Officer
of Wabash National
Corporation, a corporation duly organized and existing under and by virtue of
the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY as
follows:
FIRST:
The name of
the corporation is Wabash National Corporation (the “
Corporation
”).
SECOND:
The
Certificate of Incorporation, as amended, of the Corporation (the “
Certificate of
Incorporation
”) authorizes the issuance of 25,000,000
shares of Preferred
Stock, par value $0.01 per share, of the Corporation and expressly vests in the
Board of Directors of the Corporation (the “
Board
”) the authority
provided therein to issue all of said shares in one or more series and by
resolution or resolutions, the designation, number, full or limited voting
powers, or the denial of voting powers, preferences and relative, participation,
optional, or other special rights, qualifications, limitations or restrictions
of each series to be issued.
THIRD:
The Board,
pursuant to the authority expressly vested by the Certificate of Incorporation,
as amended, has adopted the following resolution creating Series E Redeemable
Preferred Stock:
“Be it
resolved, that the issuance of Series E Redeemable Preferred Stock, par value
$0.01 per share, of the Corporation is hereby authorized, and the designation,
voting powers, preferences and relative, participating, optional and other
special rights, and qualifications, limitations and restrictions thereof, of the
shares of such series, in addition to those set forth in the Certificate of
Incorporation of the Corporation, are hereby fixed as follows:
A. Designation
of Series E Preferred Stock
Section
1.
Designation
. The
distinctive serial designation of such series is “Series E Redeemable
Preferred Stock” (“
Series E
Preferred
”). Each share of Series E Preferred shall be
identical in all respects to each other share of Series E
Preferred. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in
Article
B
.
Section
2.
Number of
Shares
. The number of authorized shares of Series E Preferred
shall be 20,000. Such number may from time to time be increased (but
not in excess of the total number of authorized shares of Preferred Stock less
the number of shares of Preferred Stock then outstanding) or decreased (but not
below the number of shares of Series E Preferred then outstanding) by the Board.
Shares of Series E Preferred that are redeemed, purchased or otherwise
acquired by the Corporation, or converted into another series of Preferred
Stock, shall be canceled and shall revert to authorized but unissued shares of
Preferred Stock undesignated as to series.
Section
3.
Dividends
.
(a)
General
Obligation
. The holders of the Series E Preferred shall be
entitled to receive preferential dividends, when and as declared by the Board or
any duly authorized committee thereof, out of funds legally available for
payment of dividends, as provided in this
Section 3
.
Such
dividends shall be payable by the Corporation in an amount per share of Series E
Preferred (each, a “
Series E Preferred
Share
”) determined by multiplying the Dividend Rate times a fraction the
numerator of which is the number of days in such Dividend Period and the
denominator of which is three hundred sixty-five.
(b)
Payment of
Dividends
. Dividends on the Series E Preferred shall be paid
in cash and until paid shall be accrued as set forth in
Section 3(d)
. All
dividends paid pursuant to this
Section 3(b)
shall be paid in equal
pro
rata
proportions to the holders entitled thereto.
(c)
Dividend
Rate
. Except as otherwise provided herein, dividends on each
Series E Preferred Share shall accrue on a daily basis at the rate of 15.0% per
annum (as adjusted from time to time in accordance with the terms hereof, the
“
Dividend
Rate
”) of the sum of the Liquidation Value thereof and all accumulated,
accrued and unpaid dividends thereon (whether accrued with respect to the
Liquidation Value or any previously accrued dividends) from and including the
Issuance Date of such Series E Preferred Share. On August 3, 2014 and
on the third day of each third month thereafter, the Dividend Rate shall
increase by an additional 0.5%, subject to applicable usury
laws. Such dividends shall accrue whether or not they have been
declared and whether or not there are profits, surplus or other funds of the
Corporation legally available for the payment of dividends, such dividends shall
be cumulative and all accrued and unpaid dividends shall be fully paid or
declared with funds irrevocably set apart for payment before any dividends,
distributions, redemptions or other payments may be declared or paid with
respect to any Junior Stock (except as otherwise expressly provided
herein). The date on which the Corporation initially issues any
Series E Preferred Share shall be deemed to be its date of issuance (the “
Issuance Date
”)
regardless of the number of times transfer of such Series E Preferred Share is
made on the stock records maintained by or for the Corporation and regardless of
the number of certificates which may be issued to evidence such Series E
Preferred Share.
(d)
Dividend Payment Dates;
Calculation of Dividend
. Dividends shall be payable in cash
quarterly in arrears when and as declared by the Board, or any duly authorized
committee thereof, on March 31, June 30, September 30 and
December 31 of each year (each, a “
Dividend Payment
Date
”), commencing on September 30, 2009. If any Dividend
Payment Date occurs on a day that is not a Business Day, any accumulated and
accrued dividends otherwise payable on such Dividend Payment Date shall be paid
on the next succeeding Business Day. Dividends shall be paid to the
holders of record of the Series E Preferred as their names shall appear on the
share register of the Corporation on the record date for such dividend.
Dividends payable in any Dividend Period which is less than a full Dividend
Period in length will be computed on the basis of a ninety-day quarterly period
and actual days elapsed in such Dividend Period. Dividends on account
of arrears for any past Dividend Periods may be declared and paid at any time to
holders of record on the record date therefor. For any Dividend
Period in which dividends are not paid in full in cash on the Dividend Payment
Date first succeeding the end of such Dividend Period, then on such Dividend
Payment Date such accrued and unpaid dividends shall be accumulated effective at
the beginning of the Dividend Period succeeding the Dividend Period as to which
such dividends were not paid and shall thereafter accrue additional dividends in
respect thereof at the Dividend Rate until such accumulated, accrued and unpaid
dividends (whether accrued with respect to the Liquidation Value or any
previously accrued dividends) have been paid in full .
(e)
Distribution of Partial
Dividend Payments
. For so long as any share of Series E
Preferred remains outstanding, in the event that full dividends are not paid to
the holders of all outstanding shares of Series E Preferred or any Parity Stock
with the same dividend payment date or with a dividend payment date during a
Dividend Period, and funds available for payment of dividends shall be
insufficient to permit payment in full to the holders of Series E Preferred and
holders of Parity Stock of the full preferential amounts to which they are then
entitled, then the entire amount available for payment of dividends shall be
distributed ratably among all such holders of Series E Preferred and holders of
Parity Stock in proportion to the full amount to which they would otherwise be
respectively entitled.
Section
4.
Priority of Series E
Preferred Shares on Dividends and Redemptions
. So long as any
shares of Series E Preferred remain outstanding, without the prior written
consent of the holders of a majority of the outstanding Series E Preferred
Shares, the Corporation shall not, nor shall it permit any Subsidiary to,
redeem, purchase or otherwise acquire directly or indirectly any Junior Stock,
nor shall the Corporation directly or indirectly pay or declare any dividend or
make any distribution upon any Junior Stock, other than:
(a) subject
to approval, to the extent required under the Investor Rights Agreement,
purchases, redemptions or other acquisitions of shares of Junior Stock in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of employees, officers, directors or
consultants; or
(b) the
payment of any dividends in respect of Junior Stock where the dividend is in the
form of the same stock as that on which the dividend is being paid.
Subject
to the provisions set forth above in
Sections 3
and
4
and the
restrictions contained in the Investor Rights Agreement, dividends payable in
cash, stock or otherwise, as may be determined by the Board or any duly
authorized committee thereof, may be declared and paid on any Junior Stock and
Parity Stock from time to time out of any assets legally available for such
payment, and holders of Series E Preferred will not be entitled to participate
in those dividends.
Section
5.
Liquidation
.
(a)
Liquidation
. Upon
any liquidation, dissolution or winding up of the Corporation (whether voluntary
or involuntary), each holder of Series E Preferred shall be entitled to be paid,
before any distribution or payment is made upon any Junior Stock and subject to
the rights of the holders of any Parity Stock upon liquidation and the rights of
the Corporation’s creditors, an amount in cash equal to the aggregate
Liquidation Value of all Series E Preferred Shares held by such holder (plus all
accumulated, accrued and unpaid dividends thereon (whether accrued with respect
to the Liquidation Value or any previously accrued dividends)) and the holders
of Series E Preferred shall not be entitled to any further payment or have any
further right or claim to the Corporation’s assets. If, upon any such
liquidation, dissolution or winding up of the Corporation, the Corporation’s
assets to be distributed among the holders of Series E Preferred and all holders
of any Parity Stock are insufficient to permit payment to such holders of the
aggregate amount which they are entitled to be paid under this
Section 5
, then the
entire assets available to be distributed to the Corporation’s stockholders
shall be distributed
pro
rata
among such holders of Series E Preferred and holders of Parity Stock
in proportion to the full amounts to which such holders would otherwise be
respectively entitled if all amounts thereon were paid in full. Not
less than thirty days prior to the payment date stated therein, the Corporation
shall mail written notice of any such liquidation, dissolution or winding up to
each record holder of Series E Preferred, setting forth in reasonable detail the
amount of proceeds to be paid with respect to each Series E Preferred Share in
connection with such liquidation, dissolution or winding up.
(b)
Residual
Distributions
. If the respective aggregate liquidating
distributions to which all holders of Series E Preferred and all holders of any
Parity Stock are entitled pursuant to
Section 5(a)
have been paid, the holders of Junior Stock shall be entitled to receive all
remaining assets of the Corporation according to their respective rights and
preferences.
(c)
Merger, Consolidation and
Sale of Assets Not Liquidation
. For purposes of this
Section 5
, the
merger or consolidation of the Corporation with any other corporation or other
entity, including a merger or consolidation in which the holders of Series E
Preferred receive cash, securities or other property for their shares, or the
sale, lease or exchange (for cash, securities or other property) of all or
substantially all of the assets of the Corporation, shall not constitute a
liquidation, dissolution or winding up of the Corporation.
Section
6.
Redemptions
.
(a)
Optional
Redemption
.
(i) Except
pursuant to
Section
6
(b)
,
the Corporation may not redeem the Series E
Preferred prior to August 3, 2010. From and after August 3, 2010, the
Corporation may at any time and from time to time redeem all or any portion of
the Series E Preferred Shares then outstanding pursuant to this
Section 6(a)
(an
“
Optional
Redemption
”). Upon the consummation of any Optional
Redemption, the Corporation shall pay to each holder of Series E Preferred a
price per Series E Preferred Share (with respect to each Series E Preferred
Share to be redeemed in such Optional Redemption, the “
Optional Redemption
Price
”) equal to:
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(A)
|
if
such redemption occurs at any time after August 3, 2010 but on or prior to
August 3, 2012, then 120% of the sum of the Liquidation Value thereof and
all accumulated, accrued and unpaid dividends thereon (whether accrued
with respect to the Liquidation Value or any previously accrued
dividends);
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(B)
|
if
such redemption occurs at any time after August 3, 2012 but on or prior to
August 3, 2014, then 115% of the sum of the Liquidation Value thereof and
all accumulated, accrued and unpaid dividends thereon (whether accrued
with respect to the Liquidation Value or any previously accrued
dividends); and
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(C)
|
if
such redemption occurs at any time after August 3, 2014, then 100% of the
sum of the Liquidation Value thereof and all accumulated, accrued and
unpaid dividends thereon (whether accrued with respect to the Liquidation
Value or any previously accrued
dividends);
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provid
ed
that
if a Change of Control occurs on or prior to the one-year anniversary of the
date on which an Optional Redemption is consummated pursuant to this
Section
6
(a)
(i)
, then the Corporation shall, simultaneously with or prior
to such Change of Control, pay to each holder of Series E Preferred an amount
per share, in cash, equal to the positive difference, if any, between (1) the
Change of Control Price that would have been payable had such prior redemption
been consummated as a Mandatory Redemption pursuant to
Section
6
(b)
, and (2) the applicable Optional Redemption
Price.
(ii) The
Corporation shall deliver notice of an Optional Redemption to the holders of
Series E Preferred at least fifteen days prior to the date of such Optional
Redemption (the “
Optional Redemption
Date
”). Such notice shall state the Optional Redemption Date,
the Optional Redemption Price, the number of shares of Series E Preferred to be
redeemed, and the place or places where certificates for shares of Series E
Preferred are to be surrendered to the Corporation for redemption by Series E
Preferred holder, in the manner and at the place designated.
(iii) The
number of Series E Preferred Shares to be redeemed from each holder thereof in
an Optional Redemption pursuant to this
Section 6(a)
shall be
the number of Series E Preferred Shares determined by multiplying the total
number of Series E Preferred Shares to be redeemed times a fraction, the
numerator of which shall be the total number of Series E Preferred Shares then
held by such holder and the denominator of which shall be the total number of
Series E Preferred Shares then outstanding.
(b)
Mandatory
Redemption
.
(i) Immediately
prior to or simultaneously with the occurrence of a Change of Control or at such
later time as may be specified in writing by any holder of the Series E
Preferred, the Corporation shall redeem (such redemption, the “
Mandatory
Redemption
”), upon election in writing by such holder of Series E
Preferred, all of the Series E Preferred then outstanding and pay to each holder
of Series E Preferred a price per Series E Preferred Share (the “
Change of Control
Price
”) equal to the Liquidation Value thereof (and the accumulated,
accrued and unpaid dividends thereon (whether accrued with respect to the
Liquidation Value or any previously accrued dividends))
plus
a premium equal
to 200% of the sum of (A) the Liquidation Value thereof and (B) all accumulated,
accrued and unpaid dividends thereon (whether accrued with respect to the
Liquidation Value or any previously accrued dividends).
(ii) The
Corporation shall provide each holder of Series E Preferred with not less than
fifteen days’ written notice prior to the occurrence of a Change of Control (the
date on which such Change of Control occurs, the “
Mandatory Redemption
Date
”) or entering into an agreement providing for such Change of Control
or, in the case of a Change of Control referred to in clause (ii) of the
definition thereof pursuant to a tender offer of which the Corporation has no
prior knowledge, promptly after the Corporation discovers that the Change of
Control will occur or has occurred. Such notice shall describe in
reasonable detail the material terms and the Mandatory Redemption Date (or
anticipated timing, in the case of an agreement) to each holder of Series E
Preferred, and the Corporation shall give each holder of Series E Preferred
prompt written notice of any material change in the terms or timing of such
transaction. Any such notice also shall state the Change of Control
Price and that the holder is to surrender to the Corporation, at the place or
places where certificates for shares of Series E Preferred are to be surrendered
for redemption, in the manner and at the price designated, the certificate or
certificates representing the shares of Series E Preferred to be
redeemed.
(c)
Mechanics of
Redemption
. Upon receipt of payment of the Optional Redemption
Price (in the case of an Optional Redemption) or the Change of Control Price (in
the case of the Mandatory Redemption) with respect to each Series E Preferred
Share to be redeemed by the holders of Series E Preferred, each holder of Series
E Preferred will deliver the certificate(s) evidencing the Series E Preferred to
be redeemed by the Corporation, unless such holder is awaiting receipt of a new
certificate evidencing such shares from the Corporation pursuant to another
provision hereof.
(d)
Dividends After Redemption
Date
. No Series E Preferred Share shall be entitled to any
dividends accruing after the date on which Optional Redemption Price (in the
case of an Optional Redemption) or the Change of Control Price (in the case of
the Mandatory Redemption) of such Series E Preferred Share is paid to the holder
of such Series E Preferred Share. On such date, all rights of the
holder of such Series E Preferred Share shall cease, and such Series E Preferred
Share shall no longer be deemed to be issued and outstanding.
Section
7.
Other
Rights
.
(a)
Board
Representation
.
(i) From
and after the Effective Date until the Common Expiration Date, the Majority
Trailer Investors may nominate five directors (collectively, the “
Investor Directors
”)
to be elected to the Board. Any such nominee for Investor Director
shall be subject to (A) the reasonable approval of the Board’s Nominating and
Corporate Governance Committee (the “
Governance
Committee
”) (such approval not to be unreasonably withheld, conditioned
or delayed), and (B) satisfaction of all legal and governance requirements
regarding service as a director of the Corporation;
provided
that the
Corporation shall, at the reasonable request of the Majority Trailer Investors,
so long as such request is not inconsistent with applicable law or exchange
requirements, amend or modify any such requirements so as not to any way impede
the right of the Majority Trailer Investors to nominate directors. On
the Effective Date, the Corporation shall cause the five initial Investor
Directors who are named in Section 4.1 of the Investor Rights Agreement to be
elected and appointed to the Board. The Corporation from time to time
shall take all actions necessary or reasonably required such that the number of
members on the Board shall (1) except as otherwise provided herein, consist of
no more than seven non-Investor Directors, and (2) if necessary, be increased
such that there are sufficient seats on the Board for the Investor Directors to
serve on the Board and such vacancies (the “
Investor Director
Seats
”) shall be filled by the Investor Directors, effective as of the
Effective Date (or, if later, then the date that the Majority Trailer Investors
determine to appoint such Investor Directors). Each Investor Director
appointed pursuant to this
Section 7(a)(i)
shall
continue to hold office until such Investor Director’s term expires, subject,
however, to prior death, resignation, retirement, disqualification or
termination of term of office as provided in
Section
7(a)(iii)
.
(ii) Prior
to the Common Expiration Date, at each meeting of the Corporation’s stockholders
at which the election of directors to the Investor Director Seats is to be
considered, the Corporation shall, subject to the provisions of
Section 7(a)(i)
and
Section
7(a)(iii)
, nominate the Investor Director(s) designated by the Majority
Trailer Investors for election to the Board by the holders of voting capital
stock and solicit proxies from the Corporation’s stockholders in favor of the
election of Investor Directors. Subject to the provisions of
Section 7(a)(i)
and
Section
7(a)(iii)
, the Corporation shall use all reasonable best efforts to cause
each Investor Director to be elected to the Board (including voting all
unrestricted proxies in favor of the election of such Investor Director and
including recommending approval of such Investor Director’s appointment to the
Board) and shall not take any action which would diminish the prospects of such
Investor Director(s) of being elected to the Board.
(iii) The
right of the Majority Trailer Investors to designate the Investor Directors
pursuant to
Section
7(a)(i)
and
Section 7(a)(ii)
shall terminate on the Common Expiration Date. If the right of the
Majority Trailer Investors to nominate Investor Directors terminates pursuant to
the immediately preceding sentence, then each Investor Director shall promptly
submit his or her resignation as a member of the Board and each applicable Sub
Board with immediate effect.
(iv) Any
elected Investor Director may resign from the Board at any time by giving
written notice to the Board. The resignation is effective without
acceptance when the notice is given to the Board, unless a later effective time
is specified in the notice.
(v)
So long as the Majority Trailer Investors retain the right to
designate Investor Directors, the Corporation shall use all reasonable best
efforts to remove any Investor Director only if so directed in writing by the
Majority Trailer Investors.
(vi) In
the event of a vacancy on the Board resulting from the death, disqualification,
resignation, retirement or termination of term of office of an Investor Director
nominated by the Majority Trailer Investors, the Corporation shall use all
reasonable best efforts to fill such vacancy with a representative designated by
the Majority Trailer Investors as provided hereunder, in either case, to serve
until the next annual or special meeting of the stockholders (and at such
meeting, such representative, or another representative designated by the
Majority Trailer Investors, will be elected to the Board in the manner set forth
in
Section
7(a)(ii)
).
(vii) The
Investor Directors and the Board Observer, if any, shall be entitled to
reimbursement of reasonable expenses incurred in such capacities, but shall not
otherwise be entitled to any compensation from the Corporation in such
capacities as Investor Directors or the Board Observer.
(viii) Until
the Majority Trailer Investors cease to hold, or cease to “beneficially own”
(within the meaning of Rule 13d-3 under the Exchange Act) at least 2% of the
issued and outstanding Common Stock of the Corporation, the Majority Trailer
Investors shall have the right to designate one non-compensated, non-voting
observer (the “
Board
Observer
”) to attend all meetings of the Board as an
observer. The Board Observer shall not attend executive sessions or
committee meetings without the consent of the majority of the members of the
Board or committee members;
provided
that the
Board Observer shall be entitled to attend all meetings of the Audit
Committee. The Board Observer shall be entitled to notice of all
meetings of the Board and the Audit Committee in the manner that notice is
provided to members of the Board or the Audit Committee, as applicable, shall be
entitled to receive all materials provided to members of the Board and the Audit
Committee, shall be entitled to attend (whether in person, by telephone, or
otherwise), subject to the restriction set forth in the immediately preceding
sentence, all meetings of the Board and the Audit Committee as a non-voting
observer.
(ix) Subject
to (A) the reasonable approval of the Governance Committee (such approval not to
be unreasonably withheld, conditioned or delayed), and (B) satisfaction of all
legal and governance requirements regarding service as a director or member of
any committee of the Corporation or any of its Subsidiaries, at the request of
the Majority Trailer Investors, the Corporation shall cause the Investor
Directors to have proportional representation (relative to their percentage on
the whole Board, but in no event less than one representative) on the boards (or
equivalent governing body) of each Subsidiary (each, a “
Sub Board
”), and each
committee of the Board (other than the Audit Committee of the Board (the “
Audit Committee
”) to
the extent prohibited by applicable law or exchange requirements but shall allow
one representative to attend meetings of the Audit Committee as a non-voting
observer) and each Sub Board. The Corporation shall at the reasonable
request of the Majority Trailer Investors, so long as such request is not
inconsistent with applicable law or exchange requirements, amend or modify any
requirements regarding service as a director or member of any committee of the
Corporation or any of its Subsidiaries.
(x) The
Corporation shall purchase and maintain directors’ and officers’ liability
insurance policy covering each Investor Director effective from the Effective
Date (or such later date as such Investor Director is appointed pursuant to
Section 7(a)(i)
or
Section
7(a)(ii)
) and shall purchase and maintain for a period of not less than
six years from the date of any Investor Director’s death, resignation,
retirement, disqualification or termination of term of office as provided in
Section
7(a)(iii)
, a directors’ and officers’ liability insurance tail policy for
such Investor Director.
(b)
Approval of the Majority
Trailer Investors
.
(i) From
and after the Effective Date until the Preferred Expiration Date, the
Corporation and the Board shall not, and shall take all action possible to
ensure that each Subsidiary of the Corporation shall not, without the prior
written consent of the Majority Trailer Investors (which consent may be withheld
in their sole discretion) take any of the following actions or engage in any of
the following transactions:
(A) directly
or indirectly declare or make any Restricted Payment except for payments with
respect to the Series E Preferred, Series F Preferred or Series G Preferred
(including, in each case, any redemption thereof) as permitted by the
Certificates of Designation;
(B) authorize,
issue or enter into any agreement providing for the issuance (contingent or
otherwise) of (1) any notes or debt securities containing equity or voting
features (including any notes or debt securities convertible into or
exchangeable for capital stock or other equity securities, issued in connection
with the issuance of capital stock or other equity securities or containing
profit participation features) or (2) any capital stock, other equity securities
or equity-linked securities (or any securities convertible into or exchangeable
for any capital stock or other equity securities), except for the issuance of
the Registrable Securities;
(C) make
any loans or advances to, guarantees for the benefit of, or investments in, any
Person (other than the Corporation or a wholly-owned direct or indirect
Subsidiary of the Corporation), except for (1) reasonable advances to employees
in the ordinary course of business consistent with past practice, (2)
investments having a stated maturity no greater than one year from the date on
which the Corporation or any of its Subsidiaries makes such investment in (a)
obligations of the United States government or any agency thereof or obligations
guaranteed by the United States government, (b) certificates of deposit of
commercial banks having combined capital and surplus of at least
$500 million and fully insured by the Federal Deposit Insurance
Corporation, or (c) commercial paper with a rating of at least “Prime-1” by
Moody’s Investors Service, Inc., and (3) investments expressly permitted
pursuant to
Section
7(b)(i)(E)
;
(D) liquidate,
dissolve or effect a recapitalization or reorganization in any form of
transaction (including any reorganization into a limited liability company, a
partnership or any other non-corporate entity which is treated as a partnership
for federal income tax purposes), unless, in the case of a recapitalization or
reorganization, such transaction would result in a Change of Control and the
Corporation pays to the holders of the Series E Preferred, the Series F
Preferred and the Series G Preferred all amounts then due and owing under the
Series E Preferred, the Series F Preferred and the Series G Preferred (including
the premium payable in connection with any redemption relating to a Change of
Control) prior to or contemporaneous with the consummation of such
transaction;
(E) directly
or indirectly acquire or enter into, or permit any Subsidiary to acquire or
enter into, any interest in any Person, business or joint venture (in each case,
whether by a purchase of assets, purchase of stock, merger or otherwise), except
for acquisitions involving aggregate consideration (whether payable in cash or
otherwise) not to exceed $5,000,000 in the aggregate if, at the time of any such
acquisition, the Corporation and its Subsidiaries have availability for
draw-downs under the Senior Loan Agreement in an amount equal to or exceeding
$20,000,000 and the ratio of the aggregate Indebtedness of the Corporation and
its Subsidiaries as of the most recent month end to the previous twelve-month
EBITDA (as each such term is defined in the Senior Loan Agreement, as in effect
on the Effective Date) (such ratio, the “
Leverage Ratio
”)
after giving effect to such acquisition is less than 6:1;
(F) reclassify
or recapitalize any securities of the Corporation or any of its Subsidiaries,
unless such reclassification or recapitalization would result in a Change of
Control and the Corporation pays to the holders of the Series E Preferred, the
Series F Preferred and the Series G Preferred all amounts then due and owing
under the Series E Preferred, the Series F Preferred and the Series G Preferred
(including the premium payable in connection with any redemption relating to a
Change of Control) prior to or contemporaneous with the consummation of such
reclassification or recapitalization;
(G) enter
into, or permit any Subsidiary to enter into, any line of business other than
the lines of business in which those entities are currently engaged and other
activities reasonably related thereto;
(H) enter
into, amend, modify or supplement any agreement, commitment or arrangement with
any of the Corporation’s or any of its Subsidiaries’ Affiliates, except for
customary employment arrangements and benefit programs on reasonable terms and
except as otherwise expressly contemplated by this Certificate of Designation,
the Investor Rights Agreement or the Purchase Agreement;
(I) create,
incur, guarantee, assume or suffer to exist, or permit any Subsidiary to create,
incur, guarantee, assume or suffer to exist, any Indebtedness, other than (1)
Indebtedness pursuant to the Existing Loan Agreement (and refinancings thereof
in an aggregate principal amount not in excess $100,000,000 on substantially
similar terms), and (2) Indebtedness in an aggregate amount not to exceed
$10,000,000, provided that, in the case of this subclause (2), such Indebtedness
is created, incurred, guaranteed, assumed or suffered to exist solely to satisfy
the Corporation’s and its Subsidiaries’ working capital requirements and the
interest rate per annum applicable to such Indebtedness does not exceed 9% and
the Leverage Ratio after giving effect to such creation, incurrence, guaranty,
assumption of sufferance does not exceed 3:1;
(J)
(A) engage in any
transaction that results in a Change of Control unless
the Corporation
pays to the holders of
the Series E Preferred,
the Series F Preferred and the Series G Preferred
all amounts then due
and owing under
the
Series E Preferred, the Series F Preferred and the Series G Preferred
(including the premium payable in connection with any redemption relating
to a Change of Control) prior to or contemporaneous with the consummation of
such transaction
, or
(B)
sell, lease or otherwise dispose of more than 2% of the consolidated
assets of the Corporation and its Subsidiaries (computed on the basis of book
value, determined in accordance with GAAP, or fair market value, determined by
the Board in its reasonable good faith judgment) in any transaction or series of
related transactions, other than (1) sales of inventory in the ordinary course
of business, (2)
the
arm’s length
sale to a third Person
that is not an Affiliate of the Corporation or any of its Subsidiaries of the
real estate and manufacturing facilities of the Corporation that have been
previously identified to Trailer, and (3) in the event that such transaction
would result in a Change of Control and the Corporation pays to the holders of
the Series E
Preferred, the Series F Preferred and the Series G Preferred
all amounts
then due and owing under
the Series E Preferred,
the Series F Preferred and the Series G Preferred
(including the premium
payable in connection with any redemption relating to a Change of Control) prior
to or contemporaneous with the consummation of such transaction;
(K)
become
subject to any agreement or instrument which by its terms would (under any
circumstances) restrict (A) the right of any Subsidiary to make loans or
advances or pay dividends to, transfer property to, or repay any Indebtedness
owed to, the Corporation or any Subsidiary or (B) restrict the Corporation’s or
any of its Subsidiaries’ right or ability to perform the provisions of this
Certificate of Designation, the Investor Rights Agreement or any of the other
Transaction Documents or to conduct its business as conducted as of
the
Effective
Date
;
(L) make
any amendment to or rescind (including, in each case, by merger or
consolidation) any provision of the certificate of incorporation, articles of
incorporation, by-laws or similar organizational documents of the Corporation or
any of its Subsidiaries, or file any resolution of the board of directors, board
of managers or similar governing body with the applicable secretary of state of
the state of formation of the Corporation or any of its Subsidiaries which would
increase the number of authorized shares of Common Stock or Preferred Stock or
adversely affect or otherwise impair the rights of the Investors under the
Transaction Documents (including the relative preferences and priorities of the
Series E Preferred, the Series F Preferred or the Series G Preferred);
or
(M) (1)
increase the size of the Board or any Sub Board or (2) create or change any
committee of the Board or any Sub Board.
(ii) If
the Corporation violates or is in breach of the Financial Performance Levels,
until the Preferred Expiration Date, the Corporation and the Board shall not,
and shall take all action possible to ensure that each Subsidiary of the
Corporation shall not, without the prior written consent of the Majority Trailer
Investors (which consent may be withheld in their sole discretion) take any of
the following actions or engage in any of the following
transactions:
(A) approve
the annual budget of the Corporation and its Subsidiaries for any fiscal year or
deviate from any annual budget by more than 10% in the aggregate;
or
(B) approve
the employment or termination by the Board of any member of senior management of
the Corporation.
(c)
Affirmative
Covenants
. From and after the Effective Date until the
Preferred Expiration Date, the Corporation and the Board shall, and shall take
all action possible to ensure that each Subsidiary of the Corporation shall,
unless it has received the prior written consent of the Majority Trailer
Investors (which consent may be withheld in their sole discretion):
(i) at
all times cause to be done all things necessary or reasonably required to
maintain, preserve and renew its corporate existence and all material licenses,
authorizations and permits necessary or reasonably required to the conduct of
its businesses;
(ii) maintain
and keep its material properties in good repair, working order and condition
(normal wear and tear excepted), and from time to time make all necessary or
reasonably required repairs, renewals and replacements so that its businesses
may be properly and advantageously conducted in all material respects at all
times;
provided
that in no event shall this
Section 7(d)(ii)
be
deemed to require the making of capital expenditures in excess of the amount
approved by the Board;
(iii) pay
and discharge when payable all taxes, assessments and governmental charges
imposed upon its properties or upon the income or profits therefrom (in each
case, before the same becomes delinquent and before penalties accrue thereon)
and all material claims for labor, materials or supplies which if unpaid would
by law become a Lien upon any of its property, unless and to the extent that the
same are being contested in good faith and by appropriate proceedings and
adequate reserves (as determined in accordance with generally accepted
accounting principles, consistently applied) have been established on its books
and financial statements with respect thereto;
(iv) comply
with all other material obligations which it incurs pursuant to any Material
Contract (as such term is defined in the Purchase Agreement), as such
obligations become due, unless and to the extent that the same are being
contested in good faith and by appropriate proceedings and adequate reserves (as
determined in accordance with generally accepted accounting principles,
consistently applied) have been established on its books and financial
statements with respect thereto;
(v)
comply with all applicable laws, rules and regulations of all
governmental authorities in all material respects;
(vi) apply
for and continue in force with reputable insurance companies adequate insurance
covering risks of such types and in such amounts as are customary for companies
of similar size as the Corporation and its Subsidiaries and engaged in similar
lines of business as the Corporation and its Subsidiaries;
(vii) maintain
proper books of record and account which present fairly in all material respects
its financial condition and results of operations and make provisions on its
financial statements for all such proper reserves as in each case are required
in accordance with GAAP; and
(viii) reserve
and keep available out of the authorized but unissued shares of Common Stock,
solely for the purpose of providing for the exercise of the Warrant, such number
of shares of Common Stock as shall from time to time equal the number of shares
sufficient to permit the exercise of the Warrant.
(d)
Informa
tion
Rights
.
(i) For
so long as (x) the Preferred Investors hold at least 10% of the Preferred Stock
issued pursuant to the Purchase Agreement or (y) the Common Investors in the
aggregate hold, or “beneficially own” (within the meaning of Rule 13d-3 under
the Exchange Act) at least 10% of the issued and outstanding Common Stock of the
Corporation, at any time that the Corporation is not required to file periodic
reports with the SEC, the Corporation shall deliver to each Preferred Investor
and/or Common Investor, as applicable:
(A) as
soon as practicable, but in any event within ninety days after the end of each
fiscal year of the Corporation, for each of the Corporation and each of its
Subsidiaries, an income statement for such fiscal year, a balance sheet, and
statement of stockholder’s equity as of the end of such fiscal year, and a
statement of cash flows for such fiscal year, such year-end financial reports to
be in reasonable detail, prepared in accordance with GAAP, and audited and
certified by a nationally recognized accounting firm selected by the Corporation
and reasonably acceptable to the Majority Common Investors;
(B) as
soon as practicable, but in any event within thirty days after the end of each
of the first three quarters of each fiscal year of the Corporation, for the
Corporation and each of its Subsidiaries, an unaudited income statement for such
quarter, statement of cash flows for such quarter and an unaudited balance sheet
as of the end of such quarter;
(C) as
promptly as practicable but in any event within thirty days of the end of each
month, an unaudited income statement and statement of cash flows for such month,
and a balance sheet for and as of the end of such month, in reasonable
detail;
(D) with
respect to the financial statements called for in subsections (B) and (C) of
this
Section
7(d)(i)
, an instrument executed by the Chief Financial Officer or Chief
Executive Officer of the Corporation and certifying that such financial
statements were prepared in accordance with GAAP consistently applied with prior
practice for earlier periods (with the exception of footnotes that may be
required by GAAP) and fairly present in all material respects the financial
condition of the Corporation and its Subsidiaries and its results of operation
for the period specified, subject to year-end audit adjustment;
(E) notices
of events that have had or could reasonably be expected to have a material and
adverse effect on the Corporation and its Subsidiaries, taken as a whole, as
soon as practicable following the occurrence of any such event; and
(F) such
other information relating to the financial condition, business, prospects or
corporate affairs of the Corporation and its Subsidiaries as any Preferred
Investor or Common Investor may from time to time reasonably
request.
(ii) Notwithstanding
the foregoing, at all times, the Corporation shall use commercially reasonable
efforts to deliver the financial statements listed
Section 7(d)(i)(A)
,
Section
7(d)(i)(B)
and
Section 7(d)(i)(C)
promptly after such statements are internally available.
(iii) For
so long as (A) the Preferred Investors hold at least 10% of the Preferred Stock
issued pursuant to the Purchase Agreement or (B) the Common Investors in the
aggregate hold, or “beneficially own” (within the meaning of Rule 13d-3 under
the Exchange Act) at least 10% of the issued and outstanding Common Stock of the
Corporation, (a) the Corporation shall permit each Preferred Investor and/or
Common Investor, as applicable, together with such Investor’s consultants and
advisors, to visit and inspect the Corporation’s and its Subsidiaries’
properties, to examine their respective books of account and records and to
discuss the Corporation’s and its Subsidiaries’ affairs, finances and accounts
with their respective officers and employees, all at such reasonable times as
may be requested by such Investor, and (b) the Corporation shall, with
reasonable promptness, provide to each Preferred Investor and/or Common
Investor, as applicable, such other information and financial data concerning
the Corporation and its Subsidiaries as such Investor may reasonably
request.
(iv) For
so long as (A) the Trailer Investors hold at least 10% of the Preferred Stock
issued pursuant to the Purchase Agreement or (B) the Trailer Investors in the
aggregate hold, or “beneficially own” (within the meaning of Rule 13d-3 under
the Exchange Act) at least 10% of the issued and outstanding Common Stock of the
Corporation, the Corporation shall pay the reasonable fees and expenses of any
consultant or professional advisor that the Majority Trailer Investors may
engage in connection with the Trailer Investors’ interests in the
Corporation.
(v) For
so long as (A) the Preferred Investors hold at least 10% of the Preferred Stock
issued pursuant to the Purchase Agreement or (B) the Common Investors in the
aggregate hold, or “beneficially own” (within the meaning of Rule 13d-3 under
the Exchange Act) at least 10% of the issued and outstanding Common Stock of the
Corporation, the Corporation shall provide to each Preferred Investor and/or
Common Investor, as applicable, not later than thirty days before the beginning
of each fiscal year of the Corporation, but in any event, ten days prior to
presenting such budget to the Board, an annual budget prepared on a monthly
basis for the Corporation and its Subsidiaries for such fiscal year (displaying
anticipated statements of income and cash flows and balance sheets), and
promptly upon preparation thereof any other significant budgets or forecasts
prepared by the Corporation and any revisions of such annual or other budgets or
forecasts.
(e)
Right Of First
Refusal
.
(i) From
and after the Closing Date until the Preferred Expiration Date, the Trailer
Investors shall have the right, at their election in accordance with this
Section 7(e)
, to
participate in any Subsequent Financing. The Trailer Investors may
elect to provide all or any portion of the Subsequent Financing.
(ii) At
least forty-five days prior to the anticipated consummation of any Subsequent
Financing, the Corporation shall deliver a written notice (each, a “
Subsequent Financing
Notice
”) to each Trailer Investor. The Subsequent Financing
Notice shall disclose in reasonable detail the proposed terms and conditions of
the Subsequent Financing, the amount of proceeds intended to be raised
thereunder and the identity, and ownership of capital stock of the Corporation
(if applicable), of any other prospective participants in such Subsequent
Financing, and shall include a term sheet or similar document relating thereto
as an attachment. The Subsequent Financing Notice shall constitute a
binding offer to enter into the Subsequent Financing with each Trailer Investor
on the terms and conditions set forth in such Subsequent Financing
Notice.
(iii) Each
Trailer Investor may elect to participate in such Subsequent Financing and shall
have the right, subject to
Section 7(e)(v)
below, to fund all or any portion of the Subsequent Financing on the terms and
subject to the conditions specified in the Subsequent Financing Notice by
delivering written notice of such election to the Corporation within forty days
after the delivery of the Subsequent Financing Notice to the Trailer Investors
(the “
Election
Period
”). If the Trailer Investors elect to participate in the
Subsequent Financing, then the closing of the Subsequent Financing shall occur
on the date specified in the Subsequent Financing Notice or on such other date
as otherwise may be agreed by the Corporation and the Trailer Investors
participating in such Subsequent Financing. If the Trailer Investors
fail to deliver such election notices prior to the end of the Election Period,
then the Trailer Investors shall be deemed to have notified the Corporation that
they do not elect to participate in such Subsequent Financing.
(iv) If
any Trailer Investor declines to participate in the Subsequent Financing with
respect to its full Pro Rata Portion, then each Trailer Investor electing to
purchase its full Pro Rata Portion shall have the right to purchase up to (A)
its Pro Rata Portion of the Subsequent Financing, plus (B) a pro rata amount
(based upon the relative amount of the participating Trailer Investors’
respective Pro Rata Portions) of the aggregate unallocated Pro Rata Portions of
the other Trailer Investors. For purposes of clarity, (1) in the
event that there is any amount of a Subsequent Financing that is not requested
to be purchased by a Trailer Investor, then any other Trailer Investor shall
have the right to purchase such remaining amount of the Subsequent Financing and
(2) in no event shall the Trailer Investors have the right to purchase more than
100% of the amount the Subsequent Financing described in any Subsequent
Financing Notice, in the aggregate. For purposes hereof, “
Pro Rata Portion
”
means a fraction, the numerator of which is the Total Value of Securities held
by a Trailer Investor participating under this
Section 7(e)(iv)
, and
the denominator of which is the sum of the aggregate Total Value of Securities
held by all Trailer Investors participating under this
Section
7(e)(iv)
.
(v)
If any portion of a Subsequent Financing is not funded by the Trailer Investors
or the Person identified in the Subsequent Financing Notice within sixty days
after the delivery of the relevant Subsequent Financing Notice to the Trailer
Investors on the same terms described in such Subsequent Financing Notice, then
prior to consummating any subsequent Subsequent Financing, the Corporation must
deliver a new Subsequent Financing Notice to the Trailer Investors and otherwise
follow the procedures set forth in this
Section 7(e)
(and,
for the avoidance of doubt, the Trailer Investors will again have the right of
participation set forth above in this
Section
7(e)
).
(vi) Notwithstanding
any other provision in this Certificate of Designation to the contrary, the
Trailer Investors’ rights to participate in any Subsequent Financing shall be
subject to such participation not causing a violation of the NYSE Limitation;
provided
,
however
, that the
Corporation shall use all commercially reasonable efforts to discuss and explore
ways to enable the Trailer Investors to participate in any Subsequent Financing
in compliance with the NYSE Limitation.
(vii) Upon
reasonable prior notice, the Corporation shall make available, during normal
business hours, for inspection and review by the Trailer Investors and the
representatives of and advisors to the Trailer Investors, all financial and
other records, all SEC Filings and other filings with the SEC, and all other
corporate documents and properties of the Corporation as may be reasonably
necessary for the purpose of such review, and cause the Corporation’s officers,
directors and employees, within a reasonable time period, to supply all such
information reasonably requested by the Trailer Investors or any such
representative or advisor, in each case, for the sole purpose of enabling the
Trailer Investors and such representatives and advisors and their respective
accountants and attorneys to conduct due diligence with respect to the
Corporation in connection with such Subsequent Financing.
(viii) The
Corporation shall not disclose material non-public information to the Trailer
Investors, or to advisors to or representatives of the Trailer Investors, unless
prior to disclosure of such information the Corporation identifies such
information as being material non-public information and provides the Trailer
Investors, such advisors and representatives with the opportunity to accept or
refuse to accept such material non-public information for review and any Trailer
Investor wishing to obtain such information enters into an appropriate
confidentiality agreement with the Corporation with respect thereto; provided,
however, that the foregoing shall not restrict the Corporation from disclosing
material non-public information to any director or Board Observer, or to their
advisors or representatives.
Section
8.
Events of Nonc
ompliance
.
(a)
Definition
. An
“
Event of
Noncompliance
” shall have occurred if:
(i)
the Corporation fails to make any regular quarterly payment of dividends
in cash with respect to the Series E Preferred, beginning with the September 30,
2011 Dividend Payment Date;
(ii)
the Corporation fails to make any redemption payment with respect to the
Series E Preferred which it is required to make hereunder, whether or not such
payment is legally permissible or is prohibited by any agreement to which the
Corporation is subject;
(iii) the
Corporation breaches or otherwise fails to perform or observe any covenant or
agreement set forth in
Section 7
hereof or
Article II of the Investor Rights Agreement and, if such breach, failure or
Event of Noncompliance, as applicable, is capable of being cured, such breach or
failure continues for a period of thirty days or longer;
(iv) any
representation or warranty contained in Section 3.2, 3.3 or 3.4 of the Purchase
Agreement was not true and correct in all respects, at and as of the Issuance
Date;
(v)
the Corporation violates or is in breach of the Financial
Performance Levels (as defined in the Investor Rights Agreement) and such
violation continues for a period of one hundred eighty days or longer;
or
(vi) the
Corporation or any Subsidiary makes an assignment for the benefit of creditors
or admits in writing its inability to pay its debts generally as they become
due; or an order, judgment or decree is entered adjudicating the Corporation or
any of its Subsidiaries bankrupt or insolvent; or any order for relief with
respect to the Corporation or any of its Subsidiaries is entered under the
Federal Bankruptcy Code; or the Corporation or any of its Subsidiaries petitions
or applies to any tribunal for the appointment of a custodian, trustee, receiver
or liquidator of the Corporation or any of its Subsidiaries or of any
substantial part of the assets of the Corporation or any of its Subsidiaries, or
commences any proceeding (other than a proceeding for the voluntary liquidation
and dissolution of a Subsidiary of the Corporation) relating to the
Corporation or any of its Subsidiaries under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation law of
any jurisdiction; or any such petition or application is filed, or any such
proceeding is commenced, against the Corporation or any of its Subsidiaries and
either (A) the Corporation or any such Subsidiary by any act indicates its
approval thereof, consent thereto or acquiescence therein or (B) such petition,
application or proceeding is not dismissed within sixty days.
The
foregoing shall constitute Events of Noncompliance whatever the reason or cause
for any such Event of Noncompliance and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body and regardless of the effects of any subordination
provisions.
(b)
Consequences of Events of
Noncompliance
.
(i)
If any Event of Noncompliance has occurred and is continuing, then
the dividend rate on the Series E Preferred from and after the occurrence of
such Event of Noncompliance shall increase immediately by an additional 2.0% per
annum, subject to applicable usury laws; provided, that if the Event of
Noncompliance is related to the non payment of the cash dividends beginning with
the September 30, 2011 Dividend Payment Date (whether or not the Corporation is
legally able to pay the dividends), the dividend rate shall automatically
increase to (A) the higher of (X) the then prevailing dividend rate and (Y) the
then prevailing LIBOR rate plus 14.7%
plus
2.0% per
annum. Any increase of the dividend rate resulting from the operation
of this subparagraph shall terminate as of the close of business on the date on
which no Event of Noncompliance exists, subject to subsequent increases pursuant
to this paragraph.
(ii)
If any Specified Event of Noncompliance has occurred and is continuing,
then the holder or holders of a majority of the Series E Preferred then
outstanding may demand (by written notice delivered to the Corporation), subject
to any limitations contained in the Senior Credit Agreement, immediate
redemption of all or any portion of the Series E Preferred owned by such holder
or holders at a price per Series E Preferred Share equal to the sum of the
Liquidation Value thereof and all accumulated, accrued and unpaid dividends
thereon (whether accrued with respect to the Liquidation Value or any previously
accrued dividends). The Corporation shall give prompt written notice
of such election to the other holders of Series E Preferred (but in any event
within five days after receipt of the initial demand for redemption), and each
such other holder may demand immediate redemption of all or any portion of such
holder’s Series E Preferred by giving written notice thereof to the Corporation
within seven days after receipt of the Corporation’s notice. The
Corporation shall redeem all Series E Preferred as to which rights under this
paragraph have been exercised within twenty days after receipt of the initial
demand for redemption.
(iii) If
any Event of Noncompliance exists, each holder of Series E Preferred shall also
have any other rights which such holder is entitled to under any contract or
agreement at any time and any other rights which such holder may have pursuant
to applicable law.
Section
9.
Conversion
. Holders
of Series E Preferred shall have no right to exchange or convert such shares
into any other securities.
Section
10.
Voting
Rights
. Except as otherwise provided herein, in the Investor
Rights Agreement and as otherwise required by applicable law, the Series E
Preferred Shares shall have no voting rights;
provided
that each
holder of Series E Preferred shall be entitled to notice of all stockholders
meetings at the same time and in the same manner as notice is given to all
stockholders entitled to vote at such meetings.
Section
11.
Amendment and
Waiver
. No amendment, modification or waiver shall be binding
or effective with respect to any provision of the Certificate of Incorporation
or the Bylaws that would alter or change the preferences or special rights of
the Series E Preferred Shares without the prior written consent of the holders
of a majority of the Series E Preferred Shares outstanding at the time such
action is taken;
pro
vided
that no such
action shall change (a) the rate at which or the manner in which dividends on
the Series E Preferred accrue or the times at which such dividends become
payable or the amount payable on redemption of the Series E Preferred or the
times at which redemption of Series E Preferred is to occur, or (b) the
percentage required to approve any change described in this
Section 1
1
without the prior
written consent of the holders of at least 75% of the Series E Preferred then
outstanding; and
provided
further
that no
amendment, modification, alteration, repeal or waiver of the terms or relative
priorities of the Series E Preferred may be accomplished by the merger,
consolidation or other transaction of the Corporation with another corporation
or entity unless the Corporation has obtained the prior written consent of the
holders of the applicable percentage of the Series E Preferred then
outstanding.
Section
12.
Registration of
Transfer
. The Corporation shall keep at its principal office a
register for the registration of Series E Preferred Shares. Except in
connection with Optional Redemption, Mandatory Redemption or as otherwise set
forth herein, upon the surrender of any certificate representing Series E
Preferred Shares at such place, the Corporation shall, at the request of
the record holder of such certificate, execute and deliver (at the Corporation’s
expense) a new certificate or certificates in exchange therefor representing in
the aggregate the number of shares of Series E Preferred Shares represented by
the surrendered certificate. Each such new certificate shall be
registered in such name and shall represent such number of Series E Preferred
Shares as is requested by the holder of the surrendered certificate and shall be
substantially identical in form to the surrendered certificate, and dividends
shall accrue on the Series E Preferred Shares represented by such new
certificate from the date to which dividends have been fully paid on such Series
E Preferred Shares represented by the surrendered certificate.
Section
13.
Record
Holders
. To the fullest extent permitted by applicable law,
the Corporation and the transfer agent for Series E Preferred may deem and treat
the record holder of any share of Series E Preferred as the true and lawful
owner thereof for all purposes, and neither the Corporation nor such transfer
agent shall be affected by any notice to the contrary.
Section
14.
Replacement
. Upon
receipt of evidence reasonably satisfactory to the Corporation (an affidavit of
the registered holder shall be satisfactory) of the ownership and the loss,
theft, destruction or mutilation of any certificate evidencing shares of Series
E Preferred, and in the case of any such loss, theft or destruction, upon
receipt of indemnity reasonably satisfactory to the Corporation (provided that
if the holder is a financial institution or other institutional investor its own
agreement shall be satisfactory), or, in the case of any such mutilation upon
surrender of such certificate, the Corporation shall (at its expense) execute
and deliver in lieu of such certificate a new certificate of like kind
representing the number of shares of Series E Preferred represented by such
lost, stolen, destroyed or mutilated certificate and dated the date of such
lost, stolen, destroyed or mutilated certificate.
Section
15.
R
edeemed or Otherwise
Acquired Shares
. Any shares of Series E Preferred that are
redeemed or otherwise acquired by the Corporation by reason of repurchase,
conversion or otherwise shall be automatically and immediately canceled and
shall revert to authorized but unissued shares of Preferred Stock, provided,
that any such cancelled shares of Series E Preferred shall not be reissued, sold
or transferred as shares of Series E Preferred. The Corporation (without the
need for stockholder action) may thereafter take such appropriate action as may
be necessary to reduce the authorized shares of Series E Preferred
accordingly.
Section
16.
Notices
. Except
as otherwise expressly provided hereunder, all notices referred to herein shall
be in writing and shall be delivered by registered or certified mail, return
receipt requested and postage prepaid, or by reputable overnight courier
service, charges prepaid, and shall be deemed to have been given when so mailed
or sent (a) to the Corporation, at its principal executive offices, and (b) to
any holder of Series E Preferred, at such holder’s address as it from time to
time appears in the stock records of the Corporation (unless otherwise indicated
by any such holder). Notwithstanding anything herein to the contrary,
if Series E Preferred is issued in book-entry form through The Depository Trust
Company or any similar facility, such notices may be given to the holders of
Series E Preferred in any manner permitted by such facility.
Section
17.
Specific
Performance
. The Corporation hereby acknowledges and agrees
that the failure of the Corporation to perform its obligations hereunder,
including its failure to pay dividends when due and payable, will cause
irreparable injury to the holder of the Series E Preferred, for which damages,
even if available, will not be an adequate remedy. Accordingly, the
Corporation hereby consents to the issuance of injunctive relief by any court of
competent jurisdiction to compel performance of the Corporation’s obligations
and to the granting by any court of the remedy of specific performance of its
obligations hereunder.
Section
18.
No Preemptive
Rights
. Except as set forth in the Investor Rights Agreement,
no share of Series E Preferred shall have any rights of preemption whatsoever as
to any securities of the Corporation, or any warrants, rights or options issued
or granted with respect thereto, regardless of how such securities, or such
warrants, rights or options, may be designated, issued or granted.
Section
19.
