<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 2)*
LUND INTERNATIONAL HOLDINGS, INC.
(Name of issuer)
Common Stock, par value $.10 per share.
(Title of class of securities)
550 368 104
(CUSIP number)
Ira Kleinman
LIH Holdings, LLC
LIH Holdings II, LLC
c/o Harvest Partners, Inc.
767 Third Avenue
New York, New York 10017
(212) 838-7776
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
With Copies To:
Philip H. Werner, Esq.
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
(212) 309-6000
December 30, 1997
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
/ /.
NOTE: Six copies of this statement on Schedule 13D, including all
exhibits, should be filed with the Securities and Exchange Commission. See Rule
13d-1(a) for other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE> 2
CUSIP No. 550368104 13D Page 2 of Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
LIH HOLDINGS, LLC EIN: 13-3961151
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 2,561,293
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
2,561,293
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,561,293
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
48.6%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 3
CUSIP No. 550368104 13D Page 3 of Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
LIH INVESTORS, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 2,561,293
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
2,561,293
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,561,293
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
48.6%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 4
CUSIP No. 550368104 13D Page 4 of Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
LIH MANAGEMENT, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 2,561,293
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
2,561,293
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,561,293
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
48.6%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 5
CUSIP No. 550368104 13D Page 5 of Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
LIH, INC.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 2,561,293
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
2,561,293
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,561,293
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
48.6%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 6
CUSIP No. 550368104 13D Page 6 of Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
LIH HOLDINGS II, LLC EIN: 13-3979586
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 2,561,293
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
2,561,293
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,561,293
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
48.6%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 7
CUSIP No. 550368104 13D Page 7 of Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
LIH INVESTORS II, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 2,561,293
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
2,561,293
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,561,293
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
48.6%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 8
CUSIP No. 550368104 13D Page 8 of Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
LIH MANAGEMENT II, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 2,561,293
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
2,561,293
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,561,293
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
48.6%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 9
CUSIP No. 550368104 13D Page 9 of Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
HARVEST PARTNERS III, L.P.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 2,561,293
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
2,561,293
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,561,293
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
48.6%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 10
CUSIP No. 550368104 13D Page 10 of Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
HARVEST PARTNERS III BETEILIGUNGSGESELLSCHAFT
BURGERLICHEN RECHTS (MIT HAFTUNGSBESCHRANKUNG)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
GERMANY
7 SOLE VOTING POWER
NUMBER OF 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 2,561,293
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
2,561,293
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,561,293
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
48.6%
14 TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 11
CUSIP No. 550368104 13D Page 11 of Pages
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
HARVEST ASSOCIATES III, LLC
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) /X/
(b) / /
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
7 SOLE VOTING POWER
NUMBER OF 0
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 2,561,293
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
2,561,293
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,561,293
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
48.6%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 12
This Amendment (the "Second Amendment") to the Statement on
Schedule 13D originally filed on September 18, 1997 (the "Original Statement"),
as amended by the First Amendment to the Statement on Schedule 13D filed on
November 26, 1997 (as so amended, the "Statement"), amends and restates Items 2
and 5 and amends Items 3, 4, 6 and 7 of the Statement. Capitalized terms used
but not defined in this Second Amendment shall have the respective meanings
ascribed to them in the Statement.
Item 2. Identity and Background
Item 2 as set forth in the Original Statement is amended and
restated to read in its entirety as follows:
(a) This Second Amendment is being filed by each of the
following persons pursuant to Rule 13d-1(f) promulgated by the Securities and
Exchange Commission (the "Commission"): (i) LIH Holdings, LLC, a Delaware
limited liability company ("LIH Holdings"), (ii) LIH Investors, L.P., a Delaware
limited partnership ("LIH Investors"), (iii) LIH Management, L.P., a Delaware
limited partnership ("LIH Management"), (iv) LIH, Inc., a Delaware corporation
("LIH, Inc."), (v) LIH Holdings II, LLC, a Delaware limited liability company
("LIH Holdings II"), (vi) LIH Investors II, L.P., a Delaware limited partnership
("LIH Investors II"), (vii) LIH Management II, L.P., a Delaware limited
partnership ("LIH Management II"),(viii) Harvest Partners III, L.P., a Delaware
limited partnership ("HP III"), (ix) Harvest Partners III
Beteiligungsgesellschaft burgerlichen Rechts (mit Haftungsbeschrankung), a
German civil law partnership (the "German Fund") and (x) Harvest Associates III,
LLC, a Delaware limited liability company ("Harvest Associates III", and
collectively with LIH Holdings, LIH Investors, LIH Management, LIH, Inc., LIH
Holdings II, LIH Investors II, LIH Management II, HP III and the German Fund,
the "Reporting Persons").
LIH Holdings was organized solely for the purpose of acquiring
shares of Common Stock of the Company pursuant to the Stock Purchase Agreement
and has not engaged in any business other than in connection with the
acquisition of such shares of Common Stock. LIH Investors is an investment
partnership that owns a majority of the membership interests of LIH Holdings.
LIH Management serves as the general partner of LIH Investors and LIH, Inc.
serves as the general partner of LIH Management (and of LIH Management II).
LIH Holdings II recently was organized for the purpose of
acquiring the Shares pursuant to the Investment Agreement (as defined below) and
has not engaged in any business other than in connection with the acquisition of
the Shares. LIH Investors II is an investment partnership that owns a minority
of the membership interests of LIH Holdings II. LIH Management II serves as the
general partner of LIH Investors II. LIH, Inc. serves as the general partner of
LIH Management II (and of LIH Management). HP III and the German
<PAGE> 13
Fund are investment partnerships that, taken together, own a majority of the
membership interests in LIH Holdings II. Pursuant to their respective
partnership agreements, HP III and the German Fund are generally required to
invest on a "parallel" basis--that is, to purchase and sell the same securities
(allocated between them on a pro rata basis) at the same time and on the same
terms. Harvest Associates III serves as the General Partner of HP III and the
Verwaltende Gesellschafter (Administrative Partner) of the German Fund.
(b) The address of the principal offices of each of the
Reporting Persons is c/o Harvest Partners, Inc. ("Harvest"), 767 Third Avenue,
7th Floor, New York, New York 10017.
(c) Attached as Schedule A is the name and principal
occupation (where applicable) of each manager, general partner, executive
officer and/or director of each of the Reporting Persons. The business address
of each such person is c/o Harvest Partners, Inc., 767 Third Avenue, 7th Floor,
New York, New York 10017. Schedule A is incorporated into and made a part of
this Statement on Schedule 13D.
(d) During the last five years, none of the Reporting Persons
nor any person listed on Schedule A has been convicted in a criminal proceeding.
(e) During the last five years, none of the Reporting Persons
nor any person listed on Schedule A has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Considerations
Item 3 set forth in the Original Statement is amended by
adding the following language at the end thereof.
On December 30, 1997, pursuant to the terms of the Investment
Agreement dated as of November 25, 1997 (the "Investment Agreement"), LIH
Holdings II purchased from the Company 874,400 shares of Common Stock and
1,493,398 shares of Series A Preferred Stock (collectively the "Shares") for an
aggregate purchase price of $30,000,000 in cash. LIH Holdings II obtained the
funds to pay the purchase price of the Shares from its working capital.
The Series A Preferred Stock entitles the holder thereof to cumulative
quarterly cash dividends, when, as and if declared by the Company's Board of
Directors, at a rate of 15.0 percent of stated value per annum, beginning on
April 30, 1998.
<PAGE> 14
The Series A Preferred Stock has a stated value of $12.67 per share, may be
redeemed by the Company at any time on or after December 29, 2004 and must be
redeemed by the Company at the request of a majority of the holders of
shares of Series A Preferred Stock at any time on and after the earliest of (i)
December 29, 2004, (ii) the first date on which any person or group (as such
term is defined in Section 13(d)(3) under the Securities Exchange Act of 1934,
as amended) other than LIH Holdings, LIH Holdings II or any of their respective
affiliates or associates owns, beneficially and of record, securities
representing at least 50% of the Common Stock, excluding any securities acquired
by such person, entity or group from LIH Holdings, LIH Holdings II or any of
their respective affiliates or associates (a "Change of Control") and (iii) a
merger, consolidation, recapitalization, reorganization or similar transaction
in which holders of Common Stock are given the opportunity to receive
consideration for their shares. Upon the approval of a majority of the holders
of the then-outstanding Common Stock present at a meeting called to approve both
(i) the terms of a newly created series of non-voting Class B Common Stock (the
"Class B-1 Common Stock") and (ii) the conversion of the Series A Preferred
Stock into shares of Class B-1 Common Stock, each share of Series A Preferred
Stock shall automatically convert into one share of Class B-1 Common Stock.
Pursuant to the terms of the Investment Agreement, the Company has undertaken
to seek such stockholder approval promptly after the closing of the purchase and
sale of the Shares. In the event that any shares of Class B-1 Common Stock are
issued, each share of Class B-1 Common Stock shall automatically convert into
one share of Common Stock on the earliest to occur of (i) September 9, 2000 and
(ii) a Change of Control. In addition, each holder of Class B-1 Common Stock is
entitled to convert all or any of such holder's shares into an equivalent number
of shares of Common Stock (i) with the affirmative vote of a majority of the
Independent Directors, (ii) upon any transfer of such holder's shares of Class
B-1 Common Stock, other than any such transfer (a) by LIH Holdings, LIH Holdings
II or any of their respective affiliates or associates to any person or entity
if, immediately after giving effect to such transfer and conversion, the
transferee and its affiliates and associates would hold more than 49% of the
Common Stock or (b) to LIH Holdings, LIH Holdings II or any of their respective
affiliates or associates, or (iii) at any time on or after the first date as of
which LIH Holdings, LIH Holdings II and their respective affiliates and
associates own (beneficially and of record), in the aggregate, more than 50% of
the outstanding shares of Common Stock in a transaction that is permitted by, or
is effected in accordance with the terms of, the Amended and Restated Governance
Agreement. The terms of the Series A Preferred Stock and the Class B-1 Common
Stock are described in greater detail in the Company's Form 8-K filed with the
Commission on November 26, 1997.
Pursuant to the Investment Agreement, the Company makes certain
representations, warranties and covenants and agrees to indemnify LIH Holdings
II and its affiliates and associates.
The foregoing descriptions of the Investment Agreement, the Series A
Preferred Stock and the Class B-1 Common Stock are qualified in their entirety
by reference to the Investment Agreement, the Series A Preferred Stock
Certificate of Designation and the Class B-1 Common Stock Certificate
<PAGE> 15
of Designation, respectively, copies of which have been filed as exhibits
hereto.
Item 4. Purposes of Transactions
Item 4 as set forth in the Statement is amended by inserting
the following language at the end thereof.
LIH Holdings II has acquired the Shares in order to provide a
portion of the funds required for the consummation of the Company's tender offer
to purchase for cash all of the issued and outstanding shares of common stock of
Deflecta-Shield Corporation, a Delaware corporation.
Subject to the terms and provisions of the Amended and Restated
Governance Agreement, each of the Reporting Persons reserves the right to
acquire, as it deems appropriate, additional shares of Common Stock, through
open market and privately negotiated transactions, by tender offer or otherwise,
and to seek control of the Company. Each of LIH Holdings and LIH Holdings II
also reserves the right to dispose of some or all of its shares of Common Stock,
or, in the case of LIH Holdings II, Series A Preferred Stock or Class B-1 Common
Stock, in the open market or in privately negotiated transactions with third
parties or otherwise.
Each of LIH Holdings and LIH Holdings II anticipates that, from time to
time, it, directly through directors that it designates for election to the
Board of Directors or through affiliates or associates, including Harvest, may
identify to the Company businesses to be considered for acquisition by the
Company that are related or complementary to the Company's current lines of
businesses. In that connection, each of LIH Holdings and LIH Holdings II also
may propose, propose to arrange, or identify to the Company sources of equity or
debt financings.
Other than as set forth in the Statement as amended by this Second
Amendment, in the Amended and Restated Governance Agreement and in the
Investment Agreement, none of the Reporting Persons has any current plans or
proposals which relate to or would result in any of the results specified in
paragraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer
Item 5 as set forth in the Original Statement is amended and
restated in its entirety to read as follows:
(a) In the aggregate, the Reporting Persons beneficially own
2,561,293 shares of Common Stock, representing approximately 48.6% of the issued
and outstanding shares of Common Stock. LIH Holdings directly beneficially owns
1,686,893 shares of Common Stock, representing
<PAGE> 16
approximately 32.0% of the issued and outstanding shares of Common Stock. LIH
Holdings II directly beneficially owns 874,400 shares of Common Stock,
representing approximately 16.6% of the issued and outstanding shares of Common
Stock. The percentage ownership of LIH Holdings and LIH Holdings II in the
Company's Common Stock is based on 5,268,370 issued and outstanding shares of
Common Stock as represented by the Company to LIH Holdings II in the Investment
Agreement. As disclosed on the respective Statements of Beneficial Ownership of
Securities on Form 3 filed with the Commission on September 18, 1997, each of
Harvey J. Wertheim and Ira D. Kleinman, directors of the Company, have been
granted options to purchase 2,000 shares of Common Stock (which are not
included in the beneficial ownership reported by the Reporting Persons).
As described in Item 2, LIH Investors, LIH Management and LIH, Inc. may
each be deemed to control, directly or indirectly, LIH Holdings. Therefore, each
of LIH Investors, LIH Management and LIH, Inc. may be deemed to have the power
to direct the vote or disposition of the shares of Common Stock directly
beneficially owned by LIH Holdings, and accordingly, may be deemed, for purposes
of determining beneficial ownership pursuant to Rule 13d-3 under the Securities
Exchange Act of 1934 (the "1934 Act"), to beneficially own the shares of Common
Stock held by LIH Holdings.
As described in Item 2, the German Fund and HP III together own a
majority interest in LIH Holdings II, and Harvest Associates III is the General
Partner of HP III and the Administrative Partner of the German Fund.
Additionally, pursuant to their respective partnership agreements, HP III and
the German Fund are generally required to invest on a "parallel" basis-- that
is, to purchase and sell the same securities (allocated between them on a pro
rata basis) at the same time and on the same terms. Therefore, each of the
German Fund, HP III and Harvest Associates III may be deemed to have the power
to direct the vote or disposition of the shares of Common Stock directly
beneficially owned by LIH Holdings II, and accordingly, may be deemed, for
purposes of determining beneficial ownership pursuant to Rule 13d-3 under the
1934 Act, to beneficially own the shares of Common Stock held by LIH Holdings
II.
As disclosed on Schedule A, certain of the principals of LIH, Inc. and
Harvest III are the same individuals. The officers and directors of LIH, Inc.
(Messrs. Mallement, Wertheim, Kane and Kleinman) constitute four of the five
principals of Harvest Associates III. Therefore, the Reporting Persons could be
deemed to be under common control. In addition, it is anticipated that LIH
Holdings and LIH Holdings II will exercise their voting rights with respect to
the Company in a consistent manner and that any disposition of Common Stock
held by either of them will be made by both of them on a pro rata basis.
