INVESTMENT AGREEMENT
Investment Agreement dated as of April 14, 1999, (as amended,
supplemented or otherwise modified from time to time, this "Agreement"), among
Danielson Holding Corporation, a Delaware corporation (the "Company"), Samstock,
L.L.C., a Delaware limited liability company ("Samstock"), and Martin J.
Whitman, individually ("Stockholder").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Stock Purchase and Sale Agreement,
dated as of the date hereof, between the Company and Samstock (the "Purchase
Agreement"), the Company has agreed to issue and sell to Samstock, and Samstock
has agreed to purchase from the Company, an aggregate of (i) 2,000,000 newly
issued shares (collectively, the "Shares") of the Company's Common Stock, par
value $.10 per share ("Common Stock"), and (ii) a warrant to purchase an
additional 2,000,000 shares of Common Stock. All capitalized terms used and not
defined herein shall have the meanings given to them in the Purchase Agreement.
WHEREAS, the Company, Samstock and the Stockholder are entering into
this Agreement concurrently with the execution of the Purchase Agreement, to
establish certain arrangements with respect to the relationships between them.
NOW, THEREFORE, intending to be legally bound, the parties
hereto agree as follows:
ARTICLE I
VOTING OF COMPANY SECURITIES AND RELATED MATTERS
1.1 Samstock and Stockholder Board Designees.
(a) Company and Stockholder hereby agree to take all action
within their power to cause, on or prior to the Closing Date, (i) two members of
the Company's Board of Directors acceptable to Samstock to resign, (ii) two of
the resigning members of the Company's Board of Directors to be replaced by
persons designated by Samstock who are reasonably acceptable to the Company (it
being agreed by the Company that Sam Zell, Rod F. Dammeyer and Bill Pate are
acceptable to the Company), and (iii) provided Sam Zell elects to serve as one
of Samstock's director designees, Sam Zell to be elected Chairman of the Board
of the Company (which Samstock acknowledges is a non-executive position). In
addition, concurrently therewith, Company and Stockholder hereby agree to take
all action within their power to cause to be formed an acquisition committee to
the Company's Board of Directors (the "Acquisition Committee") consisting of
four members to be comprised of Stockholder (who will serve as Chairman of the
Acquisition Committee), David Barse and the two Samstock director designees.
(b) So long as Samstock owns directly or indirectly at least
1,000,000 shares of Company Voting Securities (as adjusted in the event of stock
dividends, subdivisions or similar events) (i) Samstock shall have the right to
designate two directors to the Company's Board of Directors who are reasonably
acceptable to the Company (it being agreed that Sam
Zell, Rod F. Dammeyer and Bill Pate are reasonably acceptable to the
Company); (ii) the Company and Stockholder shall take all necessary or
appropriate action to assist in the nomination and election as directors the
individuals so designated by Samstock; (iii) Stockholder shall vote all
Company Voting Securities now or hereafter owned of record by Stockholder
and shall cause all Company Voting Securities owned of record or beneficially
by him (other than any such shares which are owned beneficially or of record
by Whitman Hefferan & Rhein Workout Fund, L.P. or the Third Avenue Value
Fund, together, the "Funds") to be voted at any election of directors of
the Company in favor of the appointment as directors the individuals so
designated by Samstock; (iv) in the event that Sam Zell is so designated by
Samstock, the Company and Stockholder shall take all action necessary to
cause Sam Zell to be nominated to be appointed as Chairman of the Board of
Directors; and (v) the Company and Stockholder shall take all action
necessary to maintain the Acquisition Committee comprised of four individuals
including the two Samstock director designees. As used in this Agreement, the
term "Company Voting Securities" shall mean Common Stock and any other Equity
Securities entitled to vote generally for the election of directors. The Company
shall maintain in effect at all times directors' and officers' liability
insurance covering those persons who are designated to the Board of Directors
hereunder by Samstock on terms reasonably acceptable to Samstock, it being
agreed that the insurance in effect on the date of this Agreement is acceptable.