Limitations under Senior
Loan Agreement
. Except for payments for which there is an
express provision herein for restrictions related to the Senior Loan Agreement,
in the event a payment is required to be made by the Corporation hereunder and
such payment (or a portion thereof) would not be permitted to be paid pursuant
to the terms of the Senior Loan Agreement, the Corporation shall not be in
default with respect to non-payment of such payment or the portion thereof, in
each case that is not so permitted (the “
Deferred
Portion
”). The Deferred Portion shall accrue and accumulate at
an annual interest rate equal to the JPMorgan Chase Prime rate (or that of
another nationally recognized financial institution if the JPMorgan Chase Prime
rate is not available) (unless another rate and method of calculation is
provided for herein) until paid and shall become immediately due and payable at
the earliest to occur of (a) when permitted by the Senior Loan Agreement and (b)
when all loans under the Senior Loan Agreement have been paid off.
Section
20.
Other
Terms
. Shares of Series E Preferred shall be subject to the
other terms, provisions and restrictions set forth in the Certificate of
Incorporation with respect to the shares of Preferred Stock of the
Corporation.
Section
21.
Indemnity;
Expenses
.
(a) The
Corporation shall indemnify, exonerate and hold each of the holders of Series E
Preferred (each, an “
Indemnified Person
”)
free and harmless from and against any and all actions, causes of action, suits,
claims, liabilities, losses, damages and costs and out-of-pocket expenses in
connection therewith (including reasonable attorneys’ and accountants’ fees and
expenses) incurred by the Indemnified Persons or any of them before or after the
Date of Issuance (collectively, the “
Indemnified
Liabilities
”), as a result of, arising out of, or in any way relating to
(i) the operations of the Corporation or any of its Subsidiaries or (ii) its
capacity as a stockholder or owner of securities of the Corporation (including
litigation related thereto); in each case excluding any loss in value of any
investment in the Corporation by any Indemnified Person;
provided
that if and
to the extent that the foregoing undertaking may be unavailable or unenforceable
for any reason, the Corporation will make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. The rights of any Indemnified
Person to indemnification hereunder will be in addition to any other rights any
such Person may have under any other agreement or instrument referenced above or
any other agreement or instrument to which such Indemnified Person is or becomes
a party or is or otherwise becomes a beneficiary or under law or
regulation. None of the Indemnified Persons shall in any event be
liable to the Corporation, any of its Subsidiaries, or any of their respective
affiliates for any act or omission suffered or taken by such Indemnified
Person.
(b) All
reasonable costs and expenses incurred by any holder of Series E Preferred
(i) in exercising or enforcing any rights afforded to such holder under
this Certificate of Designation or the other Transaction Documents, (ii) in
amending, modifying, or revising this Certificate of Designation or any other
Certificate of Designation, the Investor Rights Agreement or the Warrant, or
(iii) in connection with any transaction, claim, or event which such holder
reasonably believes affects the Corporation and as to which such holder seeks
the advice of counsel, shall be paid or reimbursed by the
Corporation.
B. Definitions.
The
following terms shall have the meanings specified:
“
Affiliate
” means (i)
with respect to the Corporation, (A) any other Person (other than the
Subsidiaries of the Corporation) which directly or indirectly through one or
more intermediaries Controls, is Controlled by, or is under common Control with,
such Person, (B) any Person that owns more than 5% of the outstanding stock of
the Corporation, and (C) any officer, director or employee of the Corporation,
its Subsidiaries or any Person described in subclause (A) or (B) above with a
base salary in excess of $100,000 per year or with any individual related by
blood, marriage or adoption to such officer, director or employee, and (ii) with
respect to any Person other than the Corporation, any other Person which
directly or indirectly through one or more intermediaries Controls, is
Controlled by, or is under common Control with, such first Person.
“
Audit Committee
” has
the meaning set forth in
Article Third
,
Section 7(a)(ix)
hereof.
“
Board
” has the
meaning set forth in
Article
Second
hereof.
“
Board Observ
er
” has the meaning
set forth in
Article
Third
,
Section
7(a)(viii)
hereof.
“
Business Day
” means
any day except Saturday, Sunday and any day on which banking institutions in the
State of New York generally are authorized or required by law or other
governmental actions to close.
“
Bylaws
” means the
amended and restated bylaws of the Corporation, as they may be amended from time
to time.
“
Certificate of
Incorporation
” has the meaning set forth in
Article
Second
hereof.
“
Certificate of
Designation
” means the this Certificate of Designation, the Series F
Certificate of Designation or the Series G Certificate of Designation, as
applicable, and “
Certificates of
Designation
” means each of the foregoing, collectively.
“
Change of Control
”
means (i) any sale or other disposition of all or substantially all of the
assets of the Corporation and its Subsidiaries on a consolidated basis in any
transaction or series of related transactions, (ii) any sale, transfer or
issuance or series of related sales, transfers and/or issuance of shares of the
Corporation’s capital stock by the Corporation or any holder thereof which
results in any single Person or group (as defined in Rule 13d-5 of the Exchange
Act) other than Trailer or any of its Affiliates becoming the beneficial owners
of greater than 50.0% of the Corporation’s issued and outstanding Common Stock,
(iii) any merger or consolidation to which the Corporation is a party unless
after giving effect to such merger no single Person or group (as defined in Rule
13d-5 of the Exchange Act) other than other than Trailer or any of its
Affiliates is beneficial owner of capital stock of the Corporation possessing
the voting power (under ordinary circumstances) to elect a majority of the Board
or the surviving Person’s board of directors (or similar governing body) or
becomes the beneficial owner of greater than 50.0% of the Corporation’s or such
surviving Person’s issued and outstanding Common Stock, (iv) any sale, transfer,
issuance or series of related sales, transfers and/or issuances of shares of the
Corporation’s capital stock by the Corporation or any holder thereof which
results in Trailer or any of its Affiliates acquiring all of the Corporation’s
issued and outstanding Common Stock (other than any portion agreed by any holder
of Common Stock to be rolled over or invested in an Affiliate of Trailer in
connection with such acquisition) or a “going private” transaction of the
Corporation that is led by Trailer or any of its Affiliates, or (v) a merger or
consolidation with or into another Person, pursuant to which the holders of
equity or equity linked instruments of the Corporation at the time of the
execution of the agreement to merge or consolidate own less than 80% of the
total equity of the Person surviving or resulting from the merger or
consolidation, or of a Person owning a majority of the total equity of such
surviving or resulting Person.
“
Change of Control
Price
” has the meaning set forth in
Article Third
,
Section 6(b)(i)
hereof.
“
Common Expiration
Date
” means the date on which the Trailer Investors cease to hold, or
cease to “beneficially own” (within the meaning of Rule 13d-3 under the Exchange
Act) at least 10% of the issued and outstanding Common Stock of the
Corporation.
“
Common Investors
”
means, collectively, (a) the Trailer Investors, to the extent that the Trailer
Investors then hold the Warrant and/or any Registrable Securities, and (b) the
Investors who beneficially own a number of Registrable Securities (including,
for this purpose, Registrable Securities issuable upon exercise of a Warrant
then held by each such Investor) equal to or greater than one-third of the
Registrable Securities that were issuable pursuant to the Warrant on the
Effective Date.
“
Common Stock
” means,
collectively, the shares of the Corporation’s Common Stock, par value $0.01 per
share.
“
Control
” (including
the terms “Controlling,” “Controlled by” or “under common Control with”) means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
“
Corporation
” has the
meaning set forth in
Article First
hereof.
“
Dividend Payment
Date
” has the meaning set forth in
Article Third
,
Section 3(d)
hereof.
“
Dividend Period
”
means the period from, and including, the initial Issuance Date to, but not
including, the first Dividend Payment Date following the Issuance Date and
thereafter, each quarterly period from, and including, the Dividend Payment Date
to, but not including, the next Dividend Payment Date.
“
Dividend Rate
” has
the meaning set forth in
Article Third
,
Section 3(c)
hereof.
“
Effective Date
” means
August 3, 2009.
“
Election Period
” has
the meaning set forth in
Article Third
,
Section 7(f)(iii)
hereof.
“
Event of
Noncompliance
” has
the meaning set forth in
Article Third
,
Section 8(a)
hereof.
“
Exchange Act
” means
the United States Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“
Existing Loan
Agreement
” has the meaning set forth in the definition of Senior Loan
Agreement.
“
Fair Market Value
”
means, for the purposes of valuing the Common Stock, the average of the closing
prices of the Common Stock on the New York Stock Exchange reporting system or on
the principal stock exchange where Common Stock is traded (as reported in
The Wall Street Journal
) for
a period of five days consisting of, for the purposes of
Article Third
,
Section 7(e)
, the
date on which the Subsequent Financing Notice is delivered and the four
consecutive trading days prior to such date;
provided
that if the
Common Stock is not traded on any exchange or over-the-counter market, then the
Fair Market Value shall be jointly determined in good faith by the Board and the
Majority Common Investors.
“
Financial Performance
Levels
” means any financial covenant (as such term is commonly understood
with respect to credit agreements) as may be in force from time to time under
the Senior Loan Agreement after the relevant test contained in such financial
covenant has been modified by 5% in favor of the Corporation and its
Subsidiaries.
“
GAAP
” means United
States generally accepted accounting principles, consistently applied, as in
effect from time to time.
“
Governance Committee
”
has the meaning set forth in
Article T
hird
,
Section 7(a)(i)
hereof.
“
Indebtedness
” means,
without duplication, all obligations (including all obligations for principal,
interest, premiums, penalties, fees, and breakage costs) of the Corporation and
its Subsidiaries (i) in respect of indebtedness for money borrowed (whether
current, short-term or long-term, secured or unsecured, and including all
overdrafts and negative cash balances) and indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which the
Corporation or any of its Subsidiaries is responsible or liable; (ii) issued or
assumed as the deferred purchase price of property or services, all conditional
sale obligations and all obligations under any title retention agreement (but
excluding trade accounts payable and other accrued current liabilities arising
in the ordinary course of business); (iii) under leases required to be
capitalized in accordance with GAAP; (iv) secured by a Lien against any of its
property or assets; (v) for bankers’ acceptances or similar credit transactions
issued for the account of the Corporation or any of its Subsidiaries; (vi) under
any currency or interest rate swap, hedge or similar protection device; (vii)
under any letters of credit, performance bonds or surety obligations; (viii)
under any capital debts, deferred maintenance capital expenditures,
distributions payable or income taxes payable; and (ix) in respect of all
obligations of other Persons of the type referred to in clauses (i) through
(viii) the payment of which the Corporation or any of its Subsidiaries is
responsible or liable, directly or indirectly, as obligor, guarantor, surety or
otherwise, including guarantees of such obligations.
“
Indemnified
Liabilities
” has the meaning set forth in
Article Third
,
S
ection 20(a)
hereof.
“
Indemnified Person
”
has the meaning set forth in
Article Third
,
Section 20(a)
hereof.
“
Investor Director
Seats
” has the meaning set forth in
Article Third
,
Section 7(a)(i)
hereof.
“
Investor Directors
”
has the meaning set forth in
Arti
cle Third
,
Section 7(a)(i)
hereof.
“
Investor Rights
Agreement
” means that certain Investor Rights Agreement, dated as of the
Effective Date, by and between the Corporation and Trailer Investments, LLC, as
such agreement may from time to time be amended, supplemented or otherwise
modified in accordance with its terms.
“
Investor
” or “
Investors
” means, as
applicable, Trailer and/or any of its Permitted Transferees.
“
Issuance Date
” has
the meaning set forth in
Article Third
,
Section 3(c)
hereof.
“
Lien
” means any
mortgage, pledge, lien, deed of trust, conditional sale or other title retention
agreement, charge or other security interest or encumbrance securing obligations
for the payment of money.
“
Junior
Stock
” means, collectively, the Common Stock and any capital
stock or other equity security of the Corporation that (i) does not expressly
provide that it ranks senior in preference or priority to or on parity with the
Series E Preferred Shares, or (ii) was not approved by the holders of a majority
of the Series E Preferred Shares then outstanding, except for the Series E
Preferred, the Series F Preferred and the Series G Preferred.
“
Leverage Ratio
” has
the meaning set forth in
Article Third
,
Section 7(b)(i)(E)
hereof.
“
Liquidation Value
”
means, as of any particular date and with respect to any Series E Preferred
Share, an amount equal to $1,000.
“
Majority Common
Investors
” means the Common Investors from time to time holding at least
a majority, in the aggregate, of the Registrable Securities then outstanding and
the rights to acquire Registrable Securities.
“
Majority Trailer
Investors
” means the Trailer Investors from time to time holding (i) at
least a majority of the Series E Preferred, the Series F Preferred and the
Series G Preferred then held by all Trailer Investors or (ii) at least a
majority, in the aggregate, of the Registrable Securities then held by all
Trailer Investors and the rights to acquire Registrable Securities then held by
all Trailer Investors.
“
Mandatory Redemption
”
has the meaning set forth in
Article Third
,
Section 6(b)(i)
hereof.
“
NYSE Limitation
”
means the maximum number of securities of the Corporation that could be issued
by the Corporation to the Trailer Investors without triggering a requirement to
obtain the approval of the Corporation’s shareholders of such issuance pursuant
to Section 312.03 of the New York Stock Exchange Listed Corporation Manual, as
in effect on the date of issuance of such shares of Common Stock.
“
Optional Redemption
”
has the meaning set forth in
Article Third
,
Se
ction 6(a)(i)
hereof.
“
Optional Redemption
Price
” has the meaning set forth in
Article Third
,
Section 6(a)(ii)
hereof.
“
Optional Redemption
Price
” has the meaning set forth in
Article Third
,
Section 6(a)(i)
hereof.
“
Parity Stock
” means
the Series E Preferred, the Series F Preferred and the Series G
Preferred.
“
Permitted Transferee
”
means (i) with respect to the Series E Preferred, the Series F Preferred and the
Series G Preferred, any Person who acquires all or any portion of the Series E
Preferred, the Series F Preferred or the Series G Preferred from Trailer (or any
other Permitted Transferee) after the Effective Date, and (ii) with respect to
the Warrant or the Warrant Shares, any Person who acquires all or any portion of
the Warrant or the Registrable Securities from Trailer (or any other Permitted
Transferee) following the Effective Date. Any such transferee shall
become bound by the terms of the Investor Rights Agreement as an additional
Preferred Investor, Investor and/or Common Investor (as each such term is
defined in the Investor Rights Agreement), as applicable, by executing and
delivering to the Corporation a joinder agreement in form and substance
reasonably acceptable to the Corporation and such transferee. The
Corporation shall be furnished with at least three Business Days’ prior written
notice of the name and address of such transferee and the securities being
Transferred, the representation by the transferee that such Transfer is being
made in accordance with the applicable requirements of the Investor Rights
Agreement and with all laws applicable thereto. Following the
execution and delivery of such joinder agreement by the Corporation and such
transferee, such transferee shall constitute one of the Preferred Investors,
Investors and/or Common Investors, as applicable, referred to in the Investor
Rights Agreement and shall have all of the rights and obligations of a Preferred
Investor, Investor and/or Common Investor, as applicable,
thereunder.
“
Person
” means any
individual, partnership, corporation, limited liability company, association,
joint stock company, trust, joint venture, unincorporated organization and
governmental entity or department, agency or political subdivision
thereof.
“
Preferred Expiration
Date
” means the date on which the Trailer Investors cease to hold at
least a majority of the Series E Preferred, the Series F Preferred and the
Series G Preferred then outstanding.
“
Preferred Investors
”
means, collectively, the Investors from time to time holding the shares of the
Series E Preferred, the Series F Preferred and the Series G Preferred then
outstanding.
“
Preferred Stock
”
means, collectively, the Corporation’s preferred stock, par value $0.01 per
share, and any capital stock of any class of the Corporation hereafter
authorized which is limited to a fixed sum or percentage of par or stated value
in respect to the rights of the holders thereof to participate in dividends or
in the distribution of assets upon any liquidation, dissolution or winding up of
the Corporation.
“
Pro Rata
Portion
” has the
meaning set forth in
Article Third
,
Section 7(f)(iv)
hereof.
“
Purchase Agreement
”
means that certain Securities Purchase Agreement, dated as of July 17, 2009, by
and between the Corporation and Trailer Investments, LLC, as such agreement may
from time to time be amended, supplemented or modified in accordance with its
terms.
“
Registrable
Securities
” means, collectively, (i) the Warrant Shares and (ii) any
other securities issued or issuable with respect to or in exchange for
Registrable Securities;
provided
that a
security shall cease to be a Registrable Security upon (A) sale pursuant to a
Registration Statement (as defined in the Investor Rights Agreement) or Rule 144
under the Securities Act, or (B) such security becoming eligible for sale by the
Investor pursuant to Rule 144(b)(i)(1).
“
Restricted Payment
”
means: (i) any dividend, other distribution, repurchase or redemption, direct or
indirect, on account of any shares of any class of stock of the Corporation or
any of its Subsidiaries now or hereafter outstanding; (ii) any payment or
prepayment of principal of, premium, if any, or interest on, or any redemption,
conversion, exchange, retirement, defeasance, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of stock of the Corporation or any of its Subsidiaries now or
hereafter outstanding; (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of the Corporation or any of its Subsidiaries now
or hereafter outstanding; and (iv) any payment by the Corporation or any of its
Subsidiaries or of any management, consulting or any fees to any Affiliate of
the Corporation, whether pursuant to a management agreement or otherwise,
excluding customary compensation of employees of the Corporation and its
Subsidiaries.
“
SEC
” means the United
States Securities and Exchange Commission.
“
SEC Filings
” means,
collectively, all reports, schedules, forms, statements and other documents
required to be filed by the Corporation under the Securities Act or the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the prior
two-year period.
“
Securities Act
” means
the United States Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
“
Senior Loan
Agreement
” means the Corporation’s Second Amended and Restated Loan and
Security Agreement, dated as of March 6, 2007, as amended by the Credit
Agreement Amendment, dated as of July 17, 2009 (as amended, modified or
otherwise restated from time to time) (the “
Existing Loan
Agreement
”), and any agreement relating to a refinancing, replacement or
substitution of the loans under the Existing Loan Agreement or any subsequent
Senior Loan Agreement.
“
Series E Preferred
”
has the meaning set forth in
Article Third
,
Section 1
hereof.
“
Series E Preferred
Share
” has the meaning set forth in
Article Third
,
Section 3(a)
hereof.
“
Series F Certificate of
Designation
” means the Certificate of Designation of Rights, Preferences,
Privileges and Restrictions of Series F Preferred.
“
Series F Preferred
”
means the Corporation’s Series F Redeemable Preferred Stock, par value $0.01 per
share.
“
Series G Certificate of
Designation
” means the Certificate of Designation of Rights, Preferences,
Privileges and Restrictions of Series G Preferred.
“
Series G Preferred
”
means the Corporation’s Series G Redeemable Preferred Stock, par value $0.01 per
share.
“
Specified Event of
Noncompliance
” means any Event of Noncompliance described in
Section 8(a)(i)
,
Section
8(a)(ii)
,
Section 8(a)(iii)
(provided that, in the case of any Event of Default arising out of
Section 7(b)(i),
Section 7(c)
or
Section 7(d)
hereof, such Event of Default arose out of any intentional or willful action or
omission taken or suffered by the Corporation or any of its Subsidiaries),
Section 8(a)(iv)
,
Section 8(a)(v)
or
Section
8(a)(vi)
.
“
Sub Board
” has the
meaning set forth in
Article Third
,
Section 7(a)(ix)
hereof.
“
Subsequent Financing
”
means any private issuance of debt or equity securities or other private
financing transaction that, in each case, is consummated by the Corporation (or
any of its Subsidiaries, as applicable) following the Effective Date;
provided
that any
issuance of debt securities pursuant to the Senior Loan Agreement shall not
constitute a Subsequent Financing under this Certificate of
Designation.
“
Subsequent Financing
Notice
” has the meaning set forth in
Article Third
,
Section 7(f)(ii)
hereof.
“
Subsidiary
,” when
used with respect to any Person, means any other Person of which (i) in the
case of a corporation, at least (A) a majority of the equity and (B) a majority
of the voting interests are owned or controlled, directly or indirectly, by such
first Person, by any one or more of its Subsidiaries, or by such first Person
and one or more of its Subsidiaries or (ii) in the case of any Person other
than a corporation, such first Person, one or more of its Subsidiaries, or such
first Person and one or more of its Subsidiaries (A) owns a majority of the
equity interests thereof and (B) has the power to elect or direct the election
of a majority of the members of the governing body thereof.
“
Total Value
” means,
at any particular time and with respect to any Investor, an amount equal to (i)
the aggregate Fair Market Value of any Warrant Shares held by such Investor at
such time,
plus
(ii) the aggregate Fair Market Value of any Warrant Shares issuable to such
Investor upon exercise of the Warrant by such Investor at such time,
plus
(iii) the
aggregate liquidation value (plus accumulated, accrued and unpaid dividends) of
the Series E Preferred, Series F Preferred and Series G Preferred held by such
Investor at such time.
“
Trailer
” means
Trailer Investments, LLC, a Delaware limited liability company.
“
Trailer Investors
”
means (i) Trailer and (ii) any other Person that is a Permitted Transferee of
Trailer that is an Affiliate of Trailer (including for this purpose only any
investor (and its Affiliates) in any investment fund managed by Lincolnshire
Management, Inc.).
“
Transaction
Documents
” means the Investor Rights Agreement, the Certificates of
Designation, the Warrant, the Purchase Agreement and all other documents
delivered or required to be delivered by any party hereto pursuant to the
Purchase Agreement.
“
Transfer
” means any
transfer, sale, assignment, pledge, conveyance, loan, hypothecation or other
encumbrance or disposition of the Warrant, the Warrant Shares, the Series E
Preferred, the Series F Preferred and/or the Series G Preferred.
“
Warrant
” means,
collectively, (i) the Warrant to purchase shares of Common Stock issued to
Trailer pursuant to the Purchase Agreement on the Effective Date, and (ii) any
warrants issued in replacement or exchange, or in connection with a Transfer,
thereof.
“
Warrant Shares
” means
the shares of Common Stock issuable upon the exercise of the
Warrant.
FOURTH:
The Series
E Preferred Stock shall be created upon filing this Certificate of
Designation.
[END OF
PAGE]
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the undersigned does hereby certify under penalties of perjury
that this Certificate of Designation to the Certificate of Incorporation is the
act and deed of the undersigned and the facts stated herein are true and
accordingly has hereunto set his hand as of July 31, 2009.
|
WABASH
NATIONAL CORPORATION,
|
|
a
Delaware corporation
|
|
|
|
|
By:
|
/s/ Richard J. Giromini
|
|
Name:
|
Richard
J. Giromini
|
|
Title:
|
President
and Chief Executive Officer
|
CERTIFICATE
OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
SERIES
F REDEEMABLE PREFERRED STOCK
OF
WABASH
NATIONAL CORPORATION
* * * *
Adopted
in accordance with the provisions of Section 151(g) of the
General
Corporation Law of the State of Delaware
* * * *
Richard
J. Giromini, being the
President and Chief
Executive Officer
of Wabash National
Corporation, a corporation duly organized and existing under and by virtue of
the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY as
follows:
FIRST:
The name of
the corporation is Wabash National Corporation (the “
Corporation
”).
SECOND:
The
Certificate of Incorporation, as amended, of the Corporation (the “
Certificate of
Incorporation
”) authorizes the issuance of 25,000,000
shares of Preferred
Stock, par value $0.01 per share, of the Corporation and expressly vests in the
Board of Directors of the Corporation (the “
Board
”) the authority
provided therein to issue all of said shares in one or more series and by
resolution or resolutions, the designation, number, full or limited voting
powers, or the denial of voting powers, preferences and relative, participation,
optional, or other special rights, qualifications, limitations or restrictions
of each series to be issued.
THIRD:
The Board,
pursuant to the authority expressly vested by the Certificate of Incorporation,
as amended, has adopted the following resolution creating Series F Redeemable
Preferred Stock:
“
Be
it resolved
, that the issuance of Series F Redeemable Preferred Stock,
par value $0.01 per share, of the Corporation is hereby authorized, and the
designation, voting powers, preferences and relative, participating, optional
and other special rights, and qualifications, limitations and restrictions
thereof, of the shares of such series, in addition to those set forth in the
Certificate of Incorporation of the Corporation, are hereby fixed as
follows:
A. Designation
of Series F Preferred Stock
Section
1.
Designation
. The
distinctive serial designation of such series is “Series F Redeemable
Preferred Stock” (“
Series F
Preferred
”). Each share of Series F Preferred shall be
identical in all respects to each other share of Series F
Preferred. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in
Article
B
.
Section
2.
Number of
Shares
. The number of authorized shares of Series F Preferred
shall be 5,000. Such number may from time to time be increased (but
not in excess of the total number of authorized shares of Preferred Stock less
the number of shares of Preferred Stock then outstanding) or decreased (but not
below the number of shares of Series F Preferred then outstanding) by the Board.
Shares of Series F Preferred that are redeemed, purchased or otherwise acquired
by the Corporation, or converted into another series of Preferred Stock, shall
be canceled and shall revert to authorized but unissued shares of Preferred
Stock undesignated as to series.
Section
3.
Dividends
.
(a)
General Obligati
on
. The
holders of the Series F Preferred shall be entitled to receive preferential
dividends, when and as declared by the Board or any duly authorized committee
thereof, out of funds legally available for payment of dividends, as provided in
this
Section 3
.
Such dividends shall be payable by the Corporation in an amount per share
of Series F Preferred (each, a “
Series F Preferred
Share
”) determined by multiplying the Dividend Rate times a fraction the
numerator of which is the number of days in such Dividend Period and the
denominator of which is three hundred sixty-five.
(b)
Payment of
Dividends
. Dividends on the Series F Preferred shall be paid
in cash and until paid shall be accrued as set forth in
Section 3(d)
. All
dividends paid pursuant to this
Section 3(b)
shall be paid in equal
pro
rata
proportions to the holders entitled thereto.
(c)
Dividend
Rate
. Except as otherwise provided herein, dividends on each
Series F Preferred Share shall accrue on a daily basis at the rate of 16.0% per
annum (as adjusted from time to time in accordance with the terms hereof, the
“
Dividend
Rate
”) of the sum of the Liquidation Value thereof and all accumulated,
accrued and unpaid dividends thereon (whether accrued with respect to the
Liquidation Value or any previously accrued dividends) from and including the
Issuance Date of such Series F Preferred Share. On August 3, 2014 and
on the third day of each third month thereafter, the Dividend Rate shall
increase by an additional 0.5%, subject to applicable usury
laws. Such dividends shall accrue whether or not they have been
declared and whether or not there are profits, surplus or other funds of the
Corporation legally available for the payment of dividends, such dividends shall
be cumulative and all accrued and unpaid dividends shall be fully paid or
declared with funds irrevocably set apart for payment before any dividends,
distributions, redemptions or other payments may be declared or paid with
respect to any Junior Stock (except as otherwise expressly provided
herein). The date on which the Corporation initially issues any
Series F Preferred Share shall be deemed to be its date of issuance (the “
Issuance Date
”)
regardless of the number of times transfer of such Series F Preferred Share is
made on the stock records maintained by or for the Corporation and regardless of
the number of certificates which may be issued to evidence such Series F
Preferred Share.
(d)
Dividend Payment Dates;
Calculation of Dividend
. Dividends shall be payable in cash
quarterly in arrears when and as declared by the Board, or any duly authorized
committee thereof, on March 31, June 30, September 30 and
December 31 of each year (each, a “
Dividend Payment
Date
”), commencing on September 30, 2009. If any Dividend
Payment Date occurs on a day that is not a Business Day, any accumulated and
accrued dividends otherwise payable on such Dividend Payment Date shall be paid
on the next succeeding Business Day. Dividends shall be paid to the
holders of record of the Series F Preferred as their names shall appear on the
share register of the Corporation on the record date for such dividend.
Dividends payable in any Dividend Period which is less than a full Dividend
Period in length will be computed on the basis of a ninety-day quarterly period
and actual days elapsed in such Dividend Period. Dividends on account
of arrears for any past Dividend Periods may be declared and paid at any time to
holders of record on the record date therefor. For any Dividend
Period in which dividends are not paid in full in cash on the Dividend Payment
Date first succeeding the end of such Dividend Period, then on such Dividend
Payment Date such accrued and unpaid dividends shall be accumulated effective at
the beginning of the Dividend Period succeeding the Dividend Period as to which
such dividends were not paid and shall thereafter accrue additional dividends in
respect thereof at the Dividend Rate until such accumulated, accrued and unpaid
dividends (whether accrued with respect to the Liquidation Value or any
previously accrued dividends) have been paid in full .
(e)
Distribution of Partial
Dividend Payments
. For so long as any share of Series F
Preferred remains outstanding, in the event that full dividends are not paid to
the holders of all outstanding shares of Series F Preferred or any Parity Stock
with the same dividend payment date or with a dividend payment date during a
Dividend Period, and funds available for payment of dividends shall be
insufficient to permit payment in full to the holders of Series F Preferred and
holders of Parity Stock of the full preferential amounts to which they are then
entitled, then the entire amount available for payment of dividends shall be
distributed ratably among all such holders of Series F Preferred and holders of
Parity Stock in proportion to the full amount to which they would otherwise be
respectively entitled.
Section
4.
Priority of Series F
Preferred Shares on Dividends and Redemptions
. So long as any
shares of Series F Preferred remain outstanding, without the prior written
consent of the holders of a majority of the outstanding Series F Preferred
Shares, the Corporation shall not, nor shall it permit any Subsidiary to,
redeem, purchase or otherwise acquire directly or indirectly any Junior
Stock, nor shall the Corporation directly or indirectly pay or declare any
dividend or make any distribution upon any Junior Stock, other
than:
(a) subject
to approval, to the extent required under the Investor Rights Agreement,
purchases, redemptions or other acquisitions of shares of Junior Stock in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of employees, officers, directors or
consultants; or
(b) the
payment of any dividends in respect of Junior Stock where the dividend is in the
form of the same stock as that on which the dividend is being paid.
Subject
to the provisions set forth above in
Sections 3
and
4
and the
restrictions contained in the Investor Rights Agreement, dividends payable in
cash, stock or otherwise, as may be determined by the Board or any duly
authorized committee thereof, may be declared and paid on any Junior Stock and
Parity Stock from time to time out of any assets legally available for such
payment, and holders of Series F Preferred will not be entitled to participate
in those dividends.
Section
5.
Liquidation
.
(a)
Liquidation
. Upon
any liquidation, dissolution or winding up of the Corporation (whether voluntary
or involuntary), each holder of Series F Preferred shall be entitled to be paid,
before any distribution or payment is made upon any Junior Stock and subject to
the rights of the holders of any Parity Stock upon liquidation and the rights of
the Corporation’s creditors, an amount in cash equal to the aggregate
Liquidation Value of all Series F Preferred Shares held by such holder (plus all
accumulated, accrued and unpaid dividends thereon (whether accrued with respect
to the Liquidation Value or any previously accrued dividends)) and the holders
of Series F Preferred shall not be entitled to any further payment or have any
further right or claim to the Corporation’s assets. If, upon any such
liquidation, dissolution or winding up of the Corporation, the Corporation’s
assets to be distributed among the holders of Series F Preferred and all holders
of any Parity Stock are insufficient to permit payment to such holders of the
aggregate amount which they are entitled to be paid under this
Section 5
, then the
entire assets available to be distributed to the Corporation’s stockholders
shall be distributed
pro
rata
among such holders of Series F Preferred and holders of Parity Stock
in proportion to the full amounts to which such holders would otherwise be
respectively entitled if all amounts thereon were paid in full. Not
less than thirty days prior to the payment date stated therein, the Corporation
shall mail written notice of any such liquidation, dissolution or winding up to
each record holder of Series F Preferred, setting forth in reasonable detail the
amount of proceeds to be paid with respect to each Series F Preferred Share in
connection with such liquidation, dissolution or winding up.
(b)
Residual
Distributions
. If the respective aggregate liquidating
distributions to which all holders of Series F Preferred and all holders of any
Parity Stock are entitled pursuant to
Section 5(a)
have been paid, the holders of Junior Stock shall be entitled to receive all
remaining assets of the Corporation according to their respective rights and
preferences.
(c)
Merger, Consolidation and
Sale of Assets Not Liquidation
. For purposes of this
Section 5
, the
merger or consolidation of the Corporation with any other corporation or other
entity, including a merger or consolidation in which the holders of Series F
Preferred receive cash, securities or other property for their shares, or the
sale, lease or exchange (for cash, securities or other property) of all or
substantially all of the assets of the Corporation, shall not constitute a
liquidation, dissolution or winding up of the Corporation.
Section
6.
Redemptions
.
(a)
Optional
Redemption
.
(i) Except
pursuant to
Section
6
(b)
,
the Corporation may not redeem the Series F Preferred prior to August 3,
2010. From and after August 3, 2010, the Corporation may at any time
and from time to time redeem all or any portion of the Series F Preferred Shares
then outstanding pursuant to this
Section 6(a)
(an
“
Optional
Redemption
”). Upon the consummation of any Optional
Redemption, the Corporation shall pay to each holder of Series F Preferred a
price per Series F Preferred Share (with respect to each Series F Preferred
Share to be redeemed in such Optional Redemption, the “
Optional Redemption
Pr
ice
”)
equal to:
|
|
(A)
|
if
such redemption occurs at any time after August 3, 2010 but on or prior to
August 3, 2012, then 120% of the sum of the Liquidation Value thereof and
all accumulated, accrued and unpaid dividends thereon (whether accrued
with respect to the Liquidation Value or any previously accrued
dividends);
|
|
|
(B)
|
if
such redemption occurs at any time after August 3, 2012 but on or prior to
August 3, 2014, then 115% of the sum of the Liquidation Value thereof and
all accumulated, accrued and unpaid dividends thereon (whether accrued
with respect to the Liquidation Value or any previously accrued
dividends); and
|
|
|
(C)
|
if
such redemption occurs at any time after August 3, 2014, then 100% of the
sum of the Liquidation Value thereof and all accumulated, accrued and
unpaid dividends thereon (whether accrued with respect to the Liquidation
Value or any previously accrued
dividends);
|
provided
that if a
Change of Control occurs on or prior to the one-year anniversary of the date on
which an Optional Redemption is consummated pursuant to this
Section 6
(a)
(i)
, then the
Corporation shall, simultaneously with or prior to such Change of Control, pay
to each holder of Series F Preferred an amount per share, in cash, equal to the
positive difference, if any, between (1) the Change of Control Price that would
have been payable had such prior redemption been consummated as a Mandatory
Redemption pursuant to
Section 6
(b)
, and (2) the
applicable Optional Redemption Price.
(ii) The
Corporation shall deliver notice of an Optional Redemption to the holders of
Series F Preferred at least fifteen days prior to the date of such Optional
Redemption (the “
Optional Redemption
Date
”). Such notice shall state the Optional Redemption Date,
the Optional Redemption Price, the number of shares of Series F Preferred to be
redeemed, and the place or places where certificates for shares of Series F
Preferred are to be surrendered to the Corporation for redemption by Series F
Preferred holder, in the manner and at the place designated.
(iii) The
number of Series F Preferred Shares to be redeemed from each holder thereof in
an Optional Redemption pursuant to this
Section 6(a)
shall be
the number of Series F Preferred Shares determined by multiplying the total
number of Series F Preferred Shares to be redeemed times a fraction, the
numerator of which shall be the total number of Series F Preferred Shares then
held by such holder and the denominator of which shall be the total number of
Series F Preferred Shares then outstanding.
(b)
Mandatory
Redemption
.
(i) Immediately
prior to or simultaneously with the occurrence of a Change of Control or at such
later time as may be specified in writing by any holder of the Series F
Preferred, the Corporation shall redeem (such redemption, the “
Mandatory
Redemption
”), upon election in writing by such holder of Series F
Preferred, all of the Series F Preferred then outstanding and pay to each holder
of Series F Preferred a price per Series F Preferred Share (the “
Change of Control
Price
”) equal to the Liquidation Value thereof (and the accumulated,
accrued and unpaid dividends thereon (whether accrued with respect to the
Liquidation Value or any previously accrued dividends))
plus
a premium equal
to 200% of the sum of (A) the Liquidation Value thereof and (B) all accumulated,
accrued and unpaid dividends thereon (whether accrued with respect to the
Liquidation Value or any previously accrued dividends).
(ii) The
Corporation shall provide each holder of Series F Preferred with not less than
fifteen days’ written notice prior to the occurrence of a Change of Control (the
date on which such Change of Control occurs, the “
Mandatory Redemption
Date
”) or entering into an agreement providing for such Change of Control
or, in the case of a Change of Control referred to in clause (ii) of the
definition thereof pursuant to a tender offer of which the Corporation has no
prior knowledge, promptly after the Corporation discovers that the Change of
Control will occur or has occurred. Such notice shall describe in
reasonable detail the material terms and the Mandatory Redemption Date (or
anticipated timing, in the case of an agreement) to each holder of Series F
Preferred, and the Corporation shall give each holder of Series F Preferred
prompt written notice of any material change in the terms or timing of
such transaction. Any such notice also shall state the Change of
Control Price and that the holder is to surrender to the Corporation, at the
place or places where certificates for shares of Series F Preferred are to be
surrendered for redemption, in the manner and at the price designated, the
certificate or certificates representing the shares of Series F Preferred to be
redeemed.
(c)
Mechanics of
Redemption
. Upon receipt of payment of the Optional Redemption
Price (in the case of an Optional Redemption) or the Change of Control Price (in
the case of the Mandatory Redemption) with respect to each Series F Preferred
Share to be redeemed by the holders of Series F Preferred, each holder of Series
F Preferred will deliver the certificate(s) evidencing the Series F
Preferred to be redeemed by the Corporation, unless such holder is awaiting
receipt of a new certificate evidencing such shares from the Corporation
pursuant to another provision hereof.
(d)
Dividends After Redemption
Date
. No Series F Preferred Share shall be entitled to any
dividends accruing after the date on which Optional Redemption Price (in the
case of an Optional Redemption) or the Change of Control Price (in the case of
the Mandatory Redemption) of such Series F Preferred Share is paid to the holder
of such Series F Preferred Share. On such date, all rights of the
holder of such Series F Preferred Share shall cease, and such Series F Preferred
Share shall no longer be deemed to be issued and outstanding.
Section
7.
Other
Rights
.
(a)
Board Repre
sentation
.
(i) From
and after the Effective Date until the Common Expiration Date, the Majority
Trailer Investors may nominate five directors (collectively, the “
Investor Directors
”)
to be elected to the Board. Any such nominee for Investor Director
shall be subject to (A) the reasonable approval of the Board’s Nominating and
Corporate Governance Committee (the “
Governance
Committee
”) (such approval not to be unreasonably withheld, conditioned
or delayed), and (B) satisfaction of all legal and governance requirements
regarding service as a director of the Corporation;
provided
that the
Corporation shall, at the reasonable request of the Majority Trailer Investors,
so long as such request is not inconsistent with applicable law or exchange
requirements, amend or modify any such requirements so as not to any way impede
the right of the Majority Trailer Investors to nominate directors. On
the Effective Date, the Corporation shall cause the five initial Investor
Directors who are named in Section 4.1 of the Investor Rights Agreement to be
elected and appointed to the Board. The Corporation from time to time
shall take all actions necessary or reasonably required such that the number of
members on the Board shall (1) except as otherwise provided herein, consist of
no more than seven non-Investor Directors, and (2) if necessary, be increased
such that there are sufficient seats on the Board for the Investor Directors to
serve on the Board and such vacancies (the “
Investor Director
Seats
”) shall be filled by the Investor Directors, effective as of the
Effective Date (or, if later, then the date that the Majority Trailer Investors
determine to appoint such Investor Directors). Each Investor Director
appointed pursuant to this
Section 7(a)(i)
shall
continue to hold office until such Investor Director’s term expires, subject,
however, to prior death, resignation, retirement, disqualification or
termination of term of office as provided in
Section
7(a)(iii)
.
(ii) Prior
to the Common Expiration Date, at each meeting of the Corporation’s stockholders
at which the election of directors to the Investor Director Seats is to be
considered, the Corporation shall, subject to the provisions of
Section 7(a)(i)
and
Section
7(a)(iii)
, nominate the Investor Director(s) designated by the Majority
Trailer Investors for election to the Board by the holders of voting capital
stock and solicit proxies from the Corporation’s stockholders in favor of the
election of Investor Directors. Subject to the provisions of
Section 7(a)(i)
and
Section
7(a)(iii)
, the Corporation shall use all reasonable best efforts to cause
each Investor Director to be elected to the Board (including voting all
unrestricted proxies in favor of the election of such Investor Director and
including recommending approval of such Investor Director’s appointment to the
Board) and shall not take any action which would diminish the prospects of such
Investor Director(s) of being elected to the Board.
(iii) The
right of the Majority Trailer Investors to designate the Investor Directors
pursuant to
Section
7(a)(i)
and
Section 7(a)(ii)
shall terminate on the Common
Expiration
Date. If the right of the Majority Trailer Investors to nominate
Investor Directors terminates pursuant to the immediately preceding sentence,
then each Investor Director shall promptly submit his or her resignation as a
member of the Board and each applicable Sub Board with immediate
effect.
(iv) Any
elected Investor Director may resign from the Board at any time by giving
written notice to the Board. The resignation is effective without
acceptance when the notice is given to the Board, unless a later effective time
is specified in the notice.
(v) So
long as the Majority Trailer Investors retain the right to designate Investor
Directors, the Corporation shall use all reasonable best efforts to remove any
Investor Director only if so directed in writing by the Majority Trailer
Investors.
(vi) In
the event of a vacancy on the Board resulting from the death, disqualification,
resignation, retirement or termination of term of office of an Investor Director
nominated by the Majority Trailer Investors, the Corporation shall use all
reasonable best efforts to fill such vacancy with a representative designated by
the Majority Trailer Investors as provided hereunder, in either case, to serve
until the next annual or special meeting of the stockholders (and at such
meeting, such representative, or another representative designated by the
Majority Trailer Investors, will be elected to the Board in the manner set forth
in
Section
7(a)(ii)
).
(vii) The
Investor Directors and the Board Observer, if any, shall be entitled to
reimbursement of reasonable expenses incurred in such capacities, but shall not
otherwise be entitled to any compensation from the Corporation in such
capacities as Investor Directors or the Board Observer.
(viii) Until
the Majority Trailer Investors cease to hold, or cease to “beneficially own”
(within the meaning of Rule 13d-3 under the Exchange Act) at least 2% of the
issued and outstanding Common Stock of the Corporation, the Majority Trailer
Investors shall have the right to designate one non-compensated, non-voting
observer (the “
Board
Observer
”) to attend all meetings of the Board as an
observer. The Board Observer shall not attend executive sessions or
committee meetings without the consent of the majority of the members of the
Board or committee members;
provided
that the
Board Observer shall be entitled to attend all meetings of the Audit
Committee. The Board Observer shall be entitled to notice of all
meetings of the Board and the Audit Committee in the manner that notice is
provided to members of the Board or the Audit Committee, as applicable, shall be
entitled to receive all materials provided to members of the Board and the Audit
Committee, shall be entitled to attend (whether in person, by telephone, or
otherwise), subject to the restriction set forth in the immediately preceding
sentence, all meetings of the Board and the Audit Committee as a non-voting
observer.
(ix) Subject
to (A) the reasonable approval of the Governance Committee (such approval not to
be unreasonably withheld, conditioned or delayed), and (B) satisfaction of all
legal and governance requirements regarding service as a director or member of
any committee of the Corporation or any of its Subsidiaries, at the request of
the Majority Trailer Investors, the Corporation shall cause the Investor
Directors to have proportional representation (relative to their percentage on
the whole Board, but in no event less than one representative) on the boards (or
equivalent governing body) of each Subsidiary (each, a “
Sub Board
”), and each
committee of the Board (other than the Audit Committee of the Board (the “
Audit Committee
”) to
the extent prohibited by applicable law or exchange requirements but shall allow
one representative to attend meetings of the Audit Committee as a non-voting
observer) and each Sub Board. The Corporation shall at the reasonable
request of the Majority Trailer Investors, so long as such request is not
inconsistent with applicable law or exchange requirements, amend or modify any
requirements regarding service as a director or member of any committee of the
Corporation or any of its Subsidiaries.
(x) The
Corporation shall purchase and maintain directors’ and officers’ liability
insurance policy covering each Investor Director effective from the Effective
Date (or such later date as such Investor Director is appointed pursuant to
Section 7(a)(i)
or
Section
7(a)(ii)
) and shall purchase and maintain for a period of not less than
six years from the date of any Investor Director’s death, resignation,
retirement, disqualification or termination of term of office as provided in
Section
7(a)(iii)
, a directors’ and officers’ liability insurance tail policy for
such Investor Director.
(b)
Approval of the Majority Trailer
Investors.
(i) From
and after the Effective Date until the Preferred Expiration Date, the
Corporation and the Board shall not, and shall take all action possible to
ensure that each Subsidiary of the Corporation shall not, without the prior
written consent of the Majority Trailer Investors (which consent may be withheld
in their sole discretion) take any of the following actions or engage in any of
the following transactions:
(A) directly
or indirectly declare or make any Restricted Payment except for payments with
respect to the Series E Preferred, Series F Preferred or Series G Preferred
(including, in each case, any redemption thereof) as permitted by the
Certificates of Designation;
(B) authorize,
issue or enter into any agreement providing for the issuance (contingent or
otherwise) of (1) any notes or debt securities containing equity or voting
features (including any notes or debt securities convertible into or
exchangeable for capital stock or other equity securities, issued in connection
with the issuance of capital stock or other equity securities or containing
profit participation features) or (2) any capital stock, other equity securities
or equity-linked securities (or any securities convertible into or exchangeable
for any capital stock or other equity securities), except for the issuance of
the Registrable Securities;
(C) make
any loans or advances to, guarantees for the benefit of, or investments in, any
Person (other than the Corporation or a wholly-owned direct or indirect
Subsidiary of the Corporation), except for (1) reasonable advances to employees
in the ordinary course of business consistent with past practice, (2)
investments having a stated maturity no greater than one year from the date on
which the Corporation or any of its Subsidiaries makes such investment in (a)
obligations of the United States government or any agency thereof or obligations
guaranteed by the United States government, (b) certificates of deposit of
commercial banks having combined capital and surplus of at least
$500 million and fully insured by the Federal Deposit Insurance
Corporation, or (c) commercial paper with a rating of at least “Prime-1” by
Moody’s Investors Service, Inc., and (3) investments expressly permitted
pursuant to
Section
7(b)(i)(E)
;
(D) liquidate,
dissolve or effect a recapitalization or reorganization in any form of
transaction (including any reorganization into a limited liability company, a
partnership or any other non-corporate entity which is treated as a partnership
for federal income tax purposes), unless, in the case of a recapitalization or
reorganization, such transaction would result in a Change of Control and the
Corporation pays to the holders of the Series E Preferred, the Series F
Preferred and the Series G Preferred all amounts then due and owing under the
Series E Preferred, the Series F Preferred and the Series G Preferred (including
the premium payable in connection with any redemption relating to a Change of
Control) prior to or contemporaneous with the consummation of such
transaction;
(E) directly
or indirectly acquire or enter into, or permit any Subsidiary to acquire or
enter into, any interest in any Person, business or joint venture (in each case,
whether by a purchase of assets, purchase of stock, merger or otherwise), except
for acquisitions involving aggregate consideration (whether payable in cash or
otherwise) not to exceed $5,000,000 in the aggregate if, at the time of any such
acquisition, the Corporation and its Subsidiaries have availability for
draw-downs under the Senior Loan Agreement in an amount equal to or exceeding
$20,000,000 and the ratio of the aggregate Indebtedness of the Corporation and
its Subsidiaries as of the most recent month end to the previous twelve-month
EBITDA (as each such term is defined in the Senior Loan Agreement, as in effect
on the Effective Date) (such ratio, the “
Leverage Ratio
”)
after giving effect to such acquisition is less than 6:1;
(F) reclassify
or recapitalize any securities of the Corporation or any of its Subsidiaries,
unless such reclassification or recapitalization would result in a Change of
Control and the Corporation pays to the holders of the Series E Preferred, the
Series F Preferred and the Series G Preferred all amounts then due and owing
under the Series E Preferred, the Series F Preferred and the Series G Preferred
(including the premium payable in connection with any redemption relating to a
Change of Control) prior to or contemporaneous with the consummation of such
reclassification or recapitalization;
(G) enter
into, or permit any Subsidiary to enter into, any line of business other than
the lines of business in which those entities are currently engaged and other
activities reasonably related thereto;
(H) enter
into, amend, modify or supplement any agreement, commitment or arrangement with
any of the Corporation’s or any of its Subsidiaries’ Affiliates, except for
customary employment arrangements and benefit programs on reasonable terms and
except as otherwise expressly contemplated by this Certificate of Designation,
the Investor Rights Agreement or the Purchase Agreement;
(I) create,
incur, guarantee, assume or suffer to exist, or permit any Subsidiary to create,
incur, guarantee, assume or suffer to exist, any Indebtedness, other than (1)
Indebtedness pursuant to the Existing Loan Agreement (and refinancings thereof
in an aggregate principal amount not in excess $100,000,000 on substantially
similar terms), and (2) Indebtedness in an aggregate amount not to exceed
$10,000,000, provided that, in the case of this subclause (2), such Indebtedness
is created, incurred, guaranteed, assumed or suffered to exist solely to satisfy
the Corporation’s and its Subsidiaries’ working capital requirements and the
interest rate per annum applicable to such Indebtedness does not exceed 9% and
the Leverage Ratio after giving effect to such creation, incurrence, guaranty,
assumption of sufferance does not exceed 3:1;
(J)
(A) engage in any
transaction that results in a Change of Control unless
the Corporation
pays to the holders of
the Series E Preferred,
the Series F Preferred and the Series G Preferred
all amounts then due
and owing under
the
Series E Preferred, the Series F Preferred and the Series G Preferred
(including the premium payable in connection with any redemption relating
to a Change of Control) prior to or contemporaneous with the consummation of
such transaction
, or
(B)
sell, lease or otherwise dispose of more than 2% of the consolidated
assets of the Corporation and its Subsidiaries (computed on the basis of book
value, determined in accordance with GAAP, or fair market value, determined by
the Board in its reasonable good faith judgment) in any transaction or series of
related transactions, other than (1) sales of inventory in the ordinary
course of business, (2)
the arm’s
length
sale
to a third Person that is not an Affiliate of the Corporation or any of its
Subsidiaries of the real estate and manufacturing facilities of the Corporation
that have been previously identified to Trailer, and (3) in the event that such
transaction would result in a Change of Control and the Corporation pays to the
holders of
the
Series E Preferred, the Series F Preferred and the Series G Preferred
all
amounts then due and owing under
the Series E Preferred,
the Series F Preferred and the Series G Preferred
(including the premium
payable in connection with any redemption relating to a Change of Control) prior
to or contemporaneous with the consummation of such transaction;
(K)
become
subject to any agreement or instrument which by its terms would (under any
circumstances) restrict (A) the right of any Subsidiary to make loans or
advances or pay dividends to, transfer property to, or repay any Indebtedness
owed to, the Corporation or any Subsidiary or (B) restrict the Corporation’s or
any of its Subsidiaries’ right or ability to perform the provisions of this
Certificate of Designation, the Investor Rights Agreement or any of the other
Transaction Documents or to conduct its business as conducted as of
the
Effective
Date
;
(L) make
any amendment to or rescind (including, in each case, by merger or
consolidation) any provision of the certificate of incorporation, articles of
incorporation, by-laws or similar organizational documents of the Corporation or
any of its Subsidiaries, or file any resolution of the board of directors, board
of managers or similar governing body with the applicable secretary of state of
the state of formation of the Corporation or any of its Subsidiaries which would
increase the number of authorized shares of Common Stock or Preferred Stock or
adversely affect or otherwise impair the rights of the Investors under the
Transaction Documents (including the relative preferences and priorities of the
Series E Preferred, the Series F Preferred or the Series G Preferred);
or
(M) (1)
increase the size of the Board or any Sub Board or (2) create or change any
committee of the Board or any Sub Board.