Therefore, each of the Reporting Persons may be deemed to have the power to
direct the vote or disposition of the shares of Common Stock directly
beneficially owned by each of LIH Holdings and LIH Holdings II, and,
accordingly, may be deemed, for purposes of determining beneficial ownership
pursuant to Rule 13d-3 of the 1934 Act, to beneficially own all the shares of
Common Stock held by LIH Holdings and LIH Holdings II.
<PAGE> 17
(b) The responses of the Reporting Persons to Items (7) through (11) of
the portions of pages 2 through 11 hereto which relate to shares of Common Stock
beneficially owned are incorporated herein by reference.
(c) Except as set forth in Item 3 and pursuant to the Investment
Agreement, there have been no transactions in the shares of Common Stock during
the past sixty days by any Reporting Person or any other person listed on
Schedule A.
(d) No person is known to have the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, the
shares of Common Stock held by LIH Holdings or LIH Holdings II other than LIH
Holdings or LIH Holdings II, respectively (and control persons thereof, as
described herein).
(e) Not applicable.
Except as described in this Item 5, none of the persons listed on
Schedule A beneficially own any shares of Common Stock.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
Item 6 as set forth in the Statement is amended by inserting the
following language at the end thereof:
Except as otherwise disclosed in the Statement as amended by this
Second Amendment, none of the Reporting Persons, nor, to the best of their
knowledge, any persons listed on Schedule A hereto has any contracts,
arrangements, understandings or relationships (legal or otherwise) with any
person with respect to the securities of the Company.
Other than the Stock Purchase Agreement, the Investment Agreement, the
Amended and Restated Governance Agreement and the Services Agreement, there are
no contracts, arrangements, understandings or relationships (legal or otherwise)
among the Reporting Persons and between such persons and any other person with
respect to any securities of the Company, including, but not limited to,
transfer or voting of any of the securities, finder's fees, joint ventures, loan
or option arrangements, put or calls, guarantees of profits, division of profits
or losses, or the giving or withholding of proxies.
<PAGE> 18
Item 7. Materials to Be Filed as Exhibits
The following materials are filed as Exhibits to this Statement.
A. Information with respect to officers and directors of LIH Holdings,
LLC*+
B. Information with respect to Partners of LIH Investors, L.P.*+
C. Information with respect to Partners of LIH Management, L.P.*+
D. Information with respect to officers and directors of LIH, Inc.*+
E. Stock Purchase Agreement dated September 9, 1997 by and among LIH
Holdings, LLC, Allan W. Lund, the Lund Family Limited Partnership, the
Lois and Allan Lund Family Foundation and certain Lund Family Members.*
F. Governance Agreement dated September 9, 1997 between LIH Holdings, LLC
and Lund International Holdings, Inc.*
G. Services Agreement dated September 9, 1997 between Harvest Partners,
Inc. and Lund International Holdings, Inc.*
H. Amended and Restated Governance Agreement dated November 25, 1997 among
LIH Holdings, LLC, LIH Holdings II, LLC, Harvest Partners III, L.P. and
Lund International Holdings, Inc.*
I. Investment Agreement dated as of November 25, 1997 between LIH Holdings
II, LLC and Lund International Holdings, Inc.
J. Series A Preferred Stock Certificate of Designation.
K. Class B-1 Common Stock Certificate of Designation.
- ----------------
* Previously filed
+ Superseded by Schedule A
<PAGE> 19
SIGNATURE
After reasonable inquiry and to the best of the knowledge and belief of
each of the undersigned, each of the undersigned certifies that the information
set forth in this Second Amendment with respect to the undersigned is true,
complete and correct and each of the undersigned agrees that this Second
Amendment may be filed jointly.
Dated: January 7, 1998
LIH Holdings, LLC
By: /s/ Harvey J. Wertheim
---------------------------------------
Name: Harvey J. Wertheim
Title: Manager
LIH Investors, L.P.
By: LIH Management, L.P.,
its General Partner
By: LIH, Inc.,
its General Partner
By: /s/ Harvey P. Mallement
---------------------------------------
Name: Harvey P. Mallement
Title: President
LIH Management, L.P.
By: LIH, Inc.,
its General Partner
By: /s/ Harvey P. Mallement
---------------------------------------
Name: Harvey P. Mallement
Title: President
LIH, Inc., L.P.
By: /s/ Harvey P. Mallement
---------------------------------------
Name: Harvey P. Mallement
Title: President
LIH Holdings II, LLC
By: /s/ Ira D. Kleinman
---------------------------------------
Name: Ira D. Kleinman
Title: Authorized Person
LIH Investors II, L.P.
By: LIH Management II, L.P.,
its General Partner
By: LIH, Inc.,
its General Partner
By: /s/ Harvey P. Mallement
---------------------------------------
Name: Harvey P. Mallement
Title: President
LIH Management II, L.P.
By: LIH, Inc.,
its General Partner
By: /s/ Harvey P. Mallement
---------------------------------------
Name: Harvey P. Mallement
Title: President
Harvest Partners III, L.P.
By: Harvest Associates III, LLC,
its General Partner
By: /s/ Harvey P. Mallement
---------------------------------------
Name: Harvey P. Mallement
Title: Manager
Harvest Partners III Beteiligungsgesellschaft
burgerlichen Rechts (mit Haftungsbeschrankung)
By: Harvest Associates III, LLC,
its Administrative Partner
By: /s/ Harvey P. Mallement
---------------------------------------
Name: Harvey P. Mallement
Title: Manager
Harvest Associates III, LLC
By: /s/ Harvey P. Mallement
---------------------------------------
Name: Harvey P. Mallement
Title: Manager
<PAGE> 20
SCHEDULE A
LIH HOLDINGS, LLC
<TABLE>
<CAPTION>
Name Position Principal Occupation
- ---- -------- --------------------
<S> <C> <C>
Harvey J. Wertheim Manager and President Managing General Partner of
Harvest Partners, Inc., a private
equity investment firm ("Harvest")
Ira D. Kleinman Manager and Secretary General Partner of Harvest
William J. Kane Manager and Treasurer General Partner of Harvest
</TABLE>
LIH INVESTORS, L.P.
The General Partner of LIH Investors, L.P. is LIH Management, L.P., a Delaware
limited partnership.
LIH MANAGEMENT, L.P.
The General Partner of LIH Management, L.P. is LIH, Inc., a Delaware
corporation.
LIH, INC.
<TABLE>
<CAPTION>
Name Position Principal Occupation
- ---- -------- --------------------
<S> <C> <C>
Harvey P. Mallement Director and President Managing General Partner of
Harvest
Harvey J. Wertheim Director, Chairman and Managing General
Chief Executive Officer Partner of Harvest
Ira D. Kleinman Treasurer and Assistant General Partner of Harvest
Secretary
William J. Kane Secretary and Assistant General Partner of Harvest
Treasurer
</TABLE>
<PAGE> 21
LIH HOLDINGS II, LLC
The Manager of LIH Holding II, LLC is Harvest Partners III, L.P., a Delaware
limited partnership.
LIH INVESTORS II, L.P.
The General Partner of LIH Investors II, L.P. is LIH Management II, L.P., a
Delaware limited partnership.
LIH MANAGEMENT II, L.P.
The General Partner of LIH Management II, L.P. is LIH, Inc., a Delaware
corporation.
HARVEST PARTNERS III, L.P.
The General Partner of Harvest Partners III, L.P. is Harvest Associates III,
LLC, a Delaware limited liability company.
HARVEST PARTNERS III BETEILIGUNGSGESELLSCHAFT BURGERLICHEN RECHTS
(MIT HAFTUNGSBESCHRANKUNG)
The Administrative Partner of Harvest Partners III Beteiligungsgesellschaft
burgerlichen Rechts (mit Haftungsbeschrankung) is Harvest Associates III, LLC,
a Delaware limited liability company.
HARVEST ASSOCIATES III, LLC
<TABLE>
<CAPTION>
Name(1) Position Principal Occupation
- ---- -------- --------------------
<S> <C> <C>
Harvey J. Wertheim Manager Managing General Partner of
Harvest
Harvey P. Mallement Manager Managing General Partner of
Harvest
</TABLE>
<PAGE> 22
EXHIBIT INDEX
The following materials are filed as Exhibits to this Statement.
A. Information with respect to officers and directors of LIH Holdings,
LLC*+
B. Information with respect to Partners of LIH Investors, L.P.*+
C. Information with respect to Partners of LIH Management, L.P.*+
D. Information with respect to officers and directors of LIH, Inc.*+
E. Stock Purchase Agreement dated September 9, 1997 by and among LIH
Holdings, LLC, Allan Lund, the Lund Family Limited Partnership, the
Lois and Allan Lund Family Foundation and certain Lund Family Members.*
F. Governance Agreement dated September 9, 1997 between LIH Holdings, LLC
and Lund International Holdings, Inc.*
G. Services Agreement dated September 9, 1997 between Harvest Partners,
Inc. and Lund International holdings, Inc.*
H. Amended and Restated Governance Agreement dated November 25, 1997 among
LIH Holdings, LLC, LIH Holdings II, LLC, Harvest Partners III, L.P. and
Lund International Holdings, Inc.*
I. Investment Agreement dated as of November 25, 1997 between LIH Holdings
II, LLC and Lund International Holdings, Inc.
J. Series A Preferred Stock Certificate of Designation.
K. Class B-1 Common Stock Certificate of Designation.
- ----------------
* Previously filed
+ Superseded by Schedule A
<PAGE> 1
EXHIBIT I
EXECUTION COPY
- --------------------------------------------------------------------------------
INVESTMENT AGREEMENT
DATED AS OF NOVEMBER 25, 1997
BETWEEN
LIH HOLDINGS II, LLC
AND
LUND INTERNATIONAL HOLDINGS, INC.
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I
DEFINITION
1.1 Definitions.........................................................2
1.2 Certain Conventions.................................................7
ARTICLE II
SALE OF SHARES; CLOSING
2.1 Purchase and Sale....................................................7
2.2 Closing..............................................................7
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.1 Organization of the Company.........................................7
3.2 Power and Authority..................................................8
3.3 Capital..............................................................8
3.4 Subsidiaries.........................................................9
3.5 No Conflicts.........................................................9
3.6 Governmental Approvals and Filings..................................10
3.7 SEC Documents; Financial Statements.................................10
3.8 Absence of Changes..................................................11
3.9 Legal Proceedings...................................................11
3.10 Other Negotiations; Brokers.........................................11
3.11 Exemption from Registration; Restrictions on Offer and Sale of
Same or Similar Securities..........................................12
3.12 Other Agreements....................................................12
3.13 Disclosure..........................................................12
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
4.1 Organization; Power and Authority...................................13
4.2 No Conflicts........................................................13
4.3 Purchase for Investment.............................................13
4.4 Brokers.............................................................14
i
<PAGE> 3
ARTICLE V
COVENANTS OF THE COMPANY
5.1 Regulatory and Other Approvals..............................14
5.2 Reservation of Shares.......................................14
5.3 Venture Capital Operating Company Status....................14
5.4 Tender Offer Materials......................................15
5.5 Use of Proceeds.............................................15
5.6 Stockholder Consent.........................................15
5.7 Nasdaq National Market......................................15
5.8 Notice and Cure.............................................16
5.9 Fulfillment of Conditions...................................16
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF THE PURCHASER
6.1 Representations and Warranties..............................16
6.2 Performance.................................................17
6.3 Officers' Certificates......................................17
6.4 Orders and Laws.............................................17
6.5 Regulatory Consents and Approvals...........................17
6.6 Third Party Consents........................................17
6.7 Opinion of Counsel..........................................18
6.8 Certificates of Designation.................................18
6.9 Transaction Documents.......................................18
6.10 Delivery of Certificates....................................18
6.11 [Intentionally Omitted].....................................18
6.12 Merger Agreement............................................18
6.13 Credit Agreement............................................18
6.14 Minimum Amount of Target Shares; Offer Price................18
6.15 Conditions to Related Transactions..........................18
6.16 Nasdaq National Market......................................19
6.17 Proceedings.................................................19
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE COMPANY
7.1 Representations and Warranties..............................19
7.2 Performance.................................................19
7.3 Certificate.................................................19
7.4 Orders and Laws.............................................19
ii
<PAGE> 4
7.5 Transaction Documents..........................................19
7.6 Tender Offer...................................................20
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification................................................20
9.2 Method of Asserting Claims.....................................21
ARTICLE X
TERMINATION
10.1 Termination....................................................23
10.2 Effect of Termination..........................................23
ARTICLE XI
MISCELLANEOUS
11.1 Notices........................................................24
11.2 Entire Agreement...............................................25
11.3 Fees and Expenses..............................................25
11.4 Further Assurances.............................................25
11.5 Waiver.........................................................25
11.6 Amendment......................................................26
11.7 Third Party Beneficiaries......................................26
11.8 No Assignment; Binding Effect..................................26
11.9 Headings; Construction.........................................26
11.10 Invalid Provisions.............................................26
11.11 Governing Law..................................................27
11.12 Counterparts...................................................27
11.13 Limited Recourse...............................................27
11.14 Consent to Jurisdiction and Service of Process.................27
iii
<PAGE> 5
EXHIBITS
Exhibit A Form of Class B-1 Certificate of Designation
Exhibit B Exhibit B Form of Series A Certificate of Designation
Exhibit C Form of Amended and Restated Governance Agreement
Exhibit D-1 Form of Company's Officer's Certificate
Exhibit D-2 Form of Company's Secretary's Certificate
Exhibit E Form of Purchaser's Officer's Certificate
SCHEDULES
Schedule I - Section 3.3
Schedule II - Section 3.5
Schedule III - Section 3.8
iv
<PAGE> 6
INVESTMENT AGREEMENT, dated as of November 25, 1997, between
LIH HOLDINGS II, LLC, a Delaware limited liability company (the "Purchaser"),
and LUND INTERNATIONAL HOLDINGS, INC., a Delaware corporation (the "Company").
WHEREAS, LIH Holdings, LLC, a Delaware limited liability
company ("LIH Holdings I"), and an Affiliate of the Purchaser, is presently the
owner of 1,686,893 shares of Common Stock, par value $0.10 per share (the
"Common Stock"), of the Company.
WHEREAS, pursuant to an Offer to Purchase dated the date
hereof (the "Offer to Purchase"), Lund Acquisition Corp., a Delaware corporation
("Lund Acquisition"), and a wholly-owned subsidiary of the Company intends to
make a tender offer to purchase for cash (the "Tender Offer") all of the issued
and outstanding shares of common stock, par value $.01 per share (the "Target
Common Stock"), of Deflecta-Shield Corporation, a Delaware corporation
("Target"), at a price of $16.00 per share of Target Common Stock (the "Offer
Price").