(c) So long as Stockholder and the Funds, (i) own directly or
indirectly collectively at least 500,000 shares of Voting Securities (as
adjusted in the event of stock dividends, subdivisions or similar events) and
(ii) Stockholder is affiliated with both Funds in the same or substantially
similar capacity in which Stockholder is affiliated as of the date hereof,
Samstock shall vote all Company Voting Securities now or hereafter owned
beneficially or of record by Samstock and shall cause all Company Voting
Securities owned beneficially or of record by it, to be voted at any election of
directors of the Company in favor of the appointment as directors each of,
Stockholder and an additional individual designated by Stockholder and
reasonably acceptable to Samstock.
1.2 Approval of Proxy Proposals. Stockholder agrees to vote all Company
Voting Securities now or hereafter owned of record or beneficially by him and
shall use his best efforts to cause all Company Voting Securities now or
hereafter owned beneficially by him, to be voted in favor of the Proxy
Proposals.
ARTICLE II
REGISTRATION RIGHTS
2.1 Definitions. For purposes of this Article II:
(a) The term "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act of 1933, as amended (the "Act").
(b) The term "Registrable Securities" means shares of Common Stock
held, from time to time, by Samstock.
(c) The term "Rule 415 Offering" means an offering on a delayed or
continuous basis pursuant to Rule 415 (or any successor rule to similar effect)
promulgated under the Act.
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(d) The term "Shelf Registration Statement" means a registration
statement intended to effect a shelf registration in connection with a Rule 415
Offering.
2.2 Shelf Registrations and Piggy-Back Registrations.
(a) Upon the earlier of (i) the Company's Board of Directors
approving an acquisition proposal recommended by the Acquisition Committee or
(ii) the first anniversary of this Agreement, and provided Article Fifth of the
Company's Certificate of Incorporation does not prohibit the sale, pledging or
other disposition or transfer of the Registrable Securities, if the Company
shall at any time receive a written request from Samstock (or its designee) on
behalf of Samstock who are the holders of Registrable Securities that the
Company file a Shelf Registration Statement with respect to any Registrable
Securities, then, within sixty (60) days after the receipt of such request, the
Company shall prepare and file with the SEC a Shelf Registration Statement
(which shall include pledgees of any selling stockholder in the "plan of
distribution") with respect to such number of Registrable Securities which the
Holders request to be registered and use its reasonable efforts to cause such
Shelf Registration Statement to become effective and keep such Shelf
Registration Statement effective until such time as all such Registrable
Securities covered thereby have been sold or disposed of thereunder or sold,
transferred or otherwise disposed of (other than pursuant to a pledge of such
Registrable Securities) to a person that is not a Holder. Notwithstanding the
foregoing, if the Company shall furnish to Samstock a certificate signed by the
Chief Executive, Chief Operating, or Chief Financial Officer of the Company
stating that, in the good faith judgment of a majority of the Disinterested
Directors, it would be materially detrimental to the Company for such Shelf
Registration Statement to be filed, the Company shall have the right to defer
such filing for a period of not more than 120 days after receipt of the
Samstock's request; provided, however, that the Company may not utilize this
right more than twice in any 12-month period. Notwithstanding the foregoing,
Samstock and the Company agree that Samstock's right to request a Shelf
Registration and the Company's obligation to effect a Shelf Registration shall
terminate as of the earlier of (i) such time as Samstock no longer holds
Registrable Securities or (ii) such time as the Company has filed two (2) Shelf
Registration Statements at the request of Samstock (or its designee) and such
previously filed Shelf Registration Statements have been effective for the
period required under this Section 2.2(a).
(b) Piggyback Registration. If (but without any obligation to
do so) the Company proposes to register any of its Common Stock under the Act in
connection with the public offering of such Common Stock by the Company solely
for cash (other than a registration relating solely to the sale of securities to
participants in a dividend reinvestment plan, stock plan or employee benefit
plan; a registration relating solely to the issuance of securities to the
security holders of an acquired company in connection with an acquisition; or a
registration on any form which does not permit inclusion of selling
stockholders), or the Company proposes to register any of its securities on
behalf of a holder exercising demand registration rights, the Company shall, at
such time, promptly give Samstock written notice of such registration. Upon the
written request of Samstock given within 15 days after mailing of such notice by
the Company, the Company shall cause to be registered under the Act all of the
Registrable Securities that each Samstock has requested to be registered.