(ii) If
the Corporation violates or is in breach of the Financial Performance Levels,
until the Preferred Expiration Date, the Corporation and the Board shall not,
and shall take all action possible to ensure that each Subsidiary of the
Corporation shall not, without the prior written consent of the Majority Trailer
Investors (which consent may be withheld in their sole discretion) take any of
the following actions or engage in any of the following
transactions:
(A) approve
the annual budget of the Corporation and its Subsidiaries for any fiscal year or
deviate from any annual budget by more than 10% in the aggregate;
or
(B) approve
the employment or termination by the Board of any member of senior management of
the Corporation.
(c)
Affirmative
Covenants
. From and after the Effective Date until the
Preferred Expiration Date, the Corporation and the Board shall, and shall take
all action possible to ensure that each Subsidiary of the Corporation shall,
unless it has received the prior written consent of the Majority Trailer
Investors (which consent may be withheld in their sole discretion):
(i) at
all times cause to be done all things necessary or reasonably required to
maintain, preserve and renew its corporate existence and all material licenses,
authorizations and permits necessary or reasonably required to the conduct of
its businesses;
(ii) maintain
and keep its material properties in good repair, working order and condition
(normal wear and tear excepted), and from time to time make all necessary or
reasonably required repairs, renewals and replacements so that its businesses
may be properly and advantageously conducted in all material respects at all
times;
provided
that in no event shall this
Section 7(d)(ii)
be
deemed to require the making of capital expenditures in excess of the amount
approved by the Board;
(iii) pay
and discharge when payable all taxes, assessments and governmental charges
imposed upon its properties or upon the income or profits therefrom (in each
case, before the same becomes delinquent and before penalties accrue thereon)
and all material claims for labor, materials or supplies which if unpaid would
by law become a Lien upon any of its property, unless and to the extent that the
same are being contested in good faith and by appropriate proceedings and
adequate reserves (as determined in accordance with generally accepted
accounting principles, consistently applied) have been established on its books
and financial statements with respect thereto;
(iv) comply
with all other material obligations which it incurs pursuant to any Material
Contract (as such term is defined in the Purchase Agreement), as such
obligations become due, unless and to the extent that the same are being
contested in good faith and by appropriate proceedings and adequate reserves (as
determined in accordance with generally accepted accounting principles,
consistently applied) have been established on its books and financial
statements with respect thereto;
(v) comply
with all applicable laws, rules and regulations of all governmental authorities
in all material respects;
(vi) apply
for and continue in force with reputable insurance companies adequate insurance
covering risks of such types and in such amounts as are customary for companies
of similar size as the Corporation and its Subsidiaries and engaged in similar
lines of business as the Corporation and its Subsidiaries;
(vii) maintain
proper books of record and account which present fairly in all material respects
its financial condition and results of operations and make provisions on its
financial statements for all such proper reserves as in each case are required
in accordance with GAAP; and
(viii) reserve
and keep available out of the authorized but unissued shares of Common Stock,
solely for the purpose of providing for the exercise of the Warrant, such number
of shares of Common Stock as shall from time to time equal the number of shares
sufficient to permit the exercise of the Warrant.
(d)
Information
Rights
.
(i) For
so long as (x) the Preferred Investors hold at least 10% of the Preferred Stock
issued pursuant to the Purchase Agreement or (y) the Common Investors in the
aggregate hold, or “beneficially own” (within the meaning of Rule 13d-3 under
the Exchange Act) at least 10% of the issued and outstanding Common Stock of the
Corporation, at any time that the Corporation is not required to file periodic
reports with the SEC, the Corporation shall deliver to each Preferred Investor
and/or Common Investor, as applicable:
(A) as
soon as practicable, but in any event within ninety days after the end of each
fiscal year of the Corporation, for each of the Corporation and each of its
Subsidiaries, an income statement for such fiscal year, a balance sheet, and
statement of stockholder’s equity as of the end of such fiscal year, and a
statement of cash flows for such fiscal year, such year-end financial reports to
be in reasonable detail, prepared in accordance with GAAP, and audited and
certified by a nationally recognized accounting firm selected by the Corporation
and reasonably acceptable to the Majority Common Investors;
(B) as
soon as practicable, but in any event within thirty days after the end of each
of the first three quarters of each fiscal year of the Corporation, for the
Corporation and each of its Subsidiaries, an unaudited income statement for such
quarter, statement of cash flows for such quarter and an unaudited balance sheet
as of the end of such quarter;
(C) as
promptly as practicable but in any event within thirty days of the end of each
month, an unaudited income statement and statement of cash flows for such month,
and a balance sheet for and as of the end of such month, in reasonable
detail;
(D) with
respect to the financial statements called for in subsections (B) and (C) of
this
Section
7(d)(i)
, an instrument executed by the Chief Financial Officer or Chief
Executive Officer of the Corporation and certifying that such financial
statements were prepared in accordance with GAAP consistently applied with prior
practice for earlier periods (with the exception of footnotes that may be
required by GAAP) and fairly present in all material respects the financial
condition of the Corporation and its Subsidiaries and its results of operation
for the period specified, subject to year-end audit adjustment;
(E) notices
of events that have had or could reasonably be expected to have a material and
adverse effect on the Corporation and its Subsidiaries, taken as a whole, as
soon as practicable following the occurrence of any such event; and
(F) such
other information relating to the financial condition, business, prospects or
corporate affairs of the Corporation and its Subsidiaries as any Preferred
Investor or Common Investor may from time to time reasonably
request.
(ii) Notwithstanding
the foregoing, at all times, the Corporation shall use commercially reasonable
efforts to deliver the financial statements listed
Section 7(d)(i)(A)
,
Section
7(d)(i)(B)
and
Section 7(d)(i)(C)
promptly after such statements are internally available.
(iii) For
so long as (A) the Preferred Investors hold at least 10% of the Preferred Stock
issued pursuant to the Purchase Agreement or (B) the Common Investors in the
aggregate hold, or “beneficially own” (within the meaning of Rule 13d-3 under
the Exchange Act) at least 10% of the issued and outstanding Common Stock of the
Corporation, (a) the Corporation shall permit each Preferred Investor and/or
Common Investor, as applicable, together with such Investor’s consultants and
advisors, to visit and inspect the Corporation’s and its Subsidiaries’
properties, to examine their respective books of account and records and to
discuss the Corporation’s and its Subsidiaries’ affairs, finances and accounts
with their respective officers and employees, all at such reasonable times as
may be requested by such Investor, and (b) the Corporation shall, with
reasonable promptness, provide to each Preferred Investor and/or Common
Investor, as applicable, such other information and financial data concerning
the Corporation and its Subsidiaries as such Investor may reasonably
request.
(iv) For
so long as (A) the Trailer Investors hold at least 10% of the Preferred Stock
issued pursuant to the Purchase Agreement or (B) the Trailer Investors in the
aggregate hold, or “beneficially own” (within the meaning of Rule 13d-3 under
the Exchange Act) at least 10% of the issued and outstanding Common Stock of the
Corporation, the Corporation shall pay the reasonable fees and expenses of any
consultant or professional advisor that the Majority Trailer Investors may
engage in connection with the Trailer Investors’ interests in the
Corporation.
(v) For
so long as (A) the Preferred Investors hold at least 10% of the Preferred Stock
issued pursuant to the Purchase Agreement or (B) the Common Investors in the
aggregate hold, or “beneficially own” (within the meaning of Rule 13d-3 under
the Exchange Act) at least 10% of the issued and outstanding Common Stock of the
Corporation, the Corporation shall provide to each Preferred Investor and/or
Common Investor, as applicable, not later than thirty days before the beginning
of each fiscal year of the Corporation, but in any event, ten days prior to
presenting such budget to the Board, an annual budget prepared on a monthly
basis for the Corporation and its Subsidiaries for such fiscal year (displaying
anticipated statements of income and cash flows and balance sheets), and
promptly upon preparation thereof any other significant budgets or forecasts
prepared by the Corporation and any revisions of such annual or other budgets or
forecasts.
(e)
Right Of First
Refusal
.
(i) From
and after the Closing Date until the Preferred Expiration Date, the Trailer
Investors shall have the right, at their election in accordance with this
Section 7(e)
, to
participate in any Subsequent Financing. The Trailer Investors may
elect to provide all or any portion of the Subsequent Financing.
(ii) At
least forty-five days prior to the anticipated consummation of any Subsequent
Financing, the Corporation shall deliver a written notice (each, a “
Subsequent Financing
Notice
”) to each Trailer Investor. The Subsequent Financing
Notice shall disclose in reasonable detail the proposed terms and conditions of
the Subsequent Financing, the amount of proceeds intended to be raised
thereunder and the identity, and ownership of capital stock of the Corporation
(if applicable), of any other prospective participants in such Subsequent
Financing, and shall include a term sheet or similar document relating thereto
as an attachment. The Subsequent Financing Notice shall constitute a
binding offer to enter into the Subsequent Financing with each Trailer Investor
on the terms and conditions set forth in such Subsequent Financing
Notice.
(iii) Each
Trailer Investor may elect to participate in such Subsequent Financing and shall
have the right, subject to
Section 7(e)(v)
below, to fund all or any portion of the Subsequent Financing on the terms and
subject to the conditions specified in the Subsequent Financing Notice by
delivering written notice of such election to the Corporation within forty days
after the delivery of the Subsequent Financing Notice to the Trailer Investors
(the “
Election
Period
”). If the Trailer Investors elect to participate in the
Subsequent Financing, then the closing of the Subsequent Financing shall occur
on the date specified in the Subsequent Financing Notice or on such other date
as otherwise may be agreed by the Corporation and the Trailer Investors
participating in such Subsequent Financing. If the Trailer Investors
fail to deliver such election notices prior to the end of the Election Period,
then the Trailer Investors shall be deemed to have notified the Corporation that
they do not elect to participate in such Subsequent Financing.
(iv) If
any Trailer Investor declines to participate in the Subsequent Financing with
respect to its full Pro Rata Portion, then each Trailer Investor electing to
purchase its full Pro Rata Portion shall have the right to purchase up to (A)
its Pro Rata Portion of the Subsequent Financing, plus (B) a pro rata amount
(based upon the relative amount of the participating Trailer Investors’
respective Pro Rata Portions) of the aggregate unallocated Pro Rata Portions of
the other Trailer Investors. For purposes of clarity, (1) in the
event that there is any amount of a Subsequent Financing that is not requested
to be purchased by a Trailer Investor, then any other Trailer Investor shall
have the right to purchase such remaining amount of the Subsequent Financing and
(2) in no event shall the Trailer Investors have the right to purchase more than
100% of the amount the Subsequent Financing described in any Subsequent
Financing Notice, in the aggregate. For purposes hereof, “
Pro Rata Portion
”
means a fraction, the numerator of which is the Total Value of Securities held
by a Trailer Investor participating under this
Section 7(e)(iv)
, and
the denominator of which is the sum of the aggregate Total Value of Securities
held by all Trailer Investors participating under this
Section
7(e)(iv)
.
(v) If
any portion of a Subsequent Financing is not funded by the Trailer Investors or
the Person identified in the Subsequent Financing Notice within sixty days after
the delivery of the relevant Subsequent Financing Notice to the Trailer
Investors on the same terms described in such Subsequent Financing Notice, then
prior to consummating any subsequent Subsequent Financing, the Corporation must
deliver a new Subsequent Financing Notice to the Trailer Investors and otherwise
follow the procedures set forth in this
Section 7(e)
(and,
for the avoidance of doubt, the Trailer Investors will again have the right of
participation set forth above in this
Section
7(e)
).
(vi) Notwithstanding
any other provision in this Certificate of Designation to the contrary, the
Trailer Investors’ rights to participate in any Subsequent Financing shall be
subject to such participation not causing a violation of the NYSE Limitation;
provided
,
however
, that the
Corporation shall use all commercially reasonable efforts to discuss and explore
ways to enable the Trailer Investors to participate in any Subsequent Financing
in compliance with the NYSE Limitation.
(vii) Upon
reasonable prior notice, the Corporation shall make available, during normal
business hours, for inspection and review by the Trailer Investors and the
representatives of and advisors to the Trailer Investors, all financial and
other records, all SEC Filings and other filings with the SEC, and all other
corporate documents and properties of the Corporation as may be reasonably
necessary for the purpose of such review, and cause the Corporation’s officers,
directors and employees, within a reasonable time period, to supply all such
information reasonably requested by the Trailer Investors or any such
representative or advisor, in each case, for the sole purpose of enabling the
Trailer Investors and such representatives and advisors and their respective
accountants and attorneys to conduct due diligence with respect to the
Corporation in connection with such Subsequent Financing.
(viii) The
Corporation shall not disclose material non-public information to the Trailer
Investors, or to advisors to or representatives of the Trailer Investors, unless
prior to disclosure of such information the Corporation identifies such
information as being material non-public information and provides the Trailer
Investors, such advisors and representatives with the opportunity to accept or
refuse to accept such material non-public information for review and any Trailer
Investor wishing to obtain such information enters into an appropriate
confidentiality agreement with the Corporation with respect thereto; provided,
however, that the foregoing shall not restrict the Corporation from disclosing
material non-public information to any director or Board Observer, or to their
advisors or representatives.
Section
8.
Events of
Noncompliance
.
(a)
Definition
. An
“
Event of
Nonc
ompliance
” shall have
occurred if:
(i) the
Corporation fails to make any regular quarterly payment of dividends in cash
with respect to the Series F Preferred, beginning with the September 30, 2011
Dividend Payment Date;
(ii) the
Corporation fails to make any redemption payment with respect to the Series F
Preferred which it is required to make hereunder, whether or not such payment is
legally permissible or is prohibited by any agreement to which the Corporation
is subject;
(iii) the
Corporation breaches or otherwise fails to perform or observe any covenant or
agreement set forth in
Section 7
hereof or
Article II of the Investor Rights Agreement and, if such breach, failure or
Event of Noncompliance, as applicable, is capable of being cured, such breach or
failure continues for a period of thirty days or longer;
(iv) any
representation or warranty contained in Section 3.2, 3.3 or 3.4 of the Purchase
Agreement was not true and correct in all respects, at and as of the Issuance
Date;
(v) the
Corporation violates or is in breach of the Financial Performance Levels (as
defined in the Investor Rights Agreement) and such violation continues for a
period of one hundred eighty days or longer; or
(vi) the
Corporation or any Subsidiary makes an assignment for the benefit of creditors
or admits in writing its inability to pay its debts generally as they become
due; or an order, judgment or decree is entered adjudicating the Corporation or
any of its Subsidiaries bankrupt or insolvent; or any order for relief with
respect to the Corporation or any of its Subsidiaries is entered under the
Federal Bankruptcy Code; or the Corporation or any of its Subsidiaries petitions
or applies to any tribunal for the appointment of a custodian, trustee, receiver
or liquidator of the Corporation or any of its Subsidiaries or of any
substantial part of the assets of the Corporation or any of its Subsidiaries, or
commences any proceeding (other than a proceeding for the voluntary liquidation
and dissolution of a Subsidiary of the Corporation) relating to the Corporation
or any of its Subsidiaries under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction; or any such petition or application is filed, or any such
proceeding is commenced, against the Corporation or any of its Subsidiaries and
either (A) the Corporation or any such Subsidiary by any act indicates its
approval thereof, consent thereto or acquiescence therein or (B) such petition,
application or proceeding is not dismissed within sixty days.
The
foregoing shall constitute Events of Noncompliance whatever the reason or cause
for any such Event of Noncompliance and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body and regardless of the effects of any subordination
provisions.
(b)
Consequences of Events of
Noncompliance
.
(i) If
any Event of Noncompliance has occurred and is continuing, then the dividend
rate on the Series F Preferred from and after the occurrence of such Event of
Noncompliance shall increase immediately by an additional 2.0% per annum,
subject to applicable usury laws; provided, that if the Event of Noncompliance
is related to the non payment of the cash dividends beginning with the September
30, 2011 Dividend Payment Date (whether or not the Corporation is legally able
to pay the dividends), the dividend rate shall automatically increase to (A) the
higher of (X) the then prevailing dividend rate and (Y) the then prevailing
LIBOR rate plus 14.7%
plus
2.0% per
annum. Any increase of the dividend rate resulting from the operation
of this subparagraph shall terminate as of the close of business on the date on
which no Event of Noncompliance exists, subject to subsequent increases pursuant
to this paragraph.
(ii) If
any Specified Event of Noncompliance has occurred and is continuing, then the
holder or holders of a majority of the Series F Preferred then outstanding may
demand (by written notice delivered to the Corporation), subject to any
limitations contained in the Senior Credit Agreement, immediate redemption of
all or any portion of the Series F Preferred owned by such holder or holders at
a price per Series F Preferred Share equal to the sum of the Liquidation Value
thereof and all accumulated, accrued and unpaid dividends thereon (whether
accrued with respect to the Liquidation Value or any previously accrued
dividends). The Corporation shall give prompt written notice of such
election to the other holders of Series F Preferred (but in any event within
five days after receipt of the initial demand for redemption), and each such
other holder may demand immediate redemption of all or any portion of such
holder’s Series F Preferred by giving written notice thereof to the Corporation
within seven days after receipt of the Corporation’s notice. The
Corporation shall redeem all Series F Preferred as to which rights under this
paragraph have been exercised within twenty days after receipt of the
initial demand for redemption.
(iii) If
any Event of Noncompliance exists, each holder of Series F Preferred shall also
have any other rights which such holder is entitled to under any contract or
agreement at any time and any other rights which such holder may have pursuant
to applicable law.
Section
9.
Conversion
. Holders
of Series F Preferred shall have no right to exchange or convert such shares
into any other securities.
Section
10.
Voting
Rights
. Except as otherwise provided herein, in the Investor
Rights Agreement and as otherwise required by applicable law, the Series F
Preferred Shares shall have no voting rights;
provided
that each
holder of Series F Preferred shall be entitled to notice of all stockholders
meetings at the same time and in the same manner as notice is given to all
stockholders entitled to vote at such meetings.
Section
11.
Amendment and
Waiver
. No amendment, modification or waiver shall be binding
or effective with respect to any provision of the Certificate of Incorporation
or the Bylaws that would alter or change the preferences or special rights of
the Series F Preferred Shares without the prior written consent of the holders
of a majority of the Series F Preferred Shares outstanding at the time such
action is taken;
provided
that no such
action shall change (a) the rate at which or the manner in which dividends on
the Series F Preferred accrue or the times at which such dividends become
payable or the amount payable on redemption of the Series F Preferred or the
times at which redemption of Series F Preferred is to occur, or (b) the
percentage required to approve any change described in this
Section 1
1
without the prior
written consent of the holders of at least 75% of the Series F Preferred then
outstanding; and
provided
further
that no
amendment, modification, alteration, repeal or waiver of the terms or relative
priorities of the Series F Preferred may be accomplished by the merger,
consolidation or other transaction of the Corporation with another corporation
or entity unless the Corporation has obtained the prior written consent of the
holders of the applicable percentage of the Series F Preferred then
outstanding.
Section
12.
Registration of
Transfer
. The Corporation shall keep at its principal office a
register for the registration of Series F Preferred Shares. Except in
connection with Optional Redemption, Mandatory Redemption or as otherwise set
forth herein, upon the surrender of any certificate representing Series F
Preferred Shares at such place, the Corporation shall, at the request of the
record holder of such certificate, execute and deliver (at the Corporation’s
expense) a new certificate or certificates in exchange therefor representing in
the aggregate the number of shares of Series F Preferred Shares represented by
the surrendered certificate. Each such new certificate shall be
registered in such name and shall represent such number of Series F Preferred
Shares as is requested by the holder of the surrendered certificate and shall be
substantially identical in form to the surrendered certificate, and dividends
shall accrue on the Series F Preferred Shares represented by such new
certificate from the date to which dividends have been fully paid on such Series
F Preferred Shares represented by the surrendered certificate.
Section
13.
Record
Holders
. To the fullest extent permitted by applicable law,
the Corporation and the transfer agent for Series F Preferred may deem and treat
the record holder of any share of Series F Preferred as the true and lawful
owner thereof for all purposes, and neither the Corporation nor such transfer
agent shall be affected by any notice to the contrary.
Section
14.
Replacement
. Upon
receipt of evidence reasonably satisfactory to the Corporation (an affidavit of
the registered holder shall be satisfactory) of the ownership and the loss,
theft, destruction or mutilation of any certificate evidencing shares of Series
F Preferred, and in the case of any such loss, theft or destruction, upon
receipt of indemnity reasonably satisfactory to the Corporation (provided that
if the holder is a financial institution or other institutional investor its own
agreement shall be satisfactory), or, in the case of any such mutilation upon
surrender of such certificate, the Corporation shall (at its expense) execute
and deliver in lieu of such certificate a new certificate of like kind
representing the number of shares of Series F Preferred represented by such
lost, stolen, destroyed or mutilated certificate and dated the date of such
lost, stolen, destroyed or mutilated certificate.
Section
15.
Redeemed or Otherwise
Acquired Shares
. Any shares of Series F Preferred that are
redeemed or otherwise acquired by the Corporation by reason of repurchase,
conversion or otherwise shall be automatically and immediately canceled and
shall revert to authorized but unissued shares of Preferred Stock, provided,
that any such cancelled shares of Series F Preferred shall not be reissued, sold
or transferred as shares of Series F Preferred. The Corporation (without the
need for stockholder action) may thereafter take such appropriate action as may
be necessary to reduce the authorized shares of Series F Preferred
accordingly.
Section
16.
Notices
. Except
as otherwise expressly provided hereunder, all notices referred to herein shall
be in writing and shall be delivered by registered or certified mail, return
receipt requested and postage prepaid, or by reputable overnight courier
service, charges prepaid, and shall be deemed to have been given when so mailed
or sent (a) to the Corporation, at its principal executive offices, and (b) to
any holder of Series F Preferred, at such holder’s address as it from time to
time appears in the stock records of the Corporation (unless otherwise indicated
by any such holder). Notwithstanding anything herein to the contrary,
if Series F Preferred is issued in book-entry form through The Depository Trust
Company or any similar facility, such notices may be given to the holders of
Series F Preferred in any manner permitted by such facility.
Section
17.
Specific
Performance
. The Corporation hereby acknowledges and agrees
that the failure of the Corporation to perform its obligations hereunder,
including its failure to pay dividends when due and payable, will cause
irreparable injury to the holder of the Series F Preferred, for which damages,
even if available, will not be an adequate remedy. Accordingly, the
Corporation hereby consents to the issuance of injunctive relief by any court of
competent jurisdiction to compel performance of the Corporation’s obligations
and to the granting by any court of the remedy of specific performance of its
obligations hereunder.
Section
18.
No Preemptive
Rights
. Except as set forth in the Investor Rights Agreement,
no share of Series F Preferred shall have any rights of preemption whatsoever as
to any securities of the Corporation, or any warrants, rights or options issued
or granted with respect thereto, regardless of how such securities, or such
warrants, rights or options, may be designated, issued or granted.
Section
19.
Limitations under Senior
Loan Agreement
. Except for payments for which there is an
express provision herein for restrictions related to the Senior Loan Agreement,
in the event a payment is required to be made by the Corporation hereunder and
such payment (or a portion thereof) would not be permitted to be paid pursuant
to the terms of the Senior Loan Agreement, the Corporation shall not be in
default with respect to non-payment of such payment or the portion thereof, in
each case that is not so permitted (the “
Deferred
Portion
”). The Deferred Portion shall accrue and accumulate at
an annual interest rate equal to the JPMorgan Chase Prime rate (or that of
another nationally recognized financial institution if the JPMorgan Chase Prime
rate is not available) (unless another rate and method of calculation is
provided for herein) until paid and shall become immediately due and payable at
the earliest to occur of (a) when permitted by the Senior Loan Agreement and (b)
when all loans under the Senior Loan Agreement have been paid off.
Section
20.
Other
Terms
. Shares of Series F Preferred shall be subject to the
other terms, provisions and restrictions set forth in the Certificate of
Incorporation with respect to the shares of Preferred Stock of the
Corporation.
Section
21.
Indemnity;
Expenses
.
(a) The
Corporation shall indemnify, exonerate and hold each of the holders of Series F
Preferred (each, an “
Indemnified Person
”)
free and harmless from and against any and all actions, causes of action, suits,
claims, liabilities, losses, damages and costs and out-of-pocket expenses in
connection therewith (including reasonable attorneys’ and accountants’ fees and
expenses) incurred by the Indemnified Persons or any of them before or after the
Date of Issuance (collectively, the “
Indemnified
Liabilities
”), as a result of, arising out of, or in any way relating to
(i) the operations of the Corporation or any of its Subsidiaries or (ii) its
capacity as a stockholder or owner of securities of the Corporation (including
litigation related thereto); in each case excluding any loss in value of any
investment in the Corporation by any Indemnified Person;
provided
that if and
to the extent that the foregoing undertaking may be unavailable or unenforceable
for any reason, the Corporation will make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. The rights of any Indemnified
Person to indemnification hereunder will be in addition to any other rights any
such Person may have under any other agreement or instrument referenced above or
any other agreement or instrument to which such Indemnified Person is or becomes
a party or is or otherwise becomes a beneficiary or under law or
regulation. None of the Indemnified Persons shall in any event be
liable to the Corporation, any of its Subsidiaries, or any of their respective
affiliates for any act or omission suffered or taken by such Indemnified
Person.
(b) All
reasonable costs and expenses incurred by any holder of Series F Preferred
(i) in exercising or enforcing any rights afforded to such holder under
this Certificate of Designation or the other Transaction Documents, (ii) in
amending, modifying, or revising this Certificate of Designation or any other
Certificate of Designation, the Investor Rights Agreement or the Warrant, or
(iii) in connection with any transaction, claim, or event which such holder
reasonably believes affects the Corporation and as to which such holder seeks
the advice of counsel, shall be paid or reimbursed by the
Corporation.
B. Definitions.
The
following terms shall have the meanings specified:
“
Affiliate
” means (i)
with respect to the Corporation, (A) any other Person (other than the
Subsidiaries of the Corporation) which directly or indirectly through one or
more intermediaries Controls, is Controlled by, or is under common Control with,
such Person, (B) any Person that owns more than 5% of the outstanding stock of
the Corporation, and (C) any officer, director or employee of the Corporation,
its Subsidiaries or any Person described in subclause (A) or (B) above with a
base salary in excess of $100,000 per year or with any individual related by
blood, marriage or adoption to such officer, director or employee, and (ii) with
respect to any Person other than the Corporation, any other Person which
directly or indirectly through one or more intermediaries Controls, is
Controlled by, or is under common Control with, such first Person.
“
Audit Committee
” has
the meaning set forth in
Article Third
,
Section 7(a)(ix)
hereof.
“
Board
” has the
meaning set forth in
Article
Second
hereof.
“
Board Observer
” has
the meaning set forth in
Article Third
,
Section 7(a)(viii)
hereof.
“
Bu
siness Day
” means any
day except Saturday, Sunday and any day on which banking institutions in the
State of New York generally are authorized or required by law or other
governmental actions to close.
“
Bylaws
” means the
amended and restated bylaws of the Corporation, as they may be amended from time
to time.
“
Certificate of
Incorporation
” has the meaning set forth in
Article
Second
hereof.
“
Certificate of
Designation
” means this Certificate of Designation, the Series E
Certificate of Designation or the Series G Certificate of Designation, as
applicable, and “
Certificates of
Designation
” means each of the foregoing, collectively.
“
Change of Control
”
means (i) any sale or other disposition of all or substantially all of the
assets of the Corporation and its Subsidiaries on a consolidated basis in any
transaction or series of related transactions, (ii) any sale, transfer or
issuance or series of related sales, transfers and/or issuance of shares of the
Corporation’s capital stock by the Corporation or any holder thereof which
results in any single Person or group (as defined in Rule 13d-5 of the Exchange
Act) other than Trailer or any of its Affiliates becoming the beneficial owners
of greater than 50.0% of the Corporation’s issued and outstanding Common Stock,
(iii) any merger or consolidation to which the Corporation is a party unless
after giving effect to such merger no single Person or group (as defined in Rule
13d-5 of the Exchange Act) other than other than Trailer or any of its
Affiliates is beneficial owner of capital stock of the Corporation possessing
the voting power (under ordinary circumstances) to elect a majority of the Board
or the surviving Person’s board of directors (or similar governing body) or
becomes the beneficial owner of greater than 50.0% of the Corporation’s or such
surviving Person’s issued and outstanding Common Stock, (iv) any sale, transfer,
issuance or series of related sales, transfers and/or issuances of shares of the
Corporation’s capital stock by the Corporation or any holder thereof which
results in Trailer or any of its Affiliates acquiring all of the Corporation’s
issued and outstanding Common Stock (other than any portion agreed by any holder
of Common Stock to be rolled over or invested in an Affiliate of Trailer in
connection with such acquisition) or a “going private” transaction of the
Corporation that is led by Trailer or any of its Affiliates, or (v) a merger or
consolidation with or into another Person, pursuant to which the holders of
equity or equity linked instruments of the Corporation at the time of the
execution of the agreement to merge or consolidate own less than 80% of the
total equity of the Person surviving or resulting from the merger or
consolidation, or of a Person owning a majority of the total equity of such
surviving or resulting Person.
“
Change of Control
Price
” has the meaning set forth in
Article Third
,
Section 6(b)(i)
hereof.
“
Common Expiration
Date
” means the date on which the Trailer Investors cease to hold, or
cease to “beneficially own” (within the meaning of Rule 13d-3 under the Exchange
Act) at least 10% of the issued and outstanding Common Stock of the
Corporation.
“
Common Investors
”
means, collectively, (a) the Trailer Investors, to the extent that the Trailer
Investors then hold the Warrant and/or any Registrable Securities, and (b) the
Investors who beneficially own a number of Registrable Securities (including,
for this purpose, Registrable Securities issuable upon exercise of a Warrant
then held by each such Investor) equal to or greater than one-third of the
Registrable Securities that were issuable pursuant to the Warrant on the
Effective Date.
“
Common Stock
” means,
collectively, the shares of the Corporation’s Common Stock, par value $0.01 per
share.
“
Control
” (including
the terms “Controlling,” “Controlled by” or “under common Control with”) means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
“
Corporation
” has the
meaning set forth in
Article First
hereof.
“
Dividend Payment
Date
” has the meaning set forth in
Article Third
,
Section 3(d)
hereof.
“
Dividend Period
”
means the period from, and including, the initial Issuance Date to, but not
including, the first Dividend Payment Date following the Issuance Date and
thereafter, each quarterly period from, and including, the Dividend Payment Date
to, but not including, the next Dividend Payment Date.
“
Dividend Rate
” has
the meaning set forth in
Article Third
,
Section 3(c)
hereof.
“
Effective Date
” means
August 3, 2009.
“
Election Period
” has
the meaning set forth in
Article Third
,
Section 7(f)(iii)
hereof.
“
Event of
Noncompliance
” has the meaning set forth in
Article Third
,
Section 8(a)
hereof.
“
Exchange Act
” means
the United States Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“
Existing Loan
Agreement
” has the meaning set forth in the definition of Senior Loan
Agreement.
“
Fair Market Value
”
means, for the purposes of valuing the Common Stock, the average of the closing
prices of the Common Stock on the New York Stock Exchange reporting system or on
the principal stock exchange where Common Stock is traded (as reported in
The Wall Street Journal
) for
a period of five days consisting of, for the purposes of
Article Third
,
Section 7(e)
, the
date on which the Subsequent Financing Notice is delivered and the four
consecutive trading days prior to such date;
provided
that if the
Common Stock is not traded on any exchange or over-the-counter market, then the
Fair Market Value shall be jointly determined in good faith by the Board and the
Majority Common Investors.
“
Financial Performance
Levels
” means any financial covenant (as such term is commonly understood
with respect to credit agreements) as may be in force from time to time under
the Senior Loan Agreement after the relevant test contained in such financial
covenant has been modified by 5% in favor of the Corporation and its
Subsidiaries.
“
GAAP
” means United
States generally accepted accounting principles, consistently applied, as in
effect from time to time.
“
Governance Committee
”
has the meaning set forth in
Article Third
,
Section 7(a)(i)
hereof.
“
Indebtedness
” means,
without duplication, all obligations (including all obligations for principal,
interest, premiums, penalties, fees, and breakage costs) of the Corporation and
its Subsidiaries (i) in respect of indebtedness for money borrowed (whether
current, short-term or long-term, secured or unsecured, and including all
overdrafts and negative cash balances) and indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which the
Corporation or any of its Subsidiaries is responsible or liable; (ii) issued or
assumed as the deferred purchase price of property or services, all conditional
sale obligations and all obligations under any title retention agreement (but
excluding trade accounts payable and other accrued current liabilities arising
in the ordinary course of business); (iii) under leases required to be
capitalized in accordance with GAAP; (iv) secured by a Lien against any of its
property or assets; (v) for bankers’ acceptances or similar credit transactions
issued for the account of the Corporation or any of its Subsidiaries; (vi) under
any currency or interest rate swap, hedge or similar protection device; (vii)
under any letters of credit, performance bonds or surety obligations; (viii)
under any capital debts, deferred maintenance capital expenditures,
distributions payable or income taxes payable; and (ix) in respect of all
obligations of other Persons of the type referred to in clauses (i) through
(viii) the payment of which the Corporation or any of its Subsidiaries is
responsible or liable, directly or indirectly, as obligor, guarantor, surety or
otherwise, including guarantees of such obligations.
“
Indemnified
Liabilities
” has the meaning set forth in
Article Third
,
Section 20(a)
hereof.
“
Indemnified Person
”
has the meaning set forth in
Article T
hird
,
Section 20(a)
hereof.
“
Investor Director
Seats
” has the meaning set forth in
Article Third
,
Section 7(a)(i)
hereof.
“
Investor Directors
”
has the meaning set forth in
Article Third
,
Section 7(a)(i)
hereof.
“
Investor Rights
Agreement
” means that certain Investor Rights Agreement, dated as of the
Effective Date, by and between the Corporation and Trailer Investments, LLC, as
such agreement may from time to time be amended, supplemented or otherwise
modified in accordance with its terms.
“
Investor
” or “
Investors
” means, as
applicable, Trailer and/or any of its Permitted Transferees.
“
Issuance Date
” has
the meaning set forth in
Article Third
,
Section 3(c)
hereof.
“
Lien
” means any
mortgage, pledge, lien, deed of trust, conditional sale or other title retention
agreement, charge or other security interest or encumbrance securing obligations
for the payment of money.
“
Junior Stock
” means,
collectively, the Common Stock and any capital stock or other equity security of
the Corporation that (i) does not expressly provide that it ranks senior in
preference or priority to or on parity with the Series F Preferred Shares, or
(ii) was not approved by the holders of a majority of the Series F Preferred
Shares then outstanding, except for the Series E Preferred, the Series F
Preferred and the Series G Preferred.
“
Leverage Ratio
” has
the meaning set forth in
Article Third
,
Section 7(b)(i)(E)
hereof.
“
Liquidation Value
”
means, as of any particular date and with respect to any Series F Preferred
Share, an amount equal to $1,000.
“
Majority Common
Investors
” means the Common Investors from time to time holding at least
a majority, in the aggregate, of the Registrable Securities then outstanding and
the rights to acquire Registrable Securities.
“
Majority Trailer
Investors
” means the Trailer Investors from time to time holding (i) at
least a majority of the Series E Preferred, the Series F Preferred and the
Series G Preferred then held by all Trailer Investors or (ii) at least a
majority, in the aggregate, of the Registrable Securities then held by all
Trailer Investors and the rights to acquire Registrable Securities then held by
all Trailer Investors.
“
Mandatory Redemption
”
has the meaning set forth in
Article Third
,
Section 6(b)(i)
hereof.
“
NYSE Limitation
”
means the maximum number of securities of the Corporation that could be issued
by the Corporation to the Trailer Investors without triggering a requirement to
obtain the approval of the Corporation’s shareholders of such issuance pursuant
to Section 312.03 of the New York Stock Exchange Listed Corporation Manual, as
in effect on the date of issuance of such shares of Common Stock.
“
Optional Redemption
”
has the meaning set forth in
Article Third
,
Section 6(a)(i)
hereof.
“
Optional Redemption
Price
” has the meaning set forth in
A
rticle Third
,
Section 6(a)(ii)
hereof.
“
Optional Redemption
Price
” has the meaning set forth in
Article Third
,
Section 6(a)(i)
hereof.
“
Parity Stock
” means
the Series E Preferred, the Series F Preferred and the Series G
Preferred.
“
Permitted Transferee
”
means (i) with respect to the Series E Preferred, the Series F Preferred and the
Series G Preferred, any Person who acquires all or any portion of the Series E
Preferred, the Series F Preferred or the Series G Preferred from Trailer (or any
other Permitted Transferee) after the Effective Date, and (ii) with respect to
the Warrant or the Warrant Shares, any Person who acquires all or any portion of
the Warrant or the Registrable Securities from Trailer (or any other Permitted
Transferee) following the Effective Date. Any such transferee shall
become bound by the terms of the Investor Rights Agreement as an additional
Preferred Investor, Investor and/or Common Investor (as each such term is
defined in the Investor Rights Agreement), as applicable, by executing and
delivering to the Corporation a joinder agreement in form and substance
reasonably acceptable to the Corporation and such transferee. The
Corporation shall be furnished with at least three Business Days’ prior written
notice of the name and address of such transferee and the securities being
Transferred, the representation by the transferee that such Transfer is being
made in accordance with the applicable requirements of the Investor Rights
Agreement and with all laws applicable thereto. Following the
execution and delivery of such joinder agreement by the Corporation and such
transferee, such transferee shall constitute one of the Preferred Investors,
Investors and/or Common Investors, as applicable, referred to in the Investor
Rights Agreement and shall have all of the rights and obligations of a Preferred
Investor, Investor and/or Common Investor, as applicable,
thereunder.
“
Person
” means any
individual, partnership, corporation, limited liability company, association,
joint stock company, trust, joint venture, unincorporated organization and
governmental entity or department, agency or political subdivision
thereof.
“
Preferred Expiration
Date
” means the date on which the Trailer Investors cease to hold at
least a majority of the Series E Preferred, the Series F Preferred and the
Series G Preferred then outstanding.
“
Preferred Investors
”
means, collectively, the Investors from time to time holding the shares of the
Series F Preferred, the Series F Preferred and the Series G Preferred then
outstanding.
“
Preferred Stock
”
means, collectively, the Corporation’s preferred stock, par value $0.01 per
share, and any capital stock of any class of the Corporation hereafter
authorized which is limited to a fixed sum or percentage of par or stated value
in respect to the rights of the holders thereof to participate in dividends or
in the distribution of assets upon any liquidation, dissolution or winding up of
the Corporation.
“
Pro Rata Portion
” has
the meaning set forth in
Article Third
,
Section 7(f)(iv)
hereof.
“
Purchase Agreement
”
means that certain Securities Purchase Agreement, dated as of July 17, 2009, by
and between the Corporation and Trailer Investments, LLC, as such agreement may
from time to time be amended, supplemented or modified in accordance with its
terms.
“
Registrable
Securities
” means, collectively, (i) the Warrant Shares and (ii) any
other securities issued or issuable with respect to or in exchange for
Registrable Securities;
provided
that a
security shall cease to be a Registrable Security upon (A) sale pursuant to a
Registration Statement (as defined in the Investor Rights Agreement) or Rule 144
under the Securities Act, or (B) such security becoming eligible for sale by the
Investor pursuant to Rule 144(b)(i)(1).
“
Restricted Payment
”
means: (i) any dividend, other distribution, repurchase or redemption, direct or
indirect, on account of any shares of any class of stock of the Corporation or
any of its Subsidiaries now or hereafter outstanding; (ii) any payment or
prepayment of principal of, premium, if any, or interest on, or any redemption,
conversion, exchange, retirement, defeasance, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of stock of the Corporation or any of its Subsidiaries now or
hereafter outstanding; (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of the Corporation or any of its Subsidiaries now
or hereafter outstanding; and (iv) any payment by the Corporation or any of its
Subsidiaries or of any management, consulting or any fees to any Affiliate of
the Corporation, whether pursuant to a management agreement or otherwise,
excluding customary compensation of employees of the Corporation and its
Subsidiaries.
“
SEC
” means the United
States Securities and Exchange Commission.
“
SEC Filings
” means,
collectively, all reports, schedules, forms, statements and other documents
required to be filed by the Corporation under the Securities Act or the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the prior
two-year period.
“
Securities Act
” means
the United States Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
“
Senior Loan
Agreement
” means the Corporation’s Second Amended and Restated Loan and
Security Agreement, dated as of March 6, 2007, as amended by the Credit
Agreement Amendment, dated as of July 17, 2009 (as amended, modified or
otherwise restated from time to time) (the “
Existing Loan
Agreement
”), and any agreement relating to a refinancing, replacement or
substitution of the loans under the Existing Loan Agreement or any subsequent
Senior Loan Agreement.
“
Series E Certificate of
Designation
” means the Certificate of Designation of Rights, Preferences,
Privileges and Restrictions of Series E Preferred.
“
Series E Preferred
”
means the Corporation’s Series E Redeemable Preferred Stock, par value
$0.01 per share.
“
Series F Preferred
”
has the meaning set forth in
Article Third
,
Section 1
hereof.
“
Series F Preferred
Share
” has the meaning set forth in
Article Third
,
Section 3(a)
hereof.
“
Series G Certificate of
Designation
” means the Certificate of Designation of Rights, Preferences,
Privileges and Restrictions of Series G Preferred.
“
Series G Preferred
”
means the Corporation’s Series G Redeemable Preferred Stock, par value $0.01 per
share.
“
Specified Event of
Noncompliance
” means any Event of Noncompliance described in
Section 8(a)(i)
,
Section
8(a)(ii)
,
Section 8(a)(iii)
(provided that, in the case of any Event of Default arising out of
Section 7(b)(i),
Section 7(c)
or
Section 7(d)
hereof, such Event of Default arose out of any intentional or willful action or
omission taken or suffered by the Corporation or any of its Subsidiaries),
Section 8(a)(iv)
,
Section 8(a)(v)
or
Section
8(a)(vi)
.
“
Sub Board
” has the
meaning set forth in
Article Third
,
Section 7(a)(ix)
hereof.
“
Subsequent Financing
”
means any private issuance of debt or equity securities or other private
financing transaction that, in each case, is consummated by the Corporation (or
any of its Subsidiaries, as applicable) following the Effective Date;
provided
that any
issuance of debt securities pursuant to the Senior Loan Agreement shall not
constitute a Subsequent Financing under this Certificate of
Designation.
“
Subsequent Financing
Notice
” has the meaning set forth in
Article Third
,
Section 7(f)(ii)
hereof.
“
Subsidiary
,” when
used with respect to any Person, means any other Person of which (i) in the
case of a corporation, at least (A) a majority of the equity and (B) a majority
of the voting interests are owned or controlled, directly or indirectly, by such
first Person, by any one or more of its Subsidiaries, or by such first Person
and one or more of its Subsidiaries or (ii) in the case of any Person other
than a corporation, such first Person, one or more of its Subsidiaries, or such
first Person and one or more of its Subsidiaries (A) owns a majority of the
equity interests thereof and (B) has the power to elect or direct the election
of a majority of the members of the governing body thereof.
“
Total Value
” means,
at any particular time and with respect to any Investor, an amount equal to (i)
the aggregate Fair Market Value of any Warrant Shares held by such Investor at
such time,
plus
(ii) the aggregate Fair Market Value of any Warrant Shares issuable to such
Investor upon exercise of the Warrant by such Investor at such time,
plus
(iii) the
aggregate liquidation value (plus accumulated, accrued and unpaid dividends) of
the Series E Preferred, Series F Preferred and Series G Preferred held by such
Investor at such time.
“
Trailer
” means
Trailer Investments, LLC, a Delaware limited liability company.
“
Trailer Investors
”
means (i) Trailer and (ii) any other Person that is a Permitted Transferee of
Trailer that is an Affiliate of Trailer (including for this purpose only any
investor (and its Affiliates) in any investment fund managed by Lincolnshire
Management, Inc.).
“
Transaction
Documents
” means the Investor Rights Agreement, the Certificates of
Designation, the Warrant, the Purchase Agreement and all other documents
delivered or required to be delivered by any party hereto pursuant to the
Purchase Agreement.
“
Transfer
” means any
transfer, sale, assignment, pledge, conveyance, loan, hypothecation or other
encumbrance or disposition of the Warrant, the Warrant Shares, the Series E
Preferred, the Series F Preferred and/or the Series G Preferred.
“
Warrant
” means,
collectively, (i) the Warrant to purchase shares of Common Stock issued to
Trailer pursuant to the Purchase Agreement on the Effective Date, and (ii) any
warrants issued in replacement or exchange, or in connection with a Transfer,
thereof.
“
Warrant Shares
” means
the shares of Common Stock issuable upon the exercise of the
Warrant.
FOURTH:
The Series
F Preferred Stock shall be created upon filing this Certificate of
Designation.
[END OF
PAGE]
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the undersigned does hereby certify under penalties of perjury
that this Certificate of Designation to the Certificate of Incorporation is the
act and deed of the undersigned and the facts stated herein are true and
accordingly has hereunto set his hand as of July 31, 2009.
|
WABASH
NATIONAL CORPORATION,
|
|
a
Delaware corporation
|
|
|
|
|
By:
|
/s/ Richard J. Giromini
|
|
Name:
|
Richard
J. Giromini
|
|
Title:
|
President
and Chief Executive Officer
|
CERTIFICATE
OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
SERIES
G REDEEMABLE PREFERRED STOCK
OF
WABASH
NATIONAL CORPORATION
* * * *
Adopted
in accordance with the provisions of Section 151(g) of the
General
Corporation Law of the State of Delaware
* * * *
Richard
J. Giromini, being the
President and Chief
Executive Officer
of Wabash National
Corporation, a corporation duly organized and existing under and by virtue of
the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY as
follows:
FIRST:
The name of
the corporation is Wabash National Corporation (the “
Corporation
”).
SECOND:
The
Certificate of Incorporation, as amended, of the Corporation (the “
Certificate of
Incorporation
”) authorizes the issuance of 25,000,000
shares of Preferred
Stock, par value $0.01 per share, of the Corporation and expressly vests in the
Board of Directors of the Corporation (the “
Board
”) the authority
provided therein to issue all of said shares in one or more series and by
resolution or resolutions, the designation, number, full or limited voting
powers, or the denial of voting powers, preferences and relative, participation,
optional, or other special rights, qualifications, limitations or restrictions
of each series to be issued.
THIRD:
The Board,
pursuant to the authority expressly vested by the Certificate of Incorporation,
as amended, has adopted the following resolution creating Series G Redeemable
Preferred Stock:
“
Be
it resolved
, that the issuance of Series G Redeemable Preferred Stock,
par value $0.01 per share, of the Corporation is hereby authorized, and the
designation, voting powers, preferences and relative, participating, optional
and other special rights, and qualifications, limitations and restrictions
thereof, of the shares of such series, in addition to those set forth in the
Certificate of Incorporation of the Corporation, are hereby fixed as
follows:
A. Designation
of Series G Preferred Stock
Section
1.
Designation
. The
distinctive serial designation of such series is “Series G Redeemable
Preferred Stock” (“
Series G
Preferred
”). Each share of Series G Preferred shall be
identical in all respects to each other share of Series G
Preferred. Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in
Article
B
.
Section
2.
Number of
Shares
. The number of authorized shares of Series G Preferred
shall be 10,000. Such number may from time to time be increased (but
not in excess of the total number of authorized shares of Preferred Stock less
the number of shares of Preferred Stock then outstanding) or decreased (but not
below the number of shares of Series G Preferred then outstanding) by the Board.
Shares of Series G Preferred that are redeemed, purchased or otherwise acquired
by the Corporation, or converted into another series of Preferred Stock, shall
be canceled and shall revert to authorized but unissued shares of Preferred
Stock undesignated as to series.
Section
3.
Dividends
.
(a)
General Obligati
on
. The
holders of the Series G Preferred shall be entitled to receive preferential
dividends, when and as declared by the Board or any duly authorized committee
thereof, out of funds legally available for payment of dividends, as provided in
this
Section 3
.
Such dividends shall be payable by the Corporation in an amount per share
of Series G Preferred (each, a “
Series G Preferred
Share
”) determined by multiplying the Dividend Rate times a fraction the
numerator of which is the number of days in such Dividend Period and the
denominator of which is three hundred sixty-five.
(b)
Payment of
Dividends
. Dividends on the Series G Preferred shall be paid
in cash and until paid shall be accrued as set forth in
Section 3(d)
. All
dividends paid pursuant to this
Section 3(b)
shall be paid in equal
pro
rata
proportions to the holders entitled thereto.
(c)
Dividend
Rate
. Except as otherwise provided herein, dividends on each
Series G Preferred Share shall accrue on a daily basis at the rate of 18.0% per
annum (as adjusted from time to time in accordance with the terms hereof, the
“
Dividend
Rate
”) of the sum of the Liquidation Value thereof and all accumulated,
accrued and unpaid dividends thereon (whether accrued with respect to the
Liquidation Value or any previously accrued dividends) from and including the
Issuance Date of such Series G Preferred Share. On August 3, 2014 and
on the third day of each third month thereafter, the Dividend Rate shall
increase by an additional 0.5%, subject to applicable usury
laws. Such dividends shall accrue whether or not they have been
declared and whether or not there are profits, surplus or other funds of the
Corporation legally available for the payment of dividends, such dividends shall
be cumulative and all accrued and unpaid dividends shall be fully paid or
declared with funds irrevocably set apart for payment before any dividends,
distributions, redemptions or other payments may be declared or paid with
respect to any Junior Stock (except as otherwise expressly provided
herein). The date on which the Corporation initially issues any
Series G Preferred Share shall be deemed to be its date of issuance (the “
Issuance Date
”)
regardless of the number of times transfer of such Series G Preferred Share is
made on the stock records maintained by or for the Corporation and regardless of
the number of certificates which may be issued to evidence such Series G
Preferred Share.
(d)
Dividend Payment Dates;
Calculation of Dividend
. Dividends shall be payable in cash
quarterly in arrears when and as declared by the Board, or any duly authorized
committee thereof, on March 31, June 30, September 30 and
December 31 of each year (each, a “
Dividend Payment
Date
”), commencing on September 30, 2009. If any Dividend
Payment Date occurs on a day that is not a Business Day, any accumulated and
accrued dividends otherwise payable on such Dividend Payment Date shall be paid
on the next succeeding Business Day. Dividends shall be paid to the
holders of record of the Series G Preferred as their names shall appear on the
share register of the Corporation on the record date for such dividend.
Dividends payable in any Dividend Period which is less than a full Dividend
Period in length will be computed on the basis of a ninety-day quarterly period
and actual days elapsed in such Dividend Period. Dividends on account
of arrears for any past Dividend Periods may be declared and paid at any time to
holders of record on the record date therefor. For any Dividend
Period in which dividends are not paid in full in cash on the Dividend Payment
Date first succeeding the end of such Dividend Period, then on such Dividend
Payment Date such accrued and unpaid dividends shall be accumulated effective at
the beginning of the Dividend Period succeeding the Dividend Period as to which
such dividends were not paid and shall thereafter accrue additional dividends in
respect thereof at the Dividend Rate until such accumulated, accrued and unpaid
dividends (whether accrued with respect to the Liquidation Value or any
previously accrued dividends) have been paid in full .
(e)
Distribution of Partial
Dividend Payments
. For so long as any share of Series G
Preferred remains outstanding, in the event that full dividends are not paid to
the holders of all outstanding shares of Series G Preferred or any Parity Stock
with the same dividend payment date or with a dividend payment date during a
Dividend Period, and funds available for payment of dividends shall be
insufficient to permit payment in full to the holders of Series G Preferred and
holders of Parity Stock of the full preferential amounts to which they are then
entitled, then the entire amount available for payment of dividends shall be
distributed ratably among all such holders of Series G Preferred and holders of
Parity Stock in proportion to the full amount to which they would otherwise be
respectively entitled.
Section
4.
Priority of Series G
Preferred Shares on Dividends and Redemptions
. So long as any
shares of Series G Preferred remain outstanding, without the prior written
consent of the holders of a majority of the outstanding Series G Preferred
Shares, the Corporation shall not, nor shall it permit any Subsidiary to,
redeem, purchase or otherwise acquire directly or indirectly any Junior
Stock, nor shall the Corporation directly or indirectly pay or declare any
dividend or make any distribution upon any Junior Stock, other
than:
(a) subject
to approval, to the extent required under the Investor Rights Agreement,
purchases, redemptions or other acquisitions of shares of Junior Stock in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of employees, officers, directors or
consultants; or
(b) the
payment of any dividends in respect of Junior Stock where the dividend is in the
form of the same stock as that on which the dividend is being paid.