WHEREAS, pursuant to the Tender Offer, and subject to the
terms and conditions set forth in the Offer to Purchase, Lund Acquisition
intends to purchase not less than such number of shares of Target Common Stock
which shall constitute at least a majority of the issued and outstanding Target
Common Stock on a fully diluted basis (the "Minimum Amount of Target Shares").
WHEREAS, as soon as practicable following the consummation of
the Tender Offer, the Company intends to effect a merger of Lund Acquisition
with and into Target (the "Merger").
WHEREAS, in order to provide a portion of the funds required
for the consummation of the Tender Offer, Lund Acquisition has received a
Commitment Letter, dated the date hereof (the "Commitment Letter"), from Heller
Financial, Inc. in favor of Lund Acquisition.
WHEREAS, in order to provide a portion of the funds required
for the consummation of the Tender Offer, the Company desires to sell to the
Purchaser, and the Purchaser desires to purchase from the Company, 874,400
shares of Common Stock and 1,493,398 shares of Series A Preferred Stock, par
value $0.01 per share (the "Series A Preferred Stock"), of the Company.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
<PAGE> 7
ARTICLE I
DEFINITION
1.1 Definitions. As used in this Agreement, the following
defined terms shall have the meanings indicated below:
"Actions or Proceedings" means any action, suit, proceeding,
arbitration or Governmental or Regulatory Authority investigation or audit.
"Affiliate" means, as applied to any Person, (i) any other
Person directly or indirectly controlling, controlled by or under common control
with that Person, (ii) any other Person that owns or controls 5% or more of any
class of equity securities (including any equity securities issuable upon the
exercise of any Option) of that Person or any of its Affiliates, or (iii) any
member, director, partner, officer, agent, employee or relative of such Person.
For the purposes of this definition, "control" (including with correlative
meanings, the terms "controlling", "controlled by", and "under common control
with") as applied to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
that Person, whether through ownership of voting securities or by contract or
otherwise. For the purpose of this Agreement, (i) neither the Purchaser, LIH
Holdings I, nor any of their respective Affiliates shall be deemed to be
"Affiliates" of the Company or any Subsidiary and (ii) neither the Company, any
Subsidiary, nor any of their respective Affiliates shall be deemed to be
"Affiliates" of the Purchaser or LIH Holdings I.
"Agreement" means this Investment Agreement and the schedules
hereto and the certificates delivered in connection herewith, as the same may be
amended, modified or restated from time to time in accordance with the terms
hereof.
"Amended and Restated Governance Agreement" means the Amended
and Restated Governance Agreement, dated as of the date hereof, among LIH
Holdings I, the Purchaser and the Company, in the form attached as Exhibit C.
"Assets and Properties" of any Person means all assets and
properties of every kind, nature, character and description (whether real,
personal or mixed, whether tangible or intangible, whether absolute, accrued,
contingent, fixed or otherwise and wherever situated), including the goodwill
related thereto, operated, owned or leased by such Person, including without
limitation cash, cash equivalents, accounts and notes receivable, chattel paper,
documents, instruments, general intangibles, real estate, equipment, inventory,
goods and intellectual property.
"Business Day" means a day other than Saturday, Sunday or any
day on which banks located in the State of New York or the State of Minnesota
are authorized or obligated to close.
-2-
<PAGE> 8
"Business or Condition of the Company" means the business,
condition (financial or otherwise), results of operations, and Assets and
Properties of the Company and the Subsidiaries taken as a whole.
"Charter" means the Certificate of Incorporation of the
Company, as amended, after giving effect to the filing of the Class B-1
Certificate of Designation and the Series A Certificate of Designation with the
Secretary of State of the State of Delaware.
"Claim Notice" has the meaning ascribed to it in
Section 9.2(a).
"Class B Common Stock" has the meaning ascribed to it in
Section 3.3.
"Class B-1 Certificate of Designation" means the Certificate
of Designation with respect to the Class B-1 Common Stock in the form attached
as Exhibit A, to be filed with the Secretary of State of the State of Delaware
prior to the Closing.
"Class B-1 Common Stock" has the meaning ascribed to it in
introductory paragraphs of this Agreement.
"Closing" means the closing of the transactions contemplated
by Section 2.2.
"Closing Date" means the date on which the Closing actually
occurs.
"Commitment Letter" has the meaning ascribed to it in the
introductory paragraphs of this Agreement.
"Common Stock" has the meaning ascribed to it in introductory
paragraphs of this Agreement.
"Company" has the meaning ascribed to it in the introductory
paragraphs of this Agreement.
"Contract" means any agreement, lease, debenture, note,
evidence of Indebtedness, mortgage, indenture, security agreement or other
contract or other commitment (whether written or oral).
"Credit Agreement" means the Credit Agreement to be entered
into between Heller Financial, Inc. and Lund Acquisition on or prior to the
Closing Date pursuant to the terms of the Commitment Letter.
"Dispute Period" means the period ending thirty (30) calendar
days following receipt by an Indemnifying Party of an Indemnity Notice.
-3-
<PAGE> 9
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Financial Statement Date" means June 30, 1997.
"GAAP" means United States generally accepted accounting
principles, consistently applied throughout the specified period and in all
prior comparable periods.
"Governmental or Regulatory Authority" means any court,
tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States, any foreign country or any domestic or
foreign state, county, city or other political subdivision, any arbitrator,
tribunal or panel of arbitrators and, shall include any stock exchange,
quotation service and the National Association of Securities Dealers.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvement
Act of 1976, as amended, and the rules and regulations promulgated thereunder.
"Indebtedness" of any Person means all obligations of such
Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures or
similar instruments, (iii) for the deferred purchase price of goods or services
(other than trade payables or accruals incurred in the ordinary course of
business), (iv) under capital leases and (v) in the nature of guarantees of the
obligations described in clauses (i) through (iv) above of any other Person.
"Indemnified Party" has the meaning ascribed to it in
Section 9.1.
"Indemnifying Party" has the meaning ascribed to it in
Section 9.1.
"Indemnity Notice" has the meaning ascribed to it in
Section 9.2(c).
"Laws" means all laws, statutes, rules, regulations,
ordinances and other pronouncements having the effect of law of the United
States, any foreign country or any domestic or foreign state, county, city or
other political subdivision or of any Governmental or Regulatory Authority.
"Liens" means any mortgage, pledge, assessment, security
interest, lease, lien, adverse claim, levy, charge or other encumbrance of any
kind, or any conditional sale Contract, title retention Contract or Contract
committing to grant any of the foregoing.
"LIH Holdings I" has the meaning ascribed to it in the
introductory paragraphs of this Agreement.
"Loss" means any and all damages, fines, fees, penalties,
deficiencies, losses and expenses, including interest, reasonable expenses of
investigation, court costs, reasonable fees and
-4-
<PAGE> 10
expenses of attorneys, accountants and other experts or other expenses of
litigation or other proceedings or of any claim, default or assessment (such
fees and expenses to include all fees and expenses, including, without
limitation reasonable fees and expenses of attorneys, incurred in connection
with (i) the investigation or defense of any Third Party Claims or (ii)
asserting or disputing any rights under this Agreement or any Transaction
Document, against the Company and, including as to any indemnifiable claim of
the Purchaser, any diminution in the value of the Shares.
"Merger" has the meaning ascribed to it in the introductory
paragraphs of this Agreement.
"Merger Agreement" means the Agreement and Plan of Merger,
dated as of the date hereof, among the Company, Lund Acquisition and Target.
"Minimum Amount of Target Shares" has the meaning ascribed to
it in the introductory paragraphs of this Agreement.
"Offer Price" has the meaning ascribed to it in the
introductory paragraphs of this Agreement.
"Offer to Purchase" has the meaning ascribed to it in the
introductory paragraphs of this Agreement.
"Option" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other Contract that
gives the right to (i) purchase or otherwise receive or be issued any shares of
capital stock or other equity interests of such Person or any security of any
kind convertible into or exchangeable or exercisable for any shares of capital
stock or other equity interest of such Person or (ii) receive any benefits or
rights similar to any rights enjoyed by or accruing to the holder of shares of
capital stock or other equity interests of such Person, including without
limitation any rights to participate in the equity, income or election of
directors, management committee members or officers of such Person.
"Order" means any writ, judgment, decree, injunction or
similar order of any Governmental or Regulatory Authority (in each such case
whether preliminary or final).
"Person" or "person" means any individual, corporation, joint
stock corporation, limited liability company or partnership, general
partnership, limited partnership, proprietorship, joint venture, other business
organization, trust, union, association, Governmental or Regulatory Authority or
other entity of any kind.
"Preferred Stock" has the meaning ascribed to it in
Section 3.3.
"Purchase Price" has the meaning ascribed to it in
Section 2.1.
-5-
<PAGE> 11
"Purchaser" has the meaning ascribed to it in the introductory
paragraphs of this Agreement.
"Resolution Period" means the period ending thirty (30)
calendar days following receipt by an Indemnified Party of a Dispute Notice.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Series A Certificate of Designation" means the Certificate of
Designation with respect to the Series A Preferred Stock in the form attached as
Exhibit B, to be filed with the Secretary of State of the State of Delaware
prior to the Closing.
"Series A Preferred Stock" has the meaning ascribed to it in
the introductory paragraphs of this Agreement.
"Shares" has the meaning ascribed to it in Section 2.1.
"Subsidiary" means any Person in which the Company, directly
or indirectly through Subsidiaries or otherwise, beneficially owns more than
fifty percent (50%) of either the equity interests in, or the voting control of,
such Person.
"Target" has the meaning ascribed to it in the introductory
paragraphs of this Agreement.
"Target Common Stock" has the meaning ascribed to it in the
introductory paragraphs of this Agreement.
"Tender Offer" has the meaning ascribed to it in the
introductory paragraphs of this Agreement.
"Tender Offer Materials" means the Tender Offer Statement on
Schedule 14D-1 to be filed by the Company and Lund Acquisition with the SEC
pursuant to Section 14(d)(1) of the Exchange Act, together with all exhibits
thereto, including the form of Offer to Purchase, as amended or supplemented
from time to time, in connection with the Tender Offer.
"Third Party Claim" has the meaning ascribed to it in
Section 9.2(a).
"Transaction Documents" means the Amended and Restated
Governance Agreement and any support or other agreement to be entered into
between the parties hereto in connection with the transactions contemplated by
this Agreement.
"VCOC" has the meaning ascribed to it in Section 5.3.
-6-
<PAGE> 12
1.2 Certain Conventions. Unless the context of this Agreement
otherwise requires, (i) words of any gender include each other gender, (ii)
words using the singular or plural number also include the plural or singular
number, respectively, (iii) the terms "hereof," "herein," "hereby" and
derivative or similar words refer to this entire Agreement, (iv) the terms
"Article" or "Section" refer to the specified Article or Section of this
Agreement, and (v) the phrases "ordinary course of business" and "ordinary
course of business consistent with past practice" refer to the business and
practice of the Company or a Subsidiary. All accounting terms used herein and
not expressly defined herein shall have the meanings given to them under GAAP.
ARTICLE II
SALE OF SHARES; CLOSING
2.1 Purchase and Sale. On the terms and subject to the
conditions of this Agreement, at the Closing, the Company shall issue and sell
to the Purchaser, and the Purchaser shall purchase from the Company, 874,400
shares of Common Stock and 1,493,398 shares of Series A Preferred Stock
(together, the "Shares"), free and clear of all Liens, for an aggregate purchase
price (payable in cash in the manner provided in Section 2.2) equal to
$30,000,000 (the "Purchase Price").
2.2 Closing. The Closing will take place at such location as
the parties mutually agree on the date on which each of the conditions precedent
set forth in Article VI and Article VII shall have been satisfied or waived as
provided therein. At the Closing, the Purchaser shall pay the Purchase Price by
wire transfer of immediately available funds to the account specified by the
Company by written notice delivered to the Purchaser at least two (2) Business
Days before the Closing Date. Simultaneously, the Company shall deliver to the
Purchaser certificates, registered in the name of the Purchaser, representing
the Shares. At the Closing, there shall also be delivered to the Company and the
Purchaser the opinions, certificates and other Contracts, documents and
instruments to be delivered under Articles VI and VII.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser that the
statements contained in this Article III are true and correct as of the date of
this Agreement and will be true and correct as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Article III).
3.1 Organization of the Company. The Company is a corporation
duly organized, validly existing and in good standing under the Laws of the
State of Delaware, is duly qualified, licensed or admitted to do business and is
in good standing in those jurisdictions in which the
-7-
<PAGE> 13
ownership, use or leasing of its Assets and Properties or the conduct or nature
of its business, makes such qualification, licensing or admission necessary,
except where the failure to be so qualified, licensed, admitted or in good
standing will not, individually or in the aggregate, have a material adverse
effect on the Business or Condition of the Company.
3.2 Power and Authority. The Company has the requisite power
and authority to execute and deliver this Agreement and the Transaction
Documents to which it is a party, to perform its obligations hereunder and
thereunder, to consummate the transactions contemplated hereby and thereby and
to consummate the transactions contemplated by the Tender Offer Materials, the
Merger Agreement, the Commitment Letter and the Credit Agreement. The execution
and delivery by the Company of this Agreement and the Transaction Documents to
which it is a party, the performance by the Company of its obligations hereunder
and thereunder, the consummation of the transactions contemplated hereby and
thereby and the consummation of the transactions contemplated by the Tender
Offer Materials, the Merger Agreement, the Commitment Letter and the Credit
Agreement, have been duly and validly authorized by all necessary action on the
part of the Board of Directors of the Company, which action of the Board of
Directors is the only corporate action necessary therefor. This Agreement has
been duly and validly executed and delivered by the Company and constitutes, and
upon the execution and delivery by the Company of each Transaction Document to
which it is a party, each such Transaction Document will constitute, a legal,
valid and binding obligation of the Company, in each case enforceable against
the Company in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws relating to the enforcement of creditors'
rights generally and by general principles of equity.