Notwithstanding anything to the contrary in this Section 2.2(b), in connection
with any offering involving an underwriting of shares being issued by the
Company, the Company shall not be required under this Section 2.2(b) to include
any of the Holders' Registrable Securities in such underwriting or the
registration statement relating thereto unless they accept the terms of the
underwriting as
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agreed upon between the Company and the underwriters selected by the Company.
If the total amount of securities, including Registrable Securities,
requested by Holders and other stockholders to be included in such offering
exceeds the amount of securities offered other than by the Company that the
underwriters reasonably believe can be offered without jeopardizing the
success of the offering, then the Company shall be required to include in the
offering only that number of such securities, including Registrable Securities,
which the underwriters believe will not jeopardize the success of the offering.
To achieve any necessary reduction in the securities to be sold, the securities
to be excluded from the offering shall first be selected (in each case, pro rata
among such class of holders according to the total amount of securities proposed
to be included in the registration statement or in such other proportions as
shall mutually be agreed to by such class of holders) in the following order
(subject to any contrary provisions in registration rights agreements executed
by the Company prior to the date hereof): (i) first, securities being included
on behalf of holders other than either Samstock or other holders of Registrable
Securities shall be excluded; (ii) next, if additional securities must be
excluded, Registrable Securities included pursuant to Section 2.2(b) shall be
excluded; (iii) finally, if additional securities must be excluded, securities
offered by the Company shall be excluded.
2.3 Additional Obligations of the Company. Whenever the Company has
filed a registration statement under this Article II, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to comply with the provisions of the Act with respect to the
disposition of all securities covered thereby.
(b) Furnish to the holders of Registrable Securities such numbers of
copies of a prospectus, including a preliminary prospectus, in conformity with
the requirements of the Act, and such other documents as they may reasonably
request in order to facilitate the disposition of Registrable Securities covered
by such registration statement owned by them.
(c) Use its best efforts to register and qualify the securities covered
by such registration statement under such other securities or Blue Sky laws of
such states or other jurisdictions as shall be reasonably requested by the
holders of Registrable Securities, provided that the Company shall not be
required to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions where it is not so subject.
(d) Notify each holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, and then
use its best efforts to promptly correct such statement or omission.
Notwithstanding the foregoing and anything to the contrary set forth in this
Section 2.3, each holder of Registrable Securities acknowledges that the Company
shall have the right to suspend the use of the prospectus forming a part of a
registration statement if such offering would interfere with a pending corporate
transaction or for other reasons until such time as an amendment to the
registration
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statement has been filed by the Company and declared effective by the SEC, or
until such time as the Company has filed an appropriate report with the SEC
pursuant to the Exchange Act. Each holder of Registrable Securities hereby
covenants that it will (a) keep any such notice strictly confidential, and (b)
not sell any shares of Common Stock pursuant to such prospectus during the
period commencing at the time at which the Company gives the holder of
Registrable Securities notice of the suspension of the use of such prospectus
and ending at the time the Company gives the holder of Registrable Securities
notice that it may thereafter effect sales pursuant to such prospectus. The
Company shall only be able to suspend the use of such prospectus for periods
aggregating no more than 90 days in respect of any registration.
(e) Use its best efforts to cause all Registerable Securities to be
listed on all securities exchanges on which similar securities issued by the
Company are then listed.
2.4 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Article II with
respect to the Registrable Securities of any selling holder of Registrable
Securities that such holder of Registrable Securities shall furnish to the
Company such information regarding itself, the Registrable Securities held by
it, and the intended method of disposition of such securities as shall be
required to effect the registration of such holder's Registrable Securities and
as may be required from time to time to keep such registration current.