Subject
to the provisions set forth above in
Sections 3
and
4
and the
restrictions contained in the Investor Rights Agreement, dividends payable in
cash, stock or otherwise, as may be determined by the Board or any duly
authorized committee thereof, may be declared and paid on any Junior Stock and
Parity Stock from time to time out of any assets legally available for such
payment, and holders of Series G Preferred will not be entitled to participate
in those dividends.
Section
5.
Liquidation
.
(a)
Liquidation
. Upon
any liquidation, dissolution or winding up of the Corporation (whether voluntary
or involuntary), each holder of Series G Preferred shall be entitled to be paid,
before any distribution or payment is made upon any Junior Stock and subject to
the rights of the holders of any Parity Stock upon liquidation and the rights of
the Corporation’s creditors, an amount in cash equal to the aggregate
Liquidation Value of all Series G Preferred Shares held by such holder (plus all
accumulated, accrued and unpaid dividends thereon (whether accrued with respect
to the Liquidation Value or any previously accrued dividends)) and the holders
of Series G Preferred shall not be entitled to any further payment or have any
further right or claim to the Corporation’s assets. If, upon any such
liquidation, dissolution or winding up of the Corporation, the Corporation’s
assets to be distributed among the holders of Series G Preferred and all holders
of any Parity Stock are insufficient to permit payment to such holders of the
aggregate amount which they are entitled to be paid under this
Section 5
, then the
entire assets available to be distributed to the Corporation’s stockholders
shall be distributed
pro
rata
among such holders of Series G Preferred and holders of Parity Stock
in proportion to the full amounts to which such holders would otherwise be
respectively entitled if all amounts thereon were paid in full. Not
less than thirty days prior to the payment date stated therein, the Corporation
shall mail written notice of any such liquidation, dissolution or winding up to
each record holder of Series G Preferred, setting forth in reasonable detail the
amount of proceeds to be paid with respect to each Series G Preferred Share in
connection with such liquidation, dissolution or winding up.
(b)
Residual
Distributions
. If the respective aggregate liquidating
distributions to which all holders of Series G Preferred and all holders of any
Parity Stock are entitled pursuant to
Section 5(a)
have been paid, the holders of Junior Stock shall be entitled to receive all
remaining assets of the Corporation according to their respective rights and
preferences.
(c)
Merger, Consolidation and
Sale of Assets Not Liquidation
. For purposes of this
Section 5
, the
merger or consolidation of the Corporation with any other corporation or other
entity, including a merger or consolidation in which the holders of Series G
Preferred receive cash, securities or other property for their shares, or the
sale, lease or exchange (for cash, securities or other property) of all or
substantially all of the assets of the Corporation, shall not constitute a
liquidation, dissolution or winding up of the Corporation.
Section
6.
Redemptions
.
(a)
Optional
Redemption
.
(i) Except
pursuant to
Section
6
(b)
,
the Corporation may not redeem the Series G Preferred prior to August 3,
2010. From and after August 3, 2010, the Corporation may at any time
and from time to time redeem all or any portion of the Series G Preferred Shares
then outstanding pursuant to this
Section 6(a)
(an
“
Optional
Redemption
”). Upon the consummation of any Optional
Redemption, the Corporation shall pay to each holder of Series G Preferred a
price per Series G Preferred Share (with respect to each Series G Preferred
Share to be redeemed in such Optional Redemption, the “
Optional Redemption
Pr
ice
”)
equal to:
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|
(A)
|
if
such redemption occurs at any time after August 3, 2010 but on or prior to
August 3, 2012, then 120% of the sum of the Liquidation Value thereof and
all accumulated, accrued and unpaid dividends thereon (whether accrued
with respect to the Liquidation Value or any previously accrued
dividends);
|
|
|
(B)
|
if
such redemption occurs at any time after August 3, 2012 but on or prior to
August 3, 2014, then 115% of the sum of the Liquidation Value thereof and
all accumulated, accrued and unpaid dividends thereon (whether accrued
with respect to the Liquidation Value or any previously accrued
dividends); and
|
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(C)
|
if
such redemption occurs at any time after August 3, 2014, then 100% of the
sum of the Liquidation Value thereof and all accumulated, accrued and
unpaid dividends thereon (whether accrued with respect to the Liquidation
Value or any previously accrued
dividends);
|
provided
that if a
Change of Control occurs on or prior to the one-year anniversary of the date on
which an Optional Redemption is consummated pursuant to this
Section 6
(a)
(i)
, then the
Corporation shall, simultaneously with or prior to such Change of Control, pay
to each holder of Series G Preferred an amount per share, in cash, equal to the
positive difference, if any, between (1) the Change of Control Price that would
have been payable had such prior redemption been consummated as a Mandatory
Redemption pursuant to
Section 6
(b)
, and (2) the
applicable Optional Redemption Price.
(ii) The
Corporation shall deliver notice of an Optional Redemption to the holders of
Series G Preferred at least fifteen days prior to the date of such Optional
Redemption (the “
Optional Redemption
Date
”). Such notice shall state the Optional Redemption Date,
the Optional Redemption Price, the number of shares of Series G Preferred to be
redeemed, and the place or places where certificates for shares of Series G
Preferred are to be surrendered to the Corporation for redemption by Series G
Preferred holder, in the manner and at the place designated.
(iii) The
number of Series G Preferred Shares to be redeemed from each holder thereof in
an Optional Redemption pursuant to this
Section 6(a)
shall be
the number of Series G Preferred Shares determined by multiplying the total
number of Series G Preferred Shares to be redeemed times a fraction, the
numerator of which shall be the total number of Series G Preferred Shares then
held by such holder and the denominator of which shall be the total number of
Series G Preferred Shares then outstanding.
(b)
Mandatory
Redemption
.
(i) Immediately
prior to or simultaneously with the occurrence of a Change of Control or at such
later time as may be specified in writing by any holder of the Series G
Preferred, the Corporation shall redeem (such redemption, the “
Mandatory
Redemption
”), upon election in writing by such holder of Series G
Preferred, all of the Series G Preferred then outstanding and pay to each holder
of Series G Preferred a price per Series G Preferred Share (the “
Change of Control
Price
”) equal to the Liquidation Value thereof (and the accumulated,
accrued and unpaid dividends thereon (whether accrued with respect to the
Liquidation Value or any previously accrued dividends))
plus
a premium equal
to 225% of the sum of (A) the Liquidation Value thereof and (B) all accumulated,
accrued and unpaid dividends thereon (whether accrued with respect to the
Liquidation Value or any previously accrued dividends).
(ii) The
Corporation shall provide each holder of Series G Preferred with not less than
fifteen days’ written notice prior to the occurrence of a Change of Control (the
date on which such Change of Control occurs, the “
Mandatory Redemption
Date
”) or entering into an agreement providing for such Change of Control
or, in the case of a Change of Control referred to in clause (ii) of the
definition thereof pursuant to a tender offer of which the Corporation has no
prior knowledge, promptly after the Corporation discovers that the Change of
Control will occur or has occurred. Such notice shall describe in
reasonable detail the material terms and the Mandatory Redemption Date (or
anticipated timing, in the case of an agreement) to each holder of Series G
Preferred, and the Corporation shall give each holder of Series G Preferred
prompt written notice of any material change in the terms or timing of
such transaction. Any such notice also shall state the Change of
Control Price and that the holder is to surrender to the Corporation, at the
place or places where certificates for shares of Series G Preferred are to be
surrendered for redemption, in the manner and at the price designated, the
certificate or certificates representing the shares of Series G Preferred to be
redeemed.
(c)
Mechanics of
Redemption
. Upon receipt of payment of the Optional Redemption
Price (in the case of an Optional Redemption) or the Change of Control Price (in
the case of the Mandatory Redemption) with respect to each Series G Preferred
Share to be redeemed by the holders of Series G Preferred, each holder of Series
G Preferred will deliver the certificate(s) evidencing the Series G
Preferred to be redeemed by the Corporation, unless such holder is awaiting
receipt of a new certificate evidencing such shares from the Corporation
pursuant to another provision hereof.
(d)
Dividends After Redemption
Date
. No Series G Preferred Share shall be entitled to any
dividends accruing after the date on which Optional Redemption Price (in the
case of an Optional Redemption) or the Change of Control Price (in the case of
the Mandatory Redemption) of such Series G Preferred Share is paid to the holder
of such Series G Preferred Share. On such date, all rights of the
holder of such Series G Preferred Share shall cease, and such Series G Preferred
Share shall no longer be deemed to be issued and outstanding.
Section
7.
Other
Rights
.
(a)
Board Repre
sentation
.
(i) From
and after the Effective Date until the Common Expiration Date, the Majority
Trailer Investors may nominate five directors (collectively, the “
Investor Directors
”)
to be elected to the Board. Any such nominee for Investor Director
shall be subject to (A) the reasonable approval of the Board’s Nominating and
Corporate Governance Committee (the “
Governance
Committee
”) (such approval not to be unreasonably withheld, conditioned
or delayed), and (B) satisfaction of all legal and governance requirements
regarding service as a director of the Corporation;
provided
that the
Corporation shall, at the reasonable request of the Majority Trailer Investors,
so long as such request is not inconsistent with applicable law or exchange
requirements, amend or modify any such requirements so as not to any way impede
the right of the Majority Trailer Investors to nominate directors. On
the Effective Date, the Corporation shall cause the five initial Investor
Directors who are named in Section 4.1 of the Investor Rights Agreement to be
elected and appointed to the Board. The Corporation from time to time
shall take all actions necessary or reasonably required such that the number of
members on the Board shall (1) except as otherwise provided herein, consist of
no more than seven non-Investor Directors, and (2) if necessary, be increased
such that there are sufficient seats on the Board for the Investor Directors to
serve on the Board and such vacancies (the “
Investor Director
Seats
”) shall be filled by the Investor Directors, effective as of the
Effective Date (or, if later, then the date that the Majority Trailer Investors
determine to appoint such Investor Directors). Each Investor Director
appointed pursuant to this
Section 7(a)(i)
shall
continue to hold office until such Investor Director’s term expires, subject,
however, to prior death, resignation, retirement, disqualification or
termination of term of office as provided in
Section
7(a)(iii)
.
(ii) Prior
to the Common Expiration Date, at each meeting of the Corporation’s stockholders
at which the election of directors to the Investor Director Seats is to be
considered, the Corporation shall, subject to the provisions of
Section 7(a)(i)
and
Section
7(a)(iii)
, nominate the Investor Director(s) designated by the Majority
Trailer Investors for election to the Board by the holders of voting capital
stock and solicit proxies from the Corporation’s stockholders in favor of the
election of Investor Directors. Subject to the provisions of
Section 7(a)(i)
and
Section
7(a)(iii)
, the Corporation shall use all reasonable best efforts to cause
each Investor Director to be elected to the Board (including voting all
unrestricted proxies in favor of the election of such Investor Director and
including recommending approval of such Investor Director’s appointment to the
Board) and shall not take any action which would diminish the prospects of such
Investor Director(s) of being elected to the Board.
(iii) The
right of the Majority Trailer Investors to designate the Investor Directors
pursuant to
Section
7(a)(i)
and
Section 7(a)(ii)
shall terminate on the Common Expiration Date. If the right of the
Majority Trailer Investors to nominate Investor Directors terminates pursuant to
the immediately preceding sentence, then each Investor Director shall promptly
submit his or her resignation as a member of the Board and each applicable Sub
Board with immediate effect.
(iv) Any
elected Investor Director may resign from the Board at any time by giving
written notice to the Board. The resignation is effective without
acceptance when the notice is given to the Board, unless a later effective time
is specified in the notice.
(v) So
long as the Majority Trailer Investors retain the right to designate Investor
Directors, the Corporation shall use all reasonable best efforts to remove any
Investor Director only if so directed in writing by the Majority Trailer
Investors.
(vi) In
the event of a vacancy on the Board resulting from the death, disqualification,
resignation, retirement or termination of term of office of an Investor Director
nominated by the Majority Trailer Investors, the Corporation shall use all
reasonable best efforts to fill such vacancy with a representative designated by
the Majority Trailer Investors as provided hereunder, in either case, to serve
until the next annual or special meeting of the stockholders (and at such
meeting, such representative, or another representative designated by the
Majority Trailer Investors, will be elected to the Board in the manner set forth
in
Section
7(a)(ii)
).
(vii) The
Investor Directors and the Board Observer, if any, shall be entitled to
reimbursement of reasonable expenses incurred in such capacities, but shall not
otherwise be entitled to any compensation from the Corporation in such
capacities as Investor Directors or the Board Observer.
(viii) Until
the Majority Trailer Investors cease to hold, or cease to “beneficially own”
(within the meaning of Rule 13d-3 under the Exchange Act) at least 2% of the
issued and outstanding Common Stock of the Corporation, the Majority Trailer
Investors shall have the right to designate one non-compensated, non-voting
observer (the “
Board
Observer
”) to attend all meetings of the Board as an
observer. The Board Observer shall not attend executive sessions or
committee meetings without the consent of the majority of the members of the
Board or committee members;
provided
that the
Board Observer shall be entitled to attend all meetings of the Audit
Committee. The Board Observer shall be entitled to notice of all
meetings of the Board and the Audit Committee in the manner that notice is
provided to members of the Board or the Audit Committee, as applicable, shall be
entitled to receive all materials provided to members of the Board and the Audit
Committee, shall be entitled to attend (whether in person, by telephone, or
otherwise), subject to the restriction set forth in the immediately preceding
sentence, all meetings of the Board and the Audit Committee as a non-voting
observer.
(ix) Subject
to (A) the reasonable approval of the Governance Committee (such approval not to
be unreasonably withheld, conditioned or delayed), and (B) satisfaction of all
legal and governance requirements regarding service as a director or member of
any committee of the Corporation or any of its Subsidiaries, at the request of
the Majority Trailer Investors, the Corporation shall cause the Investor
Directors to have proportional representation (relative to their percentage on
the whole Board, but in no event less than one representative) on the boards (or
equivalent governing body) of each Subsidiary (each, a “
Sub Board
”), and each
committee of the Board (other than the Audit Committee of the Board (the “
Audit Committee
”) to
the extent prohibited by applicable law or exchange requirements but shall allow
one representative to attend meetings of the Audit Committee as a non-voting
observer) and each Sub Board. The Corporation shall at the reasonable
request of the Majority Trailer Investors, so long as such request is not
inconsistent with applicable law or exchange requirements, amend or modify any
requirements regarding service as a director or member of any committee of the
Corporation or any of its Subsidiaries.
(x) The
Corporation shall purchase and maintain directors’ and officers’ liability
insurance policy covering each Investor Director effective from the Effective
Date (or such later date as such Investor Director is appointed pursuant to
Section 7(a)(i)
or
Section
7(a)(ii)
) and shall purchase and maintain for a period of not less than
six years from the date of any Investor Director’s death, resignation,
retirement, disqualification or termination of term of office as provided in
Section
7(a)(iii)
, a directors’ and officers’ liability insurance tail policy for
such Investor Director.
(b)
Approval of the Majority
Trailer Investors
.
(i) From
and after the Effective Date until the Preferred Expiration Date, the
Corporation and the Board shall not, and shall take all action possible to
ensure that each Subsidiary of the Corporation shall not, without the prior
written consent of the Majority Trailer Investors (which consent may be withheld
in their sole discretion) take any of the following actions or engage in any of
the following transactions:
(A) directly
or indirectly declare or make any Restricted Payment except for payments with
respect to the Series E Preferred, Series F Preferred or Series G Preferred
(including, in each case, any redemption thereof) as permitted by the
Certificates of Designation;
(B) authorize,
issue or enter into any agreement providing for the issuance (contingent or
otherwise) of (1) any notes or debt securities containing equity or voting
features (including any notes or debt securities convertible into or
exchangeable for capital stock or other equity securities, issued in connection
with the issuance of capital stock or other equity securities or containing
profit participation features) or (2) any capital stock, other equity securities
or equity-linked securities (or any securities convertible into or exchangeable
for any capital stock or other equity securities), except for the issuance of
the Registrable Securities;
(C) make
any loans or advances to, guarantees for the benefit of, or investments in, any
Person (other than the Corporation or a wholly-owned direct or indirect
Subsidiary of the Corporation), except for (1) reasonable advances to employees
in the ordinary course of business consistent with past practice, (2)
investments having a stated maturity no greater than one year from the date on
which the Corporation or any of its Subsidiaries makes such investment in (a)
obligations of the United States government or any agency thereof or obligations
guaranteed by the United States government, (b) certificates of deposit of
commercial banks having combined capital and surplus of at least
$500 million and fully insured by the Federal Deposit Insurance
Corporation, or (c) commercial paper with a rating of at least “Prime-1” by
Moody’s Investors Service, Inc., and (3) investments expressly permitted
pursuant to
Section
7(b)(i)(E)
;
(D) liquidate,
dissolve or effect a recapitalization or reorganization in any form of
transaction (including any reorganization into a limited liability company, a
partnership or any other non-corporate entity which is treated as a partnership
for federal income tax purposes), unless, in the case of a recapitalization or
reorganization, such transaction would result in a Change of Control and the
Corporation pays to the holders of the Series E Preferred, the Series F
Preferred and the Series G Preferred all amounts then due and owing under the
Series E Preferred, the Series F Preferred and the Series G Preferred (including
the premium payable in connection with any redemption relating to a Change of
Control) prior to or contemporaneous with the consummation of such
transaction;
(E) directly
or indirectly acquire or enter into, or permit any Subsidiary to acquire or
enter into, any interest in any Person, business or joint venture (in each case,
whether by a purchase of assets, purchase of stock, merger or otherwise), except
for acquisitions involving aggregate consideration (whether payable in cash or
otherwise) not to exceed $5,000,000 in the aggregate if, at the time of any such
acquisition, the Corporation and its Subsidiaries have availability for
draw-downs under the Senior Loan Agreement in an amount equal to or exceeding
$20,000,000 and the ratio of the aggregate Indebtedness of the Corporation and
its Subsidiaries as of the most recent month end to the previous twelve-month
EBITDA (as each such term is defined in the Senior Loan Agreement, as in effect
on the Effective Date) (such ratio, the “
Leverage Ratio
”)
after giving effect to such acquisition is less than 6:1;
(F) reclassify
or recapitalize any securities of the Corporation or any of its Subsidiaries,
unless such reclassification or recapitalization would result in a Change of
Control and the Corporation pays to the holders of the Series E Preferred, the
Series F Preferred and the Series G Preferred all amounts then due and owing
under the Series E Preferred, the Series F Preferred and the Series G Preferred
(including the premium payable in connection with any redemption relating to a
Change of Control) prior to or contemporaneous with the consummation of such
reclassification or recapitalization;
(G) enter
into, or permit any Subsidiary to enter into, any line of business other than
the lines of business in which those entities are currently engaged and other
activities reasonably related thereto;
(H) enter
into, amend, modify or supplement any agreement, commitment or arrangement with
any of the Corporation’s or any of its Subsidiaries’ Affiliates, except for
customary employment arrangements and benefit programs on reasonable terms and
except as otherwise expressly contemplated by this Certificate of Designation,
the Investor Rights Agreement or the Purchase Agreement;
(I)
create, incur, guarantee, assume or suffer to exist, or
permit any Subsidiary to create, incur, guarantee, assume or suffer to exist,
any Indebtedness, other than (1) Indebtedness pursuant to the Existing Loan
Agreement (and refinancings thereof in an aggregate principal amount not in
excess $100,000,000 on substantially similar terms), and (2) Indebtedness in an
aggregate amount not to exceed $10,000,000, provided that, in the case of this
subclause (2), such Indebtedness is created, incurred, guaranteed, assumed or
suffered to exist solely to satisfy the Corporation’s and its Subsidiaries’
working capital requirements and the interest rate per annum applicable to such
Indebtedness does not exceed 9% and the Leverage Ratio after giving effect to
such creation, incurrence, guaranty, assumption of sufferance does not exceed
3:1;
(J)
(A) engage in any
transaction that results in a Change of Control unless
the Corporation
pays to the holders of
the Series E Preferred,
the Series F Preferred and the Series G Preferred
all amounts then due
and owing under
the
Series E Preferred, the Series F Preferred and the Series G Preferred
(including the premium payable in connection with any redemption relating
to a Change of Control) prior to or contemporaneous with the consummation of
such transaction
, or
(B)
sell, lease or otherwise dispose of more than 2% of the consolidated
assets of the Corporation and its Subsidiaries (computed on the basis of book
value, determined in accordance with GAAP, or fair market value, determined by
the Board in its reasonable good faith judgment) in any transaction or series of
related transactions, other than (1) sales of inventory in the ordinary course
of business, (2)
the
arm’s length
sale to a third Person
that is not an Affiliate of the Corporation or any of its Subsidiaries of the
real estate and manufacturing facilities of the Corporation that have been
previously identified to Trailer, and (3) in the event that such transaction
would result in a Change of Control and the Corporation pays to the holders of
the Series E
Preferred, the Series F Preferred and the Series G Preferred
all amounts
then due and owing under
the Series E Preferred,
the Series F Preferred and the Series G Preferred
(including the premium
payable in connection with any redemption relating to a Change of Control) prior
to or contemporaneous with the consummation of such transaction;
(K)
become
subject to any agreement or instrument which by its terms would (under any
circumstances) restrict (A) the right of any Subsidiary to make loans or
advances or pay dividends to, transfer property to, or repay any Indebtedness
owed to, the Corporation or any Subsidiary or (B) restrict the
Corporation’s or any of its Subsidiaries’ right or ability to perform the
provisions of this Certificate of Designation, the Investor Rights Agreement or
any of the other Transaction Documents or to conduct its business as conducted
as of
the
Effective
Date
;
(L) make
any amendment to or rescind (including, in each case, by merger or
consolidation) any provision of the certificate of incorporation, articles of
incorporation, by-laws or similar organizational documents of the Corporation or
any of its Subsidiaries, or file any resolution of the board of directors, board
of managers or similar governing body with the applicable secretary of state of
the state of formation of the Corporation or any of its Subsidiaries which would
increase the number of authorized shares of Common Stock or Preferred Stock or
adversely affect or otherwise impair the rights of the Investors under the
Transaction Documents (including the relative preferences and priorities of the
Series E Preferred, the Series F Preferred or the Series G Preferred);
or
(M) (1)
increase the size of the Board or any Sub Board or (2) create or change any
committee of the Board or any Sub Board.
(ii) If
the Corporation violates or is in breach of the Financial Performance Levels,
until the Preferred Expiration Date, the Corporation and the Board shall not,
and shall take all action possible to ensure that each Subsidiary of the
Corporation shall not, without the prior written consent of the Majority Trailer
Investors (which consent may be withheld in their sole discretion) take any of
the following actions or engage in any of the following
transactions:
(A) approve
the annual budget of the Corporation and its Subsidiaries for any fiscal year or
deviate from any annual budget by more than 10% in the aggregate;
or
(B) approve
the employment or termination by the Board of any member of senior management of
the Corporation.
(c)
Affirmative
Covenants
. From and after the Effective Date until the
Preferred Expiration Date, the Corporation and the Board shall, and shall take
all action possible to ensure that each Subsidiary of the Corporation shall,
unless it has received the prior written consent of the Majority Trailer
Investors (which consent may be withheld in their sole discretion):
(i) at
all times cause to be done all things necessary or reasonably required to
maintain, preserve and renew its corporate existence and all material licenses,
authorizations and permits necessary or reasonably required to the conduct of
its businesses;
(ii) maintain
and keep its material properties in good repair, working order and condition
(normal wear and tear excepted), and from time to time make all necessary or
reasonably required repairs, renewals and replacements so that its businesses
may be properly and advantageously conducted in all material respects at all
times;
provided
that in no event shall this
Section 7(d)(ii)
be
deemed to require the making of capital expenditures in excess of the amount
approved by the Board;
(iii) pay
and discharge when payable all taxes, assessments and governmental charges
imposed upon its properties or upon the income or profits therefrom (in each
case, before the same becomes delinquent and before penalties accrue thereon)
and all material claims for labor, materials or supplies which if unpaid would
by law become a Lien upon any of its property, unless and to the extent that the
same are being contested in good faith and by appropriate proceedings and
adequate reserves (as determined in accordance with generally accepted
accounting principles, consistently applied) have been established on its books
and financial statements with respect thereto;
(iv) comply
with all other material obligations which it incurs pursuant to any Material
Contract (as such term is defined in the Purchase Agreement), as such
obligations become due, unless and to the extent that the same are being
contested in good faith and by appropriate proceedings and adequate reserves (as
determined in accordance with generally accepted accounting principles,
consistently applied) have been established on its books and financial
statements with respect thereto;
(v) comply
with all applicable laws, rules and regulations of all governmental authorities
in all material respects;
(vi) apply
for and continue in force with reputable insurance companies adequate insurance
covering risks of such types and in such amounts as are customary for companies
of similar size as the Corporation and its Subsidiaries and engaged in similar
lines of business as the Corporation and its Subsidiaries;
(vii) maintain
proper books of record and account which present fairly in all material respects
its financial condition and results of operations and make provisions on its
financial statements for all such proper reserves as in each case are required
in accordance with GAAP; and
(viii) reserve
and keep available out of the authorized but unissued shares of Common Stock,
solely for the purpose of providing for the exercise of the Warrant, such number
of shares of Common Stock as shall from time to time equal the number of shares
sufficient to permit the exercise of the Warrant.
(d)
Information
Rights
.
(i) For
so long as (x) the Preferred Investors hold at least 10% of the Preferred Stock
issued pursuant to the Purchase Agreement or (y) the Common Investors in the
aggregate hold, or “beneficially own” (within the meaning of Rule 13d-3 under
the Exchange Act) at least 10% of the issued and outstanding Common Stock of the
Corporation, at any time that the Corporation is not required to file periodic
reports with the SEC, the Corporation shall deliver to each Preferred Investor
and/or Common Investor, as applicable:
(A) as
soon as practicable, but in any event within ninety days after the end of each
fiscal year of the Corporation, for each of the Corporation and each of its
Subsidiaries, an income statement for such fiscal year, a balance sheet, and
statement of stockholder’s equity as of the end of such fiscal year, and a
statement of cash flows for such fiscal year, such year-end financial reports to
be in reasonable detail, prepared in accordance with GAAP, and audited and
certified by a nationally recognized accounting firm selected by the Corporation
and reasonably acceptable to the Majority Common Investors;
(B) as
soon as practicable, but in any event within thirty days after the end of each
of the first three quarters of each fiscal year of the Corporation, for the
Corporation and each of its Subsidiaries, an unaudited income statement for such
quarter, statement of cash flows for such quarter and an unaudited balance sheet
as of the end of such quarter;
(C) as
promptly as practicable but in any event within thirty days of the end of each
month, an unaudited income statement and statement of cash flows for such month,
and a balance sheet for and as of the end of such month, in reasonable
detail;
(D) with
respect to the financial statements called for in subsections (B) and (C) of
this
Section
7(d)(i)
, an instrument executed by the Chief Financial Officer or Chief
Executive Officer of the Corporation and certifying that such financial
statements were prepared in accordance with GAAP consistently applied with prior
practice for earlier periods (with the exception of footnotes that may be
required by GAAP) and fairly present in all material respects the financial
condition of the Corporation and its Subsidiaries and its results of operation
for the period specified, subject to year-end audit adjustment;
(E) notices
of events that have had or could reasonably be expected to have a material and
adverse effect on the Corporation and its Subsidiaries, taken as a whole, as
soon as practicable following the occurrence of any such event; and
(F) such
other information relating to the financial condition, business, prospects or
corporate affairs of the Corporation and its Subsidiaries as any Preferred
Investor or Common Investor may from time to time reasonably
request.
(ii) Notwithstanding
the foregoing, at all times, the Corporation shall use commercially reasonable
efforts to deliver the financial statements listed
Section 7(d)(i)(A)
,
Section
7(d)(i)(B)
and
Section 7(d)(i)(C)
promptly after such statements are internally available.
(iii) For
so long as (A) the Preferred Investors hold at least 10% of the Preferred Stock
issued pursuant to the Purchase Agreement or (B) the Common Investors in the
aggregate hold, or “beneficially own” (within the meaning of Rule 13d-3 under
the Exchange Act) at least 10% of the issued and outstanding Common Stock of the
Corporation, (a) the Corporation shall permit each Preferred Investor and/or
Common Investor, as applicable, together with such Investor’s consultants and
advisors, to visit and inspect the Corporation’s and its Subsidiaries’
properties, to examine their respective books of account and records and to
discuss the Corporation’s and its Subsidiaries’ affairs, finances and accounts
with their respective officers and employees, all at such reasonable times as
may be requested by such Investor, and (b) the Corporation shall, with
reasonable promptness, provide to each Preferred Investor and/or Common
Investor, as applicable, such other information and financial data concerning
the Corporation and its Subsidiaries as such Investor may reasonably
request.
(iv) For
so long as (A) the Trailer Investors hold at least 10% of the Preferred Stock
issued pursuant to the Purchase Agreement or (B) the Trailer Investors in the
aggregate hold, or “beneficially own” (within the meaning of Rule 13d-3 under
the Exchange Act) at least 10% of the issued and outstanding Common Stock of the
Corporation, the Corporation shall pay the reasonable fees and expenses of any
consultant or professional advisor that the Majority Trailer Investors may
engage in connection with the Trailer Investors’ interests in the
Corporation.
(v) For
so long as (A) the Preferred Investors hold at least 10% of the Preferred Stock
issued pursuant to the Purchase Agreement or (B) the Common Investors in the
aggregate hold, or “beneficially own” (within the meaning of Rule 13d-3 under
the Exchange Act) at least 10% of the issued and outstanding Common Stock of the
Corporation, the Corporation shall provide to each Preferred Investor and/or
Common Investor, as applicable, not later than thirty days before the beginning
of each fiscal year of the Corporation, but in any event, ten days prior to
presenting such budget to the Board, an annual budget prepared on a monthly
basis for the Corporation and its Subsidiaries for such fiscal year (displaying
anticipated statements of income and cash flows and balance sheets), and
promptly upon preparation thereof any other significant budgets or forecasts
prepared by the Corporation and any revisions of such annual or other budgets or
forecasts.
(e)
Right Of First
Refusal
.
(i) From
and after the Closing Date until the Preferred Expiration Date, the Trailer
Investors shall have the right, at their election in accordance with this
Section 7(e)
, to
participate in any Subsequent Financing. The Trailer Investors may
elect to provide all or any portion of the Subsequent Financing.
(ii) At
least forty-five days prior to the anticipated consummation of any Subsequent
Financing, the Corporation shall deliver a written notice (each, a “
Subsequent Financing
Notice
”) to each Trailer Investor. The Subsequent Financing
Notice shall disclose in reasonable detail the proposed terms and conditions of
the Subsequent Financing, the amount of proceeds intended to be raised
thereunder and the identity, and ownership of capital stock of the Corporation
(if applicable), of any other prospective participants in such Subsequent
Financing, and shall include a term sheet or similar document relating thereto
as an attachment. The Subsequent Financing Notice shall constitute a
binding offer to enter into the Subsequent Financing with each Trailer Investor
on the terms and conditions set forth in such Subsequent Financing
Notice.
(iii) Each
Trailer Investor may elect to participate in such Subsequent Financing and shall
have the right, subject to
Section 7(e)(v)
below, to fund all or any portion of the Subsequent Financing on the terms and
subject to the conditions specified in the Subsequent Financing Notice by
delivering written notice of such election to the Corporation within forty days
after the delivery of the Subsequent Financing Notice to the Trailer Investors
(the “
Election
Period
”). If the Trailer Investors elect to participate in the
Subsequent Financing, then the closing of the Subsequent Financing shall occur
on the date specified in the Subsequent Financing Notice or on such other date
as otherwise may be agreed by the Corporation and the Trailer Investors
participating in such Subsequent Financing. If the Trailer Investors
fail to deliver such election notices prior to the end of the Election Period,
then the Trailer Investors shall be deemed to have notified the Corporation that
they do not elect to participate in such Subsequent Financing.
(iv) If
any Trailer Investor declines to participate in the Subsequent Financing with
respect to its full Pro Rata Portion, then each Trailer Investor electing to
purchase its full Pro Rata Portion shall have the right to purchase up to (A)
its Pro Rata Portion of the Subsequent Financing, plus (B) a pro rata amount
(based upon the relative amount of the participating Trailer Investors’
respective Pro Rata Portions) of the aggregate unallocated Pro Rata Portions of
the other Trailer Investors. For purposes of clarity, (1) in the
event that there is any amount of a Subsequent Financing that is not requested
to be purchased by a Trailer Investor, then any other Trailer Investor shall
have the right to purchase such remaining amount of the Subsequent Financing and
(2) in no event shall the Trailer Investors have the right to purchase more than
100% of the amount the Subsequent Financing described in any Subsequent
Financing Notice, in the aggregate. For purposes hereof, “
Pro Rata Portion
”
means a fraction, the numerator of which is the Total Value of Securities held
by a Trailer Investor participating under this
Section 7(e)(iv)
, and
the denominator of which is the sum of the aggregate Total Value of Securities
held by all Trailer Investors participating under this
Section
7(e)(iv)
.
(v) If
any portion of a Subsequent Financing is not funded by the Trailer Investors or
the Person identified in the Subsequent Financing Notice within sixty days after
the delivery of the relevant Subsequent Financing Notice to the Trailer
Investors on the same terms described in such Subsequent Financing Notice, then
prior to consummating any subsequent Subsequent Financing, the Corporation must
deliver a new Subsequent Financing Notice to the Trailer Investors and otherwise
follow the procedures set forth in this
Section 7(e)
(and,
for the avoidance of doubt, the Trailer Investors will again have the right of
participation set forth above in this
Section
7(e)
).
(vi) Notwithstanding
any other provision in this Certificate of Designation to the contrary, the
Trailer Investors’ rights to participate in any Subsequent Financing shall be
subject to such participation not causing a violation of the NYSE Limitation;
provided
,
however
, that the
Corporation shall use all commercially reasonable efforts to discuss and explore
ways to enable the Trailer Investors to participate in any Subsequent Financing
in compliance with the NYSE Limitation.
(vii) Upon
reasonable prior notice, the Corporation shall make available, during normal
business hours, for inspection and review by the Trailer Investors and the
representatives of and advisors to the Trailer Investors, all financial and
other records, all SEC Filings and other filings with the SEC, and all other
corporate documents and properties of the Corporation as may be reasonably
necessary for the purpose of such review, and cause the Corporation’s officers,
directors and employees, within a reasonable time period, to supply all such
information reasonably requested by the Trailer Investors or any such
representative or advisor, in each case, for the sole purpose of enabling the
Trailer Investors and such representatives and advisors and their respective
accountants and attorneys to conduct due diligence with respect to the
Corporation in connection with such Subsequent Financing.
(viii) The
Corporation shall not disclose material non-public information to the Trailer
Investors, or to advisors to or representatives of the Trailer Investors, unless
prior to disclosure of such information the Corporation identifies such
information as being material non-public information and provides the Trailer
Investors, such advisors and representatives with the opportunity to accept or
refuse to accept such material non-public information for review and any Trailer
Investor wishing to obtain such information enters into an appropriate
confidentiality agreement with the Corporation with respect thereto; provided,
however, that the foregoing shall not restrict the Corporation from disclosing
material non-public information to any director or Board Observer, or to their
advisors or representatives.
Section
8.
Events of
Noncompliance
.
(a)
Definition
. An
“
Event of
Noncompliance
” shall
have occurred if:
(i) the
Corporation fails to make any regular quarterly payment of dividends in cash
with respect to the Series G Preferred, beginning with the September 30, 2011
Dividend Payment Date;
(ii) the
Corporation fails to make any redemption payment with respect to the Series G
Preferred which it is required to make hereunder, whether or not such payment is
legally permissible or is prohibited by any agreement to which the Corporation
is subject;
(iii) the
Corporation breaches or otherwise fails to perform or observe any covenant or
agreement set forth in
Section 7
hereof or
Article II of the Investor Rights Agreement and, if such breach, failure or
Event of Noncompliance, as applicable, is capable of being cured, such breach or
failure continues for a period of thirty days or longer;
(iv) any
representation or warranty contained in Section 3.2, 3.3 or 3.4 of the Purchase
Agreement was not true and correct in all respects, at and as of the Issuance
Date;
(v) the
Corporation violates or is in breach of the Financial Performance Levels (as
defined in the Investor Rights Agreement) and such violation continues for a
period of one hundred eighty days or longer; or
(vi) the
Corporation or any Subsidiary makes an assignment for the benefit of creditors
or admits in writing its inability to pay its debts generally as they become
due; or an order, judgment or decree is entered adjudicating the Corporation or
any of its Subsidiaries bankrupt or insolvent; or any order for relief with
respect to the Corporation or any of its Subsidiaries is entered under the
Federal Bankruptcy Code; or the Corporation or any of its Subsidiaries petitions
or applies to any tribunal for the appointment of a custodian, trustee, receiver
or liquidator of the Corporation or any of its Subsidiaries or of any
substantial part of the assets of the Corporation or any of its Subsidiaries, or
commences any proceeding (other than a proceeding for the voluntary liquidation
and dissolution of a Subsidiary of the Corporation) relating to the Corporation
or any of its Subsidiaries under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction; or any such petition or application is filed, or any such
proceeding is commenced, against the Corporation or any of its Subsidiaries and
either (A) the Corporation or any such Subsidiary by any act indicates its
approval thereof, consent thereto or acquiescence therein or (B) such petition,
application or proceeding is not dismissed within sixty days.
The
foregoing shall constitute Events of Noncompliance whatever the reason or cause
for any such Event of Noncompliance and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body and regardless of the effects of any subordination
provisions.
(b)
Consequences of Events of
Noncompliance
.
(i) If
any Event of Noncompliance has occurred and is continuing, then the dividend
rate on the Series G Preferred from and after the occurrence of such Event of
Noncompliance shall increase immediately by an additional 2.0% per annum,
subject to applicable usury laws; provided, that if the Event of Noncompliance
is related to the non payment of the cash dividends beginning with the September
30, 2011 Dividend Payment Date (whether or not the Corporation is legally able
to pay the dividends), the dividend rate shall automatically increase to (A) the
higher of (X) the then prevailing dividend rate and (Y) the then prevailing
LIBOR rate plus 14.7%
plus
2.0% per
annum. Any increase of the dividend rate resulting from the operation
of this subparagraph shall terminate as of the close of business on the date on
which no Event of Noncompliance exists, subject to subsequent increases pursuant
to this paragraph.
(ii) If
any Specified Event of Noncompliance has occurred and is continuing, then the
holder or holders of a majority of the Series G Preferred then outstanding may
demand (by written notice delivered to the Corporation), subject to any
limitations contained in the Senior Credit Agreement, immediate redemption of
all or any portion of the Series G Preferred owned by such holder or
holders at a price per Series G Preferred Share equal to the sum of the
Liquidation Value thereof and all accumulated, accrued and unpaid dividends
thereon (whether accrued with respect to the Liquidation Value or any previously
accrued dividends). The Corporation shall give prompt written notice
of such election to the other holders of Series G Preferred (but in any event
within five days after receipt of the initial demand for redemption), and each
such other holder may demand immediate redemption of all or any portion of
such holder’s Series G Preferred by giving written notice thereof to the
Corporation within seven days after receipt of the Corporation’s
notice. The Corporation shall redeem all Series G Preferred as to
which rights under this paragraph have been exercised within twenty days after
receipt of the initial demand for redemption.
(iii) If
any Event of Noncompliance exists, each holder of Series G Preferred shall also
have any other rights which such holder is entitled to under any contract or
agreement at any time and any other rights which such holder may have pursuant
to applicable law.
Section
9.
Conversion
. Holders
of Series G Preferred shall have no right to exchange or convert such shares
into any other securities.
Section
10.
Voting
Rights
. Except as otherwise provided herein, in the Investor
Rights Agreement and as otherwise required by applicable law, the Series G
Preferred Shares shall have no voting rights;
provided
that each
holder of Series G Preferred shall be entitled to notice of all stockholders
meetings at the same time and in the same manner as notice is given to all
stockholders entitled to vote at such meetings.
Section
11.
Amendment and
Waiver
. No amendment, modification or waiver shall be binding
or effective with respect to any provision of the Certificate of Incorporation
or the Bylaws that would alter or change the preferences or special rights of
the Series G Preferred Shares without the prior written consent of the holders
of a majority of the Series G Preferred Shares outstanding at the time such
action is taken;
provided
that no such
action shall change (a) the rate at which or the manner in which dividends on
the Series G Preferred accrue or the times at which such dividends become
payable or the amount payable on redemption of the Series G Preferred or the
times at which redemption of Series G Preferred is to occur, or (b) the
percentage required to approve any change described in this
Section 1
1
without the prior
written consent of the holders of at least 75% of the Series G Preferred then
outstanding; and
provided
further
that no
amendment, modification, alteration, repeal or waiver of the terms or relative
priorities of the Series G Preferred may be accomplished by the merger,
consolidation or other transaction of the Corporation with another corporation
or entity unless the Corporation has obtained the prior written consent of the
holders of the applicable percentage of the Series G Preferred then
outstanding.
Section
12.
Registration of
Transfer
. The Corporation shall keep at its principal office a
register for the registration of Series G Preferred Shares. Except in
connection with Optional Redemption, Mandatory Redemption or as otherwise set
forth herein, upon the surrender of any certificate representing Series G
Preferred Shares at such place, the Corporation shall, at the request of the
record holder of such certificate, execute and deliver (at the Corporation’s
expense) a new certificate or certificates in exchange therefor representing in
the aggregate the number of shares of Series G Preferred Shares represented by
the surrendered certificate. Each such new certificate shall be
registered in such name and shall represent such number of Series G Preferred
Shares as is requested by the holder of the surrendered certificate and shall be
substantially identical in form to the surrendered certificate, and dividends
shall accrue on the Series G Preferred Shares represented by such new
certificate from the date to which dividends have been fully paid on such
Series G Preferred Shares represented by the surrendered
certificate.
Section
13.
Record
Holders
. To the fullest extent permitted by applicable law,
the Corporation and the transfer agent for Series G Preferred may deem and treat
the record holder of any share of Series G Preferred as the true and lawful
owner thereof for all purposes, and neither the Corporation nor such transfer
agent shall be affected by any notice to the contrary.
Section
14.
Replacement
. Upon
receipt of evidence reasonably satisfactory to the Corporation (an affidavit of
the registered holder shall be satisfactory) of the ownership and the loss,
theft, destruction or mutilation of any certificate evidencing shares of Series
G Preferred, and in the case of any such loss, theft or destruction, upon
receipt of indemnity reasonably satisfactory to the Corporation (provided that
if the holder is a financial institution or other institutional investor its own
agreement shall be satisfactory), or, in the case of any such mutilation upon
surrender of such certificate, the Corporation shall (at its expense) execute
and deliver in lieu of such certificate a new certificate of like kind
representing the number of shares of Series G Preferred represented by such
lost, stolen, destroyed or mutilated certificate and dated the date of such
lost, stolen, destroyed or mutilated certificate.
Section
15.
Redeemed or Otherwise
Acquired Shares
. Any shares of Series G Preferred that are
redeemed or otherwise acquired by the Corporation by reason of repurchase,
conversion or otherwise shall be automatically and immediately canceled and
shall revert to authorized but unissued shares of Preferred Stock, provided,
that any such cancelled shares of Series G Preferred shall not be reissued, sold
or transferred as shares of Series G Preferred. The Corporation (without
the need for stockholder action) may thereafter take such appropriate action as
may be necessary to reduce the authorized shares of Series G Preferred
accordingly.
Section
16.
Notices
. Except
as otherwise expressly provided hereunder, all notices referred to herein shall
be in writing and shall be delivered by registered or certified mail, return
receipt requested and postage prepaid, or by reputable overnight courier
service, charges prepaid, and shall be deemed to have been given when so mailed
or sent (a) to the Corporation, at its principal executive offices, and (b) to
any holder of Series G Preferred, at such holder’s address as it from time to
time appears in the stock records of the Corporation (unless otherwise indicated
by any such holder). Notwithstanding anything herein to the contrary,
if Series G Preferred is issued in book-entry form through The Depository Trust
Company or any similar facility, such notices may be given to the holders of
Series G Preferred in any manner permitted by such facility.
Section
17.
Specific
Performance
. The Corporation hereby acknowledges and agrees
that the failure of the Corporation to perform its obligations hereunder,
including its failure to pay dividends when due and payable, will cause
irreparable injury to the holder of the Series G Preferred, for which damages,
even if available, will not be an adequate remedy. Accordingly, the
Corporation hereby consents to the issuance of injunctive relief by any court of
competent jurisdiction to compel performance of the Corporation’s obligations
and to the granting by any court of the remedy of specific performance of its
obligations hereunder.
Section
18.
No Preemptive
Rights
. Except as set forth in the Investor Rights Agreement,
no share of Series G Preferred shall have any rights of preemption whatsoever as
to any securities of the Corporation, or any warrants, rights or options issued
or granted with respect thereto, regardless of how such securities, or such
warrants, rights or options, may be designated, issued or granted.
Section
19.
Limitations under Senior
Loan Agreement
. Except for payments for which there is an
express provision herein for restrictions related to the Senior Loan Agreement,
in the event a payment is required to be made by the Corporation hereunder and
such payment (or a portion thereof) would not be permitted to be paid pursuant
to the terms of the Senior Loan Agreement, the Corporation shall not be in
default with respect to non-payment of such payment or the portion thereof, in
each case that is not so permitted (the “
Deferred
Portion
”). The Deferred Portion shall accrue and accumulate at
an annual interest rate equal to the JPMorgan Chase Prime rate (or that of
another nationally recognized financial institution if the JPMorgan Chase Prime
rate is not available) (unless another rate and method of calculation is
provided for herein) until paid and shall become immediately due and payable at
the earliest to occur of (a) when permitted by the Senior Loan Agreement and (b)
when all loans under the Senior Loan Agreement have been paid
off.
Section
20.
Other
Terms
. Shares of Series G Preferred shall be subject to the
other terms, provisions and restrictions set forth in the Certificate of
Incorporation with respect to the shares of Preferred Stock of the
Corporation.
Section
21.
Indemnity;
Expenses
.
(a) The
Corporation shall indemnify, exonerate and hold each of the holders of Series G
Preferred (each, an “
Indemnified Person
”)
free and harmless from and against any and all actions, causes of action, suits,
claims, liabilities, losses, damages and costs and out-of-pocket expenses in
connection therewith (including reasonable attorneys’ and accountants’ fees and
expenses) incurred by the Indemnified Persons or any of them before or after the
Date of Issuance (collectively, the “
Indemnified
Liabilities
”), as a result of, arising out of, or in any way relating to
(i) the operations of the Corporation or any of its Subsidiaries or (ii) its
capacity as a stockholder or owner of securities of the Corporation (including
litigation related thereto); in each case excluding any loss in value of any
investment in the Corporation by any Indemnified Person;
provided
that if and
to the extent that the foregoing undertaking may be unavailable or unenforceable
for any reason, the Corporation will make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. The rights of any Indemnified
Person to indemnification hereunder will be in addition to any other rights any
such Person may have under any other agreement or instrument referenced above or
any other agreement or instrument to which such Indemnified Person is or becomes
a party or is or otherwise becomes a beneficiary or under law or
regulation. None of the Indemnified Persons shall in any event be
liable to the Corporation, any of its Subsidiaries, or any of their respective
affiliates for any act or omission suffered or taken by such Indemnified
Person.
(b) All
reasonable costs and expenses incurred by any holder of Series G Preferred
(i) in exercising or enforcing any rights afforded to such holder under
this Certificate of Designation or the other Transaction Documents, (ii) in
amending, modifying, or revising this Certificate of Designation or any other
Certificate of Designation, the Investor Rights Agreement or the Warrant, or
(iii) in connection with any transaction, claim, or event which such holder
reasonably believes affects the Corporation and as to which such holder seeks
the advice of counsel, shall be paid or reimbursed by the
Corporation.
B. Definitions.
The
following terms shall have the meanings specified:
“
Affiliate
” means (i)
with respect to the Corporation, (A) any other Person (other than the
Subsidiaries of the Corporation) which directly or indirectly through one or
more intermediaries Controls, is Controlled by, or is under common Control with,
such Person, (B) any Person that owns more than 5% of the outstanding stock of
the Corporation, and (C) any officer, director or employee of the Corporation,
its Subsidiaries or any Person described in subclause (A) or (B) above with a
base salary in excess of $100,000 per year or with any individual related by
blood, marriage or adoption to such officer, director or employee, and (ii) with
respect to any Person other than the Corporation, any other Person which
directly or indirectly through one or more intermediaries Controls, is
Controlled by, or is under common Control with, such first
Person.
“
Audit Committee
” has
the meaning set forth in
Article Third
,
Section 7(a)(ix)
hereof.
“
Board
” has the
meaning set forth in
Article
Second
hereof.
“
Board Observer
” has
the meaning set forth in
Article Third
,
Section 7(a)(viii)
hereof.
“
Business Day
” means
any day except Saturday, Sunday and any day on which banking institutions in the
State of New York generally are authorized or required by law or other
governmental actions to close.
“
Bylaws
” means the
amended and restated bylaws of the Corporation, as they may be amended from time
to time.
“
Certificate of
Incorporation
” has the meaning set forth in
Article
Second
hereof.
“
Certificate of
Designation
” means this Certificate of Designation, the Series E
Certificate of Designation or the Series F Certificate of Designation, as
applicable, and “
Certificates of
Designation
” means each of the foregoing, collectively.
“
Change of Control
”
means (i) any sale or other disposition of all or substantially all of the
assets of the Corporation and its Subsidiaries on a consolidated basis in any
transaction or series of related transactions, (ii) any sale, transfer or
issuance or series of related sales, transfers and/or issuance of shares of the
Corporation’s capital stock by the Corporation or any holder thereof which
results in any single Person or group (as defined in Rule 13d-5 of the Exchange
Act) other than Trailer or any of its Affiliates becoming the beneficial owners
of greater than 50.0% of the Corporation’s issued and outstanding Common Stock,
(iii) any merger or consolidation to which the Corporation is a party unless
after giving effect to such merger no single Person or group (as defined in Rule
13d-5 of the Exchange Act) other than other than Trailer or any of its
Affiliates is beneficial owner of capital stock of the Corporation possessing
the voting power (under ordinary circumstances) to elect a majority of the Board
or the surviving Person’s board of directors (or similar governing body) or
becomes the beneficial owner of greater than 50.0% of the Corporation’s or such
surviving Person’s issued and outstanding Common Stock, (iv) any sale, transfer,
issuance or series of related sales, transfers and/or issuances of shares of the
Corporation’s capital stock by the Corporation or any holder thereof which
results in Trailer or any of its Affiliates acquiring all of the Corporation’s
issued and outstanding Common Stock (other than any portion agreed by any holder
of Common Stock to be rolled over or invested in an Affiliate of Trailer in
connection with such acquisition) or a “going private” transaction of the
Corporation that is led by Trailer or any of its Affiliates, or (v) a merger or
consolidation with or into another Person, pursuant to which the holders of
equity or equity linked instruments of the Corporation at the time of the
execution of the agreement to merge or consolidate own less than 80% of the
total equity of the Person surviving or resulting from the merger or
consolidation, or of a Person owning a majority of the total equity of such
surviving or resulting Person.
“
Change of Control
Price
” has the meaning set forth in
Article Third
,
Section 6(b)(i)
hereof.
“
Common Expiration
Date
” means the date on which the Trailer Investors cease to hold, or
cease to “beneficially own” (within the meaning of Rule 13d-3 under the Exchange
Act) at least 10% of the issued and outstanding Common Stock of the
Corporation.
“
Common Investors
”
means, collectively, (a) the Trailer Investors, to the extent that the Trailer
Investors then hold the Warrant and/or any Registrable Securities, and (b) the
Investors who beneficially own a number of Registrable Securities (including,
for this purpose, Registrable Securities issuable upon exercise of a Warrant
then held by each such Investor) equal to or greater than one-third of the
Registrable Securities that were issuable pursuant to the Warrant on the
Effective Date.