3.3 Capital. As of the date hereof and prior to the
transactions contemplated by this Agreement, the Transaction Documents, the
Tender Offer Materials and the Credit Agreement, the authorized capital stock of
the Company consists of 25,000,000 shares of Common Stock, 3,000,000 shares of
Class B Common Stock, par value $0.01 (the "Class B Common Stock"), and
2,000,000 shares of Preferred Stock, par value $0.01 (the "Preferred Stock"), of
which (i) 4,393,970 shares of Common Stock are outstanding, all of which are
validly issued, fully paid and non-assessable, and have been issued in
compliance with all applicable federal and state securities laws, (ii) no shares
of Class B Common Stock are outstanding and (iii) no shares of Preferred Stock
are outstanding. Immediately after giving effect to the Closing and the other
transactions contemplated by this Agreement, the Transaction Documents, the
Tender Offer Materials and the Credit Agreement to occur on the Closing Date,
(i) the authorized capital stock of the Company will consist of 25,000,000
shares of Common Stock, 3,000,000 shares of Class B Common Stock, of which
1,493,398 shares shall be designated Class B-1 Common Stock, and 2,000,000
shares of Preferred Stock, of which 1,493,398 shares shall be designated Series
A Preferred Stock, in each case having the terms and conditions specified in the
Charter, and (ii) the outstanding capital stock of the Company will consist of
5,268,370 shares of Common Stock and 1,493,398 shares of Series A Preferred
Stock. Except for the Class B-1 Common Stock, the Series A Preferred Stock or as
set forth in Schedule I hereto, there are no, and immediately after giving
effect to the Closing and the other transactions contemplated by this Agreement,
the Transaction Documents, the Tender Offer
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Materials and the Credit Agreement to occur on the Closing Date, there will not
be any, outstanding Options with respect to the Company, no agreements,
arrangements or understandings to issue Options with respect to the Company and
no preemptive rights or agreements, arrangements or understandings to issue
preemptive rights with respect to the issuance or sale of the Company's capital
stock. Upon issuance at the Closing, the certificate or certificates
representing the Shares purchased hereunder to the Purchaser will grant the
Purchaser good and valid title to the Shares free and clear of all Liens, and
all the Shares will have been duly authorized, validly issued and fully paid and
will be nonassessable. The Company has taken all necessary corporate action to
reserve the full number of shares of Common Stock issuable upon conversion of
the Class B-1 Common Stock issuable upon conversion of the Series A Preferred
Stock included in the Shares, and the full number of shares of Class B-1 Common
Stock issuable upon conversion of the Series A Preferred Stock included in the
Shares. The Common Stock issuable upon conversion of the Class B-1 Common Stock
issuable upon conversion of the Series A Preferred Stock included in the Shares
and the Class B-1 Common Stock issuable upon conversion of the Series A
Preferred Stock included in the Shares, when issued upon such conversion, will
be duly authorized, validly issued, fully paid and nonassessable. Neither the
execution, delivery or performance by the Company of this Agreement or the
Transaction Documents to which it is a party, the issuance of the Shares as
contemplated hereby, the issuance of shares of Common Stock upon conversion of
the Class B-1 Common Stock issuable upon conversion of the Series A Preferred
Stock included in the Shares, the issuance of shares of Class B-1 Common Stock
issuable upon conversion of the Series A Preferred Stock included in the Shares,
nor the consummation of the transactions contemplated by this Agreement, the
Transaction Documents, the Tender Offer Materials, the Merger Agreement and the
Credit Agreement, will give rise to or result in (with or without notice, lapse
of time or both) any antidilution adjustment, acceleration of vesting or other
change under or to any Option, except as set forth in Schedule I hereto.
3.4 Subsidiaries. Each Subsidiary is a corporation duly
organized, validly existing and in good standing under the Laws of its
jurisdiction of incorporation and has full corporate power and authority to
conduct its business as and to the extent now conducted and to own, use and
lease its Assets and Properties. Each Subsidiary is duly qualified, licensed or
admitted to do business and is in good standing in those jurisdictions in which
the ownership, use or leasing of such Subsidiary's Assets and Properties, or the
conduct or nature of its business, makes such qualification, licensing or
admission necessary, except where the failure to be so qualified, licensed,
admitted or in good standing will not, individually or in the aggregate, have a
material adverse effect on the Business or Condition of the Company. All of the
outstanding shares of capital stock of each Subsidiary have been duly authorized
and validly issued, are fully paid and nonassessable, and are owned,
beneficially and of record, by the Company or Subsidiaries wholly owned by the
Company, free and clear of all Liens. There are no outstanding Options with
respect to any Subsidiary. Except for the Subsidiaries, the Company holds no
equity, partnership, joint venture or other interest in any Person.
3.5 No Conflicts. The execution and delivery by the Company of
this Agreement and the Transaction Documents to which it is a party, the
performance by the Company of its
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<PAGE> 15
respective obligations hereunder and thereunder, the consummation of the
transactions contemplated hereby and thereby (including, without limitation, the
filing of the Class B-1 Certificate of Designation and the Series A Certificate
of Designation, the issuance of the Shares, the issuance of the Common Stock
upon conversion of the Class B-1 Common Stock issuable upon conversion of the
Series A Preferred Stock included in the Shares, and the issuance of the Class
B-1 Common Stock issuable upon conversion of the Series A Preferred Stock
included in the Shares), and the consummation of the transactions contemplated
by the Tender Offer Materials, the Merger Agreement, the Commitment Letter and
the Credit Agreement does not and will not: (a) conflict with or result in a
violation or breach of any of the terms, conditions or provisions of the
Company's certificate of incorporation or by-laws; (b) conflict with or result
in a violation or breach of any term or provision of any Law or Order applicable
to the Company or any Subsidiary or any of their respective Assets and
Properties; or (c) except as set forth on Schedule II hereto, (i) conflict with
or result in a violation or breach of, (ii) constitute (with or without notice
or lapse of time or both) a default under, (iii) require the Company or any
Subsidiary to obtain any consent, approval or action of, make any filing with or
give any notice to any Person as a result or under the terms of, (iv) result in
any termination, cancellation, acceleration or modification of, or give to any
Person any right of termination, cancellation, acceleration or modification in
or with respect to, (v) give to any Person any additional rights or entitlement
to increased, additional, accelerated or guaranteed payments under, (vi) other
than liabilities under this Agreement, the Transaction Documents and the
transactions contemplated by this Agreement, the Transaction Documents, the
Tender Offer Materials, the Merger Agreement, the Commitment Letter and the
Credit Agreement, result in the creation of any new, additional or increased
liability of the Company or any Subsidiary under or (vii) result in the creation
or imposition of any Lien upon the Company or any Subsidiary or any of their
respective Assets and Properties under, any Contract to which the Company or any
Subsidiary is a party or by which any of their respective Assets and Properties
are bound.
3.6 Governmental Approvals and Filings. No consent, approval
or action of, filing with or notice to any Governmental or Regulatory Authority
on the part of the Company (other than as may be required under the HSR Act or
the Exchange Act and other than the filing of the Class B-1 Certificate of
Designation and the Series A Certificate of Designation with the Secretary of
State of the State of Delaware) is required in connection with the execution,
delivery and performance of this Agreement and the Transaction Documents, the
consummation of the transactions contemplated hereby and thereby or the
consummation of the transactions contemplated by the Tender Offer Materials, the
Merger Agreement, the Commitment Letter or the Credit Agreement.
3.7 SEC Documents; Financial Statements. Each report,
schedule, form, statement and other document required to be filed by the Company
with the SEC, including, without limitation, the Tender Offer Materials (each an
"SEC Document", and collectively, the "SEC Documents") has been filed. As of its
filing date, each SEC Document complied in all material respects with the
applicable requirements of the Securities Act and the Exchange Act and none of
the SEC Documents, except to the extent that information contained in any SEC
Document has been revised or superseded by a later-filed or later declared
effective, as the case may be, SEC Document,
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<PAGE> 16
contained any untrue statement of a material fact or omitted to state a material
fact (x) necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or (y) required to be
stated therein or necessary to make the statements therein not misleading. The
financial statements of the Company included in the SEC Documents comply in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with GAAP (except as may be indicated in the notes thereto) and
fairly present the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments which will
not have or reflect a material adverse effect on the Business or Condition of
the Company).
3.8 Absence of Changes. Since the Financial Statement Date,
except as set forth in Schedule III hereto or as disclosed in the SEC Documents
filed prior to the execution and delivery hereof, there has not been any event
or development which, individually or together with other such events, did have
or could reasonably be expected to have a material adverse effect on the
Business or Condition of the Company. None of the other representations or
warranties in this Agreement shall be deemed to limit the foregoing.
3.9 Legal Proceedings. There are no Actions or Proceedings
pending or, to the knowledge of the Company, overtly threatened against,
relating to or affecting the Company or any Subsidiary or any of their
respective Assets and Properties, which (i) could reasonably be expected to
result in the issuance of an Order restraining, enjoining or otherwise
prohibiting or making illegal the consummation of any of the transactions
contemplated by this Agreement, the Transaction Documents, the Tender Offer
Materials, the Merger Agreement, the Commitment Letter or the Credit Agreement,
or (ii) if determined adversely to the Company or such Subsidiary, could
reasonably be expected to, individually or in the aggregate, have a material
adverse effect on the Business or Condition of the Company.
3.10 Other Negotiations; Brokers. Neither the Company, any
Subsidiary, nor any of their respective Affiliates (nor any investment banker,
financial advisor, attorney, accountant or other Person retained by or acting
for or on behalf of the Company, any Subsidiary or any such Affiliate) (i) has
entered into any agreement that conflicts with any of the transactions
contemplated by this Agreement, the Transaction Documents, the Tender Offer
Materials, the Merger Agreement or the Credit Agreement or (ii) has entered into
any agreement or had any discussions with any third party regarding any
transaction involving the Company or any Subsidiary which could result in the
Purchaser, their respective members, or the general or limited partners,
members, officers, directors, employees, agents or Affiliates of any of them
being subject to any claim for liability to said third party in connection with
this Agreement, the Transaction Documents or the consummation of any of the
transactions contemplated hereby, thereby, by the Tender Offer Materials, by the
Merger Agreement or by the Credit Agreement. Other than Piper Jaffray Inc., the
fees and expenses of which will be paid by the Company, no agent, broker,
finder, investment banker, financial advisor or other similar Person will be
entitled to any fee, commission or other compensation in connection
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<PAGE> 17
with any of the transactions contemplated by this Agreement, the Transaction
Documents, the Tender Offer Materials, the Merger Agreement or the Credit
Agreement on the basis of any act or statement made or alleged to have been made
by the Company, any Subsidiary, any of their respective Affiliates, or any
investment banker, financial advisor, attorney, accountant or other Person
retained by or acting for or on behalf of the Company, any Subsidiary or any
such Affiliate.
3.11 Exemption from Registration; Restrictions on Offer and
Sale of Same or Similar Securities. Assuming the representations and warranties
of the Purchaser set forth in Section 4.3 are true and correct in all material
respects, the offer and sale of the Shares made pursuant to this Agreement is
exempt from the registration requirements of the Securities Act. Neither the
Company nor any Person (other than the Purchaser and its Affiliates as to which
no representation is made) authorized to act on its behalf has, in connection
with the offering of the Shares, engaged in (i) any form of general solicitation
or general advertising (as those terms are used within the meaning of Rule
502(c) under the Securities Act), (ii) any action involving a public offering
within the meaning of Section 4(2) of the Securities Act, or (iii) any action
that would require the registration under the Securities Act of the offering and
sale of the Shares pursuant to this Agreement or that would violate applicable
state securities or "blue sky" laws. Neither the Company nor any Person (other
than the Purchaser and its Affiliates as to which no representation is made)
authorized to act on its behalf has made, directly or indirectly, any offer or
sale of the Shares or of securities of the same or a similar class as the Shares
that could cause the offer and sale of the Shares contemplated hereby to fail to
be entitled to exemption from the registration requirements of the Securities
Act. As used herein, the terms "offer" and "sale" have the meanings specified in
Section 2(3) of the Securities Act.
3.12 Other Agreements. Each of the representations and
warranties of the Company and Lund Acquisition contained in the Merger Agreement
are true and correct in all material respects (if not qualified by materiality)
and in all respects (if qualified by materiality) on and as of the date hereof.
Each of the representations and warranties to be contained in the Credit
Agreement shall be true and correct in all material respects (if not qualified
by materiality) and in all respects (if qualified by materiality) on and as of
the Closing Date.
3.13 Disclosure. No representation or warranty contained in
this Agreement, and no statement contained in any Schedule or in any
certificate, list or other writing furnished to the Purchaser pursuant to any
provision of this Agreement, including, without limitation, pursuant to Article
VI, contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements herein or therein, in
the light of the circumstances under which they were made, not misleading.
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<PAGE> 18
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company
that the statements contained in this Article IV are true and correct as of the
date of this Agreement, and will be true and correct as of the Closing Date (as
though made then and as though the Closing Date was substituted for the date of
this Agreement throughout this Article IV).
4.1 Organization; Power and Authority. The Purchaser is a
limited liability company duly organized, validly existing and in good standing
under the Laws of the State of Delaware. The Purchaser has the requisite power
and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery by the Purchaser of this Agreement, the performance by the
Purchaser of its obligations hereunder and the consummation of the transactions
contemplated hereby have been duly and validly authorized by the Purchaser. This
Agreement has been duly and validly executed and delivered by the Purchaser and
constitutes the legal, valid and binding obligation of the Purchaser enforceable
against the Purchaser in accordance with its terms, except as the enforceability
hereof may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws relating to the enforcement of
creditors' rights generally and by general principles of equity.
4.2 No Conflicts. The execution, delivery and performance of
this Agreement and the consummation by the Purchaser of the transactions
contemplated hereby will not conflict with, or constitute a default under, any
agreement, indenture or instrument to which the Purchaser is a party, or result
in a violation of the Purchaser's operating agreement or any order, judgment or
decree of any court or Governmental or Regulatory Authority having jurisdiction
over the Purchaser or any of its properties, and, except for such filings as may
be required by the Exchange Act, no consent, authorization or order of, or
filing or registration with, any court or Governmental or Regulatory Authority
is required by the Purchaser for the execution, delivery and performance of this
Agreement.
4.3 Purchase for Investment. The Shares will be acquired by
the Purchaser for its own account for the purpose of investment and not with a
view to the resale or distribution of all or any part of the Shares in violation
of the Securities Act, it being understood that the right to dispose of the
Shares shall, subject to the Amended and Restated Governance Agreement, be
entirely within the discretion of the Purchaser. The Purchaser is an "accredited
investor" (as such term is defined in Rule 501(a) of Regulation D under the
Securities Act). Purchaser has such knowledge and experience in financial and
business matters as to be able to evaluate the merits and risks of an investment
in the Shares and is able to bear the economic risk of its investment in the
Shares (including a complete loss of its investment). Purchaser understands that
the Shares have not been registered under the Securities Act or any state
securities laws by reason of an exemption from the
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<PAGE> 19
registration requirements of the Securities Act and such state securities laws,
which depend upon, among other things, the accuracy of the representations set
forth herein.
4.4 Brokers. Other than Piper Jaffray Inc., the fees and
expenses of which will be paid by the Company, no agent, broker, finder,
investment banker, financial advisor or other similar Person will be entitled to
any fee, commission or other compensation in connection with any of the
transactions contemplated by this Agreement on the basis of any act or statement
made by the Purchaser.