2.5 Expenses of Registration. All expenses incurred by or on behalf of
the Company in connection with registrations, filings or qualifications pursuant
to Section 2.2, including, without limitation, all registration, filing and
qualification fees, printers' and accounting fees, and fees and disbursements of
counsel for the Company, shall be borne by the Company. In no event shall the
Company be obligated to bear any underwriting discounts or commissions or
brokerage fees or commissions relating to Registrable Securities or the fees and
expenses of counsel to the selling holders of Registrable Securities.
2.6 Indemnification. In the event any Registrable Securities are
included in a registration statement under this Article II:
(a) To the extent permitted by law, the Company will indemnify and hold
harmless each holder and the affiliates of such holder, and their respective
directors, officers, general and limited partners, agents and representatives
(and the directors, officers, affiliates and controlling persons thereof), and
each other person, if any, who controls such holder within the meaning of the
Act, against any losses, claims, damages, or liabilities (joint or several) to
which they may become subject under the Act, the Exchange Act or other federal
or state law, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"): (i) any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus (but only if such
statement is not corrected in the final prospectus) contained therein or any
amendments or supplements thereto, (ii) the omission or alleged omission to
state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading (but only if such omission is not
corrected in the final prospectus), or (iii) any violation or alleged violation
by the Company in connection with the registration of Registrable Securities
under the Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under the Act, the Exchange Act or any state securities
law; and the Company will pay to each such Holder, affiliate or controlling
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person, as incurred, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this Section 2.5(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably withheld),
nor shall the Company be liable in any such case for any such loss, claim,
damage, liability or action to the extent that it arises out of or is based upon
a Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
any such holder or controlling person. Each indemnified party shall furnish such
information regarding itself or the claim in question as an indemnifying party
may reasonably request in writing and as shall be reasonably required in
connection with defense of such claim and litigation resulting therefrom.
(b) To the extent permitted by law, each selling holder of Registrable
Securities will indemnify and hold harmless the Company, each of its directors,
each of its officers who has signed the registration statement, each person, if
any, who controls the Company within the meaning of the Act, any underwriter,
any other holder selling securities in such registration statement and any
controlling person of any such underwriter or other holder, against any losses,
claims, damages or liabilities (joint or several) to which any of the foregoing
persons may become subject, under the Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by such holder expressly
for use in connection with such registration; and each such holder will pay, as
incurred, any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this Section 2.5(b) in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section 2.5(b)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of such
holder, which consent shall not be unreasonably withheld; provided, that, in no
event shall any indemnity under this Section 2.5(b) exceed the gross proceeds
from the offering received by such holder.
(c) Promptly after receipt by an indemnified party under this Section
2.5 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 2.5, deliver to the
indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties. The failure to deliver written notice to the
indemnifying party within a reasonable time after the commencement of any such
action, if materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 2.5 to the extent of such prejudice, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 2.5.
The indemnified party shall have the right, but not the obligation, to
participate in the defense of any action referred to above through counsel of
its own choosing and shall have the right, but not the obligation, to assert any
and all separate defenses, cross claims or counterclaims which it may have, and
the fees and expenses of such counsel shall be at the expense of such
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indemnified party unless (i) the employment of such counsel has been
specifically authorized in advance by the indemnifying party, (ii) there is a
conflict of interest that prevents counsel for the indemnifying party from
adequately representing the interests of the indemnified party or there are
defenses available to the indemnified party that are different from, or
additional to, the defenses that are available to the indemnifying party, (iii)
the indemnifying party does not employ counsel that is reasonably satisfactory
to the indemnified party within a reasonable period of time, or (iv) the
indemnifying party fails to assume the defense or does not reasonably contest
such action in good faith, in which case, if the indemnified party notifies the
indemnifying party that it elects to employ separate counsel, the indemnifying
party shall not have the right to assume the defense of such action on behalf of
the indemnified party and the reasonable fees and expenses of such separate
counsel shall be borne by the indemnifying party; provided, however, that, the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm (in addition to one firm acting as local
counsel) for all indemnified parties.
(d) The obligations of the Company and the holders under this Section
2.5 shall survive the completion of any offering of Registrable Securities in a
registration statement under this Article II.