“
Common Stock
” means,
collectively, the shares of the Corporation’s Common Stock, par value $0.01 per
share.
“
Control
” (including
the terms “Controlling,” “Controlled by” or “under common Control with”) means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
“
Corporation
” has the
meaning set forth in
Article First
hereof.
“
Dividend Payment
Date
” has the meaning set forth in
Article Third
,
Section 3(d)
hereof.
“
Dividend Period
”
means the period from, and including, the initial Issuance Date to, but not
including, the first Dividend Payment Date following the Issuance Date and
thereafter, each quarterly period from, and including, the Dividend Payment Date
to, but not including, the next Dividend Payment Date.
“
Dividend Rate
” has
the meaning set forth in
Article Third
,
Section 3(c)
hereof.
“
Effective Date
” means
August 3, 2009.
“
Election Period
” has
the meaning set forth in
Article Third
,
Section 7(f)(iii)
hereof.
“
Event of
Noncompliance
” has the meaning set forth in
Article Third
,
Section 8(a)
hereof.
“
Exchange Act
” means
the United States Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“
Existing Loan
Agreement
” has the meaning set forth in the definition of Senior Loan
Agreement.
“
Fair Market Value
”
means, for the purposes of valuing the Common Stock, the average of the closing
prices of the Common Stock on the New York Stock Exchange reporting system or on
the principal stock exchange where Common Stock is traded (as reported in
The Wall Street Journal
) for
a period of five days consisting of, for the purposes of
Article Third
,
Section 7(e)
, the
date on which the Subsequent Financing Notice is delivered and the four
consecutive trading days prior to such date;
provided
that if the
Common Stock is not traded on any exchange or over-the-counter market, then the
Fair Market Value shall be jointly determined in good faith by the Board and the
Majority Common Investors.
“
Financial Performance
Levels
” means any financial covenant (as such term is commonly understood
with respect to credit agreements) as may be in force from time to time under
the Senior Loan Agreement after the relevant test contained in such financial
covenant has been modified by 5% in favor of the Corporation and its
Subsidiaries.
“
GAAP
” means United
States generally accepted accounting principles, consistently applied, as in
effect from time to time.
“
Governance Committee
”
has the meaning set forth in
Article Third
,
Section 7(a)(i)
hereof.
“
Indebtedness
” means,
without duplication, all obligations (including all obligations for principal,
interest, premiums, penalties, fees, and breakage costs) of the Corporation and
its Subsidiaries (i) in respect of indebtedness for money borrowed (whether
current, short-term or long-term, secured or unsecured, and including all
overdrafts and negative cash balances) and indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which the
Corporation or any of its Subsidiaries is responsible or liable; (ii) issued or
assumed as the deferred purchase price of property or services, all conditional
sale obligations and all obligations under any title retention agreement (but
excluding trade accounts payable and other accrued current liabilities arising
in the ordinary course of business); (iii) under leases required to be
capitalized in accordance with GAAP; (iv) secured by a Lien against any of its
property or assets; (v) for bankers’ acceptances or similar credit transactions
issued for the account of the Corporation or any of its Subsidiaries; (vi) under
any currency or interest rate swap, hedge or similar protection device; (vii)
under any letters of credit, performance bonds or surety obligations; (viii)
under any capital debts, deferred maintenance capital expenditures,
distributions payable or income taxes payable; and (ix) in respect of all
obligations of other Persons of the type referred to in clauses (i) through
(viii) the payment of which the Corporation or any of its Subsidiaries is
responsible or liable, directly or indirectly, as obligor, guarantor, surety or
otherwise, including guarantees of such obligations.
“
Indemnified
Liabilities
” has the meaning set forth in
Article Third
,
Section 20(a)
hereof.
“
Indemnified Person
”
has the meaning set forth in
Arti
cle Third
,
Section 20(a)
hereof.
“
Investor Director
Seats
” has the meaning set forth in
Article Third
,
Section 7(a)(i)
hereof.
“
Investor Directors
”
has the meaning set forth in
Article Third
,
Section 7(a)(i)
hereof.
“
Investor Rights
Agreement
” means that certain Investor Rights Agreement, dated as of the
Effective Date, by and between the Corporation and Trailer Investments, LLC, as
such agreement may from time to time be amended, supplemented or otherwise
modified in accordance with its terms.
“
Investor
” or “
Investors
” means, as
applicable, Trailer and/or any of its Permitted Transferees.
“
Issuance Date
” has
the meaning set forth in
Article Third
,
Section 3(c)
hereof.
“
Lien
” means any
mortgage, pledge, lien, deed of trust, conditional sale or other title retention
agreement, charge or other security interest or encumbrance securing obligations
for the payment of money.
“
Junior
Stock
” means, collectively, the Common Stock and any capital
stock or other equity security of the Corporation that (i) does not expressly
provide that it ranks senior in preference or priority to or on parity with the
Series G Preferred Shares, or (ii) was not approved by the holders of a majority
of the Series G Preferred Shares then outstanding, except for the Series E
Preferred, the Series F Preferred and the Series G Preferred.
“
Leverage Ratio
” has
the meaning set forth in
Article Third
,
Section 7(b)(i)(E)
hereof.
“
Liquidation Value
”
means, as of any particular date and with respect to any Series G Preferred
Share, an amount equal to $1,000.
“
Majority Common
Investors
” means the Common Investors from time to time holding at least
a majority, in the aggregate, of the Registrable Securities then outstanding and
the rights to acquire Registrable Securities.
“
Majority Trailer
Investors
” means the Trailer Investors from time to time holding (i) at
least a majority of the Series E Preferred, the Series F Preferred and the
Series G Preferred then held by all Trailer Investors or (ii) at least a
majority, in the aggregate, of the Registrable Securities then held by all
Trailer Investors and the rights to acquire Registrable Securities then held by
all Trailer Investors.
“
Mandatory Redemption
”
has the meaning set forth in
Article Third
,
Section 6(b)(i)
hereof.
“
NYSE Limitation
”
means the maximum number of securities of the Corporation that could be issued
by the Corporation to the Trailer Investors without triggering a requirement to
obtain the approval of the Corporation’s shareholders of such issuance pursuant
to Section 312.03 of the New York Stock Exchange Listed Corporation Manual, as
in effect on the date of issuance of such shares of Common Stock.
“
Optional Redemption
”
has the meaning set forth in
Article Third
,
Section 6(a)(i)
hereof.
“
Optional Redemption
Price
” has the meaning set forth in
Article Third
,
Section 6(a)(ii)
hereof.
“
Optional Redemption
Price
” has the meaning set forth in
Article Third
,
Section 6(a)(i)
hereof.
“
Parity Stock
” means
the Series E Preferred, the Series F Preferred and the Series G
Preferred.
“
Permitted Transferee
”
means (i) with respect to the Series E Preferred, the Series F Preferred and the
Series G Preferred, any Person who acquires all or any portion of the Series E
Preferred, the Series F Preferred or the Series G Preferred from Trailer (or any
other Permitted Transferee) after the Effective Date, and (ii) with respect to
the Warrant or the Warrant Shares, any Person who acquires all or any portion of
the Warrant or the Registrable Securities from Trailer (or any other Permitted
Transferee) following the Effective Date. Any such transferee shall
become bound by the terms of the Investor Rights Agreement as an additional
Preferred Investor, Investor and/or Common Investor (as each such term is
defined in the Investor Rights Agreement), as applicable, by executing and
delivering to the Corporation a joinder agreement in form and substance
reasonably acceptable to the Corporation and such transferee. The
Corporation shall be furnished with at least three Business Days’ prior written
notice of the name and address of such transferee and the securities being
Transferred, the representation by the transferee that such Transfer is being
made in accordance with the applicable requirements of the Investor Rights
Agreement and with all laws applicable thereto. Following the
execution and delivery of such joinder agreement by the Corporation and such
transferee, such transferee shall constitute one of the Preferred Investors,
Investors and/or Common Investors, as applicable, referred to in the Investor
Rights Agreement and shall have all of the rights and obligations of a Preferred
Investor, Investor and/or Common Investor, as applicable,
thereunder.
“
Person
” means any
individual, partnership, corporation, limited liability company, association,
joint stock company, trust, joint venture, unincorporated organization and
governmental entity or department, agency or political subdivision
thereof.
“
Preferred Expiration
Date
” means the date on which the Trailer Investors cease to hold at
least a majority of the Series E Preferred, the Series F Preferred and the
Series G Preferred then outstanding.
“
Preferred Investors
”
means, collectively, the Investors from time to time holding the shares of the
Series G Preferred, the Series F Preferred and the Series G Preferred then
outstanding.
“
Preferred Stock
”
means, collectively, the Corporation’s preferred stock, par value $0.01 per
share, and any capital stock of any class of the Corporation hereafter
authorized which is limited to a fixed sum or percentage of par or stated value
in respect to the rights of the holders thereof to participate in dividends or
in the distribution of assets upon any liquidation, dissolution or winding up of
the Corporation.
“
Pro Rata Portion
” has
the meaning set forth in
Article Third
,
Section 7(f)(iv)
hereof.
“
Purchase Agreement
”
means that certain Securities Purchase Agreement, dated as of July 17, 2009, by
and between the Corporation and Trailer Investments, LLC, as such agreement may
from time to time be amended, supplemented or modified in accordance with its
terms.
“
Registrable
Securities
” means, collectively, (i) the Warrant Shares and (ii) any
other securities issued or issuable with respect to or in exchange for
Registrable Securities;
provided
that a
security shall cease to be a Registrable Security upon (A) sale pursuant to a
Registration Statement (as defined in the Investor Rights Agreement) or Rule 144
under the Securities Act, or (B) such security becoming eligible for sale by the
Investor pursuant to Rule 144(b)(i)(1).
“
Restricted Payment
”
means: (i) any dividend, other distribution, repurchase or redemption, direct or
indirect, on account of any shares of any class of stock of the Corporation or
any of its Subsidiaries now or hereafter outstanding; (ii) any payment or
prepayment of principal of, premium, if any, or interest on, or any redemption,
conversion, exchange, retirement, defeasance, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of stock of the Corporation or any of its Subsidiaries now or
hereafter outstanding; (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of the Corporation or any of its Subsidiaries now
or hereafter outstanding; and (iv) any payment by the Corporation or any of its
Subsidiaries or of any management, consulting or any fees to any Affiliate of
the Corporation, whether pursuant to a management agreement or otherwise,
excluding customary compensation of employees of the Corporation and its
Subsidiaries.
“
SEC
” means the United
States Securities and Exchange Commission.
“
SEC Filings
” means,
collectively, all reports, schedules, forms, statements and other documents
required to be filed by the Corporation under the Securities Act or the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the prior
two-year period.
“
Securities Act
” means
the United States Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
“
Senior Loan
Agreement
” means the Corporation’s Second Amended and Restated Loan and
Security Agreement, dated as of March 6, 2007, as amended by the Credit
Agreement Amendment, dated as of July 17 2009 (as amended, modified or
otherwise restated from time to time) (the “
Existing Loan
Agreement
”), and any agreement relating to a refinancing, replacement or
substitution of the loans under the Existing Loan Agreement or any subsequent
Senior Loan Agreement.
“
Series E Certificate of
Designation
” means the Certificate of Designation of Rights, Preferences,
Privileges and Restrictions of Series E Preferred.
“
Series E Preferred
”
means the Corporation’s Series E Redeemable Preferred Stock, par value $0.01 per
share.
“
Series F Certificate of
Designation
” means the Certificate of Designation of Rights, Preferences,
Privileges and Restrictions of Series F Preferred.
“
Series F Preferred
”
means the Corporation’s Series F Redeemable Preferred Stock, par value $0.01 per
share.
“
Series G Preferred
”
has the meaning set forth in
Article Third
,
Section 1
hereof.
“
Series G Preferred
Share
” has the meaning set forth in
Article Third
,
Section 3(a)
hereof.
“
Specified Event of
Noncompliance
” means any Event of Noncompliance described in
Section 8(a)(i)
,
Section
8(a)(ii)
,
Section 8(a)(iii)
(provided that, in the case of any Event of Default arising out of
Section 7(b)(i),
Section 7(c)
or
Section 7(d)
hereof, such Event of Default arose out of any intentional or willful action or
omission taken or suffered by the Corporation or any of its Subsidiaries),
Section 8(a)(iv)
,
Section 8(a)(v)
or
Section
8(a)(vi)
.
“
Sub Board
” has the
meaning set forth in
Article Third
,
Section 7(a)(ix)
hereof.
“
Subsequent Financing
”
means any private issuance of debt or equity securities or other private
financing transaction that, in each case, is consummated by the Corporation (or
any of its Subsidiaries, as applicable) following the Effective Date;
provided
that any
issuance of debt securities pursuant to the Senior Loan Agreement shall not
constitute a Subsequent Financing under this Certificate of
Designation.
“
Subsequent Financing
Notice
” has the meaning set forth in
Article Third
,
Section 7(f)(ii)
hereof.
“
Subsidiary
,” when
used with respect to any Person, means any other Person of which (i) in the
case of a corporation, at least (A) a majority of the equity and (B) a majority
of the voting interests are owned or controlled, directly or indirectly, by such
first Person, by any one or more of its Subsidiaries, or by such first Person
and one or more of its Subsidiaries or (ii) in the case of any Person other
than a corporation, such first Person, one or more of its Subsidiaries, or such
first Person and one or more of its Subsidiaries (A) owns a majority of the
equity interests thereof and (B) has the power to elect or direct the election
of a majority of the members of the governing body thereof.
“
Total Value
” means,
at any particular time and with respect to any Investor, an amount equal to (i)
the aggregate Fair Market Value of any Warrant Shares held by such Investor at
such time,
plus
(ii) the aggregate Fair Market Value of any Warrant Shares issuable to such
Investor upon exercise of the Warrant by such Investor at such time,
plus
(iii) the
aggregate liquidation value (plus accumulated, accrued and unpaid dividends) of
the Series E Preferred, Series F Preferred and Series G Preferred held by such
Investor at such time.
“
Trailer
” means
Trailer Investments, LLC, a Delaware limited liability company.
“
Trailer Investors
”
means (i) Trailer and (ii) any other Person that is a Permitted Transferee of
Trailer that is an Affiliate of Trailer (including for this purpose only any
investor (and its Affiliates) in any investment fund managed by Lincolnshire
Management, Inc.).
“
Transaction
Documents
” means the Investor Rights Agreement, the Certificates of
Designation, the Warrant, the Purchase Agreement and all other documents
delivered or required to be delivered by any party hereto pursuant to the
Purchase Agreement.
“
Transfer
” means any
transfer, sale, assignment, pledge, conveyance, loan, hypothecation or other
encumbrance or disposition of the Warrant, the Warrant Shares, the Series E
Preferred, the Series F Preferred and/or the Series G Preferred.
“
Warrant
” means,
collectively, (i) the Warrant to purchase shares of Common Stock issued to
Trailer pursuant to the Purchase Agreement on the Effective Date, and (ii) any
warrants issued in replacement or exchange, or in connection with a Transfer,
thereof.
“
Warrant Shares
” means
the shares of Common Stock issuable upon the exercise of the
Warrant.
FOURTH:
The Series
G Preferred Stock shall be created upon filing this Certificate of
Designation.
[END OF
PAGE]
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the undersigned does hereby certify under penalties of perjury
that this Certificate of Designation to the Certificate of Incorporation is the
act and deed of the undersigned and the facts stated herein are true and
accordingly has hereunto set his hand as of July 31, 2009.
|
WABASH
NATIONAL CORPORATION,
|
|
a
Delaware corporation
|
|
|
|
|
By:
|
/s/ Richard J. Giromini
|
|
Name:
|
Richard
J. Giromini
|
|
Title:
|
President
and Chief Executive Officer
|
WABASH
NATIONAL CORPORATION
AMENDED
AND RESTATED BYLAWS
TABLE
OF CONTENTS
|
|
|
Page
|
|
1.
|
OFFICES
|
1
|
|
|
1.1.
|
Registered
Office
|
1
|
|
|
1.2.
|
Other
Offices
|
1
|
|
2.
|
MEETINGS
OF STOCKHOLDERS
|
1
|
|
|
2.1.
|
Place
of Meetings
|
1
|
|
|
2.2.
|
Annual
Meetings
|
2
|
|
|
2.3.
|
Special
Meetings
|
2
|
|
|
2.4.
|
Notice
of Meetings
|
2
|
|
|
2.5.
|
Waivers
of Notice
|
2
|
|
|
2.6.
|
Notice
of Business
|
3
|
|
|
|
2.6.1.
|
Annual
Meeting
|
3
|
|
|
|
2.6.2.
|
Notice
Procedures
|
3
|
|
|
|
2.6.3.
|
Public
Announcement
|
5
|
|
|
2.7.
|
List
of Stockholders
|
5
|
|
|
2.8.
|
Quorum
at Meetings
|
6
|
|
|
2.9.
|
Voting
and Proxies
|
6
|
|
|
2.10.
|
Required
Vote
|
7
|
|
|
2.11.
|
Action
Without a Meeting
|
7
|
|
3.
|
DIRECTORS
|
8
|
|
|
3.1.
|
Powers
|
8
|
|
|
3.2.
|
Number
and Qualification
|
8
|
|
|
|
3.2.1.
|
Number
of Directors
|
8
|
|
|
|
3.2.2.
|
Qualification
of Directors
|
8
|
|
|
3.3.
|
Nomination
of Directors
|
9
|
|
|
|
3.3.1.
|
Annual
Meetings.
|
9
|
|
|
|
3.3.2.
|
Special
Meetings of Stockholders.
|
11
|
|
|
|
3.3.3.
|
Public
Announcement
|
12
|
|
|
3.4.
|
Vacancies
|
12
|
|
|
3.5.
|
Meetings
|
13
|
|
|
|
3.5.1.
|
Regular
Meetings
|
13
|
|
|
|
3.5.2.
|
Special
Meetings
|
13
|
|
|
|
3.5.3.
|
Telephone
Meetings
|
13
|
|
|
|
3.5.4.
|
Action
Without Meeting
|
13
|
|
|
|
3.5.5.
|
Waiver
of Notice of Meeting
|
14
|
|
|
3.6.
|
Quorum
and Vote at Meetings
|
14
|
|
|
3.7.
|
Committees
of Directors
|
14
|
|
|
3.8.
|
Compensation
of Directors
|
15
|
|
4.
|
OFFICERS
|
15
|
|
|
4.1.
|
Positions
|
15
|
|
|
4.2.
|
Chairperson
|
15
|
|
|
4.3.
|
President
|
16
|
|
|
4.4.
|
Vice
President
|
16
|
|
|
4.5.
|
Secretary
|
16
|
|
|
4.6.
|
Assistant
Secretary
|
16
|
|
|
4.7.
|
Treasurer
|
17
|
|
|
4.8.
|
Assistant
Treasurer
|
17
|
|
|
4.9.
|
Term
of Office
|
17
|
|
|
4.10.
|
Compensation
|
17
|
|
|
4.11.
|
Fidelity
Bonds
|
17
|
|
5.
|
CAPITAL
STOCK
|
18
|
|
|
5.1.
|
Certificates
of Stock; Uncertificated Shares
|
18
|
|
|
5.2.
|
Lost
Certificates
|
18
|
|
|
5.3.
|
Record
Date
|
19
|
|
|
|
5.3.1.
|
Actions
by Stockholders
|
19
|
|
|
|
5.3.2.
|
Payments
|
19
|
|
|
5.4.
|
Stockholders
of Record
|
20
|
|
6.
|
INDEMNIFICATION;
INSURANCE
|
20
|
|
|
6.1.
|
Authorization
of Indemnification
|
20
|
|
|
6.2.
|
Right
of Claimant to Bring Action Against the Corporation
|
21
|
|
|
6.3.
|
Non-exclusivity
|
22
|
|
|
6.4.
|
Survival
of Indemnification
|
22
|
|
|
6.5.
|
Insurance
|
22
|
|
7.
|
GENERAL
PROVISIONS
|
23
|
|
|
7.1.
|
Inspection
of Books and Records
|
23
|
|
|
7.2.
|
Dividends
|
23
|
|
|
7.3.
|
Reserves
|
23
|
|
|
7.4.
|
Execution
of Instruments
|
23
|
|
|
7.5.
|
Fiscal
Year
|
23
|
|
|
7.6.
|
Seal
|
24
|
|
|
7.7.
|
Amendment
|
24
|
AMENDED
AND RESTATED
BYLAWS
OF
WABASH
NATIONAL CORPORATION
The
registered office of the Corporation shall be in Wilmington, Delaware, and the
registered agent in charge thereof shall be Corporation Service
Company.
The
Corporation may also have offices at such other places, both within and without
the State of Delaware, as the Board of Directors may from time to time determine
or as may be necessary or useful in connection with the business of the
Corporation.
|
2.
|
MEETINGS
OF STOCKHOLDERS
|
All
meetings of the stockholders shall be held at such place as may be fixed from
time to time by the Board of Directors, the Chairperson or the President.
Notwithstanding the foregoing, the Board of Directors may determine that the
meeting shall not be held at any place, but may instead be held by means of
remote communication.
Unless
directors are elected by written consent in lieu of an annual meeting, the
Corporation shall hold annual meetings of stockholders, on such date and at such
time as shall be designated from time to time by the Board of Directors, the
Chairperson or the President, at which stockholders shall elect a Board of
Directors and transact such other business as may properly be brought before the
meeting. If a written consent electing directors is less than
unanimous, such action by written consent may be in lieu of holding an annual
meeting only if all of the directorships to which directors could be elected at
an annual meeting held at the effective time of such action are vacant and are
filled by such action.
Special
meetings of the stockholders, for any purpose or purposes, unless otherwise
prescribed by statute, may be called by the Board of Directors, the Chairperson
or the President. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice (except to
the extent that such notice is waived or is not required as provided in the
Delaware General Corporation Law or these Bylaws).
Notice of
any meeting of stockholders, stating the place, if any, date and hour of the
meeting, the means of remote communication, if any, by which stockholders and
proxyholders may be deemed to be present in person and vote at such meeting, and
(if it is a special meeting) the purpose or purposes for which the meeting is
called, shall be given to each stockholder entitled to vote at such meeting not
less than ten nor more than sixty days before the date of the meeting (except to
the extent that such notice is waived or is not required as provided in the
General Corporation Law of the State of Delaware (the "
Delaware General Corporation
Law
") or these Bylaws). Such notice shall be given in
accordance with, and shall be deemed effective as set forth in, Sections 222 and
232 (or any successor section or sections) of the Delaware General Corporation
Law.
Whenever
the giving of any notice is required by statute, the Certificate of
Incorporation or these Bylaws, a written waiver thereof signed by the person or
persons entitled to said notice, or a waiver thereof by electronic transmission
by the person entitled to said notice, delivered to the Corporation, whether
before or after the event as to which such notice is required, shall be deemed
equivalent to notice.
Attendance of a stockholder at a meeting shall constitute a waiver of notice
(1) of such meeting, except when the stockholder at the beginning of the
meeting objects to holding the meeting or transacting business at the meeting,
and (2) (if it is a special meeting) of consideration of a particular matter at
the meeting that is not within the purpose or purposes described in the meeting
notice, unless the stockholder objects to considering the matter at the
beginning of the meeting.
At
an annual meeting of the stockholders, only such business shall be conducted as
shall have been brought before the meeting (i) pursuant to the Corporation's
notice of meeting (or any supplement thereto), (ii) by or at the direction of
the Board of Directors or (iii) by any stockholder of the Corporation who is a
stockholder of record at the time of giving of the notice provided for in this
Section 2.6
, who shall
be entitled to vote at such meeting and who complies with the notice procedures
set forth in this
Section
2.6
.
(a) For
business to be properly brought before an annual meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to the Secretary of
the Corporation. To be timely, a stockholder's notice shall be delivered to or
mailed and received at the principal executive offices of the Corporation not
later than the close of business on the ninetieth day nor earlier than the close
of business on the one hundred twentieth day prior to the first anniversary of
the preceding year's annual meeting; provided, however, that in the event that
the date of the annual meeting is more than thirty days before or more than
thirty days after such anniversary date, notice by the stockholder to be timely
must be so delivered not earlier than the close of business on the one hundred
twentieth day prior to such annual meeting and not later than the close of
business on the later of the ninetieth day prior to such annual meeting or the
tenth day following the day on which public disclosure of the date of the
meeting was first made. In no event shall the public announcement of
an adjournment or postponement of an annual meeting commence a new time period
(or extend any time period) for the giving of a stockholder's notice as
described above.
(b) A
stockholder's notice to the Secretary shall set forth (A) as to each matter the
stockholder proposes to bring before the meeting (i) a brief description of the
business desired to be brought before the meeting and the reasons for conducting
such business at the meeting, (ii) the text of the proposal or business
(including the text of any resolutions proposed for consideration and in the
event that such business includes a proposal to amend the Bylaws of the
Corporation, the language of the proposed amendment), (iii) any material
interest in such business of such stockholder and such beneficial owner, if any,
on whose behalf the proposal is made, and (iv) any other information relating to
such business that is required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitations of proxies in
support of such proposal or is otherwise required pursuant to Regulation 14A of
the Securities Exchange Act of 1934, as amended (the "
Exchange Act
") and (B) as to
the stockholder giving the notice and the beneficial owner, if any, on whose
behalf the proposal is made (i) the name and address of such stockholder, as
they appear on the Corporation's books, and of such beneficial owner, (ii) the
class or series and number of shares of the Corporation which are owned
beneficially and of record by such stockholder and by such beneficial owner,
(iii) a description of all arrangements or understandings between such
stockholder and/or beneficial owner and any other person or persons (including
their names) pursuant to which the proposal(s) are to be made by such
stockholder, (iv) a representation that such stockholder is a holder of record
of stock of the Corporation entitled to vote at such meeting and intends to
appear in person or by proxy at the meeting to propose the items of business set
forth in its notice, (v) a representation whether the stockholder or the
beneficial owner, if any, intends or is a part of a group which intends (a) to
deliver a proxy statement and/or form of proxy to holders of at least the
percentage of the Corporation's outstanding capital stock required to approve or
adopt the proposal and/or (b) otherwise to solicit proxies from stockholders in
support of such proposal, and (vi) any other information relating to such
stockholder or beneficial owner that would be required to be disclosed in a
proxy statement or other filings required to be made in connection with
solicitations of proxies in support of such proposal pursuant to Regulation 14A
under the Exchange Act.
(c) Notwithstanding
anything in the Bylaws to the contrary, no business shall be conducted at an
annual stockholder meeting except in accordance with the procedures set forth in
this
Section 2.6
. The
timing requirements for advance notice of a proposal set forth in this
Section 2.6
shall be deemed
satisfied by a stockholder if the stockholder has notified the Corporation of
his or her intention to present a proposal at an annual meeting in compliance
with Rule 14a-8 (or any successor thereof) promulgated under the Exchange Act
and such stockholder's proposal has been included in a proxy statement that has
been prepared by the Corporation to solicit proxies for such annual
meeting. Except as otherwise provided by law, the Chair of the
meeting has the power and authority to and shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting and in accordance with the provisions of these Bylaws, and if
he should so determine, he shall so declare to the meeting and any such business
not properly brought before the meeting shall not be transacted. Notwithstanding
the foregoing provisions of this
Section 2.6
, a stockholder
shall also comply with all applicable requirements of the Exchange Act and the
rules and regulations promulgated thereunder with respect to the matters set
forth in this Section. Nothing in this
Section 2.6
shall be deemed to
affect any rights of stockholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange
Act.
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|
2.6.3.
|
Public
Announcement
|
For purposes of this Section 2.6,
"public announcement" shall include disclosure in a press release reported by
the Dow Jones News Service, Associated Press or comparable national news service
or in a document publicly filed by the Corporation with the Securities and
Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange
Act.
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|
2.7.
|
List
of Stockholders
|
After the
record date for a meeting of stockholders has been fixed, at least ten days
before such meeting, the officer who has charge of the stock ledger of the
Corporation shall make a list of all stockholders entitled to vote at the
meeting, arranged in alphabetical order and showing the address of each
stockholder (but not the electronic mail address or other electronic contact
information, unless the Board of Directors so directs) and the number of shares
registered in the name of each stockholder. Such list shall be open
to the examination of any stockholder for any purpose germane to the meeting for
a period of at least ten days prior to the meeting: (1) on a reasonably
accessible electronic network, provided that the information required to gain
access to such list is provided with the notice of the meeting, or (2) during
ordinary business hours, at the principle place of business of the
Corporation. If the meeting is to be held at a place, then such list
shall also, for the duration of the meeting, be produced and kept open to the
examination of any stockholder who is present at the time and place of the
meeting. If the meeting is to be held solely by means of remote
communication, then such list shall also be open to the examination of any
stockholder during the whole time of the meeting on reasonably accessible
electronic network, and the information required to access such list shall be
provided with the notice of the meeting.
Stockholders
may take action on a matter at a meeting only if a quorum exists with respect to
that matter.
Except as otherwise provided by statute or by the Certificate of Incorporation,
the holders of a majority of the shares entitled to vote at the meeting, and who
are present in person or represented by proxy, shall constitute a quorum at all
meetings of the stockholders for the transaction of business. Where a
separate vote by a class or series or classes or series is required, a majority
of the outstanding shares of such class or series or classes or series, present
in person or represented by proxy, shall constitute a quorum entitled to take
action with respect to that vote on that matter. Once a share is
represented for any purpose at a meeting (other than solely to object (1) to
holding the meeting or transacting business at the meeting, or (2) (if it is a
special meeting) to consideration of a particular matter at the meeting that is
not within the purpose or purposes described in the meeting notice), it is
deemed present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for the
adjourned meeting. The holders of a majority of the voting shares
represented at a meeting, whether or not a quorum is present, may adjourn such
meeting from time to time.
Unless
otherwise provided in the Delaware General Corporation Law or in the
Corporation's Certificate of Incorporation, and subject to the other provisions
of these Bylaws, each stockholder shall be entitled to one vote on each matter,
in person or by proxy, for each share of the Corporation's capital stock that
has voting power and that is held by such stockholder. No proxy shall
be voted or acted upon after three years from its date, unless the proxy
provides for a longer period.
A
duly executed appointment of proxy shall be irrevocable if the appointment form
states that it is irrevocable and if, and only as long as, it is coupled with an
interest sufficient in law to support an irrevocable power. If authorized by the
Board of Directors, and subject to such guidelines as the Board of Directors may
adopt, stockholders and proxyholders not physically present at a meeting of
stockholders may, by means of remote communication, participate in a meeting of
stockholders and be deemed present in person and vote at such meeting whether
such meeting is held at a designated place or solely by means of remote
communication, provided that (1) the Corporation implements reasonable measures
to verify that each person deemed present and permitted to vote at the meeting
by means of remote communication is a stockholder or proxyholder, (2) the
Corporation implements reasonable measures to provide such stockholders and
proxyholders a reasonable opportunity to participate in the meeting and to vote
on matters submitted to the stockholders, including an opportunity to read or
hear the proceedings of the meeting substantially concurrently with such
proceedings, and (3) if any stockholder or proxyholder votes or takes other
action at the meeting by means of remote communication, a record of such vote or
other action is maintained by the Corporation.
When a
quorum is present at any meeting of stockholders, all matters shall be
determined, adopted and approved by the affirmative vote (which need not be by
ballot) of the holders of a majority of the shares present in person or
represented by proxy at the meeting and entitled to vote with respect to the
matter, unless the proposed action is one upon which, by express provision of
statutes or of the Certificate of Incorporation, a different vote is specified
and required, in which case such express provision shall govern and control with
respect to that vote on that matter. Where a separate vote by a class
or classes is required, the affirmative vote of the holders of a majority of the
shares of such class or classes present in person or represented by proxy at the
meeting shall be the act of such class. Each director shall be elected by the
vote of the majority of the votes cast (meaning the number of shares voted “for”
a nominee must exceed the number of shares voted “against” such nominee) at any
meeting for the election of directors at which a quorum is present, provided
that the directors shall be elected by a plurality of the votes cast at any
meeting at which a quorum is present and for which (i) the Secretary of the
Corporation receives a notice in compliance with applicable requirements for
stockholder nominations for directors set forth in these Bylaws that a
stockholder proposes to nominate a person for election to the Board of Directors
and (ii) such proposed nomination has not been withdrawn by such stockholder on
or prior to the tenth day preceding the day the Corporation first mails or
otherwise transmits its notice of meeting for such meeting to the
stockholders.
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|
2.11.
|
Action
Without a Meeting
|
Any
action required or permitted to be taken at a stockholders' meeting may be taken
without a meeting, without prior notice and without a vote, if the action is
taken by persons who would be entitled to vote at a meeting and who hold shares
having voting power equal to not less than the minimum number of votes that
would be necessary to authorize or take the action at a meeting at which all
shares entitled to vote were present and voted. The action must be evidenced by
one or more written consents describing the action taken, signed by the
stockholders entitled to take action without a meeting, and delivered to the
Corporation in the manner prescribed by the Delaware General Corporation Law for
inclusion in the minute book. No consent shall be effective to take the
corporate action specified unless the number of consents required to take such
action are delivered to the Corporation within sixty days of the delivery of the
earliest-dated consent. A telegram, cablegram or other electronic transmission
consenting to such action and transmitted by a stockholder or proxyholder, or by
a person or persons authorized to act for a stockholder or proxyholder, shall be
deemed to be written, signed and dated for the purposes of this
Section
2.11
, provided that any
such telegram, cablegram or other electronic transmission sets forth or is
delivered with information from which the Corporation can determine (1) that the
telegram, cablegram or other electronic transmission was transmitted by the
stockholder or proxyholder or by a person or persons authorized to act for the
stockholder or proxyholder and (2) the date on which such stockholder or
proxyholder or authorized person or persons transmitted such telegram, cablegram
or electronic transmission. The date on which such telegram,
cablegram or electronic transmission is transmitted shall be deemed to be the
date on which such consent was signed. No consent given by telegram,
cablegram or other electronic transmission shall be deemed to have been
delivered until such consent is delivered to the Corporation in accordance with
Section 228(d)(1) of the Delaware General Corporation Law. Written notice of the
action taken shall be given in accordance with the Delaware General Corporation
Law to all stockholders who do not participate in taking the action who would
have been entitled to notice if such action had been taken at a meeting having a
record date on the date that written consents signed by a sufficient number of
holders to take the action were delivered to the Corporation.
The
business and affairs of the Corporation shall be managed by or under the
direction of the Board of Directors, which may exercise all such powers of the
Corporation and do all such lawful acts and things, subject to any limitation
set forth in the Certificate of Incorporation or as otherwise may be provided in
the Delaware General Corporation Law.
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|
3.2.
|
Number
and Qualification
|
|
|
3.2.1.
|
Number
of Directors
|
The
number of directors which shall constitute the whole board shall not be fewer
than three nor more than nine. Thereafter, within the limits above
specified, the number of directors shall be determined by resolution of the
Board of Directors.
|
|
3.2.2.
|
Qualification
of Directors
|
(a) Each
director shall submit his or her Irrevocable Resignation (as defined in (b) of
this
Section
3.2.2
below) in writing to the
Board of Directors or the Corporate Governance and Nominating
Committee.
(b) The
Board of Directors shall nominate for re-election as a director only an
incumbent candidate who has tendered, prior to the mailing of the proxy
statement for the annual meeting at which he or she is to be nominated for
re-election as a director, an irrevocable resignation authorized by Section
141(b) of the Delaware General Corporation Law that will be effective upon (i)
the failure of the director to receive the required vote at any annual meeting
at which such director is nominated for re-election and (ii) acceptance by the
Board of Directors of such resignation (an “
Irrevocable
Resignation
”). The Board of Directors shall fill director
vacancies and new directorships only with candidates who tender, at or prior to
the time of their appointment to the Board of Directors, an Irrevocable
Resignation.
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|
3.3.
|
Nomination
of Directors
|
The
directors shall be elected at the annual meeting of the stockholders, except as
provided in
Section
3.4
hereof, and each director
elected shall hold office until such director's successor is elected and
qualified or until the director's earlier death, resignation or removal.
Directors need not be stockholders. Only persons who are nominated in
accordance with the procedures set forth in the Bylaws shall be eligible to
serve as directors.
(a) Nominations of persons for election
to the Board of Directors may be made at an annual meeting of stockholders only
(1) pursuant to the Corporation's notice of meeting (or any supplement thereto),
(2) by or at the direction of the Board of Directors or (3) by any stockholder
of the Corporation who is a stockholder of record at the time of giving of
notice provided for in this
Section 3.3.1
, who shall be
entitled to vote for the election of directors at the meeting and who complies
with the notice procedures set forth in this
Section 3.3.1
.
(b) (1) Such
nominations, other than those made by or at the direction of the Board of
Directors, shall be made pursuant to timely notice in writing to the Secretary
of the Corporation. To be timely, a stockholder's notice shall be
delivered to or mailed and received at the principal executive offices of the
Corporation not later than the close of business on the ninetieth day nor
earlier than the close of business on the one hundred twentieth day prior to the
first anniversary of the preceding year's annual meeting; provided, however,
that in the event that the date of the annual meeting is more than thirty days
before or more than thirty days after such anniversary, notice by the
stockholder to be timely must be so delivered not earlier than the close of
business on the one hundred twentieth day prior to such annual meeting and not
later than the close of business on the later of the ninetieth day prior to such
annual meeting or the tenth day following the day on which public disclosure of
the date of the meeting was first made. In no event shall the public
announcement of an adjournment or postponement of an annual meeting commence a
new time period (or extend any time period) for the giving of a stockholder's
notice as described above.
(2) Such
stockholder's notice shall set forth (a) as to each person whom the stockholder
proposes to nominate for election or reelection as a director (i) the name, age,
business address and residence address of the person, (ii) the principal
occupation or employment of the person, (iii) the class or series and number of
shares of capital stock of the Corporation which are beneficially owned by the
person and (iv) any other information relating to such person that is required
to be disclosed in solicitations of proxies for election of directors, or is
otherwise required, in each case pursuant to Regulation 14A under the Exchange
Act (including such person's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected); and (b) as to
the stockholder giving the notice and the beneficial owner, if any, on whose
behalf the nomination is made (i) the name and address of such stockholder, as
they appear on the Corporation's books, and of such beneficial owner, (ii) the
class or series and number of shares of the Corporation which are owned
beneficially and of record by such stockholder and by such beneficial owner,
(iii) a description of all arrangements or understandings between such
stockholder and/or beneficial owner and each proposed nominee and any other
person or persons (including their names) pursuant to which the nomination(s)
are to be made by such stockholder, (iv) a representation that such stockholder
is a holder of record of stock of the Corporation entitled to vote at such
meeting and intends to appear in person or by proxy at the meeting to nominate
the person named in its notice, (v) a representation whether the stockholder or
the beneficial owner, if any, intends or is a part of a group which intends (a)
to deliver a proxy statement and/or form of proxy to holders of at least the
percentage of the Corporation's outstanding capital stock required to elect the
nominee and/or (b) otherwise to solicit proxies from stockholders in support of
such nomination, and (vi) any other information relating to such stockholder or
beneficial owner that would be required to be disclosed in a proxy statement or
other filings required to be made in connection with solicitations of proxies
for election of directors pursuant to Regulation 14A under the Exchange Act. At
the request of the Board of Directors, any person nominated by the Board of
Directors for election as a director shall furnish to the Secretary of the
Corporation that information required to be set forth in a stockholder's notice
of nomination which pertains to the nominee, or any other information as the
Board of Directors may reasonably require to determine the eligibility of such
proposed nominee to serve as a director of the Corporation.
(3) No
person shall be eligible to serve as a director of the Corporation unless
nominated in accordance with the procedures set forth in this Bylaw and unless
qualified under the other provisions of these Bylaws. Except as otherwise
provided by law, the Chair of the meeting has the power and authority to and
shall, if the facts warrant, determine and declare to the meeting that a
nomination was not made in accordance with the procedures prescribed by the
Bylaws, and if he should so determine, he shall so declare to the meeting and
the defective nomination shall be disregarded. Notwithstanding the
foregoing provisions of this
Section 3.3
, if the
stockholder (or a qualified representative of the stockholder) does not appear
at the meeting of stockholders of the Corporation to present a nomination, such
nomination shall be disregarded, notwithstanding that proxies in respect of such
vote may have been received by the Corporation. Notwithstanding the foregoing
provisions of this
Section
3.3
, a stockholder shall also comply with all applicable requirements of
the Exchange Act and the rules and regulations promulgated thereunder with
respect to the matters set forth in this
Section
3.3
. Nothing in this
Section 3.3
shall be deemed to
affect any rights of the holders of any series of preferred stock to elect
directors pursuant to any applicable provisions of the Certificate of
Incorporation.
(c) Notwithstanding
anything in the second sentence of paragraph (b) of this
Section 3.3.1
to the contrary,
in the event that the number of directors to be elected to the Board at an
annual meeting is increased and there is no public announcement by the
Corporation naming the nominees for the additional directorships at least one
hundred days prior to the first anniversary of the preceding year's annual
meeting, a stockholder's notice required by this
Section 3.3
shall also be
considered timely, but only with respect to nominees for the additional
directorships, if it shall be delivered to the Secretary at the principal
executive offices of the Corporation not later than the close of business on the
tenth day following the day on which such public announcement is first made by
the Corporation.
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|
3.3.2.
|
Special
Meetings of Stockholders.
|
Nominations of persons for election to
the Board of Directors may be made at a special meeting of stockholders at which
directors are to be elected pursuant to the Corporation's notice of meeting (1)
by or at the direction of the Board of Directors or (2) provided that the Board
of Directors has determined that directors shall be elected at such meeting, by
any stockholder of the Corporation who is a stockholder of record at the time
the notice provided for in this
Section 3.3.2
is delivered to
the Secretary of the Corporation, who is entitled to vote at the meeting and
upon such election and who complied with the notice procedures set forth in this
Section 3.3.2.
In the
event the Corporation calls a special meeting of stockholders for the purpose of
electing one or more directors to the Board of Directors, any such stockholder
entitled to vote in such election of directors may nominate a person or persons
(as the case may be) for election to such position(s) as specified in the
Corporation's notice of meeting, if the stockholder's notice required by
Section 3.3.1(b)
shall be
delivered to the Secretary at the principal executive offices of the Corporation
not earlier than the close of business on the one hundred twentieth day prior to
such special meeting and not later than the close of business on the later of
the ninetieth day prior to such special meeting or the tenth day following the
day on which public announcement is first made of the date of the special
meeting and of the nominees proposed by the Board of Directors to be elected at
such meeting. In no event shall the public announcement of an
adjournment or postponement of a special meeting commence a new time period (or
extend any time period) for the giving of a stockholder's notice as described
above.
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|
3.3.3.
|
Public
Announcement
|
For purposes of this
Section 3.3
, "public
announcement" shall include disclosure in a press release reported by the Dow
Jones News Service, Associated Press or comparable national news service or in a
document publicly filed by the Corporation with the Securities and Exchange
Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.
Vacancies
and newly created directorships resulting from any increase in the authorized
number of directors elected by all of the stockholders having the right to vote
as a single class may be filled by the affirmative vote of a majority of the
directors then in office, although fewer than a quorum, or by a sole remaining
director. Whenever the holders of any class or classes of stock or
series thereof are entitled to elect one or more directors by the provisions of
the Certificate of Incorporation, vacancies and newly created directorships of
such class or classes or series may be filled by the affirmative vote of a
majority of the directors elected by such class or classes or series thereof
then in office, or by a sole remaining director so elected. Each director so
chosen shall hold office until the next election of directors of the class to
which such director was appointed, and until such director's successor is
elected and qualified, or until the director's earlier death, resignation or
removal. In the event that one or more directors resign from the Board,
effective at a future date, a majority of the directors then in office,
including those who have so resigned, shall have power to fill such vacancy or
vacancies, the vote thereon to take effect when such resignation or resignations
shall become effective, and each director so chosen shall hold office until the
next election of directors, and until such director's successor is elected and
qualified, or until the director's earlier death, resignation or
removal.
Regular
meetings of the Board of Directors may be held without notice at such time and
at such place as shall from time to time be determined by the Board of
Directors.
Special
meetings of the Board may be called by the Chairperson or President on one day's
notice to each director, either personally or by telephone, express delivery
service (so that the scheduled delivery date of the notice is at least one day
in advance of the meeting), telegram, facsimile transmission, electronic mail
(effective when directed to an electronic mail address of the director), or
other electronic transmission, as defined in Section 232(c) (or any successor
section) of the Delaware General Corporation Law (effective when directed to the
director), and on five days' notice by mail (effective upon deposit of such
notice in the mail). The notice need not describe the purpose of a special
meeting.
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|
3.5.3.
|
Telephone
Meetings
|
Members
of the Board of Directors may participate in a meeting of the board by any
communication by means of which all participating directors can simultaneously
hear each other during the meeting. A director participating in a meeting by
this means is deemed to be present in person at the meeting.
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|
3.5.4.
|
Action
Without Meeting
|
Any
action required or permitted to be taken at any meeting of the Board of
Directors may be taken without a meeting if the action is taken by all members
of the Board. The action must be evidenced by one or more consents in writing or
by electronic transmission describing the action taken, signed (if in writing)
by each director, and delivered to the Corporation for inclusion in the minute
book.
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|
3.5.5.
|
Waiver
of Notice of Meeting
|
A
director may waive any notice required by statute, the Certificate of
Incorporation or these Bylaws before or after the date and time stated in the
notice. Except as set forth below, the waiver must be in writing, signed by the
director entitled to the notice, or made by electronic transmission by the
director entitled to the notice, and delivered to the Corporation for inclusion
in the minute book. Notwithstanding the foregoing, a director's attendance at or
participation in a meeting waives any required notice to the director of the
meeting unless the director at the beginning of the meeting objects to holding
the meeting or transacting business at the meeting and does not thereafter vote
for or assent to action taken at the meeting.
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|
3.6.
|
Quorum
and Vote at Meetings
|
At all
meetings of the board, a quorum of the Board of Directors consists of a majority
of the total number of directors prescribed pursuant to
Section
3.2
of these Bylaws. The vote
of a majority of the directors present at any meeting at which there is a quorum
shall be the act of the Board of Directors, except as may be otherwise
specifically provided by statute or by the Certificate of Incorporation or by
these Bylaws.
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|
3.7.
|
Committees
of Directors
|
The Board
of Directors may designate one or more committees, each committee to consist of
one or more directors. The Board may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. If a member of a committee
shall be absent from any meeting, or disqualified from voting thereat, the
remaining member or members present and not disqualified from voting, whether or
not such member or members constitute a quorum, may, by unanimous vote, appoint
another member of the Board of Directors to act at the meeting in the place of
such absent or disqualified member. Any such committee, to the extent
provided in the resolution of the Board of Directors, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may require it; but no
such committee shall have the power or authority in reference to approving or
adopting, or recommending to the stockholders, any action or matter expressly
required by the Delaware General Corporation Law to be submitted to stockholders
for approval or adopting, amending or repealing any bylaw of the Corporation;
and unless the resolution designating the committee, these bylaws or the
Certificate of Incorporation expressly so provide, no such committee shall have
the power or authority to declare a dividend, to authorize the issuance of
stock, or to adopt a certificate of ownership and merger pursuant to Section 253
of the Delaware General Corporation Law. Such committee or committees
shall have such name or names as may be determined from time to time by
resolution adopted by the Board of Directors. Each committee shall
keep regular minutes of its meetings and report the same to the Board of
Directors, when required. Unless otherwise specified in the Board resolution
appointing the Committee, all provisions of the Delaware General Corporation Law
and these Bylaws relating to meetings, action without meetings, notice (and
waiver thereof), and quorum and voting requirements of the Board of Directors
apply, as well, to such committees and their members.
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|
3.8.
|
Compensation
of Directors
|
The Board
of Directors shall have the authority to fix the compensation of directors. No
such payment shall preclude any director from serving the Corporation in any
other capacity and receiving compensation therefor.
The
officers of the Corporation shall be a Chairperson, a President, a Secretary and
a Treasurer, and such other officers as the Board of Directors (or an officer
authorized by the Board of Directors) from time to time may appoint, including
one or more Vice Chairmen, Executive Vice Presidents, Vice Presidents, Assistant
Secretaries and Assistant Treasurers. Each such officer shall exercise such
powers and perform such duties as shall be set forth below and such other powers
and duties as from time to time may be specified by the Board of Directors or by
any officer(s) authorized by the Board of Directors to prescribe the duties of
such other officers. Any number of offices may be held by the same person,
except that in no event shall the President and the Secretary be the same
person. As set forth below, each of the Chairperson, President, and/or any Vice
President may execute bonds, mortgages and other contracts under the seal of the
Corporation, if required, except where required or permitted by law to be
otherwise executed and except where the execution thereof shall be expressly
delegated by the Board of Directors to some other officer or agent of the
Corporation.
The
Chairperson shall (when present) preside at all meetings of the Board of
Directors and stockholders, and shall ensure that all orders and resolutions of
the Board of Directors and stockholders are carried into effect. The Chairperson
may execute bonds, mortgages and other contracts, under the seal of the
Corporation, if required, except where required or permitted by law to be
otherwise signed and executed and except where the signing and execution thereof
shall be expressly delegated by the Board of Directors to some other officer or
agent of the Corporation.
The
President shall be the chief operating officer of the Corporation and shall have
full responsibility and authority for management of the day-to-day operations of
the Corporation, subject to the authority of the Board of Directors and
Chairperson. The President may execute bonds, mortgages and other contracts,
under the seal of the Corporation, if required, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the Board of
Directors to some other officer or agent of the Corporation.
In the
absence of the President or in the event of the President's inability or refusal
to act, the Vice President (or in the event there be more than one Vice
President, the Vice Presidents in the order designated, or in the absence of any
designation, then in the order of their election) shall perform the duties of
the President, and when so acting shall have all the powers of, and be subject
to all the restrictions upon, the President.
The
Secretary shall have responsibility for preparation of minutes of meetings of
the Board of Directors and of the stockholders and for authenticating records of
the Corporation. The Secretary shall give, or cause to be given, notice of all
meetings of the stockholders and special meetings of the Board of Directors. The
Secretary or an Assistant Secretary may also attest all instruments signed by
any other officer of the Corporation.
The
Assistant Secretary, or if there be more than one, the Assistant Secretaries in
the order determined by the Board of Directors (or if there shall have been no
such determination, then in the order of their election), shall, in the absence
of the Secretary or in the event of the Secretary's inability or refusal to act,
perform the duties and exercise the powers of the Secretary.
The
Treasurer shall be the chief financial officer of the Corporation and shall have
responsibility for the custody of the corporate funds and securities and shall
see to it that full and accurate accounts of receipts and disbursements are kept
in books belonging to the Corporation. The Treasurer shall render to the
Chairperson, the President, and the Board of Directors, upon request, an account
of all financial transactions and of the financial condition of the
Corporation.
The
Assistant Treasurer, or if there shall be more than one, the Assistant
Treasurers in the order determined by the Board of Directors (or if there shall
have been no such determination, then in the order of their election), shall, in
the absence of the Treasurer or in the event of the Treasurer's inability or
refusal to act, perform the duties and exercise the powers of the
Treasurer.
The
officers of the Corporation shall hold office until their successors are chosen
and qualify or until their earlier resignation or removal. Any officer may
resign at any time upon written notice to the Corporation. Any officer elected
or appointed by the Board of Directors may be removed at any time, with or
without cause, by the affirmative vote of a majority of the Board of
Directors.
The
compensation of officers of the Corporation shall be fixed by the Board of
Directors or by any officer(s) authorized by the Board of Directors to prescribe
the compensation of such other officers.
The
Corporation may secure the fidelity of any or all of its officers or agents by
bond or otherwise.
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5.1.
|
Certificates
of Stock; Uncertificated Shares
|
The
shares of the Corporation shall be represented by certificates, provided that
the Board of Directors may provide by resolution that some or all of any or all
classes or series of the Corporation's stock shall be uncertificated shares. Any
such resolution shall not apply to shares represented by a certificate until
such certificate is surrendered to the Corporation. Notwithstanding the adoption
of such a resolution by the Board of Directors, every holder of stock
represented by certificates, and upon request every holder of uncertificated
shares, shall be entitled to have a certificate (representing the number of
shares registered in certificate form) signed in the name of the Corporation by
the Chairperson, President or any Vice President, and by the Treasurer,
Secretary or any Assistant Treasurer or Assistant Secretary of the Corporation.