ARTICLE V
COVENANTS OF THE COMPANY
5.1 Regulatory and Other Approvals. The Company shall and
shall cause each Subsidiary to (a) take all necessary or desirable steps and
proceed diligently and in good faith and use its best efforts, as promptly as
practicable, to obtain all consents, approvals or actions of, to make all
filings with and to give all notices to, Governmental or Regulatory Authorities
or any other Person required of the Company or any Subsidiary to consummate the
transactions contemplated by this Agreement, the Transaction Documents, the
Tender Offer Materials, the Merger Agreement, the Commitment Letter and the
Credit Agreement, (b) provide such other information and communications to such
Governmental or Regulatory Authorities or other Persons as the Purchaser or such
Governmental or Regulatory Authorities or other Persons may reasonably request
and (c) cooperate with the Purchaser as promptly as practicable in obtaining all
consents, approvals or actions of, making all filings with and giving all
notices to, Governmental or Regulatory Authorities or other Persons required of
the Purchaser to consummate the transactions contemplated by this Agreement, the
Transaction Documents, the Tender Offer Materials, the Merger Agreement, the
Commitment Letter and the Credit Agreement. The Company will provide prompt
notification to the Purchaser when any such consent, approval, action, filing or
notice referred to in clause (a) above is obtained, taken, made or given, as
applicable, and will advise the Purchaser of any communications (and, unless
precluded by Law, provide the Purchaser with copies of any such communications
that are in writing) with any Governmental or Regulatory Authority or other
Person regarding any of the transactions contemplated by this Agreement, the
Transaction Documents, the Tender Offer Materials, the Merger Agreement or the
Credit Agreement.
5.2 Reservation of Shares. The Company will, at all times that
the shares of Series A Preferred Stock included in the Shares are outstanding,
keep reserved (i) the full number of shares of Class B-1 Common Stock issuable
upon conversion of the shares of Series A Preferred Stock included in the Shares
and (ii) the full number of shares of Common Stock issuable upon conversion of
the shares of Class B-1 Common Stock issuable upon conversion of the Series A
Preferred Stock included in the Shares.
5.3 Venture Capital Operating Company Status. In the event
that (i) at any time the Purchaser is not entitled to designate at least one
member for election to the board of directors
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of the Company, or (ii) the United States Department of Labor through formal or
informal rules, regulations or interpretations provides, or it is otherwise
established through governmental or court action, that such representation does
not constitute the exercise of management rights of the kind necessary to enable
Harvest Partners III, L.P. to continue to qualify as a "venture capital
operating company" within the meaning of Section 2510.3-101 of the plan asset
regulations promulgated by the United States Department of Labor (a "VCOC"),
then the Company shall, acting through its Board of Directors in a manner
consistent with its fiduciary obligations and the terms of the Amended and
Restated Governance Agreement, grant to the Purchaser such management rights as
the Company shall determine, the exercise of which would, in the opinion of
counsel to the Purchaser, enable Harvest Partners III, L.P. to continue to
qualify as a VCOC.
5.4 Tender Offer Materials. As soon as practicable after the
execution and delivery of this Agreement, the Company shall prepare the Tender
Offer Materials. The Company shall incorporate into the Tender Offer Materials
all revisions thereto with respect to descriptions of and references to the
Purchaser or any of its Affiliates and the terms of this Agreement, the
Transaction Documents and the transactions contemplated hereby or thereby
reasonably requested by the Purchaser, and the Company shall file the Tender
Offer Materials with the SEC as promptly as practicable after the execution and
delivery of this Agreement, and in any event within the time periods required by
the SEC. The Company shall promptly deliver to the Purchaser all Tender Offer
Materials and all other documents and materials filed with the SEC by the
Company, Lund Acquisition or Target in connection with the transactions
contemplated by this Agreement, the Transaction Documents, the Tender Offer
Materials, the Merger Agreement and the Credit Agreement. The Company shall
promptly forward to the Purchaser copies of any comments of the staff of the SEC
to the Tender Offer Materials and will incorporate into its reply and any
revised Tender Offer Materials all revisions thereto with respect to
descriptions of and references to the Purchaser or any of its Affiliates and the
terms of this Agreement, the Transaction Documents and the transactions
contemplated hereby or thereby reasonably requested by the Purchaser.
5.5 Use of Proceeds. The Company shall use the proceeds from
(i) the purchase and sale of the Shares hereunder and (ii) the Credit Agreement
in order to consummate the Offer to Purchase and the Merger.
5.6 Stockholder Consent. The Company shall promptly (and, if
necessary, from time to time as requested by the Purchaser) call a stockholders
meeting for the purpose of approving the terms of the Class B-1 Common Stock and
the conversion of the Series A Preferred Stock into Class B-1 Common Stock
pursuant to the terms of the Series A Certificate of Designation.
5.7 Nasdaq National Market. Prior to the Closing, the Company
shall cause the shares of Common Stock included in the Shares to be approved for
listing, subject to notice of issuance, by the Nasdaq National Market. As soon
as practicable after the approval of the stockholders of the Company of the
terms of the Class B-1 Common Stock and the conversion of the Series A Preferred
Stock into Class B-1 Common Stock pursuant to the terms of the Series A
Certificate of Designation, the Company shall cause the shares of Common Stock
issuable upon
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<PAGE> 21
conversion of the Class B-1 Common Stock issuable upon conversion of the Series
A Preferred Stock included in the Shares to be approved for listing, subject to
notice of issuance, by the Nasdaq National Market.
5.8 Notice and Cure. The Company shall notify the Purchaser
promptly in writing of, and contemporaneously shall provide the Purchaser with
true and complete copies of any and all information or documents relating to,
and the Company shall use its best efforts to cure before the Closing, any
event, transaction or circumstance that causes or shall cause any covenant or
agreement of the Company under this Agreement to be materially breached (if not
qualified by materiality or material adverse effect) or breached (if qualified
by materiality or material adverse effect) or that renders or shall render
materially untrue (if not qualified by materiality or material adverse effect)
or untrue (if qualified by materiality or material adverse effect) any
representation or warranty of the Company contained in this Agreement as if the
same were made on or as of the date of such event, transaction or circumstance.
The Company also shall notify the Purchaser promptly in writing of, and the
Company shall use its best efforts to cure, before the Closing, any material
violation or material breach (in each case, if not qualified by materiality or
material adverse effect) or any violation or breach (in each case, if qualified
by materiality or material adverse effect) of any representation, warranty,
covenant or agreement made by the Company in this Agreement, whether occurring
or arising before, on or after the date of this Agreement. No notice given
pursuant to this Section shall have any effect on the representations,
warranties, covenants or agreements contained in this Agreement for purposes of
determining satisfaction of any condition contained herein or shall in any way
limit the Purchaser's right to seek indemnity under Article IX.
5.9 Fulfillment of Conditions. The Company shall take all
steps necessary or desirable and use its best efforts to satisfy each condition
to the obligations of the Purchaser contained in this Agreement and shall not
take or fail to take any action that could reasonably be expected to result in
the nonfulfillment of any such condition.
ARTICLE VI
CONDITIONS TO OBLIGATIONS OF THE PURCHASER
The obligations of the Purchaser hereunder are subject to the
fulfillment, at or before the Closing, of each of the following conditions (all
or any of which may be waived in whole or in part by the Purchaser in its sole
discretion):
6.1 Representations and Warranties. Each of the
representations and warranties made by the Company in this Agreement shall be
true and correct in all material respects (if not qualified by materiality or
material adverse effect) and in all respects (if qualified by materiality or
material adverse effect) on and as of the Closing Date as though such
representation or warranty was made on and as of the Closing Date.
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6.2 Performance. The Company shall have performed and complied
with each agreement, covenant and obligation required by this Agreement to be so
performed or complied with by the Company at or before the Closing.
6.3 Officers' Certificates. The Company shall have delivered
to the Purchaser a closing certificate, dated the Closing Date and executed by
the President or any Vice President of the Company, substantially in the form
and to the effect of Exhibit D-1 hereto, and a certificate, dated the Closing
Date and executed by the Secretary or any Assistant Secretary of the Company,
substantially in the form and to the effect of Exhibit D-2 hereto.
6.4 Orders and Laws. There shall not be in effect on the
Closing Date any Order or Law restraining, enjoining or otherwise prohibiting or
making illegal the consummation of any of the transactions contemplated by this
Agreement, the Transaction Documents, the Tender Offer Materials, the Merger
Agreement or the Credit Agreement.
6.5 Regulatory Consents and Approvals. All consents, approvals
and actions of, filings with and notices to any Governmental or Regulatory
Authority necessary to permit the Purchaser and the Company to perform their
obligations under this Agreement and the Transaction Documents and to consummate
the transactions contemplated by this Agreement, the Transaction Documents, the
Tender Offer Materials, the Merger Agreement and the Credit Agreement (i) shall
have been duly obtained, made or given, (ii) shall be in form and substance
reasonably satisfactory to the Purchaser, (iii) shall not be subject to the
satisfaction of any condition that has not been satisfied or waived and (iv)
shall be in full force and effect, and all terminations or expirations of
waiting periods imposed by any Governmental or Regulatory Authority necessary
for the consummation of the transactions contemplated by this Agreement, the
Transaction Documents, the Tender Offer Materials, the Merger Agreement and the
Credit Agreement shall have occurred.
6.6 Third Party Consents. All consents (or in lieu thereof
waivers) to the performance by the Purchaser and the Company of their
obligations under this Agreement and the Transaction Documents or to the
consummation of the transactions contemplated by this Agreement, the Transaction
Documents, the Tender Offer Materials, the Merger Agreement and the Credit
Agreement as are required under any Contract to which the Purchaser or the
Company or any Subsidiary is a party or by which any of their respective Assets
and Properties are bound and where the failure to obtain any such consent (or in
lieu thereof waiver) could reasonably be expected, individually or in the
aggregate with other such failures, to materially adversely affect the Purchaser
or the Business or Condition of the Company or otherwise result in a material
diminution of the benefits of the transactions contemplated by this Agreement,
the Transaction Documents, the Tender Offer Materials, the Merger Agreement or
the Credit Agreement to the Purchaser in its sole discretion, (i) shall have
been obtained, (ii) shall be in form and substance reasonably satisfactory to
the Purchaser, (iii) shall not be subject to the satisfaction of any condition
that has not been satisfied or waived and (iv) shall be in full force and
effect.
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6.7 Opinion of Counsel. The Purchaser shall have received the
opinion of Leonard, Street and Deinard, counsel to the Company, dated the
Closing Date, in the form and to the effect reasonably satisfactory to the
Purchaser.
6.8 Certificates of Designation. The Purchaser shall have
received evidence satisfactory to it that the Class B-1 Certificate of
Designation, substantially in the form of Exhibit A hereto, and the Series A
Certificate of Designation, substantially in the form of Exhibit B hereto, shall
each have been duly filed with the Office of the Secretary of State of the State
of Delaware and become effective in accordance with their respective terms.
6.9 Transaction Documents. Each of the Transaction Documents
shall have been duly executed and delivered by the respective parties thereto
other than the Purchaser and LIH Holdings I and shall be in full force and
effect.
6.10 Delivery of Certificates. Duly executed certificates
representing the Shares shall have been delivered to the Purchaser.
6.11 [Intentionally Omitted].
6.12 Merger Agreement. The Purchaser shall have received an
executed copy of the Merger Agreement, and all amendments, waivers,
modifications and supplements thereto, which shall be in full force and effect
and which shall not impose any limitations on the exercise by any holder of
Class B-1 Common Stock or Series A Preferred Stock of any of its rights
(including without limitation rights of conversion or redemption under the Class
B-1 Common Stock or the Series A Preferred Stock, respectively).
6.13 Credit Agreement. The Purchaser shall have received an
executed copy of the Credit Agreement, and all amendments, waivers,
modifications and supplements thereto, which shall be in full force and effect
and which shall not impose any limitations on the exercise by any holder of
Class B-1 Common Stock or Series A Preferred Stock of any of its rights
(including without limitation rights of conversion or redemption under the Class
B-1 Common Stock or the Series A Preferred Stock, respectively).
6.14 Minimum Amount of Target Shares; Offer Price. The Company
shall have acquired concurrently with the purchase and sale of the Shares
hereunder at least the Minimum Amount of Target Shares at a price per share
equal to the Offer Price, and there shall not have been any material change in
the number of shares of Target Common Stock outstanding since the date of the
execution and delivery of this Agreement.
6.15 Conditions to Related Transactions. Each of the
conditions precedent to the consummation of the transactions contemplated by the
Tender Offer Materials, the Merger Agreement and the Credit Agreement shall have
been satisfied in all material respects.
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<PAGE> 24
6.16 Nasdaq National Market. The Common Stock included in the
Shares shall have been approved for listing, subject to notice of issuance, by
the Nasdaq National Market.
6.17 Proceedings. All proceedings to be taken on the part of
the Company in connection with the transactions contemplated by this Agreement
and all documents incident thereto shall be reasonably satisfactory in form and
substance to Purchaser and its legal counsel, and Purchaser shall have received
copies of all such documents and other evidence as Purchaser may reasonably
request in order to establish the consummation of such transactions and the
taking of all proceedings in connection therewith.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE COMPANY
The obligations of the Company hereunder are subject to the
fulfillment, at or before the Closing, of each of the following conditions (all
or any of which may be waived in whole or in part by the Company in its sole
discretion):
7.1 Representations and Warranties. Each of the
representations and warranties made by the Purchaser in this Agreement shall be
true and correct in all material respects on and as of the Closing Date as
though such representation or warranty was made on and as of the Closing Date.
7.2 Performance. The Purchaser shall have performed and
complied with, in all material respects, each agreement, covenant and obligation
required by this Agreement to be so performed or complied with by the Purchaser
at or before the Closing.
7.3 Certificate. The Purchaser shall have delivered to the
Company a certificate, dated the Closing Date and executed by a Manager of the
Purchaser, substantially in the form and to the effect of Exhibit E attached
hereto.
7.4 Orders and Laws. There shall not be in effect on the
Closing Date any Orders or Laws that became effective after the execution and
delivery of this Agreement restraining, enjoining or otherwise prohibiting or
making illegal the consummation of any of the transactions contemplated by this
Agreement, the Transaction Documents, the Tender Offer Materials, the Merger
Agreement or the Credit Agreement.
7.5 Transaction Documents. The Transaction Documents shall
have been duly executed and delivered by the respective parties thereto other
than the Company, and shall be in full force and effect.