(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement (if
any) entered into in connection with any underwritten public offering of the
Registrable Securities are in conflict with the foregoing provisions, the
provisions in such underwriting agreement shall control.
2.6 Reports Under the Exchange Act. With a view to making available to
the holders of Registrable Securities the benefits of Rule 144 and any other
rule or regulation of the SEC that may at any time permit a holder to sell
securities of the Company to the public without registration or pursuant to a
registration on Form S-3, the Company agrees to:
(a) use its best efforts to make and keep public information available,
as those terms are understood and defined in Rule 144;
(b) use its best efforts to file with the SEC in a timely manner all
reports and other documents required under the Act and the Exchange Act; and
(c) furnish to any Holder forthwith upon request (i) a written
statement by the Company as to its compliance with the reporting requirements of
Rule 144, or as to whether it qualifies as a registrant whose securities may be
resold pursuant to Form S-3, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information (and the Company shall take such
action) as may be reasonably requested in availing any holder of Registrable
Securities of any rule or regulation of the SEC which permits the selling of any
such securities without registration or pursuant to such form.
2.7 No Assignment of Registration Rights. The rights to cause the
Company to register Registrable Securities pursuant to this Article II may only
be assigned by a holder of Registrable Securities to a transferee or assignee of
any Registrable Securities if immediately
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following such transfer the further disposition of such securities by the
transferee or assignee is restricted under the Act.
2.8 Waiver Procedures. The observance by the Company of any provision
of this Article II may be waived (either generally or in a particular instance
and either retroactively or prospectively) with the written consent of the
holders of a majority of the Registrable Securities, and any waiver effected in
accordance with this paragraph shall be binding upon each holder of Registrable
Securities.
2.9 "Market Stand-off" Agreement. Any holder of Registrable Securities,
if requested by an underwriter of any registered public offering of Company
securities being sold in a firm commitment underwriting, agrees not to sell or
otherwise transfer or dispose of any Common Stock (or other Company Voting
Securities) held by such holder other than shares of Registrable Securities
included in the registration during the seven days prior to, and during a period
of up to 180 days following, the effective date of the registration statement.
Such agreement shall be in writing in a form reasonably satisfactory to the
Company and such underwriter. The Company may impose stop-transfer instructions
with respect to the securities subject to the foregoing restriction until the
end of the required stand-off period.
ARTICLE III
MISCELLANEOUS
3.1. Termination of this Agreement. This Agreement shall terminate
immediately upon, and without further liability to any of the parties hereto,
the termination of the Purchase Agreement in accordance with Article VIII
thereof.
3.2 Remedies. Each of Stockholder, Samstock and the Company acknowledge
and agree that (i) the provisions of this Agreement are reasonable and necessary
to protect the proper and legitimate interests of the parties hereto, and (ii)
the parties would be irreparably damaged in the event any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that each party shall be
entitled to seek preliminary and permanent injunctive relief to prevent breaches
of the provisions of this Agreement by the other party (or its Affiliates)
without the necessity of proving actual damages or of posting any bond, and to
enforce specifically the terms and provisions hereof and thereof in any court of
the United States or any state thereof having jurisdiction, which rights shall
be cumulative and in addition to any other remedy to which the parties may be
entitled hereunder or at law or equity.
3.3 Notices. All notices, and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, sent by documented
overnight delivery service or, to the extent receipt is confirmed, facsimile, to
the appropriate address or facsimile number set forth below (or at such other
address or facsimile number for a party as shall be specified by like notice):
if to Samstock:
Samstock, L.L.C.
Two N. Riverside Plaza - Suite 600
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Chicago, IL 60606
Attention: Bill Pate
Fax: (312) 454-0610
with an additional copy to:
Rosenberg & Liebentritt, P.C.
Two N. Riverside Plaza - Suite 1600
Chicago, IL 60606
Attention: President
Fax: (312) 454-0335
if to Whitman:
c/o Danielson Holding Corporation
767 Third Avenue
New York, NY 10017-2023
Attention: David M. Barse
Fax: (212) 888-6704
with a copy to:
Danielson Holding Corporation
767 Third Avenue
New York, NY 10017-2023
Attention: Ian M. Kirschner, Esq.