Any or all the signatures on the certificate may be facsimile. In case any
officer, transfer agent or registrar whose signature or facsimile signature
appears on a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the Corporation
with the same effect as if such person were such officer, transfer agent or
registrar at the date of issue.
The Board
of Directors, Chairperson, President or Secretary may direct a new certificate
of stock to be issued in place of any certificate theretofore issued by the
Corporation and alleged to have been lost, stolen or destroyed, upon the making
of an affidavit of that fact by the person claiming that the certificate of
stock has been lost, stolen or destroyed. When authorizing such issuance of a
new certificate, the board or any such officer may, as a condition precedent to
the issuance thereof, require the owner of such lost, stolen or destroyed
certificate or certificates, or such owner's legal representative, to advertise
the same in such manner as the board or such officer shall require and/or to
give the Corporation a bond or indemnity, in such sum or on such terms and
conditions as the board or such officer may direct, as indemnity against any
claim that may be made against the Corporation on account of the certificate
alleged to have been lost, stolen or destroyed or on account of the issuance of
such new certificate or uncertificated shares.
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5.3.1.
|
Actions
by Stockholders
|
In order
that the Corporation may determine the stockholders entitled to notice of or to
vote at any meeting of stockholders, the Board of Directors may fix a record
date, which record date shall not precede the date upon which the resolution
fixing the record date is adopted by the Board of Directors, and which record
date shall not be more than sixty days nor less than ten days before the date of
such meeting. If no record date is fixed by the Board of Directors,
the record date for determining stockholders entitled to notice of or to vote at
a meeting of stockholders shall be the close of business on the day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting, unless the Board of Directors fixes a new record date for the adjourned
meeting.
In order
that the Corporation may determine the stockholders entitled to consent to
corporate action in writing without a meeting, the Board of Directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and
which record date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the Board of Directors. If no
record date has been fixed by the Board of Directors, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the Board of Directors is required by
the Delaware General Corporation Law, shall be the first date on which a signed
written consent setting forth the action taken or proposed to be taken is
delivered to the Corporation in the manner prescribed by Section 213(b) of the
Delaware General Corporation Law. If no record date has been fixed by the Board
of Directors and prior action by the Board of Directors is required by the
Delaware General Corporation Law, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting shall be at
the close of business on the day on which the Board of Directors adopts the
resolution taking such prior action.
In order
that the Corporation may determine the stockholders entitled to receive payment
of any dividend or other distribution or allotment of any rights or the
stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty days prior to such action. If
no record date is fixed, the record date for determining stockholders for any
such purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
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5.4.
|
Stockholders
of Record
|
The
Corporation shall be entitled to recognize the exclusive right of a person
registered on its books as the owner of shares to receive dividends, to receive
notifications, to vote as such owner, and to exercise all the rights and powers
of an owner. The Corporation shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise may be provided by the Delaware General Corporation Law.
|
6.
|
INDEMNIFICATION;
INSURANCE
|
|
|
6.1.
|
Authorization
of Indemnification
|
Each
person who was or is a party or is threatened to be made a party to or is
involved in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative and whether by or in
the right of the Corporation or otherwise (a "proceeding"), by reason of the
fact that he or she, or a person of whom he or she is the legal representative,
is or was a director or officer of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee, partner (limited or
general) or agent of another corporation or of a partnership, joint venture,
limited liability company, trust or other enterprise, including service with
respect to an employee benefit plan, shall be (and shall be deemed to have a
contractual right to be) indemnified and held harmless by the Corporation (and
any successor to the Corporation by merger or otherwise) to the fullest extent
authorized by, and subject to the conditions and (except as provided herein)
procedures set forth in the Delaware General Corporation Law, as the same exists
or may hereafter be amended (but any such amendment shall not be deemed to limit
or prohibit the rights of indemnification hereunder for past acts or omissions
of any such person insofar as such amendment limits or prohibits the
indemnification rights that said law permitted the Corporation to provide prior
to such amendment), against all expenses, liabilities and losses (including
attorneys' fees, judgments, fines, ERISA taxes or penalties and amounts paid or
to be paid in settlement) reasonably incurred or suffered by such person in
connection therewith;
provided,
however
, that the
Corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person (except
for a suit or action pursuant to
Section
6.2
hereof) only if such
proceeding (or part thereof) was authorized by the Board of Directors of the
Corporation. Persons who are not directors or officers of the
Corporation and are not so serving at the request of the Corporation may be
similarly indemnified in respect of such service to the extent authorized at any
time by the Board of Directors of the Corporation. The
indemnification conferred in this
Section
6.1
also shall include the
right to be paid by the Corporation (and such successor) the expenses (including
attorneys' fees) incurred in the defense of or other involvement in any such
proceeding in advance of its final disposition;
provided,
however
, that, if and
to the extent the Delaware General Corporation Law requires, the payment of such
expenses (including attorneys' fees) incurred by a director or officer in
advance of the final disposition of a proceeding shall be made only upon
delivery to the Corporation of an undertaking by or on behalf of such director
or officer to repay all amounts so paid in advance if it shall ultimately be
determined that such director or officer is not entitled to be indemnified under
this
Section
6.1
or otherwise; and
provided
further
, that, such
expenses incurred by other employees and agents may be so paid in advance upon
such terms and conditions, if any, as the Board of Directors deems
appropriate.
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6.2.
|
Right
of Claimant to Bring Action Against the
Corporation
|
If a
claim under
Section
6.1
is not paid
in full by the Corporation within sixty days after a written claim has been
received by the Corporation, the claimant may at any time thereafter bring an
action against the Corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such action. It shall be a defense to any
such action (other than an action brought to enforce a claim for expenses
incurred in connection with any proceeding in advance of its final disposition
where the required undertaking, if any is required, has been tendered to the
Corporation) that the claimant has not met the standards of conduct which make
it permissible under the Delaware General Corporation Law for the Corporation to
indemnify the claimant for the amount claimed or is otherwise not entitled to
indemnification under
Section
6.1
, but the
burden of proving such defense shall be on the Corporation. The
failure of the Corporation (in the manner provided under the Delaware General
Corporation Law) to have made a determination prior to or after the commencement
of such action that indemnification of the claimant is proper in the
circumstances because he or she has met the applicable standard of conduct set
forth in the Delaware General Corporation Law shall not be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct. Unless otherwise specified in an agreement with
the claimant, an actual determination by the Corporation (in the manner provided
under the Delaware General Corporation Law) after the commencement of such
action that the claimant has not met such applicable standard of conduct shall
not be a defense to the action, but shall create a presumption that the claimant
has not met the applicable standard of conduct.
The
rights to indemnification and advance payment of expenses provided by
Section
6.1
hereof shall not be deemed
exclusive of any other rights to which those seeking indemnification and advance
payment of expenses may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
or her official capacity and as to action in another capacity while holding such
office.
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6.4.
|
Survival
of Indemnification
|
The
indemnification and advance payment of expenses and rights thereto provided by,
or granted pursuant to,
Section
6.1
hereof shall, unless
otherwise provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee, partner or agent and shall inure to
the benefit of the personal representatives, heirs, executors and administrators
of such person.
The
Corporation shall have power to purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee, partner (limited or general) or agent of another corporation or of a
partnership, joint venture, limited liability company, trust or other
enterprise, against any liability asserted against such person or incurred by
such person in any such capacity, or arising out of such person's status as
such, and related expenses, whether or not the Corporation would have the power
to indemnify such person against such liability under the provisions of the
Delaware General Corporation Law.
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7.1.
|
Inspection
of Books and Records
|
Any
stockholder, in person or by attorney or other agent, shall, upon written demand
under oath stating the purpose thereof, have the right during the usual hours
for business to inspect for any proper purpose the Corporation's stock ledger, a
list of its stockholders, and its other books and records, and to make copies or
extracts therefrom. A proper purpose shall mean a purpose reasonably related to
such person's interest as a stockholder. In every instance where an attorney or
other agent shall be the person who seeks the right to inspection, the demand
under oath shall be accompanied by a power of attorney or such other writing
which authorizes the attorney or other agent to so act on behalf of the
stockholder. The demand under oath shall be directed to the Corporation at its
registered office or at its principal place of business.
The Board
of Directors may declare dividends upon the capital stock of the Corporation,
subject to the provisions of the Certificate of Incorporation and the laws of
the State of Delaware.
The
directors of the Corporation may set apart, out of the funds of the Corporation
available for dividends, a reserve or reserves for any proper purpose and may
abolish any such reserve.
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7.4.
|
Execution
of Instruments
|
All
checks, drafts or other orders for the payment of money, and promissory notes of
the Corporation shall be signed by such officer or officers or such other person
or persons as the Board of Directors may from time to time
designate.
The
fiscal year of the Corporation shall be fixed by resolution of the Board of
Directors.
The
corporate seal shall be in such form as the Board of Directors shall
approve. The seal may be used by causing it or a facsimile thereof to
be impressed or affixed or otherwise reproduced.
These by-laws may be amended or
repealed by the Board of Directors at any meeting or by the stockholders casting
66 2/3% of the outstanding stock of the Corporation entitled to vote thereon at
any meeting.
Bylaw
Amendment
Wabash
National Corporation
Amendment
to the Wabash National Corporation Amended and Restated Bylaws
Section
3.2.1 shall be amended and restated as follows (revisions in tracked
changes):
3.2.1.
Number of Directors
The
number of directors which shall constitute the whole board shall not be fewer
than three nor more than twelve. Thereafter, within the limits above specified,
the number of directors shall be determined by resolution of the Board of
Directors.
INVESTOR
RIGHTS AGREEMENT
dated
as of
AUGUST
3, 2009
by
and between
WABASH
NATIONAL CORPORATION
and
TRAILER
INVESTMENTS, LLC
Table of
Contents
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Page
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Article
I Certain Definitions
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1
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Article
II Registration Rights
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8
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Section
2.1
|
Mandatory
Registration
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|
8
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Section
2.2
|
Allowed
Delay
|
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10
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Section
2.3
|
Expenses
|
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10
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Section
2.4
|
Company
Obligations
|
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10
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Section
2.5
|
Due
Diligence Review; Information
|
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13
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Section
2.6
|
Obligations
of the Common Investors
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13
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Section
2.7
|
Indemnification
|
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14
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Article
III Other Rights
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16
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Section
3.1
|
Right
Of First Refusal
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16
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Section
3.2
|
Due
Diligence in Connection with Subsequent Financings
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18
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Article
IV Nomination Of Investor Directors
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18
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Section
4.1
|
Interim
Appointment of Investor Directors
|
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18
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Section
4.2
|
Continuing
Designation of Investor Directors
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19
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Section
4.3
|
Termination
of Investor Director Designation Rights
|
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19
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Section
4.4
|
Resignation;
Removal; Vacancies
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19
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Section
4.5
|
Fees
and Expenses
|
|
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19
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Section
4.6
|
Board
Observer
|
|
|
19
|
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Section
4.7
|
Subsidiary
Boards; Committees
|
|
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20
|
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Section
4.8
|
Reporting
Information
|
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20
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Section
4.9
|
Directors
and Officers Insurance; Indemnification Agreements
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20
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Article
V Consent Rights
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20
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Section
5.1
|
Approval
of the Majority Trailer Investors
|
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20
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Section
5.2
|
Affirmative
Covenants
|
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23
|
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Article
VI Information Rights
|
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24
|
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Section
6.1
|
Delivery
of Financial Statements
|
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24
|
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Section
6.2
|
Inspection
|
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25
|
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Section
6.3
|
Budget
|
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26
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Article
VII Events of Default; Remedies
|
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26
|
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Section
7.1
|
Events
of Default
|
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26
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Section
7.2
|
Remedies
|
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27
|
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Article
VIII Indemnity; Expenses
|
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28
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Section
8.1
|
Indemnity
|
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28
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Section
8.2
|
Expenses
|
|
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28
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Table of
Contents
(continued)
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Page
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Article
IX Miscellaneous
|
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29
|
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Section
9.1
|
Amendments
and Waivers
|
|
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29
|
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Section
9.2
|
Limitations
under Senior Credit Agreement.
|
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29
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Section
9.3
|
Notices
|
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29
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Section
9.4
|
Assignments
and Transfers by Investors
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30
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Section
9.5
|
Assignments
and Transfers by the Company
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30
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Section
9.6
|
Benefits
of the Agreement
|
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30
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Section
9.7
|
Counterparts;
Facsimiles and Electronic Copies
|
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31
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Section
9.8
|
Titles
and Subtitles
|
|
|
31
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Section
9.9
|
Severability
|
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|
31
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Section
9.10
|
No
Strict Construction
|
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31
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Section
9.11
|
Further
Assurances
|
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31
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Section
9.12
|
Entire
Agreement
|
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31
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Section
9.13
|
Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial
|
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32
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INVESTOR RIGHTS
AGREEMENT
This
INVESTOR RIGHTS AGREEMENT (this “
Agreement
”) is made
and entered into as of August 3, 2009 by and between Wabash National
Corporation, a Delaware corporation (the “
Company
”), and
Trailer Investments, LLC, a Delaware limited liability company (“
Trailer
”). Capitalized
terms used but not otherwise defined in this Agreement shall have the meanings
ascribed to such terms in
Article
I
.
WHEREAS,
Trailer is party to that certain Securities Purchase Agreement, dated as of July
17, 2009, by and between the Company and Trailer (the “
Purchase Agreement
”);
and
WHEREAS,
as a condition to entering into the Purchase Agreement, Trailer and the Company
have agreed to enter into this Agreement.
NOW,
THEREFORE, in consideration of the mutual promises made herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE
I
CERTAIN
DEFINITIONS
As used
in this Agreement, the following terms shall have the following
meanings:
“
Additional Shares
”
has the meaning set forth in
Section
2.1(b)
.
“
Affiliate
” means (i)
with respect to the Company, (A) any other Person (other than the Subsidiaries
of the Company) which directly or indirectly through one or more intermediaries
Controls, is Controlled by, or is under common Control with, such Person, (B)
any Person that owns more than 5% of the outstanding stock of the Company, and
(C) any officer, director or employee of the Company, its Subsidiaries or any
Person described in subclause (A) or (B) above with a base salary in excess of
$100,000 per year or with any individual related by blood, marriage or adoption
to such officer, director or employee, and (ii) with respect to any Person other
than the Company, any other Person which directly or indirectly through one or
more intermediaries Controls, is Controlled by, or is under common Control with,
such first Person.
“
Agreement
” has the
meaning set forth in the preamble.
“
Allowed Delay
” has
the meaning set forth in
Section
2.2
.
“
Audit Committee
” has
the meaning set forth in
Section
4.6
.
“
Availability Date
”
has the meaning set forth in
Section
2.4(a)(ix)
.
“
Blackout Period
” has
the meaning set forth in
Section
7.2
.
“
Blue Sky Application
”
has the meaning set forth in
Section
2.7(a)
.
“
Board
” means the
board of directors of the Company.
“
Board Observer
” has
the meaning set forth in
Section
4.6
.
“
Business Day
” means a
day, other than a Saturday or Sunday, on which banks in New York, New York are
open for the general transaction of business.
“
Certificate of
Designation
” means the Series E Certificate of Designation, the Series F
Certificate of Designation or the Series G Certificate of Designation, as
applicable, and “
Certificates of
Designation
” means each of the foregoing, collectively.
“
Change of Control
”
has the meaning set forth in the Series E Certificate of
Designation.
“
Closing Date
” means
the date hereof.
“
Common Expiration
Date
” means the date on which the Trailer Investors cease to hold, or
cease to “beneficially own” (within the meaning of Rule 13d-3 under the Exchange
Act) at least 10% of the issued and outstanding Common Stock of the
Company.
“
Common Investors
”
means, collectively, (a) the Trailer Investors, to the extent that the Trailer
Investors then hold the Warrant and/or any Registrable Securities, and (b) the
Investors who beneficially own a number of Registrable Securities (including,
for this purpose, Registrable Securities issuable upon exercise of a Warrant
then held by each such Investor) equal to or greater than one-third of the
Registrable Securities that were issuable pursuant to the Warrant on the date
hereof.
“
Common Stock
” means
the Company’s common stock, par value $0.01 per share, and any securities into
which such shares may hereinafter be reclassified.
“
Company Indemnified
Person
” has the meaning set forth in
Section
2.7(b)
.
“
Company
” has the
meaning set forth in the preamble.
“
Control
” (including
the terms “Controlling,” “Controlled by” or “under common Control with”) means
the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
“
Effectiveness Period
”
has the meaning set forth in
Section
2.4(a)(i)
.
“
Election Period
” has the meaning set forth in
Section 3.1(c)
.
“
Event of Default
” has
the meaning set forth in
Section
7.1
.
“
Exchange Act
” means
the United States Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
“
Fair Market Value
”
means, for the purposes of valuing the Common Stock, the average of the closing
prices of the Common Stock on the New York Stock Exchange reporting system or on
the principal stock exchange where Common Stock is traded (as reported in
The Wall Street Journal
) for
a period of five days consisting of (i) for the purposes of
Section 3.1
, the date
on which the Subsequent Financing Notice is delivered and the four consecutive
trading days prior to such date, and (ii) for the purposes of
Section 7.2
, (A) the
date on which the Repurchase Request is delivered or (B) the date on which an
Event of Default first occurs, as applicable, and the four consecutive trading
days prior to such date;
provided
that, in
each case, if the Common Stock is not traded on any exchange or over-the-counter
market, then the Fair Market Value shall be jointly determined in good faith by
the Board and the Majority Common Investors.
“
Filing Deadline
” has
the meaning set forth in
Section
2.1(a)
.
“
Financial Performance
Levels
” means any financial covenant (as such term is commonly understood
with respect to credit agreements) as may be in force from time to time under
the Senior Loan Agreement after the relevant test contained in such financial
covenant has been modified by 5% in favor of the Company and its
Subsidiaries.
“
GAAP
” means United
States generally accepted accounting principles, consistently applied, as in
effect from time to time.
“
Governance Committee
”
has the meaning set forth in
Section
4.1
.
“
Indebtedness
” means,
without duplication, all obligations (including all obligations for principal,
interest, premiums, penalties, fees, and breakage costs) of the Company and its
Subsidiaries (i) in respect of indebtedness for money borrowed (whether current,
short-term or long-term, secured or unsecured, and including all overdrafts and
negative cash balances) and indebtedness evidenced by notes, debentures, bonds
or other similar instruments for the payment of which the Company or any of its
Subsidiaries is responsible or liable; (ii) issued or assumed as the deferred
purchase price of property or services, all conditional sale obligations and all
obligations under any title retention agreement (but excluding trade accounts
payable and other accrued current liabilities arising in the ordinary course of
business); (iii) under leases required to be capitalized in accordance with
GAAP; (iv) secured by a Lien against any of its property or assets; (v) for
bankers’ acceptances or similar credit transactions issued for the account of
the Company or any of its Subsidiaries; (vi) under any currency or interest rate
swap, hedge or similar protection device; (vii) under any letters of credit,
performance bonds or surety obligations; (viii) under any capital debts,
deferred maintenance capital expenditures, distributions payable or income taxes
payable; and (ix) in respect of all obligations of other Persons of the type
referred to in clauses (i) through (viii) the payment of which the Company or
any of its Subsidiaries is responsible or liable, directly or indirectly, as
obligor, guarantor, surety or otherwise, including guarantees of such
obligations.
“
Indemnified
Liabilities
” has the meaning set forth in
Section
8.1
.
“
Initial Registration
Statement
” has the meaning set forth in
Section
2.1(a)
.
“
Investor
” or “
Investors
” means, as
applicable, Trailer and/or any of its Permitted Transferees.
“
Investor Directors
”
has the meaning set forth in
Section
4.1
.
“
Investor Director
Seats
” has the meaning set forth in
Section
4.1
.
“
Investor Indemnified
Person
” has the meaning set forth in
Section
2.7(a)
.
“
Leverage Ratio
” has
the meaning set forth in
Section
5.1(a)(v)
.
“
Lien
” means any
mortgage, pledge, lien, deed of trust, conditional sale or other title retention
agreement, charge or other security interest or encumbrance securing obligations
for the payment of money.
“
Majority Common
Investors
” means the Common Investors from time to time holding at least
a majority, in the aggregate, of the Registrable Securities then outstanding and
the rights to acquire Registrable Securities.
“
Majority Preferred
Investors
” means the Investors from time to time holding at least a
majority of the Preferred Stock then outstanding.
“
Majority Trailer
Investors
” means the Trailer Investors from time to time holding (i) at
least a majority of the Preferred Stock then held by all Trailer Investors or
(ii) at least a majority, in the aggregate, of the Registrable Securities then
held by all Trailer Investors and the rights to acquire Registrable Securities
then held by all Trailer Investors.
“
NYSE Limitation
”
means the maximum number of securities of the Company that could be issued by
the Company to the Trailer Investors without triggering a requirement to obtain
the approval of the Company’s shareholders of such issuance pursuant to Section
312.03 of the New York Stock Exchange Listed Company Manual, as in effect on the
date of issuance of such shares of Common Stock.
“
Outside Date
” has the
meaning set forth in
Section
7.2
.
“
Permitted Transferee
”
means (i) with respect to the Preferred Stock, any Person who acquires all or
any portion of the Preferred Stock from Trailer (or any other Permitted
Transferee) after the Closing Date, and (ii) with respect to the Warrant or the
Warrant Shares, any Person who acquires all or any portion of the Warrant or the
Registrable Securities from Trailer (or any other Permitted Transferee)
following the Closing Date. Any such transferee shall become bound by
the terms of this Agreement as an additional Preferred Investor, Investor and/or
Common Investor, as applicable, by executing and delivering to the Company a
joinder agreement in form and substance reasonably acceptable to the Company and
such transferee. The Company shall be furnished with at least three
Business Days’ prior written notice of the name and address of such transferee
and the Securities being Transferred, the representation by the transferee that
such Transfer is being made in accordance with the applicable requirements of
this Agreement and with all laws applicable thereto. Following the
execution and delivery of such joinder agreement by the Company and such
transferee, such transferee shall constitute one of the Preferred Investors,
Investors and/or Common Investors, as applicable, referred to in this Agreement
and shall have all of the rights and obligations of a Preferred Investor,
Investor and/or Common Investor, as applicable, hereunder.
“
Person
” means any
individual, corporation, partnership, limited liability company, trust, business
trust, association, joint stock company, joint venture, sole proprietorship,
unincorporated organization, governmental authority or other form of entity not
specifically listed in this definition.
“
Preferred Expiration
Date
” means the date on which the Trailer Investors cease to hold at
least a majority of the Preferred Stock then outstanding.
“
Preferred Investors
”
means, collectively, the Investors from time to time holding the shares of
Preferred Stock then outstanding.
“
Preferred Stock
”
means, collectively, the Series E Preferred, the Series F Preferred and the
Series G Preferred, if any.
“
Pro Rata Portion
” has
the meaning set forth in
Section
3.1(d)
.
“
Prospectus
” means the
prospectus included in a Registration Statement, as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by such Registration Statement and
by all other amendments and supplements to such prospectus, including
post-effective amendments and all material incorporated by reference in such
prospectus.
“
Purchase Agreement
”
has the meaning set forth in the recitals to this Agreement.
“
Put Purchase Price
”
has the meaning set forth in
Section
7.2(b)
.
“
Put Shares
” has the
meaning set forth in
Section
7.2(b)
.
“
Register
,” “
registered
” and
“
registration
”
refer to a registration made by preparing and filing a Registration Statement or
similar document in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such Registration Statement or
document.
“
Registrable
Securities
” means, collectively, (i) the Warrant Shares and (ii) any
other securities issued or issuable with respect to or in exchange for
Registrable Securities;
provided
that a
security shall cease to be a Registrable Security upon (A) sale pursuant to a
Registration Statement or Rule 144 under the Securities Act, or (B) such
security becoming eligible for sale by the Investor pursuant to Rule
144(b)(i)(1).
“
Registration
Statement
” means any registration statement of the Company filed under
the Securities Act that covers the resale of any of the Registrable Securities
pursuant to the provisions of this Agreement (including the Initial Registration
Statement, the New Registration Statement, if any, and any Remainder
Registration Statements), amendments and supplements to such registration
statement, including post-effective amendments, all exhibits and all material
incorporated by reference in such registration statement.
“
Repurchase Request
”
has the meaning set forth in
Section
7.2(b)
.
“
Restricted Payment
”
means: (i) any dividend, other distribution, repurchase or redemption, direct or
indirect, on account of any shares of any class of stock of the Company or any
of its Subsidiaries now or hereafter outstanding; (ii) any payment or prepayment
of principal of, premium, if any, or interest on, or any redemption, conversion,
exchange, retirement, defeasance, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class of
stock of the Company or any of its Subsidiaries now or hereafter outstanding;
(iii) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of stock of the
Company or any of its Subsidiaries now or hereafter outstanding; and (iv) any
payment by the Company or any of its Subsidiaries or of any management,
consulting or any fees to any Affiliate of the Company, whether pursuant to a
management agreement or otherwise, excluding customary compensation of employees
of the Company and its Subsidiaries.
“
Rule 415
” means Rule
415 promulgated by the SEC pursuant to the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC having substantially the same effect as such Rule.
“
SEC
” means the United
States Securities and Exchange Commission.
“
SEC Filings
” means,
collectively, all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act or the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the prior
two-year period.
“
SEC Guidance
” means
(i) any publicly-available written or oral guidance, comments, requirements or
requests of the SEC staff and (ii) the Securities Act.
“
Securities
” means,
collectively, (i) the shares of Preferred Stock issued pursuant to the Purchase
Agreement, (ii) the Warrant issued pursuant to the Purchase Agreement, and (iii)
the Warrant Shares issued upon exercise of the Warrant.
“
Securities Act
” means
the United States Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
“
Senior Loan
Agreement
” means the Company’s Second Amended and Restated Loan and
Security Agreement, dated as of March 6, 2007, as amended by the Credit
Agreement Amendment, dated as of July 17, 2009 (as amended, modified or
otherwise restated from time to time) (the “
Existing Loan
Agreement
”), and any agreement relating to a refinancing, replacement or
substitution of the loans under the Existing Loan Agreement or any subsequent
Senior Loan Agreement.
“
Senior Loan
Documents
” means the “Loan Documents” as defined in the Existing Loan
Agreement and any other equivalent or similar term used in any subsequent Senior
Loan Agreement.
“
Series E Certificate of
Designation
” means the Certificate of Designation of Rights, Preferences,
Privileges and Restrictions of Series E Preferred, in the form attached as
Exhibit D
to the
Purchase Agreement.
“
Series E Preferred
”
means Series E Redeemable Preferred Stock of the Company, par value $0.01 per
share, having the rights, preferences, privileges and restrictions set forth in
the Series E Certificate of Designation, together with any securities into which
such shares may be reclassified.
“
Series F Certificate of
Designation
” means the Certificate of Designation of Rights, Preferences,
Privileges and Restrictions of Series F Preferred, in the form attached as
Exhibit E
to the
Purchase Agreement.
“
Series F Preferred
”
means Series F Redeemable Preferred Stock of the Company, par value $0.01 per
share, having the rights, preferences, privileges and restrictions set forth in
the Series E Certificate of Designation, together with any securities into which
such shares may be reclassified.
“
Series G Certificate of
Designation
” means the Certificate of Designation of Rights, Preferences,
Privileges and Restrictions of Series G Preferred, in the form attached as
Exhibit F
to the
Purchase Agreement.
“
Series G Preferred
”
means the Series G Redeemable Preferred Stock, par value $0.01 per share, having
the rights, preferences, privileges and restrictions set forth in the Series G
Certificate of Designation, together with any securities into which such shares
may be reclassified.
“
Specified Event of
Default
” means any Event of Default described in
Section 7.1(a)
,
Section 7.1(b)
,
Section 7.1(c)
,
Section 7.1(d)
,
Section 7.1(e)
(
provided
that, in the
case of any Event of Default arising out of
Section 5.1
or
Article VI
, such
Event of Default arose out of any intentional or willful action or omission
taken or suffered by the Company or any of its Subsidiaries) or
Section 7.1(f)
(
provided
that, in the
case of any Event of Default arising out of
Section 5.2
, such
Event of Default arose out of any intentional or willful action or omission
taken or suffered by the Company or any of its Subsidiaries).
“
Sub Board
” has the
meaning set forth in
Section
4.7
.
“
Subsequent
Financing
” means any private issuance of
debt or equity securities or other private financing transaction that, in each
case, is consummated by the Company (or any of its Subsidiaries, as applicable)
following the Closing Date;
provided
that any issuance of debt securities pursuant to the
Senior Loan Agreement shall not constitute a Subsequent Financing under this
Agreement.
“
Subsequent Financing
Notice
” has the meaning set forth in
Section
3.1(b)
.
“
Subsidiary
,” when
used with respect to any Person, means any other Person of which (i) in the
case of a corporation, at least (A) a majority of the equity and (B) a majority
of the voting interests are owned or Controlled, directly or indirectly, by such
first Person, by any one or more of its Subsidiaries, or by such first Person
and one or more of its Subsidiaries or (ii) in the case of any Person other
than a corporation, such first Person, one or more of its Subsidiaries, or such
first Person and one or more of its Subsidiaries (A) owns a majority of the
equity interests thereof and (B) has the power to elect or direct the election
of a majority of the members of the governing body thereof.
“
Total Value
” means,
at any particular time and with respect to any Investor, an amount equal to (i)
the aggregate Fair Market Value of any Warrant Shares held by such Investor at
such time,
plus
(ii) the aggregate Fair Market Value of any Warrant Shares issuable to such
Investor upon exercise of the Warrant by such Investor at such time,
plus
(iii) the
aggregate liquidation value (plus accumulated, accrued and unpaid dividends) of
the Preferred Shares held by such Investor at such time.
“
Trailer
” has the
meaning set forth in the preamble.
“
Trailer Investors
”
means (i) Trailer and (ii) any other Person that is a Permitted Transferee of
Trailer that is an Affiliate of Trailer (including for this purpose only any
investor (and its Affiliates) in any investment fund managed by Lincolnshire
Management, Inc.).
“
Transaction
Documents
” means this Agreement, the Certificates of Designation, the
Warrant, the Purchase Agreement and all other documents delivered or required to
be delivered by any party hereto pursuant to the Purchase
Agreement.
“
Transfer
” means any
transfer, sale, assignment, pledge, conveyance, loan, hypothecation or other
encumbrance or disposition of the Warrant, the Warrant Shares and/or the
Preferred Stock.
“
Transfer Agent
” has
the meaning set forth in
Section
2.4(b)
.
“
Warrant
” means,
collectively, (i) the Warrant to purchase shares of Common Stock issued to
Trailer pursuant to the Purchase Agreement on the date hereof, the form of which
is attached to the Purchase Agreement as
Exhibit A
thereto,
and (ii) any warrants issued in replacement or exchange, or in connection with a
Transfer, thereof.
“
Warrant Shares
” means
the shares of Common Stock issuable upon the exercise of the
Warrant.
ARTICLE
II
REGISTRATION
RIGHTS
Section
2.1
Mandatory
Registration
.
(a) Promptly,
but no later than thirty days after, the Closing Date (the “
Filing Deadline
”),
the Company shall prepare and file with the SEC one Registration Statement on
Form S-3 (or, if Form S-3 is not then available to the Company, then on (i) Form
S-1 or (ii) such other form of registration statement as is then available to
effect a registration for resale of the Registrable Securities, subject, in the
case of clause (ii) above, to the Majority Common Investors’ prior written
consent), covering the resale of the Registrable Securities in an amount at
least equal to the Warrant Shares (the “
Initial Registration
Statement
”). The Initial Registration Statement also shall
cover, to the extent allowable under the Securities Act and the rules
promulgated thereunder (including Rule 416), such indeterminate number of
additional shares of Common Stock resulting from stock splits, stock dividends,
similar transactions or other adjustments provided for in the Warrant with
respect to the Registrable Securities. The Initial Registration
Statement shall not include any shares of Common Stock or other securities for
the account of any other holder without the prior written consent of the
Majority Common Investors. Each Registration Statement (and each
amendment or supplement thereto, and each request for acceleration of
effectiveness thereof) shall be provided in accordance with
Section 2.4(a)(iii)
to the Common Investors and their counsel prior to its filing or other
submission.
(b) At
such time as additional shares of Common Stock (“
Additional Shares
”)
become issuable upon the exercise of the Warrant (whether due to an adjustment
under the Warrant or otherwise), the Company shall prepare and file with the SEC
one or more Registration Statements on Form S-3 or amend any Registration
Statement filed pursuant to
Section 2.1(a)
, if
such Registration Statement has not previously been declared effective (or, if
Form S-3 is not then available to the Company, then on (i) Form S-1 or (ii) such
other form of registration statement as is then available to effect a
registration for resale of such Additional Shares, subject, in the case of
clause (ii) above, to the Majority Common Investors’ prior written consent)
covering the resale of the Additional Shares, but only to the extent the
Additional Shares are not at the time covered by an effective Registration
Statement. Such Registration Statement also shall cover, to the
extent allowable under the Securities Act and the rules promulgated thereunder
(including Rule 416), such indeterminate number of additional shares of Common
Stock resulting from stock splits, stock dividends or similar transactions with
respect to the Additional Shares. Such Registration Statement shall
not include any shares of Common Stock or other securities for the account of
any other holder without the prior written consent of the Majority Common
Investors.
(c) Notwithstanding
the registration obligations set forth in this
Section 2.1
, in the
event that the SEC informs the Company that all of the Registrable Securities
may not, as a result of the application of Rule 415 or any other applicable
securities law, rule or regulation, be registered for resale as a secondary
offering on a single registration statement, the Company agrees to (i) promptly
inform each of the Common Investors thereof, and (ii) use all best efforts to
promptly file amendments to the Initial Registration Statement as required by
the Commission and/or (iii) promptly withdraw the Initial Registration Statement
and promptly file a new registration statement (a “
New Registration
Statement
”), in either case, covering the maximum number of Registrable
Securities permitted to be registered by the SEC, on Form S-3 or such other form
available to register for resale the Registrable Securities as a secondary
offering;
provided
,
however
, that prior
to filing such amendment or New Registration Statement, the Company shall be
obligated to use all reasonable best efforts to advocate with the SEC for the
registration of all of the Registrable Securities in accordance with the SEC
Guidance, including the Manual of Publicly Available Telephone Interpretations
D.29. In the event that the Company amends the Initial Registration
Statement or files a New Registration Statement, as the case may be, under
clauses (ii) or (iii) above, the Company will use all reasonable best efforts to
file with the SEC, as promptly as allowed by the SEC or the SEC Guidance
provided to the Company or to registrants of securities in general, one or more
registration statements on Form S-3 or such other form available to register for
resale those Registrable Securities that were not registered for resale on the
Initial Registration Statement, as amended, or the New Registration Statement
(the “
Remainder
Registration Statements
”).
Section
2.2
Allowed Delay.
For
not more than twenty consecutive days or for a total of not more than forty-five
days in any twelve-month period, the Company may delay the disclosure of
material non-public information concerning the Company by suspending the use of
any Prospectus included in any registration contemplated by
Section 2.1
, containing such
information, the disclosure of which at the time is not, in the good faith
opinion of the Board, in the best interests of the Company (an “
Allowed Delay
”);
provided
that the Company shall
promptly (a) notify the Common Investors in writing of the existence of (but in
no event, without the prior written consent of an Investor, shall the Company
disclose to such Investor any of the facts or circumstances regarding) material
non-public information giving rise to an Allowed Delay, (b) advise the Common
Investors in writing to cease all sales under a Registration Statement until the
end of the Allowed Delay and (c) use all reasonable best efforts to terminate an
Allowed Delay as promptly as practicable.
Section
2.3
Expenses.
The Company
will pay all expenses associated with the registration contemplated by
Section 2.1
, including filing and
printing fees, the Company’s counsel and accounting fees and expenses, costs
associated with clearing the Registrable Securities for sale under applicable
state securities laws, listing fees, reasonable fees and expenses of one counsel
to the Common Investors, underwriters’ fees and expenses, and the Common
Investors’ reasonable out-of-pocket expenses in connection with the
registration, but excluding discounts, commissions, selling brokers, dealer
managers or similar securities industry professionals with respect to the
Registrable Securities being sold.
Section
2.4
Company
Obligations
.
(a) The
Company will use all reasonable best efforts to effect the registration of the
Registrable Securities in accordance with the terms hereof, and pursuant thereto
the Company will, as expeditiously as possible (but subject to the limitations
set forth set forth in
Section
2.2
):
(i) use
all reasonable best efforts to cause such Registration Statement to become
effective and to remain continuously effective for a period that will terminate
upon the earlier of (A) the date on which all Registrable Securities covered by
such Registration Statement have been sold, and (B) the date on which all
Registrable Securities covered by such Registration Statement may be sold
pursuant to Rule 144(b)(i)(1) (the “
Effectiveness
Period
”), and advise the Common Investors in writing when the
Effectiveness Period has expired;
(ii) prepare
and file with the SEC such amendments and post-effective amendments to each
Registration Statement and the Prospectus as may be necessary to keep such
Registration Statement continuously effective, supplemented and amended for the
Effectiveness Period and to comply with the provisions of the Securities Act and
the Exchange Act with respect to the distribution of all of the Registrable
Securities covered thereby;
(iii) provide
copies to and permit counsel designated by the Common Investors to review each
Registration Statement and all amendments and supplements thereto no fewer than
five Business Days prior to their filing with the SEC and not file any document
to which such counsel reasonably objects;
(iv) furnish
to the Common Investors and their legal counsel (A) promptly after the same is
prepared and publicly distributed, filed with the SEC, or received by the
Company (but not later than three Business Days after the filing date, receipt
date or sending date, as the case may be) one copy of each Registration
Statement and any amendment thereto, each preliminary prospectus, free-writing
prospectus and Prospectus and each amendment or supplement thereto, and each
letter written by or on behalf of the Company to the SEC or the staff of the
SEC, and each item of correspondence from the SEC or the staff of the SEC, in
each case, relating to such Registration Statement (other than any portion
thereof which contains information for which the Company has sought confidential
treatment), and (B) such number of copies of a Prospectus, including a
preliminary prospectus, any free-writing prospectus and all amendments and
supplements thereto and such other documents as each Common Investor may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Common Investor that are covered by each Registration
Statement;
(v) use
all reasonable best efforts to (A) prevent the issuance of any stop order or
other suspension of effectiveness and, (B) if such order is issued, obtain the
withdrawal of any such order at the earliest possible moment;
(vi) prior
to any public offering of Registrable Securities, use all reasonable best
efforts to register or qualify or cooperate with the Common Investors and their
counsel in connection with the registration or qualification of such Registrable
Securities for offer and sale under the securities or blue sky laws of such
jurisdictions requested by the Common Investors and do any and all other acts or
things necessary or advisable to enable the distribution in such jurisdictions
of the Registrable Securities covered by each Registration Statement;
provided
,
however
, that the
Company shall not be required in connection therewith or as a condition thereto
to (A) qualify to do business in any jurisdiction where it would not otherwise
be required to qualify but for this
Section 2.4(a)(vi)
,
(B) subject itself to general taxation in any jurisdiction where it would not
otherwise be so subject but for this
Section 2.4(a)(vi)
,
or (C) file a general consent to service of process in any such
jurisdiction;
(vii) use
all reasonable best efforts to cause all Registrable Securities covered by each
Registration Statement to be listed on each securities exchange, interdealer
quotation system or other market on which similar securities issued by the
Company are then listed;
(viii) promptly
notify the Common Investors, at any time when a Prospectus relating to
Registrable Securities is required to be delivered under the Securities Act
(including during any period when the Company is in compliance with Rule 172),
upon discovery that, or upon the happening of any event as a result of which,
the Prospectus included in any Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing, and at the request
of any Common Investor, promptly prepare, file with the SEC pursuant to Rule 172
and furnish to such Common Investor a supplement to or an amendment of such
Prospectus as may be necessary so that such Prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;
(ix) otherwise
use all reasonable best efforts to comply with all applicable rules and
regulations of the SEC under the Securities Act and the Exchange Act, including
Rule 172, notify the Common Investors promptly if the Company no longer
satisfies the conditions of Rule 172 and take such other actions as may be
reasonably necessary to facilitate the registration of the Registrable
Securities hereunder; and make available to its security holders, as soon as
reasonably practicable, but not later than the Availability Date (as defined
below), an earnings statement covering a period of at least twelve months,
beginning after the effective date of each Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act, including Rule 158 promulgated thereunder (for the purpose of
this
Section
2.4(a)(ix)
, “
Availability Date
”
means the 45th day following the end of the fourth fiscal quarter that includes
the effective date of such Registration Statement, except that, if such fourth
fiscal quarter is the last quarter of the Company’s fiscal year, “
Availability Date
”
means the 90th day after the end of such fourth fiscal quarter);
and
(x) use
all reasonable best efforts to take all other steps necessary or reasonably
required to effect the registration of the Registrable Securities covered by
each Registration Statement contemplated hereby.
(b) Upon
the earlier of (i) Rule 144(b)(i) or (b)(iv) becoming available the Company,
(ii) any sale pursuant to Rule 144 (assuming the transferor is not an Affiliate
of the Company) or (iii) such time as a legend is no longer required under
applicable requirements of the Securities Act (including controlling judicial
interpretations and pronouncements issued by the SEC), the Company shall (A)
deliver to the transfer agent for the Common Stock (the “
Transfer Agent
”)
irrevocable instructions that the Transfer Agent shall reissue a certificate
representing shares of Common Stock without legends upon receipt by such
Transfer Agent of the legended certificates for such shares, together with
either (1) a customary representation by each Common Investor that Rule
144(b)(i), Rule 144(b)(iv) or Rule 144 applies to the shares of Common Stock
represented thereby or (2) in connection with any sale of Common Stock by the
Common Investors pursuant to the registration contemplated by this Agreement,
and (B) cause its counsel to deliver to the Transfer Agent one or more blanket
opinions to the effect that the removal of such legends in such circumstances
may be effected under the Securities Act. From and after the earlier
of such dates, upon the Majority Common Investors’ written request, the Company
shall promptly cause certificates evidencing the Majority Common Investors’
Securities to be replaced with certificates which do not bear such restrictive
legends, and Warrant Shares subsequently issued upon due exercise of the Warrant
shall not bear such restrictive legends provided the provisions of clause (i)
above are satisfied with respect to such Warrant Shares. When the
Company is required to cause unlegended certificates to replace previously
issued legended certificates, if unlegended certificates are not delivered to
the Common Investor within three Business Days of submission by such Common
Investors of legended certificate(s) to the Transfer Agent as provided above (or
to the Company, in the case of the Warrant), then the Company shall be liable to
the Common Investors for liquidated damages in an amount equal to 2.0% of the
aggregate purchase price of the Securities evidenced by such certificate(s) for
each thirty-day period (or portion thereof) beyond such three Business Day
period that the unlegended certificates have not been so
delivered.
(c) With
a view to making available to the Common Investors the benefits of Rule 144 (or
its successor rule) and any other rule or regulation of the SEC that may at any
time permit the Common Investors to sell shares of Common Stock to the public
without registration, the Company covenants and agrees to: (i) make
and keep public information available, as those terms are understood and defined
in Rule 144, until the earlier of (A) six months after such date as all of the
Registrable Securities may be resold pursuant to Rule 144(b)(i)(1) or any other
rule of similar effect or (B) such date as all of the Registrable Securities
shall have been resold; (ii) file with the SEC in a timely manner all reports
and other documents required of the Company under the Exchange Act; and (iii)
furnish to each Common Investor upon request, as long as such Common Investor
owns any Registrable Securities, (A) a written statement by the Company that it
has complied with the reporting requirements of the Exchange Act, (B) a copy of
the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form
10-Q, and (C) such other information as may be reasonably requested in order to
avail such Common Investor of any rule or regulation of the SEC that permits the
selling of any such Registrable Securities without registration.
Section
2.5
Due Diligence Review;
Information
.
(a) Upon
reasonable prior notice, the Company shall make available, during normal
business hours, for inspection and review by the Common Investors and the
representatives of and advisors to the Common Investors, all financial and other
records, all SEC Filings and other filings with the SEC, and all other corporate
documents and properties of the Company as may be reasonably necessary for the
purpose of such review, and cause the Company’s officers, directors and
employees, within a reasonable time period, to supply all such information
reasonably requested by the Common Investors or any such representative or
advisor, in each case, in connection with each Registration Statement (including
in response to all questions and other inquiries reasonably made or submitted by
any of them), prior to and from time to time after the filing and effectiveness
of such Registration Statement for the sole purpose of enabling the Common
Investors and such representatives and advisors and their respective accountants
and attorneys to conduct initial and ongoing due diligence with respect to the
Company and the accuracy of such Registration Statement.
(b) The
Company shall not disclose material non-public information to the Common
Investors, or to advisors to or representatives of the Common Investors, unless
prior to disclosure of such information the Company identifies such information
as being material non-public information and provides the Common Investors, such
advisors and representatives with the opportunity to accept or refuse to accept
such material non-public information for review and any Common Investor wishing
to obtain such information enters into an appropriate confidentiality agreement
with the Company with respect thereto;
provided
,
however
, that the
foregoing shall not restrict the Company from disclosing material non-public
information to any director or Board Observer, or to their advisors or
representatives.
Section
2.6
Obligations of the Common
Investors
.
(a) Each
Common Investor shall promptly furnish in writing to the Company such
information regarding itself and the Registrable Securities held by it as shall
be reasonably required to effect the registration of such Registrable Securities
and shall execute such documents in connection with such registration as the
Company may reasonably request. At least ten Business Days prior to
the first anticipated filing date of each Registration Statement, the Company
shall notify each Common Investor of the information the Company requires from
such Common Investor if such Common Investor elects to have any of the
Registrable Securities included in such Registration Statement. A
Common Investor shall provide such information to the Company at least three
Business Days prior to the first anticipated filing date of such Registration
Statement if such Common Investor elects to have any of the Registrable
Securities included in any Registration Statement.
(b) Each
Common Investor, by its acceptance of the Registrable Securities agrees to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of any Registration Statement hereunder, unless
such Common Investor has notified the Company in writing of its election to
exclude all of its Registrable Securities from such Registration
Statement.
(c) Each
Common Investor agrees that, upon receipt of any notice from the Company of
either (i) the commencement of an Allowed Delay pursuant to
Section 2.2
or (ii)
the happening of an event pursuant to
Section 2.4(a)(viii)
,
such Common Investor will immediately discontinue disposition of Registrable
Securities pursuant to any Registration Statement covering such Registrable
Securities, until the Common Investor is advised by the Company that a
supplemented or amended Prospectus has been filed with the SEC and until any
related post-effective amendment is declared effective and, if so directed by
the Company, then the Common Investor shall deliver to the Company or destroy
(and deliver to the Company a certificate of destruction) all copies in such
Common Investor’s possession of the Prospectus covering the Registrable
Securities current at the time of receipt of such notice.
Section
2.7
Indemnification
.
(a)
Indemnification by the
Company
. The Company agrees to indemnify and hold harmless
each Common Investor and its Affiliates and their respective directors,
officers, members, shareholders, fiduciaries, partners, employees, Affiliates,
representatives and agents (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any
other title), each Person who Controls such Common Investor (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, members, partners, employees, Affiliates, representatives
and agents (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other
title) of such Controlling Person (each, an “
Investor Indemnified
Person
”) from and against, without duplication, any and all losses,
claims, damages, liabilities, contingencies and expenses (including reasonable
attorneys’ fees and disbursements and other expenses incurred in connection with
investigating, preparing or defending any action, claim or proceeding, pending
or threatened and the costs of enforcement thereof) to which such Investor
Indemnified Person may become subject as a result of or relating to: (i) any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, any preliminary Prospectus or final Prospectus
contained therein, or any amendment or supplement thereof; (ii) any blue sky
application or other document executed by the Company specifically for that
purpose or based upon written information furnished by the Company filed in any
state or other jurisdiction in order to qualify any or all of the Registrable
Securities under the securities laws thereof (any such application, document or
information herein called a “
Blue Sky
Application
”); (iii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; (iv) any violation by the Company or its agents of any
rule or regulation promulgated under the Securities Act applicable to the
Company or its agents and relating to action or inaction required of the Company
in connection with such registration; or (v) any failure to register or qualify
the Registrable Securities included in any such Registration in any state where
the Company or its agents has affirmatively undertaken or agreed in writing that
the Company will undertake such registration or qualification on any Common
Investor’s behalf, and will reimburse each Investor Indemnified Person for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, contingency
or expense;
provided
,
however
, that the
Company will not be liable to any Common Investor pursuant to this Section if
and to the extent that any such loss, claim, damage, liability, contingency or
expense arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with information
furnished by such Common Investor in writing specifically for use in such
Registration Statement or Prospectus.
(b)
Indemnification by the
Common Investors
. Each Common Investor agrees, severally but
not jointly, to indemnify and hold harmless the Company and its Affiliates and
their respective directors, officers, members, shareholders, fiduciaries,
partners, employees, Affiliates, representatives and agents (and any other
Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
Controls the Company (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act), and the directors, officers, agents, members,
partners, employees, Affiliates, representatives and agents (and any other
Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such Controlling
Person (each, a “
Company Indemnified
Person
”) from and against, without duplication, any and all losses,
claims, damages, liabilities, contingencies and expenses (including reasonable
attorneys’ fees and disbursements and other expenses incurred in connection with
investigating, preparing or defending any action, claim or proceeding, pending
or threatened and the costs of enforcement thereof) to which such Company
Indemnified Person may become subject as a result of or relating to any untrue
statement of a material fact or any omission of a material fact required to be
stated in any Registration Statement or Prospectus or preliminary prospectus or
amendment or supplement thereto or necessary to make the statements therein not
misleading, to the extent, but only to the extent that such untrue statement or
omission is contained in any information furnished in writing by such Common
Investor to the Company specifically for inclusion in such Registration
Statement or Prospectus or amendment or supplement thereto. In no
event shall the liability of any Common Investor be greater in amount than the
dollar amount of the proceeds (net of all expenses paid by such Common Investor
in connection with any claim relating to this
Section 2.7
and the
amount of any damages such Common Investor has otherwise been required to pay by
reason of such untrue statement or omission) received by such Common Investor
upon the sale of the Registrable Securities included in any Registration
Statement giving rise to such indemnification obligation.
(c)
Conduct of Indemnification
Proceedings
. Any Person entitled to indemnification hereunder
shall (i) give prompt notice to the indemnifying party of any claim with respect
to which it seeks indemnification and (ii) permit such indemnifying party to
assume the defense of such claim with counsel reasonably satisfactory to the
indemnified party;
provided
that any
Person entitled to indemnification hereunder shall have the right to employ
separate counsel and to participate in the defense of such claim, but the fees
and expenses of such counsel shall be at the expense of such Person unless (A)
the indemnifying party has agreed to pay such fees or expenses, or (B) the
indemnifying party shall have failed to assume the defense of such claim and
employ counsel reasonably satisfactory to such Person or (C) in the reasonable
judgment of any such Person, based upon written advice of its counsel, a
conflict of interest exists between such Person and the indemnifying party with
respect to such claims (in which case, if the Person notifies the indemnifying
party in writing that such Person elects to employ separate counsel at the
expense of the indemnifying party, then the indemnifying party shall not have
the right to assume the defense of such claim on behalf of such Person); and
provided
,
further
, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations hereunder, except to the
extent that such failure to give notice shall materially and adversely affect
the indemnifying party in the defense of any such claim or
litigation. It is understood that the indemnifying party shall not,
in connection with any proceeding in the same jurisdiction, be liable for fees
or expenses of more than one separate firm of attorneys at any time for all such
indemnified parties. No indemnifying party will, except with the
consent of the indemnified party, consent to entry of any judgment or enter into
any settlement that does not include as an unconditional term thereof the giving
by the claimant or plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation.