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<PAGE> 25
7.6 Tender Offer. At least the Minimum Amount of Target Shares
shall have been tendered to the Company at the Offer Price by the holders
thereof.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS
Notwithstanding any right of the Purchaser (whether or not
exercised) to investigate the affairs of the Company or any right of any party
(whether or not exercised) to investigate the accuracy of the representations
and warranties of another party contained in this Agreement or the waiver of any
condition to Closing, the Company, on the one hand, and the Purchaser, on the
other hand, have the right to rely fully upon the representations, warranties,
covenants and agreements of the other contained in this Agreement. The
representations, warranties, covenants and agreements of the Company and the
Purchaser contained in this Agreement will survive the Closing (a) indefinitely
with respect to the covenants and agreements herein and the representations and
warranties contained in Sections 3.1, 3.2, 3.3, 3.4 and 3.10 and 4.1 and 4.4 and
(b) until the third anniversary of the Closing Date with respect to all other
representations and warranties, except that any representation or warranty that
would otherwise terminate in accordance with clause (b) above will continue to
survive if a Claim Notice (as defined below) or Indemnity Notice (as defined
below), as applicable, shall have been timely given under Article IX on or prior
to such termination date, until the related claim for indemnification has been
satisfied or otherwise resolved as provided in Article IX, but only with respect
to matters described in such Claim Notice or Indemnity Notice.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification. Whether or not the transactions
contemplated by this Agreement are consummated, the Company (the "Indemnifying
Party") shall indemnify the Purchaser and its Affiliates, and each of their
respective officers, directors, managers, partners, employees, agents, members
and stockholders (the "Indemnified Parties") in respect of, and hold each of
them harmless from and against, any and all Losses suffered, incurred or
sustained by any of them or to which any of them becomes subject, resulting
from, arising out of or relating to (i) any misrepresentation or breach of
warranty or nonfulfillment of or failure to perform any covenant or agreement on
the part of the Company contained in this Agreement, (ii) the assertion by any
Person not a party to this Agreement of any claim against an Indemnified Party
in connection with the matters or transactions that are the subject of or
contemplated by this Agreement, any of the Transaction Documents, the Tender
Offer Materials, the Merger Agreement or the Credit Agreement (including without
limitation any claim asserted in any actual or threatened Action or Proceeding
with respect to (x) any use made or proposed to be made of the proceeds from the
issuance or sale of the Shares or (y) the purchase of the Shares), (iii)
violations of applicable securities laws by the
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<PAGE> 26
Company in connection with the offering of the Shares; provided, however, that
no Indemnifying Party shall be obligated pursuant to clause (ii) of this Section
9.1 to the extent that a Loss claimed thereunder is finally adjudicated by a
court of competent jurisdiction to have resulted primarily from the negligence
or wilful misconduct of the Indemnified Party making such claim. The Company
shall reimburse each Indemnified Party (whether or not such Indemnified Party is
a party to this Agreement) for all expenses (including counsel fees and
disbursements) as they are incurred by such Indemnified Party in connection with
investigating and preparing or defending any Action or Proceeding referred to
above (whether or not such Indemnified Party is a formal party to any such
Action or Proceeding). If and to the extent that the indemnification set forth
herein is finally determined by a court of competent jurisdiction to be
unenforceable, the Company shall make the maximum contribution to the payment
and satisfaction of the indemnified Losses as shall be permissible under
applicable laws.
9.2 Method of Asserting Claims. All claims for indemnification
by any Indemnified Party under Section 9.1 will be asserted and resolved as
follows:
(a) In order for an Indemnified Party to be entitled to any
indemnification provided for under Section 9.1 in respect of, arising out of or
involving a claim or demand made by any Person not a party to this Agreement
against the Indemnified Party (a "Third Party Claim"), the Indemnified Party
must deliver a claim notice (a "Claim Notice") to the Indemnifying Party within
thirty (30) Business Days after receipt by such Indemnified Party of written
notice of the Third Party Claim; provided, however, that failure to give such
Claim Notice shall not affect the indemnification provided hereunder except to
the extent the Indemnifying Party shall have been actually prejudiced as a
result of such failure.
(b) If a Third Party Claim is made against an Indemnified
Party, the Indemnifying Party shall be entitled to participate in the defense
thereof and, if it so chooses, to assume the defense thereof with counsel
selected by the Indemnifying Party, which counsel must be reasonably
satisfactory to the Indemnified Party. Subject to the next sentence, should the
Indemnifying Party so elect to assume the defense of a Third Party Claim, the
Indemnifying Party shall not be liable to the Indemnified Party for legal
expenses subsequently incurred by the Indemnified Party in connection with the
defense thereof, but shall continue to pay for any expenses of investigation or
any Loss suffered; and if the Indemnifying Party assumes such defense, the
Indemnified Party shall have the right to participate in such defense and to
employ counsel, at its own expense, separate from the counsel employed by the
Indemnifying Party. If (i) the Indemnifying Party shall not assume the defense
of a Third Party Claim with counsel satisfactory to the Indemnified Party within
twenty Business Days of any Claim Notice, or (ii) legal counsel for the
Indemnified Party notifies the Indemnifying Party in writing that there are or
may be legal defenses available to the Indemnified Party or to other Indemnified
Parties which are different from or additional to those available to the
Indemnifying Party, which, if the Indemnified Party and the Indemnifying Party
were to be represented by the same counsel, would constitute a conflict of
interest for such counsel or prejudice prosecution of the defenses available to
such Indemnified Party, or (iii) the Indemnifying Party shall assume the defense
of a Third Party Claim and fail to diligently prosecute such defense, then in
each
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<PAGE> 27
such case the Indemnified Party, by notice to the Indemnifying Party, may employ
its own counsel and control the defense of the Third Party Claim and the
Indemnifying Party shall be liable for the reasonable fees, charges and
disbursements of counsel employed by the Indemnified Party; and the Indemnified
Party shall be promptly reimbursed for any such fees, charges and disbursements,
as and when incurred. Whether the Indemnifying Party or the Indemnified Party
controls the defense of any Third Party Claim, the parties hereto shall
cooperate in the defense thereof. Such cooperation shall include the retention
and provision to the counsel of the controlling party of records and information
which are reasonably relevant to such Third Party Claim, and making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. The Indemnifying Party shall
have the right to settle, compromise or discharge a Third Party Claim (other
than any such Third Party Claim in which criminal conduct is alleged) without
the Indemnified Party's consent if such settlement, compromise or discharge (i)
constitutes a complete and unconditional discharge and release of the
Indemnified Party, and (ii) provides for no relief other than the payment of
monetary damages and such monetary damages are paid in full by the Indemnifying
Party. Any amounts reimbursed to any Indemnified Party hereunder with respect to
a particular Third Party Claim shall be repaid to the Indemnifying Party in the
event that it is finally adjudicated by a court of competent jurisdiction that
such Indemnified Party is not entitled to indemnification by the Indemnifying
Party with respect to such Third Party Claim.
(c) In the event any Indemnified Party shall have a claim
under Section 9.1 against any Indemnifying Party that does not involve a Third
Party Claim, the Indemnified Party shall deliver an indemnity notice (an
"Indemnity Notice") with reasonable promptness to the Indemnifying Party. The
failure by any Indemnified Party to give the Indemnity Notice shall not impair
such party's rights hereunder except to the extent that an Indemnifying Party
demonstrates that it has been materially prejudiced thereby. If the Indemnifying
Party notifies the Indemnified Party that it does not dispute the claim
described in such Indemnity Notice or fails to notify the Indemnified Party
within the Dispute Period whether the Indemnifying Party disputes the claim
described in such Indemnity Notice, the Loss in the amount specified in the
Indemnity Notice will be conclusively deemed a liability of the Indemnifying
Party under Section 9.1 and the Indemnifying Party shall pay the amount of such
Loss to the Indemnified Party on demand. If the Indemnifying Party has timely
disputed its liability with respect to such claim, the Indemnifying Party and
the Indemnified Party will proceed in good faith to negotiate a resolution of
such dispute, and if not resolved through negotiations within the Resolution
Period, such dispute shall be resolved by litigation in a court of competent
jurisdiction.
(d) The rights accorded to Indemnified Parties hereunder shall
be in addition to any rights that any Indemnified Party may have at law or in
equity, under federal and state securities laws by separate agreement or
otherwise.
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<PAGE> 28
ARTICLE X
TERMINATION
10.1 Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned:
(a) at any time before the Closing, by mutual written
agreement of the Company and the Purchaser;
(b) at any time before the Closing, by the Company or the
Purchaser in the event (i) of a material breach hereof by the non-terminating
party if such non-terminating party fails to cure such breach within five (5)
Business Days following notification thereof by the terminating party or (ii)
upon notification of the non-terminating party by the terminating party that the
satisfaction of any condition to the terminating party's obligations under this
Agreement becomes impossible or impracticable with the use of commercially
reasonable efforts if the failure of such condition to be satisfied is not
caused by a breach hereof by the terminating party; and
(c) at any time after June 30, 1998 by the Company or the
Purchaser, upon notification of the non-terminating party by the terminating
party, if the Closing shall not have occurred on or before such date and such
failure to consummate is not caused by a breach of this Agreement by the
terminating party.
10.2 Effect of Termination. If this Agreement is validly
terminated pursuant to Section 10.1, this Agreement will forthwith become null
and void, and there will be no liability or obligation on the part of the
Company or the Purchaser, except as provided in the next two (2) succeeding
sentences and except that the provisions with respect to expenses in Section
11.3 will continue to apply following any such termination. Notwithstanding any
other provision in this Agreement to the contrary, upon termination of this
Agreement pursuant to Section 10.1(b) or (c), the Company will remain liable to
the Purchaser for any misrepresentation or breach of warranty or nonfulfillment
of or failure to perform any covenant or agreement of the Company existing at
the time of such termination, and the Purchaser will remain liable to the
Company for any misrepresentation or breach of warranty or nonfulfillment of or
failure to perform any covenant or agreement of the Purchaser existing at the
time of such termination. Each of the Company and the Purchaser may seek such
remedies, including damages and reimbursement for fees and expenses of
attorneys, against the other with respect to any misrepresentation, breach,
nonfulfillment or failure referred to above as provided under this Agreement,
including, its remedies under Article IX with respect thereto, or as are
otherwise available at Law or in equity.
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<PAGE> 29
ARTICLE XI
MISCELLANEOUS
11.1 Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally against written receipt or by facsimile transmission or
mailed by prepaid first class certified mail, return receipt requested, or
mailed by overnight courier prepaid, to the parties at the following addresses
or facsimile numbers:
(a) If to the Purchaser, to:
LIH Holdings II, LLC
c/o Harvest Partners, Inc.
767 Third Avenue
New York, New York 10017
Facsimile No: (212) 593-0734
Attn: Ira D. Kleinman
with a copy (which shall not constitute notice) to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
Facsimile No: (212) 309-6273
Attn: Philip Werner, Esq.
(b) If to the Company, to:
Lund International Holdings, Inc.
911 Lund Boulevard
Anoka, Minnesota 55303
Facsimile No:
Attn: Chief Executive Officer
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<PAGE> 30
with a copy (which shall not constitute notice) to:
Leonard, Street and Deinard
150 South Fifth Avenue
Suite 2300
Minneapolis, Minnesota 55402
Facsimile No: (612) 335-1657
Attn: Mark Weitz, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, (iii) if delivered by
mail in the manner described above to the address as provided in this Section,
be deemed given on the earlier of the third Business Day following mailing or
upon receipt and (iv) if delivered by overnight courier to the address as
provided in this Section, be deemed given on the earlier of the first Business
Day following the date sent by such overnight courier or upon receipt (in each
case regardless of whether such notice, request or other communication is
received by any other Person to whom a copy of such notice is to be delivered
pursuant to this Section). Any party from time to time may change its address,
facsimile number or other information for the purpose of notices to that party
by giving notice specifying such change to the other party hereto.
11.2 Entire Agreement. This Agreement and the Transaction
Documents supersede all prior discussions and agreements between the parties
with respect to the subject matter hereof and thereof and contain the sole and
entire agreement between the parties hereto with respect to the subject matter
hereof and thereof.
11.3 Fees and Expenses. In the event that (i) the transactions
contemplated by this Agreement are consummated or (ii) this Agreement is
terminated other than pursuant to Section 10.1(b) by reason of a material breach
by Purchaser, the Company shall reimburse the Purchaser for all the reasonable
fees and expenses (including the fees and expenses of counsel, consultants and
accountants), incurred by the Purchaser prior to the Closing in connection with
this Agreement, the other Transaction Documents and the transactions
contemplated hereby or thereby.
11.4 Further Assurances. At any time and from time to time
after the Closing, the Company shall execute and deliver to the Purchaser such
other documents and instruments, provide such materials and information and take
such other actions as the Purchaser may reasonably request more effectively to
vest title to the Shares in the Purchaser and to otherwise cause the Company to
fulfill its other obligations under this Agreement and the Transaction
Documents.
11.5 Waiver. Any term or condition of this Agreement may be
waived at any time by the party that is entitled to the benefit thereof, but no
such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No waiver
by any party of any term or condition of this Agreement, in any one or more
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<PAGE> 31
instances, shall be deemed to be or construed as a waiver of the same or any
other term or condition of this Agreement on any future occasion. All remedies,
either under this Agreement or by Law or otherwise afforded, will be cumulative
and not alternative.
11.6 Amendment. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
11.7 Third Party Beneficiaries. The terms and provisions of
this Agreement are intended solely for the benefit of each party hereto and
their respective successors and permitted assigns, and it is not the intention
of the parties to confer third-party beneficiary rights, and this Agreement does
not confer any such rights, upon any other Person other than any Person entitled
to indemnity under Article IX.
11.8 No Assignment; Binding Effect. Neither this Agreement nor
any right, interest or obligation hereunder may be assigned (by operation of Law
or otherwise) by the Company without the prior written consent of the Purchaser
and any attempt to do so will be void ab initio. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by the Purchaser without
the prior written consent of the Company and any attempt to do so will be void
ab initio; provided, however, that the Purchaser may, to the extent applicable,
assign any or all of such right, interest or obligation in connection with a
transfer of all or any part of the Purchaser's interests in the Company
permitted under the Amended and Restated Governance Agreement. Subject to the
preceding sentence, this Agreement shall bind and inure to the benefit of and be
enforceable by the parties hereto and their respective successors and assigns,
including, without limitation, any holder of the Shares.
11.9 Headings; Construction. The headings used in this
Agreement have been inserted for convenience of reference only and do not define
or limit the provisions hereof. The parties hereto agree that this Agreement is
the product of negotiation between sophisticated parties and individuals, all of
whom were represented by counsel, and each of whom had an opportunity to
participate in and did participate in, the drafting of each provision hereof.
Accordingly, ambiguities in this Agreement, if any, shall not be construed
strictly or in favor of or against any party hereto but rather shall be given a
fair and reasonable construction without regard to the rule of contra
proferentum. The words "include," "includes" and "including" shall be deemed to
be followed by the phrase "without limitation."
11.10 Invalid Provisions. If any provision of this Agreement
is held to be illegal, invalid or unenforceable under any present or future Law,
and if the rights or obligations of any party hereto under this Agreement will
not be materially and adversely affected thereby, (i) such provision will be
fully severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(iii) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance here from and (iv) in lieu of such illegal,
invalid or unenforceable provision, there will be added automatically as a part
of this Agreement a legal, valid
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<PAGE> 32
and enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible.
11.11 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of New York.
11.12 Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
11.13 Limited Recourse. Notwithstanding anything in this
Agreement, any Transaction Document or any other document, agreement or
instrument contemplated hereby to the contrary, the obligations of the Purchaser
hereunder shall be without recourse to any Affiliate of the Purchaser or any
stockholder, partner, member, officer, director, manager, employee or agent of
Purchaser or such Affiliates, and shall be limited to the assets of the
Purchaser.