Fax: (212) 735-0003
3.4 Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. The parties hereto agree that they will use
their best efforts at all times to support and defend this Agreement.
3.5 Amendments. This Agreement may be amended only by an
agreement in writing signed by each of the parties hereto;
3.6 Governing Law. This Agreement shall be governed and controlled as
to validity, enforcement, interpretation, construction, effect and in all other
respects by the internal laws of the State of Delaware applicable to contracts
made in that State.
3.7 Descriptive Headings. Descriptive headings are for convenience
only and shall not control or affect the meaning or construction of any
provision of this Agreement.
3.8 Counterparts; Facsimile Signatures. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
bears the signatures of each of the parties hereto. This Agreement may be
executed in any number of counterparts, each of which shall be an original as
against the party whose signature appears thereon, or on whose
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behalf such counterpart is executed, but all of which taken together shall
be one and the same agreement. A facsimile copy of a signature of a party to
this Agreement or any such counterpart shall be fully effective as if an
original signature.
3.9 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the successors and assigns of the
parties hereto.
3.10 Assignments. This Agreement may not be assigned without the prior
written consent of each party hereto, and any attempt to effect an assignment
hereof without such consent shall be void.
3.11 Jurisdiction and Service of Process. THE COMPANY,
PURCHASER AND STOCKHOLDER HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT LOCATED WITHIN THE STATE OF DELAWARE AND IRREVOCABLY AGREE THAT,
SUBJECT TO THE OTHER PROVISIONS OF THIS AGREEMENT, ALL ACTIONS OR PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT WHICH MAY BE LITIGATED SHALL BE
LITIGATED IN SUCH COURTS. THE COMPANY, PURCHASER AND STOCKHOLDER ACCEPTS FOR
SUCH PARTY AND IN CONNECTION WITH SUCH PARTY'S 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. THE COMPANY,
PURCHASER AND STOCKHOLDER AGREES TO ACCEPT SERVICE OF ALL PROCESS BY REGISTERED
OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, IN ANY SUCH PROCEEDINGS IN ANY SUCH
COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY EACH SUCH PARTY TO BE EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT. IF ANY AGENT APPOINTED BY THE COMPANY, OR
PURCHASER REFUSES TO ACCEPT SERVICE, SUCH PARTY HEREBY AGREES THAT SERVICE UPON
SUCH PARTY BY MAIL SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL
AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT OF THE COMPANY OR PURCHASER TO BRING PROCEEDINGS AGAINST THE
COMPANY OR PURCHASER IN THE COURTS OF ANY OTHER JURISDICTION.
3.12 Trial. THE COMPANY, PURCHASER AND STOCKHOLDER HEREBY WAIVES SUCH
PARTY'S RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THE PARTIES HERETO
RELATING TO THE SUBJECT MATTER HEREOF. THE COMPANY, PURCHASER AND STOCKHOLDER
ALSO WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR
THIS WAIVER, BE REQUIRED OF ANY PARTY TO THIS AGREEMENT WITH RESPECT TO ANY
ACTION COMMENCED BY ONE OF THEM AGAINST THE OTHER OF THEM. THE SCOPE OF THIS
WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE COMPANY, PURCHASER
AND STOCKHOLDER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER
INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN
ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER
IN THEIR RELATED FUTURE DEALINGS. THE COMPANY,
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PURCHASER AND STOCKHOLDER FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS
REVIEWED THIS WAIVER WITH SUCH PARTY'S LEGAL COUNSEL, AND THAT SUCH PARTY
KNOWINGLY AND VOLUNTARILY WAIVES SUCH PARTY'S JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
IN WITNESS WHEREOF, Stockholder, Samstock and the Company have executed
this Agreement as of the date first above written.
SAMSTOCK, L.L.C.
Donald J. Liebentritt
________________________________
By: Donald J. Liebentritt, Vice President
DANIELSON HOLDING CORPORATION
By: David Barse
__________________________
David Barse
President
Martin J. Whitman
__________________________
Martin J. Whitman
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