(d)
Contribution
. If
for any reason the indemnification provided for in
Section 2.7(a)
and
Section 2.7(b)
is unavailable to an indemnified party or insufficient to hold it harmless,
other than as expressly specified therein, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result of
all such losses, claims, damages, liabilities, contingencies and expenses
(including reasonable attorneys’ fees and disbursements and other expenses
incurred in connection with investigating, preparing or defending any action,
claim or proceeding, pending or threatened and the costs of enforcement thereof)
in such proportion as is appropriate to reflect the relative fault of the
indemnified party and the indemnifying party, as well as any other relevant
equitable considerations. No Person guilty of fraudulent
misrepresentation within the meaning of Section 11(f) of the Securities Act
shall be entitled to contribution from any Person not guilty of such fraudulent
misrepresentation. In no event shall the contribution obligation of
any Investor be greater in amount than the dollar amount of the proceeds (net of
all expenses paid by such Common Investor in connection with any claim relating
to this
Section
2.7
and the amount of any damages such Common Investor has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission) received by such Common Investor upon the sale of the
Registrable Securities giving rise to such contribution obligation.
ARTICLE
III
OTHER
RIGHTS
Section
3.1
Right Of First
Refusal
(a)
From and after the Closing Date until the Preferred
Expiration Date, the Trailer Investors shall have the right, at their election
in accordance with this
Article III
, to participate in any Subsequent
Financing. The Trailer Investors may elect to provide all or any
portion of the Subsequent Financing.
(b)
At least forty-five days prior to the anticipated
consummation of any Subsequent Financing, the Company shall deliver a written
notice (each, a “
Subsequent Financing
Notice
”) to each Trailer
Investor. The Subsequent Financing Notice shall disclose in
reasonable detail the proposed terms and conditions of the Subsequent Financing,
the amount of proceeds intended to be raised thereunder and the identity, and
ownership of capital stock of the Company (if applicable), of any other
prospective participants in such Subsequent Financing, and shall include a term
sheet or similar document relating thereto as an attachment. The
Subsequent Financing Notice shall constitute a binding offer to enter into the
Subsequent Financing with each Trailer Investor on the terms and conditions set
forth in such Subsequent Financing Notice.
(c)
Each Trailer Investor may elect to participate in such
Subsequent Financing and shall have the right, subject to
Section 3.1(e)
below, to fund all or any portion of the Subsequent
Financing on the terms and subject to the conditions specified in the Subsequent
Financing Notice by delivering written notice of such election to the Company
within forty days after the delivery of the Subsequent Financing Notice to the
Trailer Investors (the “
Election Period
”). If the Trailer Investors elect to
participate in the Subsequent Financing, then the closing of the Subsequent
Financing shall occur on the date specified in the Subsequent Financing Notice
or on such other date as otherwise may be agreed by the Company and the Trailer
Investors participating in such Subsequent Financing. If the Trailer
Investors fail to deliver such election notices prior to the end of the Election
Period, then the Trailer Investors shall be deemed to have notified the Company
that they do not elect to participate in such Subsequent
Financing.
(d)
If
any
Trailer
Investor declines to
participate in the Subsequent Financing with respect to its full Pro Rata
Portion, then each
Trailer
Investor
electing to purchase its full Pro Rata Portion shall have the right to purchase
up to (i) its Pro Rata Portion of the Subsequent Financing,
plus
(ii) a
pro rata
amount (based upon
the relative amount of the participating
Trailer
Investors’ respective Pro Rata Portions) of the aggregate unallocated Pro
Rata Portions of the other
Trailer
Investors. For purposes of clarity, (A) in the event that
there is any amount of a Subsequent Financing that is not requested to be
purchased by a
Trailer
Investor, then any
other
Trailer
Investor shall have the right
to purchase such remaining amount of the Subsequent Financing and (B) in no
event shall the
Trailer
Investors have the
right to purchase more than 100% of the amount the Subsequent Financing
described in any Subsequent Financing Notice, in the aggregate. For
purposes hereof, “
Pro
Rata Portion
” means a fraction, the numerator of which is the Total Value
of Securities held by a
Trailer
Investor
participating under this
Section 3.1(d)
, and
the denominator of which is the sum of the aggregate Total Value of Securities
held by all
Trailer
Investors participating
under this
Section
3.1(d)
.
(e)
If any portion of a Subsequent Financing is not funded
by the Trailer Investors or the Person identified in the Subsequent Financing
Notice within
sixty
days after the delivery of the relevant Subsequent
Financing Notice to the Trailer Investors on the same terms described in such
Subsequent Financing Notice, then prior to consummating any subsequent
Subsequent Financing, the Company must deliver a new Subsequent Financing Notice
to the Trailer Investors and otherwise follow the procedures set forth in this
Section
3.1
(
and, for the avoidance of
doubt, the
Trailer
Investors will again
have the right of participation set forth above in this
Section 3.1
).
(f) Notwithstanding
any other provision in this Agreement to the contrary, the Trailer Investors’
rights to participate in any Subsequent Financing shall be subject to such
participation not causing a violation of the NYSE Limitation;
provided
,
however
, that the
Company shall use all commercially reasonable efforts to discuss and explore
ways to enable the Trailer Investors to participate in any Subsequent Financing
in compliance with the NYSE Limitation.
Section
3.2
Due Diligence in Connection
with Subsequent Financings
. The
provisions of
Section
2.5
shall apply
mutatis
mutandis
to the Trailer Investors’ due diligence review of any Subsequent
Financings pursuant to
Article
III
.
ARTICLE
IV
NOMINATION
OF INVESTOR DIRECTORS
Section
4.1
Interim Appointment of
Investor Directors.
From and after the Closing Date until the Common
Expiration Date, the Majority Trailer Investors may (which right shall be
exercisable by Trailer so long as Trailer is the Majority Trailer
Investor) nominate five directors (collectively, the “
Investor Directors
”) to be elected to
the Board. Any such nominee for Investor Director shall be subject to
(a) the reasonable approval of the Board’s Nominating and Corporate Governance
Committee (the “
Governance
Committee
”) (such approval not to be unreasonably withheld, conditioned
or delayed), and (b) satisfaction of all legal and governance requirements
regarding service as a director of the Company; provided, that the Company shall
at the reasonable request of the Majority Trailer Investors, so long as such
request is not inconsistent with applicable law or exchange requirements, amend
or modify any such requirements so as not to any way impede the right of the
Majority Trailer Investors to nominate directors. On the Closing
Date, the Company shall cause the following five initial Investor Directors to
be elected and appointed to the Board: Thomas J. Maloney, Michael J. Lyons,
Vineet Pruthi, James G. Binch and Andrew C. Boynton. The Company from
time to time shall take all actions necessary or reasonably required such that
the number of members on the Board shall (a) except as otherwise provided
herein, consist of no more than seven non-Investor Directors, and (b) if
necessary, be increased such that there are sufficient seats on the Board for
the Investor Directors to serve on the Board and such vacancies (the “
Investor Director Seats
”) shall be
filled by the Investor Directors, effective as of the Closing Date (or, if
later, then the date that the Majority Trailer Investors determine (which right
shall be exercisable by Trailer so long as Trailer is the Majority Trailer
Investor) to appoint such Investor Directors). Each Investor Director
appointed pursuant to this
Section
4.1
shall continue to hold office until such Investor Director’s term
expires, subject, however, to prior death, resignation, retirement,
disqualification or termination of term of office as provided in
Section 4.3
.
Section
4.2
Continuing Designation of
Investor Directors.
Prior to the Common Expiration Date, at each meeting
of the Company’s stockholders at which the election of directors to the Investor
Director Seats is to be considered, the Company shall, subject to the provisions
of
Section 4.1
and
Section 4.3
, nominate the Investor
Director(s) designated by the Majority Trailer Investors (which right shall be
exercisable by Trailer so long as Trailer is the Majority Trailer Investor) for
election to the Board by the holders of voting capital stock and solicit proxies
from the Company’s stockholders in favor of the election of Investor
Directors. Subject to the provisions of
Section 4.1
and
Section 4.3
, the Company shall use all
reasonable best efforts to cause each Investor Director to be elected to the
Board (including voting all unrestricted proxies in favor of the election of
such Investor Director and including recommending approval of such Investor
Director’s appointment to the Board) and shall not take any action which would
diminish the prospects of such Investor Director(s) of being elected to the
Board.
Section
4.3
Termination of Investor
Director Designation Rights
. The
right of the Majority Trailer Investors to designate the Investor Directors
pursuant to
Section
4.1
and
Section
4.2
shall terminate on the Common Expiration Date. If the
right of the Majority Trailer Investors to nominate Investor Directors
terminates pursuant to the immediately preceding sentence, then each Investor
Director shall promptly submit his or her resignation as a member of the Board
and each applicable Sub Board with immediate effect.
Section
4.4
Resignation; Removal;
Vacancies
.
(a) Any
elected Investor Director may resign from the Board at any time by giving
written notice to the Board. The resignation is effective without
acceptance when the notice is given to the Board, unless a later effective time
is specified in the notice.
(b) So
long as the Majority Trailer Investors retain the right to designate Investor
Directors, the Company shall use all reasonable best efforts to remove any
Investor Director only if so directed in writing by the Majority Trailer
Investors.
(c) In
the event of a vacancy on the Board resulting from the death, disqualification,
resignation, retirement or termination of term of office of an Investor Director
nominated by the Majority Trailer Investors, the Company shall use all
reasonable best efforts to fill such vacancy with a representative designated by
the Majority Trailer Investors as provided hereunder, in either case, to serve
until the next annual or special meeting of the stockholders (and at such
meeting, such representative, or another representative designated by the
Majority Trailer Investors, will be elected to the Board in the manner set forth
in
Section
4.2
).
Section
4.5
Fees and Expenses.
The Investor Directors and the Board Observer, if any, shall be entitled
to reimbursement of reasonable expenses incurred in such capacities, but shall
not otherwise be entitled to any compensation from the Company in such
capacities as Investor Directors or the Board Observer.
Section
4.6
Board Observer.
Until
the Majority Trailer Investors cease to hold, or cease to “beneficially own”
(within the meaning of Rule 13d-3 under the Exchange Act) at least 2% of the
issued and outstanding Common Stock of the Company, the Majority Trailer
Investors (which right shall be exercisable by Trailer so long as Trailer is the
Majority Trailer Investor) shall have the right to designate one
non-compensated, non-voting observer (the “Board Observer”) to attend all
meetings of the Board as an observer. The Board Observer shall not
attend executive sessions or committee meetings without the consent of the
majority of the members of the Board or committee members; provided that the
Board Observer shall be entitled to attend all meetings of the Audit
Committee. The Board Observer shall be entitled to notice of all
meetings of the Board and the Audit Committee in the manner that notice is
provided to members of the Board or the Audit Committee, as applicable, shall be
entitled to receive all materials provided to members of the Board and the Audit
Committee, shall be entitled to attend (whether in person, by telephone, or
otherwise), subject to the restriction set forth in the immediately preceding
sentence, all meetings of the Board and the Audit Committee as a non-voting
observer.
Section
4.7
Subsidiary Boards;
Committees.
Subject to (a) the reasonable approval of the Governance
Committee (such approval not to be unreasonably withheld, conditioned or
delayed), and (b) satisfaction of all legal and governance requirements
regarding service as a director or member of any committee of the Company or any
of its Subsidiaries, at the request of the Majority Trailer Investors, the
Company shall cause the Investor Directors to have proportional representation
(relative to their percentage on the whole Board, but in no event less than one
representative) on the boards (or equivalent governing body) of each Subsidiary
(each, a “
Sub Board
”), and each
committee of the Board (other than the Audit Committee of the Board (the “
Audit Committee
”) to the extent
prohibited by applicable law or exchange requirements but shall allow one
representative to attend meetings of the Audit Committee as a non-voting
observer) and each Sub Board. The Company shall at the reasonable
request of the Majority Trailer Investors, so long as such request is not
inconsistent with applicable law or exchange requirements, amend or modify any
requirements regarding service as a director or member of any committee of the
Company or any of its Subsidiaries.
Section
4.8
Reporting
Information
. With
respect to each Investor Director designated pursuant to the provisions of this
Article IV
, the
Trailer Investors shall use their reasonable best efforts to cause each Investor
Director to provide to the Company all necessary assistance and information
related to such Investor Director that is required under Regulation 14A under
the Exchange Act to be disclosed in solicitations of proxies or otherwise,
including such Person’s written consent to being named in the proxy statement
(if applicable) and to serving as a director if elected.
Section
4.9
Directors and Officers
Insurance; Indemnification Agreements
.
(a) The
Company shall purchase and maintain directors’ and officers’ liability insurance
policy covering each Investor Director effective from the Closing Date (or such
later date as such Investor Director is appointed pursuant to
Section 4.1
or
Section 4.2
) and
shall purchase and maintain for a period of not less than six years from the
date of any Investor Director’s death, resignation, retirement, disqualification
or termination of term of office as provided in
Section 4.3
, a
directors’ and officers’ liability insurance tail policy for such Investor
Director.
(b) The
Company shall enter into a separate Indemnification Agreement with each of the
Investor Directors substantially in the form set forth as
Exhibit C
to the
Purchase Agreement.
ARTICLE
V
CONSENT
RIGHTS
Section
5.1
Approval of the Majority
Trailer Investors
.
(a) From
and after the Closing Date until the Preferred Expiration Date, the Company and
the Board shall not, and shall take all action possible to ensure that each
Subsidiary of the Company shall not, without the prior written consent of the
Majority Trailer Investors (which consent may be withheld in their sole
discretion) take any of the following actions or engage in any of the following
transactions:
(i) directly
or indirectly declare or make any Restricted Payment except for payments with
respect to the Preferred Stock (including redemption thereof) as permitted by
the Certificates of Designation;
(ii) authorize,
issue or enter into any agreement providing for the issuance (contingent or
otherwise) of (A) any notes or debt securities containing equity or voting
features (including any notes or debt securities convertible into or
exchangeable for capital stock or other equity securities, issued in connection
with the issuance of capital stock or other equity securities or containing
profit participation features) or (B) any capital stock, other equity securities
or equity-linked securities (or any securities convertible into or exchangeable
for any capital stock or other equity securities), except for the issuance of
the Registrable Securities;
(iii) make
any loans or advances to, guarantees for the benefit of, or investments in, any
Person (other than the Company or a wholly-owned direct or indirect Subsidiary
of the Company), except for (A) reasonable advances to employees in the ordinary
course of business consistent with past practice, (B) investments having a
stated maturity no greater than one year from the date on which the Company or
any of its Subsidiaries makes such investment in (1) obligations of the United
States government or any agency thereof or obligations guaranteed by the United
States government, (2) certificates of deposit of commercial banks having
combined capital and surplus of at least $500 million and fully insured by
the Federal Deposit Insurance Corporation, or (3) commercial paper with a rating
of at least “Prime-1” by Moody’s Investors Service, Inc., and (C) investments
expressly permitted pursuant to
Section
5.1(a)(v)
;
(iv) liquidate,
dissolve or effect a recapitalization or reorganization in any form of
transaction (including any reorganization into a limited liability company, a
partnership or any other non-corporate entity which is treated as a partnership
for federal income tax purposes), unless, in the case of a recapitalization or
reorganization, such transaction would result in a Change of Control and the
Company pays to the holders of the Preferred Stock all amounts then due and
owing under the Preferred Stock (including the premium payable in connection
with any redemption relating to a Change of Control) prior to or contemporaneous
with the consummation of such transaction;
(v) directly
or indirectly acquire or enter into, or permit any Subsidiary to acquire or
enter into, any interest in any Person, business or joint venture (in each case,
whether by a purchase of assets, purchase of stock, merger or otherwise), except
for acquisitions involving aggregate consideration (whether payable in cash or
otherwise) not to exceed $5,000,000 in the aggregate if, at the time of any such
acquisition, the Company and its Subsidiaries have availability for draw-downs
under the Senior Loan Agreement in an amount equal to or exceeding $20,000,000
and the ratio of the aggregate Indebtedness of the Company and its Subsidiaries
as of the most recent month end to the previous twelve-month EBITDA (as each
such term is defined in the Senior Loan Agreement, as in effect on the date
hereof) (such ratio, the “
Leverage Ratio
”)
after giving effect to such acquisition is less than 6:1;
(vi) reclassify
or recapitalize any securities of the Company or any of its Subsidiaries, unless
such reclassification or recapitalization would result in a Change of Control
and the Company pays to the holders of the Preferred Stock all amounts then due
and owing under the Preferred Stock (including the premium payable in connection
with any redemption relating to a Change of Control) prior to or contemporaneous
with the consummation of such reclassification or recapitalization;
(vii) enter
into, or permit any Subsidiary to enter into, any line of business other than
the lines of business in which those entities are currently engaged and other
activities reasonably related thereto;
(viii) enter
into, amend, modify or supplement any agreement, commitment or arrangement with
any of the Company’s or any of its Subsidiaries’ Affiliates, except for
customary employment arrangements and benefit programs on reasonable terms and
except as otherwise expressly contemplated by this Agreement or the Purchase
Agreement;
(ix) create,
incur, guarantee, assume or suffer to exist, or permit any Subsidiary to create,
incur, guarantee, assume or suffer to exist, any Indebtedness, other than (A)
Indebtedness pursuant to the Existing Loan Agreement (and refinancings thereof
in an aggregate principal amount not in excess $100,000,000 on substantially
similar terms), and (B) Indebtedness in an aggregate amount not to exceed
$10,000,000, provided that, in the case of this subclause (B), such Indebtedness
is created, incurred, guaranteed, assumed or suffered to exist solely to satisfy
the Company’s and its Subsidiaries’ working capital requirements and the
interest rate per annum applicable to such Indebtedness does not exceed 9% and
the Leverage Ratio after giving effect to such creation, incurrence, guaranty,
assumption of sufferance does not exceed 3:1;
(x)
(A) engage in any
transaction that results in a Change of Control unless
the Company pays
to the holders of the Preferred Stock all amounts then due and owing under the
Preferred Stock (including the premium payable in connection with any redemption
relating to a Change of Control) prior to or contemporaneous with the
consummation of such transaction
, or (B)
sell,
lease or otherwise dispose of more than 2% of the consolidated assets of the
Company and its Subsidiaries (computed on the basis of book value, determined in
accordance with GAAP, or fair market value, determined by the Board in its
reasonable good faith judgment) in any transaction or series of related
transactions, other than (1) sales of inventory in the ordinary course of
business, (2)
the
arm’s length
sale to a third Person
that is not an Affiliate of the Company or any of its Subsidiaries of the real
estate and manufacturing facilities of the Company that have been previously
identified to Trailer, and (3) in the event that such transaction would result
in a Change of Control and the Company pays to the holders of the Preferred
Stock all amounts then due and owing under the Preferred Stock (including the
premium payable in connection with any redemption relating to a Change of
Control) prior to or contemporaneous with the consummation of such
transaction;
(xi)
become
subject to any agreement or instrument which by its terms would (under any
circumstances) restrict (A) the right of any Subsidiary to make loans or
advances or pay dividends to, transfer property to, or repay any Indebtedness
owed to, the Company or any Subsidiary or (B) restrict the Company’s or any of
its Subsidiaries’ right or ability to perform the provisions of this Agreement
or any of the other Transaction Documents or to conduct its business as
currently conducted;
(xii) make
any amendment to or rescind (including, in each case, by merger or
consolidation) any provision of the certificate of incorporation, articles of
incorporation, by-laws or similar organizational documents of the Company or any
of its Subsidiaries, or file any resolution of the board of directors, board of
managers or similar governing body with the applicable secretary of state of the
state of formation of the Company or any of its Subsidiaries which would
increase the number of authorized shares of Common Stock or Preferred Stock or
adversely affect or otherwise impair the rights of the Investors under the
Transaction Documents (including the relative preferences and priorities of the
Preferred Stock); or
(xiii) (A)
increase the size of the Board or any Sub Board or (B) create or change any
committee of the Board or any Sub Board.
(b) If
the Company violates or is in breach of the Financial Performance Levels, until
the Preferred Expiration Date, the Company and the Board shall not, and shall
take all action possible to ensure that each Subsidiary of the Company shall
not, without the prior written consent of the Majority Trailer Investors (which
consent may be withheld in their sole discretion) take any of the following
actions or engage in any of the following transactions:
(i) approve
the annual budget of the Company and its Subsidiaries for any fiscal year or
deviate from any annual budget by more than 10% in the aggregate;
or
(ii) approve
the employment or termination by the Board of any member of senior management of
the Company.
Section
5.2
Affirmative
Covenants
. From
and after the Closing Date until the Preferred Expiration Date, the Company and
the Board shall, and shall take all action possible to ensure that each
Subsidiary of the Company shall, unless it has received the prior written
consent of the Majority Trailer Investors (which consent may be withheld in
their sole discretion):
(a) at
all times cause to be done all things necessary or reasonably required to
maintain, preserve and renew its corporate existence and all material licenses,
authorizations and permits necessary or reasonably required to the conduct of
its businesses;
(b) maintain
and keep its material properties in good repair, working order and condition
(normal wear and tear excepted), and from time to time make all necessary or
reasonably required repairs, renewals and replacements so that its businesses
may be properly and advantageously conducted in all material respects at all
times;
provided
that in no event shall this
Section 5.2(b)
be
deemed to require the making of capital expenditures in excess of the amount
approved by the Board;
(c) pay
and discharge when payable all taxes, assessments and governmental charges
imposed upon its properties or upon the income or profits therefrom (in each
case, before the same becomes delinquent and before penalties accrue thereon)
and all material claims for labor, materials or supplies which if unpaid would
by law become a Lien upon any of its property, unless and to the extent that the
same are being contested in good faith and by appropriate proceedings and
adequate reserves (as determined in accordance with generally accepted
accounting principles, consistently applied) have been established on its books
and financial statements with respect thereto;
(d) comply
with all other material obligations which it incurs pursuant to any Material
Contract (as such term is defined in the Purchase Agreement), as such
obligations become due, unless and to the extent that the same are being
contested in good faith and by appropriate proceedings and adequate reserves (as
determined in accordance with generally accepted accounting principles,
consistently applied) have been established on its books and financial
statements with respect thereto;
(e) comply
with all applicable laws, rules and regulations of all governmental authorities
in all material respects;
(f) apply
for and continue in force with reputable insurance companies adequate insurance
covering risks of such types and in such amounts as are customary for companies
of similar size as the Company and its Subsidiaries and engaged in similar lines
of business as the Company and its Subsidiaries;
(g) maintain
proper books of record and account which present fairly in all material respects
its financial condition and results of operations and make provisions on its
financial statements for all such proper reserves as in each case are required
in accordance with GAAP; and
(h) reserve
and keep available out of the authorized but unissued shares of Common Stock,
solely for the purpose of providing for the exercise of the Warrant, such number
of shares of Common Stock as shall from time to time equal the number of shares
sufficient to permit the exercise of the Warrant.
ARTICLE
VI
INFORMATION
RIGHTS
Section
6.1
Delivery of Financial
Statements
.
(a)
For so long as (x) the Preferred Investors
hold
at least 10% of the Preferred Stock issued pursuant to the Purchase Agreement or
(y)
the Common Investors
in the aggregate
hold, or “beneficially own” (within the meaning of Rule 13d-3 under the Exchange
Act) at least 10% of the issued and outstanding Common Stock of the Company,
a
t any time that the Company is not required to
file periodic reports with the SEC, the Company shall deliver to each Preferred
Investor and/or Common Investor, as applicable:
(i)
as soon as practicable, but in any event within ninety
days after the end of each fiscal year of the Company, for each of the Company
and each of its Subsidiaries, an income statement for such fiscal year, a
balance sheet, and statement of stockholder’s equity as of the end of such
fiscal year, and a statement of cash flows for such fiscal year, such year-end
financial reports to be in reasonable detail, prepared in accordance with GAAP,
and audited and certified by a nationally recognized accounting firm selected by
the Company and reasonably acceptable to the Majority Common
Investors;
(ii)
as soon as practicable, but in any event within thirty
days after the end of each of the first three quarters of each fiscal year of
the Company, for the Company and each of its Subsidiaries, an unaudited income
statement for such quarter, statement of cash flows for such quarter and an
unaudited balance sheet as of the end of such quarter;
(iii)
as promptly as practicable but in any event within
thirty days of the end of each month, an unaudited income statement and
statement of cash flows for such month, and a balance sheet for and as of the
end of such month, in reasonable detail;
(iv)
with respect to the financial statements called for in
subsections (ii) and (iii) of this
Section 6.1(a)
, an instrument executed by the Chief Financial Officer
or Chief Executive Officer of the Company and certifying that such financial
statements were prepared in accordance with GAAP consistently applied with prior
practice for earlier periods (with the exception of footnotes that may be
required by GAAP) and fairly present in all material respects the financial
condition of the Company and its Subsidiaries and its results of operation for
the period specified, subject to year-end audit adjustment;
(v)
notices of events that have had or could reasonably be
expected to have a material and adverse effect on the Company and its
Subsidiaries, taken as a whole, as soon as practicable following the occurrence
of any such event; and
(vi)
such other information relating to the financial
condition, business, prospects or corporate affairs of the Company and its
Subsidiaries as any Preferred Investor or Common Investor may from time to time
reasonably request.
(b)
Notwithstanding the foregoing, at all times, the Company
shall use commercially reasonable efforts to deliver the financial statements
listed
Sections
6.1(a)(i)
,
6.1(a)(ii)
, and
6.1(a)(iii)
promptly after such statements are internally
available.
Section
6.2
Inspection
.
(a)
For so long as (i) the Preferred Investors
hold
at least 10% of the Preferred Stock issued pursuant to the Purchase Agreement or
(ii)
the Common Investors
in the aggregate
hold, or “beneficially own” (within the meaning of Rule 13d-3 under the Exchange
Act) at least 10% of the issued and outstanding Common Stock of the
Company,
(A) t
he Company shall permit each Preferred Investor and/or
Common Investor, as applicable, together with such Investor’s consultants and
advisors, to visit and inspect the Company’s and its Subsidiaries’ properties,
to examine their respective books of account and records and to discuss the
Company’s and its Subsidiaries’ affairs, finances and accounts with their
respective officers and employees, all at such reasonable times as may be
requested by such Investor, and (B) the Company shall, with reasonable
promptness, provide to each Preferred Investor and/or Common Investor, as
applicable, such other information and financial data concerning the Company and
its Subsidiaries as such Investor may reasonably
request.
(b)
For so long as (i) the Trailer Investors
hold at
least 10% of the Preferred Stock issued pursuant to the Purchase Agreement or
(ii)
the Trailer Investors
in the aggregate
hold, or “beneficially own” (within the meaning of Rule 13d-3 under the Exchange
Act) at least 10% of the issued and outstanding Common Stock of the
Company,
the
Company
shall pay the reasonable fees and expenses
of any consultant or professional advisor that the Majority Trailer Investors
may engage in connection with the Trailer Investors’ interests in the
Company.
Section
6.3
Budget
. For so long
as (a) the Preferred Investors hold at least 10% of the Preferred Stock issued
pursuant to the Purchase Agreement or (b) the Common Investors in the aggregate
hold, or “beneficially own” (within the meaning of Rule 13d-3 under the Exchange
Act) at least 10% of the issued and outstanding Common Stock of the
Company,
the
Company shall provide to each Preferred Investor and/or Common Investor, as
applicable, not later than thirty days before the beginning of each fiscal year
of the Company, but in any event, ten days prior to presenting such budget to
the Board, an annual budget prepared on a monthly basis for the Company and its
Subsidiaries for such fiscal year (displaying anticipated statements of income
and cash flows and balance sheets), and promptly upon preparation thereof any
other significant budgets or forecasts prepared by the Company and any revisions
of such annual or other budgets or forecasts.
ARTICLE
VII
EVENTS
OF DEFAULT; REMEDIES
Section
7.1
Events of
Default
. It
shall be considered an “
Event of Default
”
if:
(a) the
Company fails to file or cause to be filed with the SEC (i) the Initial
Registration Statement covering the Registrable Securities on or prior to the
Filing Deadline or (ii) the New Registration Statement, if any, prior to the
30th day after the Board reasonably and in good faith has determined that it has
exhausted the Company’s obligations under Section 2.1(c) to use all reasonable
best efforts to advocate with the SEC for the registration of all of the
Registrable Securities in the Initial Registration Statement;
(b) (i)
any Registration Statement covering the Registrable Securities is not declared
effective by the SEC prior to the earlier of (A) five Business Days after the
SEC shall have informed the Company that no review of such Registration
Statement will be made or that the SEC has no further comments on such
Registration Statement, or (B) in the case of the Initial Registration Statement
or the New Registration Statement, the 90
th
day
after the Closing Date (or the 180
th
day if
the SEC reviews such Registration Statement), (ii) any Registration Statement
covering the Additional Shares is not declared effective by the SEC within
ninety days following the time such Registration Statement was required to be
filed pursuant to
Section 2.1(b)
(or
the 180
th
day if
the SEC reviews such Registration Statement), or (C) any additional Registration
Statement covering Additional Securities that may be required pursuant to
Section 2(c)
is not
declared effective by the SEC prior to the 90
th
day
following the date on which the Company, pursuant to SEC Guidance, is permitted
to register for re-sale the securities set forth in such additional Registration
Statement (or the 120
th
day if
the SEC reviews such Registration Statement);
(c) after
a Registration Statement has been declared effective by the SEC, sales cannot be
made pursuant to such Registration Statement for any reason (including by reason
of a stop order or the Company’s failure to update the Registration Statement),
but excluding the inability of any Common Investor to sell the Registrable
Securities covered thereby due to market conditions and except as excused
pursuant to
Section
2.2
;
(d) the
Company fails to file or amend, or to cause to be filed or amended, the
Registration Statement covering the Additional Shares as required to be filed or
amended pursuant to
Section 2.1(b)
, and
such default continues for ten Business Days or longer following the delivery to
the Company of a written demand by any Common Investor;
(e) the
Company defaults in any way with its obligations under
Section 2.7(a)
,
Section 3.1
,
Article IV
,
Section 5.1
or
Article VI
, and such
default (other than with respect to
Section 3.1
,
Article IV
or
Section 5.1
for which
there shall be no cure period) continues for thirty days or longer;
or
(f) the
Company defaults in any way with its obligations under
Section 5.2
or
Article VIII
, and
such default continues for ninety days or longer.
Section
7.2
Remedies
.
(a) Upon
the occurrence and during the continuation of any Event of Default, (i) if
requested in writing by the Majority Common Investors, the Company will, for as
long as the Warrant or any Warrant Shares are outstanding, pay to each Common
Investor in respect of the Warrant or the Warrant Shares held by such Investor,
subject to any limitations in the Senior Credit Agreement, an amount equal to
2.0% of the aggregate Fair Market Value of the Warrant Shares (or the Warrant
Shares underlying the Warrant, if the Warrant has not been exercised in full)
held by such Investor for each thirty-day period or
pro rata
for any portion
thereof following the occurrence of an Event of Default (the “
Blackout Period
”) and
(ii) the holders of the Preferred Stock shall have the rights and remedies set
forth in the applicable Certificate of Designation. The payments
described in subclause (i) above shall not affect the right of the Investors to
seek any other relief including injunctive relief or request registration
pursuant to
Section
2.1
. The amounts payable pursuant to this paragraph shall be
paid monthly within three Business Days of the last day of each month following
the commencement of the Blackout Period until the termination of the Blackout
Period. Such payments shall be made to each Common Investor in
cash.
(b) In
addition to the remedy set forth in
Section 7.2(a)
, if
any Specified Event of Default is not cured within three months following the
date on which such Specified Event of Default first occurs (the “
Outside Date
”), then
each Common Investor shall be entitled to, subject to any limitations in the
Senior Credit Agreement, cause the Company to repurchase all or any lesser
portion of such Investor’s Warrant Shares (or all or any portion of the Warrant)
(together, the “
Put
Shares
”) for an aggregate cash purchase price equal to the Fair Market
Value of such Warrant Shares (or Warrant Shares underlying the Warrant if the
Warrant has not been exercised in full) (the “
Put Purchase
Price
”). Each Common Investor may exercise such right by
delivering written notice thereof to the Company at any time after the Outside
Date (the “
Repurchase
Request
”). If a Repurchase Request is delivered, then such Put
Shares shall immediately cease to be outstanding and the Company shall pay the
Put Purchase Price as soon as reasonably practicable, but in any event within
thirty days after the delivery of the Repurchase Request. If the Put
Purchase Price is not paid in full within such time period, then interest shall
accrue on the unpaid Put Purchase Price at a rate of 15% per annum (or such
lesser interest rate as may be permitted under applicable law) from the date
that is thirty days after the date on which the Repurchase Request was delivered
to the Company through and including the date of payment. The Company
shall not declare or pay a dividend until such time as the Put Purchase Price,
together with any accrued interest thereon, has been paid in full.
ARTICLE
VIII
INDEMNITY;
EXPENSES
Section
8.1
Indemnity.
The
Company shall indemnify, exonerate and hold each of the Investor Indemnified
Persons (provided that, for purposes of this
Section 8.1
, each reference to “Common
Investor” in the definition of Investor Indemnified Parties shall be replaced
with a referenced to “Common Investor and Preferred Investor”) free and harmless
from and against any and all actions, causes of action, suits, claims,
liabilities, losses, damages and costs and out-of-pocket expenses in connection
therewith (including reasonable attorneys’ and accountants’ fees and expenses)
incurred by the Investor Indemnified Persons or any of them before or after the
date of this Agreement (collectively, the “
Indemnified Liabilities
”), as a result
of, arising out of, or in any way relating to (a) the operations of the Company
or any of its Subsidiaries or (b) its capacity as a stockholder or owner
of securities of the Company (including litigation related thereto), in each
case excluding any loss in value of any investment in the Company by the
Investor Indemnified Persons;
provided
that if and to the extent
that the foregoing undertaking may be unavailable or unenforceable for any
reason, the Company will make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law. The rights of any Investor Indemnified Person to
indemnification hereunder will be in addition to any other rights any such
Person may have under any other agreement or instrument referenced above or any
other agreement or instrument to which such Investor Indemnified Person is or
becomes a party or is or otherwise becomes a beneficiary or under law or
regulation. None of the Investor Indemnified Persons shall in any
event be liable to the Company, any of its Subsidiaries, or any of their
respective affiliates for any act or omission suffered or taken by such Investor
Indemnified Person.
Section
8.2
Expenses.
All
reasonable costs and expenses incurred by any Preferred Investor or Common
Investor (a) in exercising or enforcing any rights afforded to such
Investor under this Agreement or the other Transaction Documents, (b) in
amending, modifying, or revising this Agreement, the Warrant or the Certificate
of Designation, or (c) in connection with any transaction, claim, or event which
such Investor reasonably believes affects the Company and as to which such
Investor seeks the advice of counsel, shall be paid or reimbursed by the
Company.
ARTICLE
IX
MISCELLANEOUS
Section
9.1
Amendments and
Waivers.
This Agreement may be amended, modified or waived (a) with
respect to the rights of the Common Investors, only by a writing signed by the
Company and the Majority Common Investors, (b) with respect to the rights of the
Preferred Investors, only by a writing signed by the Company and the Majority
Preferred Investors, and (c) with respect to the rights of the Trailer
Investors, only by a writing signed by the Company and the Majority Trailer
Investors.
Section
9.2
Limitations under Senior
Credit Agreement.
Except
for payments for which this Agreement expressly provides for restrictions
related to the Senior Credit Agreement, in the event a payment is required to be
made by the Company hereunder and such payment (or a portion thereof) would not
be permitted to be paid pursuant to the terms of the Senior Credit Agreement,
the Company shall not be in default with respect to non-payment of such payment
or the portion thereof, in each case that is not so permitted (the “
Deferred
Portion
”). The Deferred Portion shall accrue and accumulate at
an annual interest rate equal to the JPMorgan Chase Prime rate (or that of
another nationally recognized financial institution if the JPMorgan Chase Prime
rate is not available) (unless another rate and method of calculation is
provided for herein) until paid and shall become immediately due and payable at
the earliest to occur of (a) when permitted by the Senior Credit Agreement and
(b) when all loans under the Senior Credit Agreement have been paid
off.
Section
9.3
Notices.
Unless
otherwise provided, any notice required or permitted under this Agreement shall
be given in writing and shall be deemed effectively given as hereinafter
described (a) if given by personal delivery, then such notice shall be deemed
given upon such delivery, (b) if given by facsimile, then such notice shall be
deemed given upon receipt of confirmation of complete transmittal, (c) if given
by mail, then such notice shall be deemed given upon the earlier of (i) receipt
of such notice by the recipient or (ii) three days after such notice is
deposited in first class mail, postage prepaid, and (d) if given by an
internationally recognized overnight air courier, then such notice shall be
deemed given one Business Day after delivery to such carrier. All
notices shall be addressed to the party to be notified at the address as
follows, or at such other address as such party may designate by ten days’
advance written notice to the other party:
If to the
Company:
Wabash
National Corporation
1000
Sagamore Parkway South
Lafayette,
Indiana 47905
Attention: Chief
Financial Officer
Facsimile: (765)
771-5579
With a
copy to:
Hogan &
Hartson LLP
111 South
Calvert Street
Suite
1600
Baltimore,
MD 21202
Attention: Michael
J. Silver
Facsimile: (410)
539-6981
If to
Trailer:
Trailer
Investments, LLC
c/o
Lincolnshire Management, Inc.
780 Third
Avenue
New York,
NY 10017
Attention: Michael
J. Lyons
Allan D.
L. Weinstein
Facsimile: (212)
755-5457
With a
copy to:
Kirkland &
Ellis LLP
601
Lexington Avenue
New York,
NY 10022
Attention: Frederick
Tanne, P.C.
Srinivas S.
Kaushik
Facsimile: (212)
446-6460
Section
9.4
Assignments and Transfers by
Investors.
The provisions of this Agreement shall be binding upon and
inure to the benefit of Trailer, the other Investors and their respective
successors and Permitted Transferees. Any Investor may Transfer, in
whole or from time to time in part, to one or more Permitted Transferees its
rights hereunder (to the extent transferable and applicable to such Transferee
as set forth herein) in connection with the Transfer of Securities to such
Permitted Transferee(s).
Section
9.5
Assignments and Transfers by
the Company.
This Agreement may not be assigned by the Company (whether
by operation of law or otherwise) (a) with respect to the Warrants or the
Registrable Securities, without the prior written consent of the Majority Common
Investors and the Majority Trailer Investors, or (b) with respect to the
Preferred Stock, without the prior written consent of the Majority Preferred
Investors.
Section
9.6
Benefits of the
Agreement.
The terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective permitted successors
and Permitted Transferees of the parties hereto as set forth in this
Agreement. Nothing in this Agreement, express or implied, is intended
to confer upon any Person other than the parties hereto or their respective
successors and Permitted Transferees any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
Section
9.7
Counterparts; Facsimiles and
Electronic Copies.
This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement
may also be executed via facsimile or other electronic copy (including copies
sent via email), which shall be deemed an original.
Section
9.8
Titles and Subtitles.
The titles and subtitles used in this Agreement are used for convenience only
and are not to be considered in construing or interpreting this
Agreement. All references to “Section” or “Sections” refer to the
corresponding Section or Sections of this Agreement. All words used
in this Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word
“including” does not limit the preceding words or terms.
Section
9.9
Severability.
If any
provision of this Agreement or the application of any such provision to any
Person or circumstance shall be declared by any court of competent jurisdiction
to be invalid, illegal, void or unenforceable in any respect, all other
provisions of this Agreement, or the application of such provision to Persons or
circumstances other than those as to which it has been held invalid, illegal,
void or unenforceable, shall nevertheless remain in full force and effect and
will in no way be affected, impaired or invalidated thereby. Upon
such determination that any provision, or the application of any such provision,
is invalid, illegal, void or unenforceable, the parties hereto shall negotiate
in good faith to modify this Agreement so as to effect the original intent of
the parties hereto as closely as possible to the fullest extent permitted by Law
in an acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the greatest extent possible.
Section
9.10
No Strict
Construction.
The language used in this Agreement shall be deemed to be
the language chosen by the parties hereto to express their mutual intent, and no
rule of strict construction shall be applied against any Person.
Section
9.11
Further Assurances.
The parties hereto shall execute and deliver all such further instruments and
documents and take all such other actions as may be necessary or reasonably
required to carry out the transactions contemplated hereby and to evidence the
fulfillment of the agreements herein contained.
Section
9.12
Entire Agreement.
This Agreement is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. This Agreement and the other Transaction Documents
supersede all prior agreements and understandings between the parties with
respect to such subject matter.
Section
9.13
Governing Law; Consent to
Jurisdiction; Waiver of Jury Trial
. This Agreement shall be governed by,
and construed in accordance with, the internal laws of the State of New York
without regard to the choice of law principles thereof. Each of the
parties hereto irrevocably submits to the exclusive jurisdiction of the courts
of the State of New York located in New York County and the United States
District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby. Service of
process in connection with any such suit, action or proceeding may be served on
each party hereto anywhere in the world by the same methods as are specified for
the giving of notices under this Agreement. Each of the parties
hereto irrevocably consents to the jurisdiction of any such court in any such
suit, action or proceeding and to the laying of venue in such
court. Each party hereto irrevocably waives any objection to the
laying of venue of any such suit, action or proceeding brought in such courts
and irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
EACH OF THE PARTIES HERETO WAIVES ANY
RIGHT TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS
AGREEMENT AND REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
WAIVER.
[END OF
PAGE]
[SIGNATURE
PAGE FOLLOWS]
SIGNATURE
PAGE TO
INVESTOR
RIGHTS AGREEMENT
IN
WITNESS WHEREOF, the parties have executed this Agreement or caused their duly
authorized officers to execute this Agreement as of the date first above
written.
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By:
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/s/
Richard J. Giromini
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Name:
Richard J. Giromini
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Title:
President and Chief Executive Officer
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TRAILER
INVESTMENTS, LLC
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/s/
Michael J. Lyons
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Name:
Michael J. Lyons
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Title:
President
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THE
SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES
HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE “
SECURITIES ACT
”),
(II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144 OF THE SECURITIES ACT, OR
(III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE COMPANY THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER
THE SECURITIES ACT OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES
LAWS.
SUBJECT
TO THE PROVISIONS OF
SECTION 13
HEREOF, THIS WARRANT SHALL BE VOID AFTER 5:00 P.M. (EASTERN TIME) ON THE TENTH
ANNIVERSARY (THE “
EXPIRATION DATE
”) OF
AUGUST 3, 2009 (THE “
DATE OF
ISSUANCE
”).
WABASH
NATIONAL CORPORATION
WARRANT
TO PURCHASE SHARES OF COMMON STOCK
FOR VALUE
RECEIVED, Trailer Investments, LLC (the “
Warrantholder
”), is
entitled to purchase, subject to the provisions of this Warrant, from Wabash
National Corporation, a Delaware corporation (the “
Company
”), at any
time not later than 5:00 p.m. (Eastern Time) on the Expiration Date, at an
exercise price per share equal to $0.01 (such exercise price, as adjusted from
time to time in accordance with the terms of this Warrant, the “
Warrant Price
”),
24,762,636 shares (the “
Warrant Shares
”) of
the Company’s Common Stock, par value $0.01 per share (“
Common
Stock
”). The number of Warrant Shares purchasable upon
exercise of this Warrant shall be subject to adjustment from time to time as
described herein. Capitalized terms used but not otherwise defined in
this Warrant shall have the meanings ascribed to such terms in the Securities
Purchase Agreement, dated as of the date hereof, by and between the Company and
the Warrantholder (the “
Purchase
Agreement
”).
Section
1.
Registration
. The
Company shall maintain books for the transfer and registration of this
Warrant. Upon the initial issuance of this Warrant, the Company shall
issue and register this Warrant in the name of the Warrantholder.
Section
2.
Transfers
. As
provided herein, this Warrant may be transferred to any person or entity but
only pursuant to a registration statement filed under the Securities Act or
pursuant to an exemption from such registration. Subject to such
restrictions, the Company shall transfer this Warrant from time to time upon the
books to be maintained by the Company for that purpose, within five calendar
days following the surrender hereof for transfer, properly endorsed or
accompanied by appropriate instructions for transfer and a new Warrant shall be
issued to the transferee and the surrendered Warrant shall be canceled by the
Company within such five calendar day period.
Section
3.
Exercise of
Warrant
. Subject to the provisions hereof, the Warrantholder
may exercise this Warrant, in whole or in part, at any time prior to the
Expiration Date upon surrender of this Warrant, together with delivery of a duly
executed Warrant exercise form, in the form attached hereto as
Appendix A
(the
“
Exercise
Agreement
”) and payment by wire transfer of funds (or, in certain
circumstances, by cashless exercise as provided in
Section 4
) of the
aggregate Warrant Price for that number of Warrant Shares then being purchased,
to the Company during normal business hours on any business day at the Company’s
principal executive offices (or such other office or agency of the Company as it
may designate by notice to the Warrantholder). The Warrant Shares so
purchased shall be deemed to be issued to the Warrantholder or the
Warrantholder’s designee, as the record owner of such shares, as of the close of
business on the date on which this Warrant shall have been surrendered (or the
date evidence of loss, theft or destruction thereof and security or indemnity
reasonably satisfactory to the Company has been provided to the Company), the
Warrant Price shall have been paid and the completed Exercise Agreement shall
have been delivered. Certificates for the Warrant Shares so purchased
shall be delivered to the Warrantholder within a reasonable time, not exceeding
three business days, after this Warrant shall have been so
exercised. The certificates so delivered shall be in such
denominations as may be requested by the Warrantholder and shall be registered
in the name of the Warrantholder or such other name as shall be designated by
the Warrantholder, as specified in the Exercise Agreement. If this
Warrant shall have been exercised only in part, then, unless this Warrant has
expired, the Company shall, at its expense, at the time of delivery of such
certificates, deliver to the Warrantholder a new Warrant representing the right
to purchase the number of shares with respect to which this Warrant shall not
then have been exercised. As used herein, “business day” means a day,
other than a Saturday or Sunday, on which banks in New York, New York are open
for the general transaction of business.
Section
4.
Cashless
Exercise
. Notwithstanding any other provision contained herein
to the contrary, the Warrantholder may elect to receive, without payment by the
Warrantholder of the aggregate Warrant Price in respect of the shares of Common
Stock to be acquired, shares of Common Stock having a Fair Market Value equal to
the Market Price of all shares of Common Stock that may then be purchased upon
full exercise of this Warrant, less the aggregate Warrant Price for all such
shares, or any specified portion thereof, by the surrender to the Company of
this Warrant (or such portion of this Warrant being so exercised) together with
a Net Issue Election Notice, in the form annexed hereto as
Appendix B
, duly
executed, to the Company. Thereupon, the Company shall issue to the
Warrantholder such number of fully paid, validly issued and nonassessable shares
of Common Stock as is computed using the following formula:
X =
Y (A -
B)
A
where
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X
=
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the
number of shares of Common Stock to which the Warrantholder is entitled
upon such cashless exercise;
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Y
=
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the
total number of shares of Common Stock covered by this Warrant for which
the Warrantholder has surrendered purchase rights at such time for
cashless exercise (including both shares to be issued to the Warrantholder
and shares as to which the purchase rights are to be canceled as payment
therefor);
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A
=
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the
Market Price of one share of Common Stock as of the date the net issue
election is made; and
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provided
that if X is
equal to zero or a negative number, then the Warrantholder shall not be entitled
to receive any Warrant Shares pursuant to a cashless exercise in accordance with
this
Section
4
.
Section
5.
Compliance with Securities
Act
. Except as provided in the Purchase Agreement, the Company
may cause the legend set forth on the first page of this Warrant to be set forth
on each Warrant, and a similar legend on any security issued or issuable upon
exercise of this Warrant, unless counsel for the Company is of the opinion as to
any such security that such legend is unnecessary. The Warrantholder
hereby represents and warrants to the Company that the Warrantholder is
acquiring the Warrant and the Warrant Shares purchasable upon exercise of this
Warrant (collectively, the “
Securities
”) for
investment for its own account and not with a view to, or for resale in
connection with, any distribution thereof. The Warrantholder
acknowledges and understands that the Securities have not been registered under
the Securities Act or applicable state securities laws and may not be offered,
sold, assigned, pledged, transferred or otherwise disposed of unless (a) such
Securities have been registered for sale pursuant to the Securities Act, (b)
such Securities may be sold pursuant to Rule 144 of the Securities Act, or (c)
the Company has received an opinion of counsel reasonably satisfactory to the
Company that such transfer may lawfully be made without registration under the
Securities Act or qualification under applicable state securities
laws.
Section
6.
Payment of
Taxes
. The Company will pay any documentary stamp taxes
attributable to the initial issuance of Warrant Shares issuable upon the
exercise of this Warrant;
provided
,
however
, that the
Company shall not be required to pay any tax or taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificates
for Warrant Shares in a name other than that of the Warrantholder in respect of
which such shares are issued, and in such case, the Company shall not be
required to issue or deliver any certificate for Warrant Shares or any Warrant
until the person requesting the same has paid to the Company the amount of such
tax or has established to the Company’s reasonable satisfaction that such tax
has been paid. The Warrantholder shall be responsible for income
taxes due under federal, state or other law to the extent any such tax is
due.
Section
7.
Replacement
. Upon
receipt of evidence reasonably satisfactory to the Company (an affidavit of the
Warrantholder shall be satisfactory) of the ownership and the loss, theft,
destruction or mutilation of this Warrant, and in the case of any such loss,
theft or destruction, upon receipt of indemnity reasonably satisfactory to the
Company (
provided
that if the
Warrantholder is a financial institution or other institutional investor, then
the Warrantholder’s own agreement shall be satisfactory; it being understood and
agreed that each of Trailer Investments, LLC and its affiliates shall constitute
an institutional investor for such purpose), or, in the case of any such
mutilation upon surrender of this Warrant, the Company shall (at its expense)
execute and deliver in lieu of this Warrant a new Warrant of like kind
representing the number of Warrant Shares represented by such lost, stolen,
destroyed or mutilated Warrant and dated the date of such lost, stolen,
destroyed or mutilated Warrant.
Section
8.
Reservation of Common Stock;
Outstanding Options
. The Company hereby represents and
warrants that there have been reserved, and the Company shall at all applicable
times keep reserved until issued (if necessary), out of the authorized and
unissued shares of Common Stock, the maximum number of shares issuable upon the
exercise of the rights of purchase represented by this Warrant. The
Company represents, warrants and covenants that all Warrant Shares issued upon
due exercise of this Warrant shall be, at the time of delivery of the
certificates for such Warrant Shares, duly authorized, validly issued, fully
paid and non-assessable shares of Common Stock. The Company
represents and warrants that, as of the Date of Issuance, (a) 31,248,755 shares
of Common Stock have been issued and remain outstanding, (b) 2,181,541 Options
(as defined below) have been issued or granted, and (c) no Convertible
Securities (as defined below) have been issued or remain
outstanding.
Section
9.
Adjustment of Number of
Warrant Shares
. In order to prevent dilution of the rights
granted under this Warrant (including on account of the Out of the Money
Options) and to provide for certain protections in the event the Company is
unable to fully utilize its NOLs, the number of Warrant Shares obtainable upon
exercise of this Warrant shall be subject to adjustment from time to time as
provided in this
Section 9
;
provided
that if more
than one subsection of this
Section 9
is
applicable to a single event, then the subsection shall be applied that produces
the largest adjustment and no single event shall cause an adjustment under more
than one subsection of this
Section 9
so as to
result in duplication;
provided
,
further
, that, with
respect to any Warrantholder that is not a Trailer Investor (as defined in the
Investor Rights Agreement), no adjustment shall be made pursuant to
Section 9(a),
Section 9(b)
or
Section 9(e)
if,
immediately prior to the time at which such adjustment would otherwise be made,
the number of shares of Common Stock exercisable under this Warrant and any
other Warrant held by the Warrantholder or any of its affiliates is for fewer
than 2,800,570 shares of Common Stock (
provided
,
however
, that such
number shall be adjusted from time to time in the same manner as the number of
Warrant Shares subject to this Warrant is adjusted in accordance with
Section 9(c)
and
Section
9(d))
. For the avoidance of doubt, the Warrant Price shall not
be subject to adjustment hereunder. For the purposes of this Warrant,
the following terms have the meanings set forth below:
“
Common Stock Deemed
Outstanding
” means, at any given time, the number of shares of Common
Stock actually outstanding at such time, plus the number of shares of Common
Stock deemed to be outstanding pursuant to
Section 9(b)(i)
and
Section
9(b)(ii)
hereof regardless of whether the Options or Convertible
Securities are actually exercisable at such time, but excluding any shares of
Common Stock issuable upon exercise of this Warrant.