11.14 Consent to Jurisdiction and Service of Process. EACH OF
THE COMPANY AND THE PURCHASER CONSENTS TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW YORK, STATE OF NEW YORK AND
IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS RELATING TO THIS AGREEMENT OR
THE TRANSACTION DOCUMENTS MAY BE LITIGATED IN SUCH COURTS. EACH OF THE COMPANY
AND THE PURCHASER ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS RESPECTIVE
PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
AGREEMENT OR THE TRANSACTION DOCUMENTS. EACH OF THE COMPANY AND THE PURCHASER
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE PARTY AT THE
ADDRESS SPECIFIED IN THIS AGREEMENT, SUCH SERVICE TO BECOME EFFECTIVE FIFTEEN
(15) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT
THE ABILITY OF ANY PARTY HERETO TO SERVE ANY SUCH LEGAL PROCESS, SUMMONS,
NOTICES AND DOCUMENTS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW OR TO
OBTAIN JURISDICTION OVER OR TO BRING ACTIONS, SUITS OR PROCEEDINGS AGAINST ANY
OF THE OTHER PARTIES HERETO IN SUCH OTHER JURISDICTIONS, AND IN SUCH MANNER, AS
MAY BE PERMITTED BY ANY APPLICABLE LAW.
[SIGNATURE PAGE TO FOLLOW]
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<PAGE> 33
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officer of each party hereto as of the date
first above written.
LIH HOLDINGS II, LLC
By:/s/ Ira D. Kleinman
------------------------------
Name: Ira D. Kleinman
Title: Authorized Person
LUND INTERNATIONAL HOLDINGS, INC.
By:/s/ Ira D. Kleinman
------------------------------
Name: Ira D. Kleinman
Title: President
[SIGNATURE PAGE TO INVESTMENT AGREEMENT]
<PAGE> 34
Schedule I
(Section 3.3)
None
<PAGE> 35
Schedule II
(Section 3.5)
None
<PAGE> 36
Schedule III
(Section 3.8)
None
<PAGE> 1
EXHIBIT J
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES A PREFERRED STOCK
LUND INTERNATIONAL HOLDINGS, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
The undersigned, William J. McMahon, hereby certifies that:
A. He is the duly elected and acting Chief Executive Officer of LUND
INTERNATIONAL HOLDINGS, INC., Inc., a Delaware corporation (the "Corporation").
B. Pursuant to authority given by the Corporation's Certificate of
Incorporation, as amended through the date hereof (the "Certificate of
Incorporation"), the Board of Directors of the Corporation duly adopted the
following resolutions on November 25, 1997, creating a new series of 1,493,398
shares of Preferred Stock designated as "Series A Preferred Stock".
C. The resolutions contained herein have not been modified, altered or
amended and are presently in full force and effect.
RESOLVED, that pursuant to the authority expressly vested in the Board
of Directors of the Corporation by Article Fourth of the Certificate of
Incorporation, the Board of Directors hereby fixes and determines the powers,
preferences, rights and limitations of a series of Preferred Stock, which shall
consist of 1,493,398 shares and shall be designated as Series A Preferred Stock
(the "Series A Preferred Stock"), as follows:
4B. Series A Preferred Stock.
(i) Designation: Stated Value. There shall be a series of Preferred
Stock designated as "Series A Preferred Stock." The number of shares initially
constituting such series shall be 1,493,398. The Series A Preferred Stock shall
have a stated value of $12.67 per share (the "Series A Stated Value").
(ii) Rank. The Series A Preferred Stock shall, with respect to dividend
and other distribution rights, and rights on liquidation, dissolution and
winding up, rank (i) pari passu with any class of capital stock or series of
Preferred Stock hereafter created which expressly provides that it ranks pari
passu with the Series A Preferred Stock as to dividends, other distributions,
liquidation preference and/or otherwise (collectively, the "Parity Securities"),
and (ii) senior to (x) the Common Stock, the Class B Common Stock and all other
securities of any class or classes (however designated) of the Corporation
(other than the Series A Preferred Stock) the holders of which have the right,
without limitation as to amount, after payment on any securities
<PAGE> 2
entitled to a preference on dividends or other distributions upon any
dissolution, liquidation or winding up, either to all or to a share of the
balance of payments upon such dissolution, liquidation or winding up
(collectively, the "Common Stock Instruments") and (y) any other class of
capital stock or series of Preferred Stock hereafter created which does not
expressly provide that it ranks pari passu with the Series A Preferred Stock as
to dividends, other distributions, liquidation preference and/or otherwise
(collectively, the "Junior Securities"). The terms "Parity Securities" and
"Junior Securities" as used herein with respect to any class or series of
capital stock shall only be deemed to refer to such class or series to the
extent it ranks (i) pari passu with or (ii) not pari passu with, as applicable,
the Series A Preferred Stock with respect to dividends, other distributions,
liquidation preference or otherwise. The Corporation shall not issue any
securities ranking senior to the Parity Securities with respect to dividends,
distributions, liquidation preference or otherwise.
(iii) Dividends.
(a) The holders of shares of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of
Directors, to the extent funds are legally available therefor in
accordance with the Delaware General Corporation Law, a dividend for
each such share, payable quarterly, as provided below, on the last day
of each January, April, July and October, commencing on July 31, 1998
(each such date hereinafter referred to as a "Series A Dividend Payment
Date"), except that if such date is not a Business Day, then such
dividend shall be payable on the next succeeding Business Day, to the
holders of record as they appear on the register of the Corporation for
the Series A Preferred Stock of the Corporation five Business Days
prior to such Dividend Payment Date (the "Series A Dividend Record
Date").
Dividends on the Series A Preferred Stock shall accrue and be
paid at a rate per annum equal to 15.0 percent of the Stated Value of
each share of Series A Preferred Stock outstanding on the Series A
Dividend Record Date with respect to a Series A Dividend Payment Date.
(b) Dividends on the Series A Preferred Stock shall be
cumulative and shall accrue from April 30, 1998 whether or not such
dividends have been declared. Unpaid dividends, whether or not
declared shall compound quarterly at a rate per annum equal to 15.0%
of the aggregate amount thereof' from the Series A Dividend Payment
Date on which such dividend was payable as herein provided until
payment of such dividend.
(c) For so long as any shares of Series A Preferred Stock
shall be outstanding, no dividend or distribution, whether in cash,
stock or other property, shall be paid, declared and set apart for
payment or made on any date on or in respect to any Junior Securities
and no payment on account of the redemption, purchase or other
acquisition or retirement for value by the Corporation shall be made on
any date of shares of Junior Securities unless, in each case, the full
amount of unpaid dividends accrued on all outstanding shares of Series
A Preferred Stock shall have been paid or
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<PAGE> 3
contemporaneously are declared and paid; provided, however, that the
foregoing provisions of this sentence shall not prohibit (i) a dividend
payable solely in shares of Common Stock Instruments or any other
Junior Securities, or (ii) the acquisition of any shares of any Common
Stock Instruments or any other Junior Securities upon conversion or
exchange thereof into or for any shares of any other class of Common
Stock Instruments or other Junior Securities.
In the event that the dividend to be paid to any holder of shares of
Series A Preferred Stock shall be a fractional interest in a share of Series A
Preferred Stock then a fractional share of Series A Preferred Stock shall be
issued to such holder of shares of Series A Preferred Stock.
(iv) Redemption.
(a) Redemption by Corporation. To the extent funds are legally
available therefor, the Company may, at any time on or after December
29, 2004 redeem for the Series A Redemption Price each share of Series
A Preferred Stock then outstanding. To the extent funds are legally
available therefor, the Company shall, at the request of a majority of
the holders of shares of Series A Preferred Stock then outstanding
given at any time on and after the Put Date, redeem for the Series A
Redemption Price each share of Series A Preferred Stock then
outstanding. The date on which shares are redeemed pursuant to this
Part iv(a) of Section 4B is referred to herein as the "Series A
Redemption Date." If on the Series A Redemption Date there shall be
insufficient funds of the Corporation legally available for such
redemption, such amount of the funds as is legally available shall be
used for the redemption requirement. Such redemption requirement shall
be cumulative so that if such requirement shall not be fully discharged
for any reason, funds legally available therefor shall immediately be
applied thereto upon receipt by the Corporation until such requirement
is discharged. The redemption price (the "Series A Redemption Price")
for each outstanding share of Series A Preferred Stock to be redeemed
pursuant to this Part (iv)(a) of Section 4B shall be the sum (payable
in cash) of (x) the Series A Stated Value plus (y) an amount equal to
all accrued and unpaid dividends thereon to the Series A Redemption
Date.
(b) Payment of Series A Redemption Price. On the Series A
Redemption Date, the Corporation shall pay to the holder of each share
of Series A Preferred Stock being redeemed, upon surrender by such
holder at the Corporation's principal executive office of the
certificate representing such share, duly endorsed in blank or
accompanied by an appropriate form of assignment, the Series A
Redemption Price.
(c) Redeemed or Otherwise Acquired Shares Not to be Reissued.
All shares of Series A Preferred Stock redeemed pursuant to this Part
(iv) of Section 4B or otherwise acquired by the Corporation shall be
retired and shall not thereafter be reissued.
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<PAGE> 4
(d) Determination of Number of Each Holder's Shares to be
Redeemed. If, for any reason, less than all of the outstanding shares
of Series A Preferred Stock are to be redeemed pursuant to Part (iv)(a)
of this Section 4B, the Corporation shall determine the shares held by
each holder of Series A Preferred Stock to be redeemed as hereinafter
provided. The number of shares to be redeemed from each holder thereof
shall be the number of shares determined by multiplying the total
number of shares to be redeemed times a fraction, the numerator of
which shall be the total number of shares of Series A Preferred Stock
then held by such holder and the denominator of which shall be the
total number of shares of Series A Preferred Stock then outstanding.
(e) Notice of Redemption. Notice of any redemption of Series A
Preferred Stock pursuant to Part (iv)(a) of this Section 4B, specifying
the time and place of redemption and the Series A Redemption Price,
shall be mailed by certified or registered mail, return receipt
requested, to each holder of record of shares to be redeemed, at the
address for such holder shown on the Corporation's records, not less
than 15 days prior to the date on which such redemption is to be made;
provided, that neither failure to give such notice nor any defect
therein shall affect the validity of the proceeding for the redemption
of any shares of Series A Preferred Stock to be redeemed. Such notice
shall also specify the number of shares of each holder thereof and the
certificate numbers thereof which are to be redeemed. In case less than
all the shares represented by any certificate are redeemed, a new
certificate representing the unredeemed shares shall be issued to the
holder thereof without cost to such holder.
(f) Dividends After Redemption Date. Unless the Series A
Redemption Price in respect of a share of Series A Preferred Stock is
not made available in full to the holder thereof, from and after the
Series A Redemption Date, such share of Series A Preferred Stock shall
not be entitled to any dividends accruing after such date, all rights
of the holder of such share, as a stockholder of the Corporation by
reason of the ownership of such share, shall cease, except the right to
receive the Series A Redemption Price of such share upon the
presentation and surrender of the certificate representing such share,
and such share shall not after such date be deemed to be outstanding
for any purpose.
(v) Liquidation Rights.
(a) Upon the dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, the holders of
outstanding shares of Series A Preferred Stock shall be entitled to
receive for each such share, out of the assets of the Corporation
available for distribution to stockholders, before any payment or
distribution to stockholders and before any payment or distribution
shall be made to the holders of Common Stock or any other Junior
Securities upon liquidation, an amount in cash equal to the sum of (x)
the Series A Stated Value, plus (y) all accrued and unpaid dividends in
respect of such share to the date of final distribution (the "Series A
Liquidation Value").
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<PAGE> 5
(b) After the payment to the holders of the Series A Preferred
Stock of the full preferential amounts provided for in this Part (v) of
Section 4B, the holders of the Series A Preferred Stock as such shall
have no right or claim to any of the remaining assets of the
Corporation.
(c) If, upon any such liquidation, dissolution or other
winding up of the affairs of the Corporation, the assets of the
Corporation are insufficient to permit the payment in full of the
Series A Liquidation Preference for each share of Series A Preferred
Stock then outstanding and the full liquidating payment on all Parity
Securities, then the assets of the Corporation remaining shall be
ratably distributed among the holders of Series A Preferred Stock and
of any Parity Securities in proportion to the full amounts to which
they would otherwise be respectively entitled if all amounts thereon
were paid in full.
(d) Neither the voluntary sale, conveyance, exchange or
transfer (for cash, shares of stock, securities or other consideration)
of all or substantially all the property or assets of the Corporation
nor the consolidation, merger or other business combination of the
Corporation with or into one or more corporations shall be deemed to be
a liquidation, dissolution or winding-up voluntary or involuntary, of
the Corporation.
(vi) Conversion.
(a) Immediately upon Stockholder Approval, each share of
Series A Preferred Stock shall automatically convert into one share of
Class B-1 Common Stock (the "Series A Conversion Ratio") and such
conversion shall be effective without any further action on the part of
the Corporation, such holder of Series A Preferred Stock or any other
person or entity; provided, however, that in the event that Stockholder
Approval occurs after April 30, 1998, in addition to the shares of
Class B-1 Common Stock to be received by the holders of the Series A
Preferred Stock, each holder of Series A Preferred Stock shall receive
a cash payment of all accrued and unpaid dividends on the shares of
Series A Preferred Stock then held by it.
(b) Each conversion of shares of Series A Preferred Stock into
shares of Class B-1 Common Stock will be effected by the surrender of
the certificate or certificates representing the shares to be converted
at the principal office of the Corporation (or such other office or
agency of the Corporation as the Corporation may designate in writing
to the holders of the Series A Preferred Stock) at any time during
normal business hours. Each conversion will be deemed to have been
effected as of the close of business on the date on which such
certificate or certificates were surrendered. At such time, the rights
of the holder of the converted Series A Preferred Stock (in its
capacity as such) will cease and the person or persons or entity or
entities in whose name or names the certificate or certificates for
shares of Class B-1 Common Stock are to be issued upon such conversion
will be deemed to have become the holder or holders of record of the
shares of Class B-1 Common Stock represented thereby.
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<PAGE> 6
(c) Following each surrender of certificates pursuant to
paragraph (b) above, the Corporation will issue and deliver, in
accordance with the surrendering holder's instructions, (x) the
certificate or certificates for the Class B-1 Common Stock issuable
upon such conversion, and (y) any cash payment required to be made
pursuant to Part (vi)(a) of Section 4B.
(d) The issuance of certificates representing shares of Class
B-1 Common Stock upon conversion of any shares of Series A Preferred
Stock will be made without charge to the holders of such converted or
newly issued shares for any issuance tax in respect thereof or other
cost incurred by the Corporation in connection with such conversion and
the related issuance of shares of Class B-l Common Stock.
(e) The Corporation will at all times reserve and keep
available out of its authorized but unissued shares of Class B-1 Common
Stock the number of such shares sufficient for issuance upon
conversions of the Series A Preferred Stock hereunder.
(f) The Corporation will not close its books against the
transfer of Class B-1 Common Stock in any manner which would interfere
with the timely conversion of Series A Preferred Stock.