“
Convertible
Securities
” means any stock or securities (directly or indirectly)
convertible into or exchangeable for Common Stock.
“
Fair Market Value
”
means, with respect to any security or other property, the fair market value of
such security or other property, as jointly determined in good faith by the
Board of Directors of the Company and the Warrantholder, assuming a willing
buyer and willing seller; provided that no minority or illiquidity discount
shall be taken into account and no consideration shall be given to any
restrictions on transfer, or to the existence or absence of, or any limitations
on, voting rights.
“
Liquidity Event
”
means, (i) with respect to any Option (other than awards of Common Stock), the
last day of the fiscal quarter during which such Option is exercised or in
respect of which any liquidity event has occurred, including the cashing out of
such Option or the underlying share of Common Stock, the payment of any
consideration or the exchange or rollover of such Option (or the underlying
share of Common Stock),
provided
,
however
, that if any
of the foregoing occur in connection with any transaction or a series of related
transactions in which the liquidity for the Warrant or the Warrant Share occurs
substantially contemporaneously, then “Liquidity Event” shall mean the date on
which such transaction or the last portion of such series of related
transactions is consummated, and (ii) with respect to any Option that is an
award of Common Stock, the date of grant of such Option.
“
Market Price
” means,
as of a particular date (the “
Valuation Date
”), the
following: (i) if the Common Stock is then quoted on the New York Stock
Exchange, Inc. (“
NYSE
”), The Nasdaq
Stock Market, Inc. (“
Nasdaq
”), the
National Association of Securities Dealers, Inc. OTC Bulletin Board (the “
Bulletin Board
”) or
such similar quotation system or association (together with the NYSE, Nasdaq and
Bulletin Board, “
Trading Markets
” and
each, a “
Trading
Market
”), the average of the daily volume weighted average prices, as
reported by Bloomberg Financial L.P., of one share of Common Stock on a Trading
Market for a period of five trading days consisting of the trading day
immediately prior to the Valuation Date and the four trading days prior to such
date; or (ii) if the Common Stock is not then quoted on a Trading Market, the
Fair Market Value of one share of Common Stock as of the Valuation Date, as
jointly determined in good faith by the Board of Directors of the Company and
the Warrantholder. If the Common Stock is not then listed on a
Trading Market, then the Board of Directors of the Company shall respond
promptly, in writing, to an inquiry by the Warrantholder prior to the exercise
hereunder as to the Fair Market Value of a share of Common Stock as determined
in good faith by the Board of Directors of the Company. In the event
that the Board of Directors of the Company and the Warrantholder are unable to
agree upon the Fair Market Value in respect of clause (ii) above, the Company
and the Warrantholder shall jointly select an appraiser who is experienced in
such matters. The decision of such appraiser shall be final and
conclusive, and the cost of such appraiser shall be borne equally by the Company
and the Warrantholder.
“
Options
” means any
rights or options to subscribe for or purchase Common Stock or Convertible
Securities and any awards of Common Stock or Convertible
Securities.
“
Out of the Money
Options
” means any Options existing as of the Signing Date with an
exercise in excess of $0.54, which have the right on such date to convert to
2,195,442 shares of Common Stock. For the avoidance of doubt, an Out
of the Money Option shall continue to remain an Out of the Money Option after a
repricing, exchange or similar action with respect to such Out of the Money
Option.
“
Signing Date
” means
July 17, 2009.
(a)
Adjustment of Number of
Warrant Shares Issuable upon Exercise of Warrant
.
(i) If
and whenever on or after the Date of Issuance of this Warrant the Company issues
or sells, or in accordance with
Section 9(b)
is
deemed to have issued or sold, any shares of Common Stock for a consideration
per share less than (x) $0.54 (as such amount is proportionately adjusted for
stock splits, stock combinations, stock dividends and recapitalizations
affecting the Common Stock after the Date of Issuance, the “
Base Price
”) or
(y) the Market Price of the Common Stock determined as of the date of such
issue or sale, then immediately upon such issue or sale the number of Warrant
Shares issuable upon exercise of this Warrant shall be increased to whichever of
the following number of Warrant Shares is greater:
(A) the
number of Warrant Shares acquirable upon exercise of this Warrant determined by
multiplying number of Warrant Shares acquirable upon exercise of this Warrant
immediately prior to such issue or sale by a fraction, the numerator of which
shall be the product derived by multiplying the Base Price of the Common Stock
by the number of shares of Common Stock Deemed Outstanding immediately after
such issue or sale, and the denominator of which shall be the sum of (1) the
number of shares of Common Stock Deemed Outstanding immediately prior to such
issue or sale multiplied by the Base Price of the Common Stock determined as of
the date of such issue or sale, plus (2) the consideration, if any, received by
the Company upon such issue or sale; or
(B) the
number of Warrant Shares acquirable upon exercise of this Warrant determined by
multiplying the number of Warrant Shares acquirable upon exercise of this
Warrant immediately prior to such issue or sale by a fraction, the numerator of
which shall be the product derived by multiplying the Market Price of the Common
Stock by the number of shares of Common Stock Deemed Outstanding immediately
after such issue or sale, and the denominator of which shall be the sum of (1)
the number of shares of Common Stock Deemed Outstanding immediately prior to
such issue or sale multiplied by the Market Price of the Common Stock determined
as of the date of such issuance of sale, plus (2) the consideration, if any,
received by the Company upon such issue or sale.
(ii) Anything
herein to the contrary notwithstanding, the Company shall not be required to
make any adjustment of the number of Warrant Shares acquirable upon exercise of
this Warrant in the case of the issuance of (A) securities issued pursuant to
the Purchase Agreement and securities issued upon the exercise or conversion of
those securities, and (B) shares of Common Stock issued or issuable by reason of
a dividend, stock split or other distribution on shares of Common Stock (but
only to the extent that such a dividend, split or distribution results in an
adjustment in the number of Warrant Shares acquirable upon exercise of this
Warrant pursuant to the other provisions of this Warrant).
(b)
Effect of Certain Events on
Number of Warrant Shares
. For purposes of determining the
adjusted number of Warrant Shares acquirable upon exercise of this Warrant under
Section 9(a)
,
the following shall be applicable:
(i)
Issuance of
Options
. If the Company in any manner grants or sells any
Options, then upon the occurrence of a Liquidity Event with respect to such
Options the number of Warrant Shares acquirable upon exercise of this Warrant
shall be increased such that the Warrantholder shall be entitled to acquire upon
exercise of this Warrant the same percentage of the fully diluted Common Stock
(i.e., determined by calculating all convertible instruments as fully converted)
immediately following or contemporaneous with the occurrence of such
Liquidity Event that the Warrantholder otherwise would have been entitled to
acquire upon exercise of this Warrant immediately prior to the occurrence of
such Liquidity Event (excluding, for purposes of such calculation, the number of
Out of the Money Options outstanding as of the Signing Date). The
Company shall promptly provide the Warrantholder with written notice of the
occurrence of any Liquidity Event. The adjustments set forth in this
paragraph shall also be given effect with respect to any transaction where the
relevant Liquidity Event and liquidity for the Warrant or the Warrant Shares
occurs contemporaneously, in the same transaction or as part of a series of
related transactions.
(ii)
Issuance of Convertible
Securities
. If the Company in any manner issues or sells any
Convertible Securities, and the price per share for which Common Stock is
issuable upon conversion or exchange thereof is less than (a) the Base Price in
effect immediately prior to the time of such issue or sale or (b) the Market
Price determined as of such time, then the maximum number of shares of Common
Stock issuable upon conversion or exchange of such Convertible Securities shall
be deemed to be outstanding and to have been issued and sold by the Company for
such price per share. For the purposes of this paragraph, the “price
per share for which Common Stock is issuable upon conversion or exchange
thereof” is determined by dividing (A) the total amount received or receivable
by the Company as consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional consideration, if
any, payable to the Company upon the conversion or exchange thereof, by (B) the
total maximum number of shares of Common Stock issuable upon the conversion or
exchange of all such Convertible Securities. No further adjustment of
the number of Warrant Shares acquirable upon exercise of this Warrant shall be
made upon the actual issue of such Common Stock upon conversion or exchange of
such Convertible Securities, and if any such issue or sale of such Convertible
Securities is made upon exercise of any Options for which adjustments of the
number of Warrant Shares acquirable upon exercise of this Warrant had been or
are to be made pursuant to other provisions of this
Section 9(b)
, no
further adjustment of the number of Warrant Shares acquirable upon exercise of
this Warrant shall be made by reason of such issue or sale.
(iii)
Change in Conversion
Rate
. If the additional consideration, if any, payable upon
the issue, conversion or exchange of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exchangeable for Common
Stock changes at any time, the number of Warrant Shares acquirable upon exercise
of this Warrant at the time of such change shall be adjusted immediately to the
number of Warrant Shares which would have been acquirable upon exercise of this
Warrant at such time had such Convertible Securities still outstanding provided
for such changed additional consideration or changed conversion rate, as the
case may be, at the time initially granted, issued or sold. For
purposes of this
Section 9(b)
, if the
terms of any Convertible Security which was outstanding as of the date of
issuance of this Warrant are changed in the manner described in the immediately
preceding sentence, then such Convertible Security and the Common Stock deemed
issuable upon exercise, conversion or exchange thereof shall be deemed to have
been issued as of the date of such change;
provided
that no such
change shall at any time cause the number of Warrant Shares acquirable upon
exercise of this Warrant hereunder to be decreased.
(iv)
Treatment of Expired Options
and Terminated Convertible Securities
. Upon the expiration of
any Option issued or granted on or following the Date of Issuance or the
termination of any right to convert or exchange any Convertible Securities
without the exercise of such Option or right, the number of Warrant Shares
acquirable upon exercise of this Warrant shall be adjusted immediately to the
number of Warrant Shares which would have been acquirable upon exercise of this
Warrant at the time of such expiration or termination had such Option or
Convertible Securities, to the extent outstanding immediately prior to such
expiration or termination, never been issued.
(v)
Treatment of Out of the
Money Options Outstanding as of the Date of Issuance
. Upon the
occurrence of a Liquidity Event with respect to any Out of the Money Option at
any time after the Signing Date, (A) if this Warrant shall not have been
exercised in full, then the number of Warrant Shares acquirable upon exercise of
this Warrant shall be increased such that the Warrantholder shall be entitled to
acquire upon exercise of this Warrant the same percentage of the Common Stock
outstanding immediately following the occurrence of the Liquidity Event with
respect to such Option that the Warrantholder otherwise would have been entitled
to acquire upon exercise of this Warrant immediately prior to the occurrence of
the Liquidity Event with respect to of such Option, or (B) if this Warrant shall
have been exercised in full, then the Company shall promptly, and in any event
within three business days, issue and deliver to the Warrantholder the requisite
number of shares of Common Stock such that the Warrantholder shall own the same
percentage of the Common Stock outstanding immediately following the occurrence
of the Liquidity Event with respect to such Option that the Warrantholder owned
immediately prior to the occurrence of the Liquidity Event with respect to such
Option. The Company shall promptly provide the Warrantholder with
written notice of the occurrence of any Liquidity Event. The
adjustments set forth in this paragraph shall also be given effect with respect
to any transaction where the relevant Liquidity Event and liquidity for the
Warrant or the Warrant Shares occurs contemporaneously in the same transaction
or as part of a series of related transactions.
(vi)
Calculation of Consideration
Received
. If any Common Stock or Convertible Securities are
issued or sold or deemed to have been issued or sold for cash, then the
consideration received therefor shall be deemed to be the net amount received by
the Company therefor. In case any Common Stock or Convertible
Securities are issued or sold for a consideration other than cash, the amount of
the consideration other than cash received by the Company shall be the Fair
Market Value of such consideration, except where such consideration consists of
securities, in which case the amount of consideration received by the Company
shall be the Market Price thereof as of the date of receipt. In case
any Common Stock or Convertible Securities are issued to the owners of the
non-surviving entity in connection with any merger in which the Company is the
surviving entity the amount of consideration therefor shall be deemed to be the
Fair Market Value of such portion of the net assets and business of the
non-surviving entity as is attributable to such Common Stock or Convertible
Securities, as the case may be. In the event that the Board of
Directors of the Company and the Warrantholder are unable to agree upon the Fair
Market Value, the Company and the Warrantholder shall jointly select an
appraiser who is experienced in such matters. The decision of such
appraiser shall be final and conclusive, and the cost of such appraiser shall be
borne equally by the Company and the Warrantholder.
(vii)
Treasury
Shares
. The number of shares of Common Stock outstanding at
any given time does not include shares owned or held by or for the account of
the Company or any Subsidiary of the Company, and the disposition of any shares
so owned or held shall be considered an issue or sale of Common
Stock.
(viii)
Record
Date
. If the Company takes a record of the holders of Common
Stock for the purpose of entitling them (A) to receive a dividend or other
distribution payable in Common Stock, Options or in Convertible Securities or
(B) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may
be.
(c)
Subdivision or Combination
of Common Stock
. If the Company at any time subdivides (by any
stock split, stock dividend, recapitalization or otherwise) one or more classes
of its outstanding shares of Common Stock into a greater number of shares, then
the number of Warrant Shares acquirable upon exercise of this Warrant
immediately prior to such subdivision shall be proportionately
increased. If the Company at any time combines (by reverse stock
split or otherwise) one or more classes of its outstanding shares of Common
Stock into a smaller number of shares, then the number of Warrant Shares
acquirable upon exercise of this Warrant shall be proportionately
decreased.
(d)
Reorganization,
Reclassification, Consolidation, Merger or Sale
. Any
recapitalization, reorganization, reclassification, consolidation, merger, sale
of all or substantially all of the Company’s assets or other transaction, which
in each case is effected in such a way that the holders of Common Stock are
entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Stock is referred
to herein as “
Organic
Change
.” Prior to the consummation of any Organic Change, the
Company shall make appropriate provision (in form and substance reasonably
satisfactory to the Warrantholder) to insure that the Warrantholder shall
thereafter have the right to acquire and receive, in lieu of or addition to (as
the case may be) the Warrant Shares immediately theretofore acquirable and
receivable upon the exercise of this Warrant, such shares of stock, securities
or assets as would have been issued or payable in such Organic Change (if the
Warrantholder had exercised this Warrant immediately prior to such Organic
Change) with respect to or in exchange for the number of Warrant Shares
immediately theretofore acquirable and receivable upon exercise of this Warrant
had such Organic Change not taken place. In any such case, the
Company shall make appropriate provision (in form and substance satisfactory to
the Warrantholder) with respect to the Warrantholder’s rights and interests to
insure that the provisions of this
Section 9
and
Sections 10
and
11
hereof shall
thereafter be applicable to the Warrant. The Company shall not effect
any such consolidation, merger or sale, unless prior to the consummation
thereof, the successor entity (if other than the Company) resulting from
consolidation or merger or the entity purchasing such assets assumes by written
instrument (in form and substance reasonably satisfactory to the Warrantholder),
the obligation to deliver to the Warrantholder such shares of stock, securities
or assets as, in accordance with the foregoing provisions, the Warrantholder may
be entitled to acquire. Notwithstanding any other provision in this
Warrant to the contrary, the Warrantholder shall have the right, at its
election, to sell or exchange this Warrant (rather sell or exchange the Warrant
Shares) in connection with any Organic Change that is structured as a sale or
exchange of securities of the Company, and the Company shall use its reasonable
best efforts to take all actions necessary or reasonably requested by the
Warrantholder to give effect to such election.
(e)
Loss of Existing
NOLs
: If the Company is unable to fully utilize its net
operating loss carry forward for income tax purposes (“NOLs”) existing as of the
date hereof (which is at least $117 million) as a result of an ownership change
within the meaning of Section 382(g) of the Internal Revenue Code of 1986, as
amended (an “NOL Event”), the number of Warrant Shares acquirable upon exercise
of this Warrant shall be increased on the date the Company becomes aware of the
NOL Event by the sum of (A) a number of shares of Common Stock that the Warrant
would have been initially exercisable for as of the Issuance Date if the initial
number of Warrant Shares represented 49.99% of the fully diluted shares of
Common Stock of the Company on the Issuance Date including the Warrant Shares
(i.e., determined by calculating all convertible instruments as fully converted
but excluding, for purposes of such calculation, the number of Out of the Money
Options outstanding as of Issuance Date) (such number of additional shares, the
“
Additional NOL
Shares
”) and (B) such additional shares of Common Stock that would have
been issuable under the Warrant with respect to the Additional NOL Shares
pursuant to the adjustments set forth in provision of this Warrant if such
Additional NOL Shares were part of the Warrant Shares issuable under this
Warrant as of the Issuance Date. The Company shall promptly provide
the Warrantholder with written notice of any NOL Event as soon as practicable
after the NOL Event becomes known to the Company. In the event this
Warrant has been transferred or exercised, the adjustments set forth in this
paragraph shall be made on a pro rata basis among the holders of the Warrants if
none of the Warrants had been exercised, or if any Warrant has been exercised,
taking into account the number of Warrant Shares held by the holders of the
Warrant and the Warrant Shares. For the avoidance of doubt and in
clarification of the foregoing, to the extent that this Warrant has been
exercised, in whole or in part (the “
Exercised Portion
”),
the holder of this Warrant will be entitled to receive an additional Warrant to
purchase the number of Warrant Shares for which this Warrant would have been
increased with respect to the Exercised Portion had the Exercised Portion not
been exercised prior to an adjustment for an NOL Event, plus, to the extent that
the Warrant has not been fully exercised, the increase that the holder of the
Warrant would be entitled to receive pursuant to this Section 9(e) for the
portion of the Warrant still outstanding, in each case, without
duplication. The adjustments set forth in this paragraph shall also
be given effect with respect to any transaction where the loss of the NOLs
occurs contemporaneously, in the same transaction or as part of a series of
related transactions, with a liquidity event for the Warrant or the Warrant
Shares.
(f)
Certain
Events
. If any event occurs of the type contemplated by the
provisions of this
Section 9
but not
expressly provided for by such provisions (including, without limitation, the
granting of stock appreciation rights, phantom stock rights or other rights with
equity features), then the Company’s Board of Directors shall make an
appropriate adjustment in the number of Warrant Shares obtainable upon exercise
of this Warrant so as to protect the rights of the Warrantholder;
provided
that no such
adjustment shall decrease the number of Warrant Shares obtainable as otherwise
determined pursuant to this
Section
9
.
Section
10.
Dividends
. If
the Company declares or pays any dividend upon the Common Stock except for a
stock dividend payable in shares of Common Stock (a “
Dividend
”), then the
Company shall pay to the Warrantholder at the time of payment thereof the
Dividend which would have been paid to such Warrantholder had this Warrant been
fully exercised immediately prior to the date on which a record is taken for
such Dividend, or, if no record is taken, the date as of which the record
holders of Common Stock entitled to such dividends are to be
determined.
Section
11.
Purchase
Rights
. If at any time the Company grants, issues or sells any
Convertible Securities or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of Common Stock (the
“
Purchase
Rights
”), then the Warrantholder shall be entitled to acquire, upon the
terms applicable to such Purchase Rights, the aggregate Purchase Rights which
such holder could have acquired if such holder had held the number of Warrant
Shares acquirable upon complete exercise of this Warrant immediately before the
date on which a record is taken for the grant, issuance or sale of such Purchase
Rights, or, if no such record is taken, the date as of which the record holders
of Common Stock are to be determined for the grant, issue or sale of such
Purchase Rights.
Section
12.
Fractional
Interest
. The Company shall not be required to issue fractions
of Warrant Shares upon the exercise of this Warrant. If any
fractional share of Common Stock would, except for the provisions of the first
sentence of this
Section 12
, be
deliverable upon such exercise, then the Company, in lieu of delivering such
fractional share, shall pay to the exercising Warrantholder an amount in cash
equal to the Market Price of such fractional share of Common Stock on the date
of exercise.
Section
13.
Extension of Expiration
Date
. If (a)(i) the Company fails to cause any Registration
Statement covering Registrable Securities (as such term is defined in that
certain Investor Rights Agreement, dated as of the date hereof, by and between
the Company and Trailer Investments, LLC, as amended, supplemented or otherwise
modified from time to time (the “
Investor Rights
Agreement
”)) to be declared effective prior to the applicable dates set
forth therein, or (ii) if any of the events specified in Section 7.1 of the
Investor Rights Agreement occurs, and the Blackout Period (as such term is
defined in the Investor Rights Agreement) (whether alone, or in combination with
any other Blackout Period) continues for more than sixty days in any
twelve-month period, or for more than a total of ninety days, or (b) the Company
fails to provide the notice required by
Section 15(b)
within
the time periods set forth therein, then the Expiration Date of this Warrant
shall be extended one day for (1) in the case of clause (a), each day beyond the
sixty day or ninety day limits, as the case may be, that the Blackout Period
continues, or (2) in the case of clause (b), each day after the ninetieth day
prior to the Expiration Date that the required notice has not yet been provided
to the Warrantholder.
Section
14.
Benefits
. Nothing
in this Warrant shall be construed to give any person, firm or corporation
(other than the Company and the Warrantholder) any legal or equitable right,
remedy or claim, it being agreed that this Warrant shall be for the sole and
exclusive benefit of the Company and the Warrantholder.
Section
15.
Notices to
Warrantholder
.
(a) Upon
the happening of any event requiring an adjustment of the number of Warrant
Shares acquirable upon exercise of this Warrant, the Company shall promptly give
written notice thereof to the Warrantholder at the address appearing in the
records of the Company, stating the adjusted number of Warrant Shares acquirable
upon exercise of this Warrant resulting from such event and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. Failure to give such notice to the
Warrantholder or any defect therein shall not affect the legality or validity of
the subject adjustment.
(b) At
least ninety but no more than one hundred twenty days prior to the Expiration
Date, the Company shall provide written notice to the Warrantholder at the
address appearing in the records of the Company, stating the calendar date upon
which the Expiration Date will occur.
Section
16.
Identity of Transfer
Agent
. The transfer agent for the Common Stock is BNY
Mellon. Upon the appointment of any subsequent transfer agent for the
Common Stock or other shares of the Company’s capital stock issuable upon the
exercise of the rights of purchase represented by this Warrant, the Company will
mail to the Warrantholder a statement setting forth the name and address of such
transfer agent;
provided
,
however
, that such
notice shall be provided for convenience only and shall not be required for
effectiveness of any such subsequent appointment.
Section
17.
Further
Assurances
. Except and to the extent as waived or consented to
by the Warrantholder, the Company shall not by any action, including, without
limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such actions as may be necessary or reasonably required to
protect the rights of Warrantholder as set forth in this Warrant against
impairment. Without limiting the generality of the foregoing, the Company will
(a) not increase the par value of any Warrant Shares above the amount payable
therefor upon such exercise immediately before such increase in par value, (b)
take all such action as may be necessary or reasonably required in order that
the Company may validly and legally issue fully paid and nonassessable Warrant
Shares upon the exercise of this Warrant, and (c) use all reasonable best
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to enable
the Company to perform its obligations under this Warrant. Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable, the Company shall use all
reasonable best efforts to obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary or reasonably
required from any public regulatory body or bodies having jurisdiction
thereof.
Section
18.
Notices
. Unless
otherwise provided, any notice required or permitted under this Warrant shall be
given in writing and shall be deemed effectively given as hereinafter described
(a) if given by personal delivery, then such notice shall be deemed given upon
such delivery, (b) if given by telex or facsimile, then such notice shall be
deemed given upon receipt of confirmation of complete transmittal, (c) if given
by mail, then such notice shall be deemed given upon the earlier of (i) receipt
of such notice by the recipient or (ii) three days after such notice is
deposited in first class mail, postage prepaid, and (d) if given by an
internationally recognized overnight air courier, then such notice shall be
deemed given one business day after delivery to such carrier. All
notices shall be addressed as set forth below, or at such other address as the
Warrantholder or the Company may designate by ten days’ advance written notice
to the other party:
If to the
Company, then to:
Wabash
National Corporation
1000
Sagamore Parkway South
Lafayette,
Indiana 47905
Attention: Chief
Financial Officer
Facsimile: (765)
771-5579
with a
copy to (which shall not constitute notice):
Hogan &
Hartson LLP
111 South
Calvert Street
Suite
1600
Baltimore,
MD 21202
Attention: Michael
J. Silver
Facsimile: (410)
539-6981
If to the
Warrantholder, then to:
Trailer
Investments, Inc.
c/o
Lincolnshire Management, Inc.
780 Third
Avenue
New York,
NY 10017
Attention: Michael
J. Lyons
Allan
D. L. Weinstein
Facsimile: (212)
755-5457
with a
copy to (which shall not constitute notice):
Kirkland &
Ellis LLP
601
Lexington Avenue
New York,
NY 10022
Attention:
Frederick
Tanne, P.C.
Facsimile:
(212)
446-6460
Section
19.
Registration
Rights
. The initial Warrantholder is entitled to the benefit
of certain registration rights with respect to the shares of Common Stock
issuable upon the exercise of this Warrant as provided in the Investor Rights
Agreement, and any subsequent Warrantholder may be entitled to such rights in
accordance with the terms of the Investor Rights Agreement.
Section
20.
Successors
. All
the covenants and provisions hereof by or for the benefit of the Warrantholder
shall bind and inure to the benefit of its respective successors and assigns
hereunder.
Section
21.
Governing Law; Consent to
Jurisdiction; Waiver of Jury Trial
. This Warrant shall be
governed by, and construed in accordance with, the internal laws of the State of
New York, without reference to the choice of law provisions
thereof. The Company and, by accepting this Warrant, the
Warrantholder, each irrevocably submits to the exclusive jurisdiction of the
courts of the State of New York located in New York County and the United States
District Court for the Southern District of New York for the purpose of any
suit, action, proceeding or judgment relating to or arising out of this Warrant
and the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Warrant. The Company and, by accepting this
Warrant, the Warrantholder, each irrevocably consents to the jurisdiction of any
such court in any such suit, action or proceeding and to the laying of venue in
such court. The Company and, by accepting this Warrant, the
Warrantholder, each irrevocably waives any objection to the laying of venue of
any such suit, action or proceeding brought in such courts and irrevocably
waives any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum.
EACH OF THE COMPANY AND, BY ITS
ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY WAIVES ANY RIGHT TO REQUEST A TRIAL
BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND REPRESENTS AND
WARRANTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
WAIVER.
Section
22.
No Rights as
Stockholder
. Prior to the exercise of this Warrant, the
Warrantholder shall not have or exercise any rights as a stockholder of the
Company by virtue of its ownership of this Warrant.
Section
23.
Amendment;
Waiver
. This Warrant was issued in connection with the
consummation of the transactions contemplated by the Purchase
Agreement. Any term of this Warrant may be amended or waived
(including the adjustment provisions included in
Section 9
of this
Warrant) upon the written consent of the Company and the
Warrantholder.
Section
24.
No Strict
Construction
. The language used in this Warrant shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against any
Person.
Section
25.
Section
Headings
. The section headings in this Warrant are for the
convenience of the Company and the Warrantholder and in no way alter, modify,
amend, limit or restrict the provisions hereof.
[END OF
PAGE]
[SIGNATURE
PAGES FOLLOW]
SIGNATURE
PAGE TO WARRANT
IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of
the Date of Issuance.
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WABASH
NATIONAL CORPORATION
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By:
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/s/ Richard J. Giromini
|
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Name:
|
Richard
J. Giromini
|
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Title:
President and Chief Executive
Officer
|
SIGNATURE
PAGE TO WARRANT
ACCEPTED
AND AGREED TO AS OF THE DATE OF ISSUANCE BY:
|
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TRAILER
INVESTMENTS, LLC
|
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By:
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/s/ Michael J. Lyons
|
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Name:
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Michael
J. Lyons
|
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Title:
|
President
|
APPENDIX
A
WABASH
NATIONAL CORPORATION
WARRANT
EXERCISE FORM
To:
Wabash National Corporation
The
undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant (“
Warrant
”) for, and to
purchase thereunder by the payment of the Warrant Price and surrender of the
Warrant, _______________ shares of Common Stock (“
Warrant Shares
”)
provided for therein, and requests that:
certificates
for the Warrant Shares be issued as follows:
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Name
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Address
|
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Federal
Tax ID
No.
|
and
delivered by
(certified
mail to the above address, or
(other (specify): _______________________________________).
and, if
the number of Warrant Shares shall not be all the Warrant Shares purchasable
upon exercise of the Warrant, then that a new Warrant for the balance of the
Warrant Shares purchasable upon exercise of this Warrant be registered in the
name of the undersigned Warrantholder or the undersigned’s assignee as below
indicated and delivered to the address stated below.
Dated:
___________________, ____
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Signature:
|
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Name
(please print)
|
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Address
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Federal
Tax ID No.
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Assignee:
|
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APPENDIX
B
WABASH
NATIONAL CORPORATION
NET ISSUE
ELECTION NOTICE
To:
Wabash National Corporation
Date:
[_________________________]
The
undersigned hereby elects under
Section 4
of this
Warrant to surrender the right to purchase [____________] shares of Common Stock
pursuant to this Warrant and hereby requests the issuance of [_____________]
shares of Common Stock. The certificate(s) for the shares issuable
upon such net issue election shall be issued in the name of the undersigned or
as otherwise indicated below.
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Signature
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Name
for Registration
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Mailing
Address
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DIRECTOR INDEMNIFICATION
AGREEMENT
THIS
AGREEMENT (this “
Agreement
”) is made
as of [__________], 2009, by and between Wabash National Corporation, a Delaware
corporation (the “
Company
”, which term
shall include, where appropriate, any Entity (as hereinafter defined) controlled
directly or indirectly by the Company), and [______________] (“
Indemnitee
”).
WHEREAS,
it is essential to the Company that it be able to retain and attract as
directors the most capable persons available;
WHEREAS,
increased corporate litigation has subjected directors to litigation risks and
expenses, and the limitations on the availability of directors and officers
liability insurance have made it increasingly difficult for companies to attract
and retain such persons;
WHEREAS,
the Company desires to provide Indemnitee with specific contractual assurance of
Indemnitee’s rights to full indemnification against litigation risks and
expenses (regardless, among other things, of any amendment to the Company’s
certificate of incorporation or revocation of any provision of the Company’s
by-laws or any change in the ownership of the Company or the composition of its
Board of Directors); and
WHEREAS,
Indemnitee is relying upon the rights afforded under this Agreement in accepting
Indemnitee’s position as a director of the Company.
NOW,
THEREFORE, in consideration of the promises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as follows:
1.
Definitions
.
(a) “
Corporate Status
”
describes the status of a person who is serving or has served (i) as a director
of the Company, including as a member of any committee thereof, (ii) in any
capacity with respect to any employee benefit plan of the Company, or (iii) as a
director, partner, trustee, officer, employee, or agent of any other Entity at
the request of the Company. For purposes of subsection (iii) of
this Section 1(a), an officer or director of the Company who is serving or
has served as a director, partner, trustee, officer, employee or agent of a
Subsidiary (as defined below) shall be deemed to be serving at the request of
the Company.
(b) “
Determination
” has
the meaning ascribed to it in
Section
5(b)
.
(c) “
Entity
” shall mean
any corporation, partnership, limited liability company, joint venture, trust,
foundation, association, organization or other legal entity.
(d) “
Expenses
” shall mean
all reasonable fees, costs and expenses actually incurred in connection with any
Proceeding (as defined below), including, without limitation, reasonable
attorneys’ fees, disbursements and retainers (including, without limitation, any
such fees, disbursements and retainers incurred by Indemnitee pursuant to
Section 8 (unless required to be returned as provided by Section 8) and
Section 10(c) of this Agreement), fees and disbursements of expert witnesses,
private investigators and professional advisors (including, without limitation,
accountants and investment bankers), court costs, transcript costs, fees of
experts, travel expenses, duplicating, printing and binding costs, telephone and
fax transmission charges, postage, delivery services, secretarial services and
other disbursements and expenses of the types customarily incurred in any
Proceeding.
(e) “
Indemnifiable
Amounts
” shall have the meaning ascribed to it in Section 3(a)
below.
(f) “
Indemnifiable
Expenses
” shall have the meaning ascribed to it in Section 3(a)
below.
(g) “
Indemnifiable
Liabilities
” shall have the meaning ascribed to it in Section 3(a)
below.
(h) “
Independent Counsel
”
means a law firm of national standing that is experienced in matters of
corporation law and neither presently is, nor in the past five years has been,
retained to represent: (i) the Company or Indemnitee in any matter
material to either such party (other than with respect to matters concerning
Indemnitee under this Agreement, or of other indemnitees under similar
indemnification agreements), or (ii) any other party to the Proceeding giving
rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “Independent Counsel” shall not include any person who,
under the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or Indemnitee in
an action to determine Indemnitee’s rights under this Agreement.
(i) “
Liabilities
” shall
mean judgments, damages, liabilities, losses, penalties, excise taxes, fines and
amounts reasonably paid in settlement; provided, that any amount paid in
settlement with the consent of the Company shall be deemed
reasonable.
(j) “Negative
Determination” has the meaning ascribed to it in
Section
5(b)
.
(k) “
Proceeding
” shall
mean any threatened, pending or completed claim, action, suit, arbitration,
alternate dispute resolution process, investigation, administrative hearing,
appeal, or any other proceeding, whether civil, criminal, administrative,
arbitrative or investigative, whether formal or informal, including a proceeding
initiated by Indemnitee pursuant to Section 10 of this Agreement to enforce
Indemnitee’s rights hereunder.
(l) “
Subsidiary
” shall
mean any corporation, partnership, limited liability company, joint venture,
trust or other Entity of which the Company owns (either directly or through or
together with another Subsidiary of the Company) either (i) a general partner,
managing member or other similar interest or (ii)(A) 50% or more of the voting
power of the voting capital equity interests of such corporation, partnership,
limited liability company, joint venture or other Entity, or (B) 50% or more of
the outstanding voting capital stock or other voting equity interests of such
corporation, partnership, limited liability company, joint venture or other
Entity.
2.
Services of
Indemnitee
. In consideration of the Company’s covenants and
commitments hereunder, Indemnitee agrees to serve or continue to serve as a
director of the Company. However, this Agreement shall not impose any
obligation on Indemnitee or the Company to continue Indemnitee’s service to the
Company beyond any period otherwise required by law or by other agreements or
commitments of the parties, if any.
3.
Agreement to
Indemnify
. The Company agrees to indemnify Indemnitee as
follows:
(a) Subject
to the exceptions contained in Section 4(a) below, if Indemnitee was or is
a party or is threatened to be made a party to any Proceeding (other than an
action by or in the right of the Company) by reason of Indemnitee’s Corporate
Status, Indemnitee shall be indemnified by the Company against all Expenses and
Liabilities incurred or paid by Indemnitee in connection with such Proceeding
(referred to herein as “
Indemnifiable
Expenses
” and “
Indemnifiable
Liabilities
,” respectively, and collectively as “
Indemnifiable
Amounts
”).
(b) Subject
to the exceptions contained in Section 4(b) below, if Indemnitee was or is
a party or is threatened to be made a party to any Proceeding by or in the right
of the Company to procure a judgment in its favor by reason of Indemnitee’s
Corporate Status, Indemnitee shall be indemnified by the Company against all
Indemnifiable Expenses.
4.
Exceptions to
Indemnification
. Indemnitee shall be entitled to
indemnification under Sections 3(a) and 3(b) above in all circumstances
other than the following:
(a) If
indemnification is requested under Section 3(a) and it has been adjudicated
finally by a court of competent jurisdiction that, in connection with the
subject of the Proceeding out of which the claim for indemnification has arisen,
Indemnitee failed to act (i) in good faith
and
(ii) in a
manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, Indemnitee shall not be entitled to payment of any
Indemnifiable Amounts.
(b) If
indemnification is requested under Section 3(b) and
(i) it
has been adjudicated finally by a court of competent jurisdiction that, in
connection with the subject of the Proceeding out of which the claim for
indemnification has arisen, Indemnitee failed to act (A) in good faith
and
(B) in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company, Indemnitee shall not be entitled to payment of Indemnifiable
Expenses hereunder; or
(ii) it
has been adjudicated finally by a court of competent jurisdiction that
Indemnitee is liable to the Company with respect to any claim, issue or matter
involved in the Proceeding out of which the claim for indemnification has
arisen, including, without limitation, a claim that Indemnitee received an
improper personal benefit, no Indemnifiable Expenses shall be paid with respect
to such claim, issue or matter unless the court of law or another court in which
such Proceeding was brought shall determine upon application that, despite the
adjudication of liability, but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such Indemnifiable
Expenses which such court shall deem proper.
5.
Procedure for Payment of
Indemnifiable Amounts
.
(a) Indemnitee
shall submit to the Company a written request, including therein or therewith
such documentation and information as is reasonably available to Indemnitee with
respect to a claim for payment of an Indemnifiable Amount. The
Secretary of the Company shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that Indemnitee has
requested indemnification. Notwithstanding the foregoing, any failure
of Indemnitee to provide such a request to the Company, or to provide such a
request in a timely fashion, shall not relieve the Company of any liability that
it may have to Indemnitee unless, and to the extent that, such failure actually
and materially prejudices the interests of the Company.
(b) Upon
written request by Indemnitee for indemnification pursuant to the first sentence
of
Section 5(a)
hereof, the Company shall pay such Indemnifiable Amount within 30 days of
receipt of such request unless a Negative Determination (as defined below) has
been made in good faith by the Company. As used herein a “
Determination
” means
a good faith determination made by the Company whether or not a request for
indemnification pursuant to the first sentence of
Section 5(a)
hereof
is being made by reason of Indemnitee’s Corporate Status, and a “
Negative
Determination
” means any such Determination that such request is not
being made by reason of Indemnitee’s Corporate Status. A
Determination shall be promptly made (but in any event within 30 days of the
written request) in the specific case by one of the following three methods,
which shall be at the election of the Board of Directors: (1) by a
majority vote of the disinterested Directors, even though less than a quorum,
(2) by a committee of disinterested Directors designated by a majority vote of
the Disinterested directors, even though less than a quorum, or (3) if there are
no disinterested Directors or if the disinterested Directors so direct, by
Independent Counsel in a written opinion to the Board of Directors, a copy of
which shall be delivered to the Indemnitee. For purposes hereof,
disinterested Directors are those members of the Board of Directors of the
Company who are not parties to the action, suit or proceeding in respect of
which indemnification is sought by Indemnitee.
(c) If
a Determination is to be made by Independent Counsel pursuant to
Section 5(b)
hereof,
the Independent Counsel shall be selected as provided in this
Section
5(c)
. The Independent Counsel shall be selected by the Board
of Directors. Indemnitee may, within 10 days after such written
notice of selection shall have been given, deliver to the Company a written
objection to such selection; provided, however, that such objection may be
asserted only on the ground that the Independent Counsel so selected does not
meet the requirements of “Independent Counsel” as defined in
Section 1(h)
of this
Agreement, and the objection shall set forth with reasonable particularity the
factual basis of such assertion. Absent a proper and timely
objection, the person so selected shall act as Independent
Counsel. If such written objection is made, the Independent Counsel
selected may not serve as Independent Counsel unless and until such objection is
withdrawn or a court has determined that such objection is without
merit. If, within 20 days after submission by Indemnitee of a written
request for indemnification pursuant to
Section 5(a)
hereof,
no Independent Counsel shall have been selected and not objected to, either the
Company or Indemnitee may petition the Court of Chancery of the State of
Delaware or other court of competent jurisdiction for resolution of any
objection which shall have been made by the Indemnitee to the Company’s
selection of Independent Counsel and/or for the appointment as Independent
Counsel of a person selected by the court or by such other person as the court
shall designate, and the person with respect to whom all objections are so
resolved or the person so appointed shall act as Independent Counsel under
Section 5(b)
hereof. The Company shall pay any and all reasonable fees and
expenses of Independent Counsel incurred by such Independent Counsel in
connection with acting pursuant to
Section 5(b)
hereof,
and the Company shall pay all reasonable fees and expenses (including those of
Indemnitee) incident to the procedures of this
Section 5(c)
,
regardless of the manner in which such Independent Counsel was selected or
appointed.
(d) In
making a Determination the person or persons or entity making such Determination
shall presume that Indemnitee is entitled to indemnification under this
Agreement. Anyone seeking to overcome this presumption shall have the
burden of proof and the burden of persuasion by clear and convincing
evidence. Neither the failure of the Company (including by its
Directors or Independent Counsel) to have made a Determination prior to the
commencement of any action pursuant to this Agreement nor an actual Negative
Determination shall be a defense to the action or create a presumption that
Indemnitee has not met the requirements set forth herein.
(e) If
the person, persons or entity empowered or selected under
Section 5(b)
shall
not have made a Determination within thirty (30) days after receipt by the
Company of the written request referred to in
Section 5(a)
, it
shall be deemed that a Determination has been made that Indemnitee is entitled
to indemnification hereunder and the Company shall immediately pay the relevant
Indemnification Amount.
(f) Indemnitee
shall cooperate with the person, persons or entity making a Determination,
including providing to such person, persons or entity upon reasonable advance
request any documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably available to Indemnitee and
reasonably necessary to such Determination. Any Independent Counsel
or member of the Board of Directors shall act reasonably and in good faith in
making a Determination. Any costs or expenses (including attorneys’
fees and disbursements) incurred by Indemnitee in so cooperating with the
person, persons or entity making such Determination shall be borne by the
Company (irrespective of the outcome of such Determination) and the Company
hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
6.
Indemnification for Expenses
of a Party Who is Wholly or Partly Successful
. Notwithstanding
any other provision of this Agreement, and without limiting any such provision,
to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a
party to and is successful, on the merits or otherwise, in any Proceeding,
Indemnitee shall be indemnified against all Expenses incurred by Indemnitee or
on Indemnitee’s behalf in connection therewith. If Indemnitee is not
wholly successful in such Proceeding but is successful, on the merits or
otherwise, as to one or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee against all Expenses incurred
by Indemnitee or on Indemnitee’s behalf in connection with each successfully
resolved claim, issue or matter. For purposes of this Agreement, the
termination of any claim, issue or matter in such a Proceeding by dismissal,
with or without prejudice, shall be deemed to be a successful result as to such
claim, issue or matter.
7.
Effect of Certain
Resolutions
. The Company acknowledges that a settlement
or other disposition short of final judgment may be successful if it permits a
party to avoid expense, delay, distraction, disruption and
uncertainty. In the event that any action, claim or proceeding to
which Indemnitee is a party is resolved in any manner other than by adverse
judgment against Indemnitee (including, without limitation, settlement of such
action, claim or proceeding with or without payment of money or other
consideration) it shall be presumed that Indemnitee has been successful on the
merits or otherwise in such action, suit or proceeding. Anyone
seeking to overcome this presumption shall have the burden of proof and the
burden of persuasion by clear and convincing evidence. The
termination of any Proceeding or of any claim, issue or matter therein, by
judgment, order, settlement or conviction, or upon a plea of nolo contendere or
its equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself adversely affect the right of Indemnitee to indemnification
or create a presumption that Indemnitee did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal Proceeding, that
Indemnitee had reasonable cause to believe that his conduct was
unlawful.
8.
Agreement to Advance
Expenses; Conditions
. The Company shall pay to Indemnitee all
Indemnifiable Expenses incurred by Indemnitee in connection with any Proceeding,
including a Proceeding by or in the right of the Company, in advance of the
final disposition of such Proceeding, as the same are incurred. To
the extent required by Delaware corporate law, Indemnitee hereby undertakes to
repay the amount of Indemnifiable Expenses paid to Indemnitee if it is finally
determined by a court of competent jurisdiction that Indemnitee is not entitled
under this Agreement to indemnification with respect to such
Expenses. This undertaking is an unlimited and unsecured general
obligation of Indemnitee and no interest shall be charged thereon.
9.
Procedure for Advance
Payment of Expenses
. Indemnitee shall submit to the Company a
written request specifying the Indemnifiable Expenses for which Indemnitee seeks
an advancement under Section 8 of this Agreement, together with
documentation evidencing that Indemnitee has incurred such Indemnifiable
Expenses and accompanied by a written affirmation by the Indemnitee of the
Indemnitee's good faith belief that the standard of conduct necessary for
indemnification by the Company as authorized by this Agreement has been
met. Payment of Indemnifiable Expenses under Section 8 shall be
made no later than ten (10) calendar days after the Company’s receipt of such
request.
10.
Remedies of
Indemnitee
.
(a)
Right to Petition
Court
. In the event that Indemnitee makes a request for
payment of Indemnifiable Amounts under Sections 3 and 5 above or a request
for an advancement of Indemnifiable Expenses under Sections 8 and 9 above
and the Company fails to make such payment or advancement in a timely manner
pursuant to the terms of this Agreement, Indemnitee may petition a court of law
to enforce the Company’s obligations under this Agreement, including to
challenge a Negative Determination.
(b)
Burden of
Proof
. In any judicial proceeding brought under
Section 10(a) above, the Company shall have the burden of proving that
Indemnitee is not entitled to payment of Indemnifiable Amounts
hereunder.
(c)
Expenses
. The
Company agrees to reimburse Indemnitee in full for any Expenses incurred by
Indemnitee in connection with investigating, preparing for, litigating,
defending or settling any action brought by Indemnitee under Section 10(a)
above, or in connection with any claim or counterclaim brought by the Company in
connection therewith, in each case so long as Indemnitee shall have provided an
undertaking of the type contemplated in
Section
8
.
(d)
Validity of
Agreement
. The Company shall be precluded from asserting in
any Proceeding, including, without limitation, an action under
Section 10(a) above, that the provisions of this Agreement are not valid,
binding and enforceable or that there is insufficient consideration for this
Agreement and shall stipulate in court that the Company is bound by all the
provisions of this Agreement.
(e)
Failure to Act Not a
Defense
. The failure of the Company (including its Board of
Directors or any committee thereof, independent legal counsel or stockholders)
to make a determination concerning the permissibility of the payment of
Indemnifiable Amounts or the advancement of Indemnifiable Expenses under this
Agreement shall not be a defense in any action brought under Section 10(a)
above, and shall not create a presumption that such payment or advancement is
not permissible.
11.
Exception to Right of
Indemnification or Advancement of Expenses
. Notwithstanding
any other provisions of this Agreement, the Indemnitee shall not be entitled to
indemnification or advancement of Expenses under this Agreement with respect to
any Proceeding:
(a) initiated
by such Indemnitee against the Company unless (i) the Board of Directors of the
Company authorized the Proceeding (or any part of any Proceeding) prior to its
initiation; (ii) the Company provides the indemnification, in its sole
discretion, pursuant to the powers vested in the Company under applicable law;
or (iii) as with respect to a proceeding commenced pursuant to paragraph 10(a);
or
(b) for
which payment has actually been made to or on behalf of Indemnitee under any
insurance policy or otherwise by or on behalf of the Company, except with
respect to any excess beyond the amount paid under such insurance policy or
otherwise by or on behalf of the Company; or
(c) for
an accounting of profits made from the purchase and sale (or sale and purchase)
by Indemnitee of securities of the Company within the meaning of
Section 16(b)
of the
Securities Exchange Act of 1934, as amended, or similar provisions of state
statutory law or common law.
12.
Representations and
Warranties of the Company
. The Company hereby represents and
warrants to Indemnitee as follows:
(a)
Authority
. The
Company has all necessary power and authority to enter into, and be bound by the
terms of, this Agreement, and the execution, delivery and performance of the
undertakings contemplated by this Agreement have been duly authorized by the
Company.
(b)
Enforceability
. This
Agreement, when executed and delivered by the Company in accordance with the
provisions hereof, shall be a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the enforcement of
creditors’ rights generally.
13.
Insurance
. The
Company shall use its reasonable best efforts to maintain requisite directors
and officers indemnity insurance coverage in effect at all times (subject to
appropriate cost considerations) and the Company’s certificate of incorporation
and bylaws shall at all times provide for indemnification and exculpation of
directors to the fullest extent permitted under applicable law. In
all policies of director and officer liability insurance, Indemnitee shall be
named as an insured in such a manner as to provide Indemnitee the same rights
and benefits as are accorded to the most favorably insured of the Company’s
officers and directors. The Company shall hereafter take all
necessary or desirable actions to cause such insurers to pay, on behalf of the
Indemnitee, all Indemnifiable Amounts in accordance with the terms of such
policies;
provided
that
nothing in this
Section 13 shall affect the Company’s obligations under this Agreement or
the Company’s obligations to comply with the provisions of this Agreement in a
timely manner as provided.
14.
Contract Rights Not
Exclusive
. The rights to payment of Indemnifiable Amounts and
advancement of Indemnifiable Expenses provided by this Agreement shall be in
addition to, but not exclusive of, any other rights which Indemnitee may have at
any time under applicable law, the Company’s by-laws or certificate of
incorporation, or any other agreement, vote of stockholders or directors (or a
committee of directors), or otherwise, both as to action in Indemnitee’s
Corporate Status.
15.
Successors
. This
Agreement shall be (a) binding upon all successors and assigns of the Company
(including any transferee of all or a substantial portion of the business, stock
and/or assets of the Company and any direct or indirect successor by merger or
consolidation or otherwise by operation of law) and (b) binding on and shall
inure to the benefit of the heirs, personal representatives, executors and
administrators of Indemnitee. This Agreement shall continue for the
benefit of Indemnitee and such heirs, personal representatives, executors and
administrators after Indemnitee has ceased to have Corporate
Status.
16.
Subrogation
. In
the event of any payment of Indemnifiable Amounts under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of contribution or recovery of Indemnitee against other persons, and Indemnitee
shall take, at the request and expense of the Company, all reasonable action
necessary to secure such subrogation rights, including the execution of such
documents as are necessary to enable the Company to bring suit to enforce such
rights.
17.
Change in
Law
. To the extent that a change in Delaware law (whether by
statute or judicial decision) shall permit broader indemnification or
advancement of expenses than is provided under the terms of the certificate of
incorporation and/or by-laws of the Company and this Agreement, Indemnitee shall
be entitled to such broader indemnification and advancements, and this Agreement
shall be deemed to be automatically amended to such extent.
18.
Severability
. Whenever
possible, each provision of this Agreement shall be interpreted in such a manner
as to be effective and valid under applicable law, but if any provision of this
Agreement, or any clause thereof, shall be determined by a court of competent
jurisdiction to be illegal, invalid or unenforceable, in whole or in part, such
provision or clause shall be limited or modified in its application to the
minimum extent necessary to make such provision or clause valid, legal and
enforceable, and the remaining provisions and clauses of this Agreement shall
remain fully enforceable and binding on the parties.
19.
Modifications and
Waiver
. Except as provided in Section 17 above with
respect to changes in Delaware law which broaden the right of Indemnitee to be
indemnified by the Company, no supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by each of the parties
hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions of this Agreement
(whether or not similar), nor shall such waiver constitute a continuing
waiver.
20.
General
Notices
. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (a) when delivered by hand, (b) when transmitted by facsimile and
receipt is acknowledged, or (c) if mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it is so
mailed:
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(i)
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If to Indemnitee, to
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With
a copy to:
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Kirkland
& Ellis LLP
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601
Lexington Avenue
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New
York, NY 10022
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Attention:
Frederick Tanne, P.C.
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Srinivas S. Kaushik
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Fax::
(212) 446-6460
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(ii)
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If to the Company, to
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Wabash
National Corporation
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1000
Sagamore Parkway South
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Lafayette,
Indiana 47905
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Attention:
Chief Financial Officer
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Fax:
(765) 771-5579
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With
a copy to:
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Hogan
& Hartson LLP
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111
South Calvert Street
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Suite
1600
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Baltimore,
MD 21202
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Attention:
Michael J. Silver
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Fax::
(410) 539-6981
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or to
such other address as may have been furnished in the same manner by any party to
the others.
21.
Governing Law
. This
Agreement shall be governed by and construed and enforced under the laws of the
State of Delaware without giving effect to the provisions thereof relating to
conflicts of law.
* * * *
*
IN
WITNESS WHEREOF, the parties hereto have executed this Director Indemnification
Agreement as of the day and year first above written.
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WABASH
NATIONAL CORPORATION
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By:
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Name:
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Title:
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INDEMNITEE
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Print
Name:
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