(g) If the Corporation at any time or from time to time after
the Issue Date effects a subdivision of the outstanding Class B-1
Common Stock or combines the outstanding shares of the Class B-1 Common
Stock, then, in each such case, the Series A Conversion Ratio in effect
immediately prior to such event shall be adjusted so that each holder
of shares of Series A Preferred Stock shall have the right to convert
its shares of Series A Preferred Stock into the number of shares of the
Class B- I Common Stock which it would have owned after the event had
such shares of Series A Preferred Stock been converted immediately
before the happening of such event. Any adjustment under this Part
(vi)(g) of Section 4B shall become effective as of the date and time
the subdivision or combination becomes effective.
(h) In connection with any merger, consolidation,
recapitalization, reorganization or similar transactions in which
holders of Common Stock generally receive, or are given the opportunity
to receive, consideration for their shares, then, in all such
circumstances, unless otherwise approved by a majority of the holders
of the then outstanding shares of Series A Preferred Stock voting as a
separate class, all holders of Series A Preferred Stock shall be given
the opportunity to receive (x) the same consideration per share for
their shares (calculated as if such shares of Series A Preferred Stock
had been converted into shares of Class B-l Common Stock at the Series
A Conversion Rate then in effect and as if such shares of Class B-1
Common Stock had been converted on a one-for-one basis into shares of
Common Stock) as is received by the holders of Common Stock, including,
but not limited to, form, amount and timing of
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<PAGE> 7
payment, plus (y) if such event occurs after April 30, 1998, all
accrued and unpaid dividends with respect to such shares of Series A
Preferred Stock.
(vii) Voting Rights. Except as expressly provided herein or as required
under the Delaware General Corporation Law, on all matters to be voted on by the
Corporation's stockholders, holders of shares of Series A Preferred Stock will
be entitled to no voting rights.
As used in Part 4B, the following capitalized terms shall have the
following meanings:
"Affiliate" or "Associate" means an affiliate or associate of
a person or entity, as such terms are defined in Section 203
of the Delaware General Corporation Law.
"Equity Equivalents" means (a) the Class B-l Common Stock and
(b) any other securities which, by their terms, are or may be
exercisable, convertible or exchangeable for or into Common
Stock at the election of the holder thereof.
"Fully-Diluted Basis" means, with respect to the calculation
of the number of shares of Common Stock, (i) all shares of
Common Stock outstanding at the time of determination and (ii)
all shares of Common Stock issuable upon the exercise,
conversion or exchange of any Equity Equivalents outstanding
at the time of determination.
"Issue Date" means, as to any share of Series A Preferred
Stock, the date of original issuance thereof by the
Corporation.
"Put Date" means the earlier of (a) December 29, 2004, (b) the
first date as of which any person or entity or group (as such
term is defined in Rule 13d-3 under the Securities Exchange
Act of 1934, as amended) other than LIH Holdings, LLC, LIH
Holdings II, LLC, or any of their respective Affiliates or
Associates owns, beneficially and of record, securities
representing at least 50% of the Common Stock, excluding any
securities acquired by such person, entity, or group from LIH
Holdings, LLC, LIH Holdings II, LLC, or any of their
respective Affiliates or Associates, and (c) the first date as
of which (and immediately prior to) the occurrence of any of
the events described in Part (vi)(h) of Section 4B.
"Stockholder Approval" means the approval of at least a
majority of the holders of the then outstanding shares of
Common Stock present at a meeting called to approve the terms
of the Class B-1 Common Stock and the conversion of the Series
A Preferred Stock into shares of Class B-1 Common Stock as
provided herein.
RESOLVED, that the Board of Directors hereby authorizes and directs the
officers of the Corporation, in the name of and on behalf of the Corporation,
and to the extent required under its corporate seal, to execute and deliver any
and all other instruments, certificates and other
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<PAGE> 8
documents, and to do any and all other acts and things, including the
expenditure of corporate funds, that said officers shall deem necessary or
appropriate in order to fully carry out the intent and accomplish the purposes
of the resolutions adopted hereby.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
hereunto affixed and this Certificate to be signed by William J. McMahon, its
Chief Executive Officer, and attested by Kathy R. Smith, its Secretary, this
22nd day of December, 1997.
LUND INTERNATIONAL HOLDINGS, INC.
By: /s/ William J. McMahon
--------------------------------------
Name: William J. McMahon
Title: Chief Executive Officer
Attest:
/s/ Kathy R. Smith
- -------------------------------
Name: Kathy R. Smith
Title: Secretary
8
<PAGE> 1
EXHIBIT K
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF CLASS B-1 COMMON STOCK
LUND INTERNATIONAL HOLDINGS, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
The undersigned, William J. McMahon , hereby certifies that:
A. He is the duly elected and acting Chief Executive Officer of LUND
INTERNATIONAL HOLDINGS, INC., Inc., a Delaware corporation (the "Corporation").
B. Pursuant to authority given by the Corporation's Certificate of
Incorporation, as amended through the date hereof (the "Certificate of
Incorporation"), the Board of Directors of the Corporation duly adopted the
following resolutions on November 25, 1997, creating a new series of 1,493,398
shares of Class B Common Stock designated as "Class B- I Common Stock".
C. The resolutions contained herein have not been modified, altered or
amended and are presently in full force and effect.
RESOLVED, that pursuant to the authority expressly vested in the Board
of Directors of the Corporation by Article Fourth of the Certificate of
Incorporation, the Board of Directors hereby fixes and determines the powers,
preferences, rights and limitations of a series of the Class B Common Stock,
which shall consist of 1,493,398 shares and shall be designated as Class B-1
Common Stock (the "Class B-l Common Stock"), as follows:
4C. Class B-1 Common Stock.
(i) Designation. There shall be a series of Class B Common
Stock designated as the Class B-1 Common Stock (the "Class B-1 Common
Stock"). The number of shares initially constituting the Class B-1
Common Stock shall be 1,493,398.
(ii) Voting Rights.
(a) Except as expressly provided herein or as
required under the Delaware General Corporation Law, on all
matters to be voted on by the Corporation's stockholders,
holders of shares of Class B-l Common Stock will be entitled
to no voting rights.
(b) Except as expressly provided herein or as
expressly required under the Delaware General Corporation Law,
on any matter on which holders of Class B-1 Common Stock shall
be entitled to vote, they shall be entitled to one vote per
<PAGE> 2
share and shall vote together as a single class with the
holders of the Common Stock.
(iii) Dividends. In the event that the Corporation shall at
any time or from time to time declare, order, pay or make a dividend or
other distribution (whether in cash, securities or other property) on
its Common. Stock, the holders of shares of the Class B- 1 Common Stock
shall be entitled to receive from the Corporation, with respect to each
share of Class B-1 Common Stock held, a dividend or distribution that
is the same dividend or distribution that would be received by a holder
of the number of shares of Common Stock into which such share of Class
B-1 Common Stock is convertible pursuant to the provisions of Section
4C(vi) hereof on the record date for such dividend or distribution,
provided that (a) if a dividend or distribution is declared in shares
of Common Stock, such dividend will be declared and paid on the Class
B-1 Common Stock in shares of Class B-l Common Stock at the same rate
per share as the Common Stock, and (b) if a dividend or distribution
consists of voting securities of the Corporation other than the Common
Stock, the Corporation will make available to each holder of Class B-l
Common Stock, a dividend or distribution consisting of non-voting
securities of the Corporation which are otherwise identical to such
voting securities and which are convertible into or exchangeable for
such voting securities on the same terms as the Class B-1 Common Stock
is convertible into the Common Stock. Any such dividend or distribution
shall be declared, ordered, paid or made on the Class B-1 Common Stock
at the same time such dividend or distribution is declared, ordered,
paid or made on the Common Stock.
(iv) Stock Splits: Combinations. If the Corporation, in any
manner, subdivides or combines the outstanding shares of Common Stock,
the outstanding shares of Class B-1 Common Stock will be
proportionately subdivided or combined.
(v) Liquidation, etc. The holders of the Class B-1 Common
Stock will be entitled to share ratably with the holders of Common
Stock, based upon the aggregate number of outstanding shares of Common
Stock and Class B-1 Common Stock and upon the number of shares of Class
B-1 Common Stock then held by each holder of Class B-l Common Stock, in
all distributions to the holders of the Common Stock in any
liquidation, dissolution or winding up of the Corporation.
(vi) Conversion of Class B-1 Common Stock. On the Conversion
Date, each share of Class B-l Common Stock shall automatically convert
into one share of Common Stock, and such conversion shall be effective
without any further action on the part of the Corporation, such holder
of Class B-1 Common Stock or any other person or entity. In addition,
each holder of Class B-1 Common Stock is entitled to convert all or any
of such holder's shares into an equivalent number of shares of Common
Stock (x) with the affirmative vote of a majority of the Independent
Directors, (y) upon any transfer of such holder's shares of Class B-l
Common Stock:, other than any such transfer (A) by LIH Holdings, LLC,
LIH Holdings II, LLC or any of their respective Affiliates or
Associates to any person or entity if, immediately after giving effect
to such transfer and conversion,
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<PAGE> 3
the transferee and its Affiliates and Associates would hold more than
49% of the outstanding Common Stock, or (B) to LIH Holdings, LLC, LIH
Holdings II, LLC or any of their respective Affiliates or Associates,
or (z) at any time on or after the first date as of which LIH Holdings,
LLC, LIH Holdings II, LLC and their respective Affiliates and
Associates own (beneficially and of record), in the aggregate, more
than 50% of the outstanding shares of Common Stock in a transaction
that is permitted by, or is effected in accordance with the terms of,
the Amended and Restated Governance Agreement.
As used in this Section 4C(vi), the following capitalized
terms shall have the following meanings:
"Affiliate" or "Associate" means an affiliate or associate of
a person or entity, as such terms are defined in Section 203
of the Delaware General Corporation Law.
"Amended and Restated Governance Agreement" means the Amended
and Restated Governance Agreement, dated November 25, 1997,
among LIH Holdings, LLC, LIH Holdings II, LLC, Harvest
Partners III, L.P. and the Corporation, as amended,
supplemented or otherwise modified from time to time in
accordance with its terms.
"Conversion Date" means the earlier of (a) September 9, 2000
and (b) the first date as of which any person or entity or
group (as such term is defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) other than LIH
Holdings, LLC, LIH Holdings II, LLC, or any of their
respective Affiliates or Associates owns, beneficially and of
record, securities representing at least 50% of the Common
Stock on a Fully-Diluted Basis, excluding any securities
acquired by such person, entity, or group from LIH Holdings,
LLC, LIH Holdings II, LLC, or any of their respective
Affiliates or Associates.
"Equity Equivalents" means (a) the Class B-l Common Stock and
(b) any other securities which, by their terms, are or may be
exercisable, convertible or exchangeable for or into Common
Stock at the election of the holder thereof.
"Fully-Diluted Basis" means, with respect to the calculation
of the number of shares of Common Stock, (i) all shares of
Common Stock outstanding at the time of determination and (ii)
all shares of Common Stock issuable upon the exercise,
conversion or exchange of any Equity Equivalents outstanding
at the time of determination
"Independent Director" means any person who is a director of
the Corporation who is independent of and otherwise
unaffiliated with LIH Holdings, LLC, LIH Holdings II, LLC, the
Corporation or any of their respective Affiliates or
Associates (other than as a director, or holder of beneficial
ownership of less than 5% of the voting securities of the
Corporation), and shall not be an officer or an employee,
agent, consultant or advisor (financial, legal or other) of
LIH
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<PAGE> 4
Holdings, LLC, LIH Holdings II, LLC, or their respective
Affiliates or Associates, or any person who shall have served
in any such capacity within the three-year period immediately
preceding the date such determination is made.
(vii) Conversion Procedure.
(a) Each conversion of shares of Class B-1 Common
Stock into shares of Common Stock will be effected by the
surrender of the certificate or certificates representing the
shares to be converted at the principal office of the
Corporation (or such other office or agency of the Corporation
as the Corporation may designate in writing to the holders of
the Common Stock and the Class B-l Common Stock) at any time
during normal business hours. Each conversion will be deemed
to have been effected as of the close of business on the date
on which such certificate or certificates were surrendered. At
such time, the rights of the holder of the converted Class B-1
Common Stock (in its capacity as such) will cease and the
person or persons or entity or entities in whose name or names
the certificate or certificates for shares of Common Stock are
to be issued upon such conversion will be deemed to have
become the holder or holders of record of the shares of Common
Stock represented thereby.
(b) Following each surrender of certificates pursuant
to paragraph (a) above, the Corporation will issue and
deliver, in accordance with the surrendering holder's
instructions, (x) the certificate or certificates for the
Common Stock issuable upon such conversion and (y) a
certificate representing any shares of Class B-l Common Stock
which were represented by the certificate or certificates
delivered to the Corporation in connection with such
conversion but which were not converted.
(c) The issuance of certificates representing shares
of Common Stock upon conversion of any shares of Class B-1
Common Stock will be made without charge to the holders of
such converted or newly issued shares for any issuance tax in
respect thereof or other cost incurred by the Corporation in
connection with such conversion and the related issuance of
shares of Common Stock.
(d) The Corporation will at all times reserve and
keep available out of its authorized but unissued shares of
Common Stock the number of such shares sufficient for issuance
upon conversions of the Class B-l Common Stock hereunder.
(e) The Corporation will not close its books against
the transfer of Common Stock in any manner which would
interfere with the timely conversion of Class B-1 Common
Stock.
(viii) Merger; Etc. In connection with any merger,
consolidation, recapitalization reorganization or similar transaction
in which holders of Common Stock
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<PAGE> 5
generally receive, or are given the opportunity to receive,
consideration for their shares, then, in all such circumstances, unless
otherwise approved by the holders of a majority of the then outstanding
shares of Class B-1 Common Stock voting as a separate class, all
holders of Class B-1 Common Stock shall he given the opportunity to
receive the same consideration per share for their shares as is
received by holders of Common Stock, including, but not limited to,
form, amount and timing of payment.
RESOLVED, that the Board of Directors hereby authorizes and directs the
officers of the Corporation, in the name and on behalf of the Corporation, and
to the extent required under its corporate seal, to execute and deliver any and
all other instruments, certificates and other documents, and to do any and all
other acts and things, including the expenditure of corporate funds, that said
officers shall deem necessary or appropriate in order to fully carry out the
intent and accomplish the purposes of the resolutions adopted hereby.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
hereunto affixed and this Certificate to be signed by William J. McMahon, its
Chief Executive Officer, and attested by Kathy R. Smith, its Secretary, this
22nd day of December, 1997.
LUND INTERNATIONAL HOLDINGS, INC.
By:/s/ William J. McMahon
---------------------------------------
Name: William J. McMahon
Title: Chief Executive Officer
Attest:
/s/ Kathy R. Smith
- -------------------------------
Name: Kathy R. Smith
Title: Secretary
5
