0000950142-14-000703.txt : 20140321 0000950142-14-000703.hdr.sgml : 20140321 20140321171052 ACCESSION NUMBER: 0000950142-14-000703 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20140321 DATE AS OF CHANGE: 20140321 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HARBINGER GROUP INC. CENTRAL INDEX KEY: 0000109177 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690] IRS NUMBER: 741339132 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-19362 FILM NUMBER: 14711008 BUSINESS ADDRESS: STREET 1: 450 PARK AVENUE STREET 2: 30TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 212-906-8548 MAIL ADDRESS: STREET 1: 450 PARK AVENUE STREET 2: 30TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10022 FORMER COMPANY: FORMER CONFORMED NAME: ZAPATA CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: ZAPATA NORNESS INC DATE OF NAME CHANGE: 19720314 FORMER COMPANY: FORMER CONFORMED NAME: ZAPATA OFF SHORE CO DATE OF NAME CHANGE: 19690115 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD. CENTRAL INDEX KEY: 0001233563 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: C/O INTERNATIONAL FUND SVS. (IRELAND) LT STREET 2: 78 SIR JOHN ROGERSON'S QUAY CITY: DUBLIN 2 STATE: L2 ZIP: 00000 BUSINESS PHONE: 2125216972 MAIL ADDRESS: STREET 1: C/O INTERNATIONAL FUND SVS. (IRELAND) LT STREET 2: 78 SIR JOHN ROGERSON'S QUAY CITY: DUBLIN 2 STATE: L2 ZIP: 00000 FORMER COMPANY: FORMER CONFORMED NAME: HARBERT DISTRESSED INVESTMENT MASTER FUND LTD DATE OF NAME CHANGE: 20030516 SC 13D/A 1 eh1400455_13da21-hrg.htm AMENDMENT NO. 21 eh1400455_13da21-hrg.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
SCHEDULE 13D
(Rule 13d-101)
 
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 21)
 
HARBINGER GROUP INC.
(Name of Issuer)
 
COMMON STOCK (PAR VALUE $0.01 PER SHARE)
(Title of Class of Securities)
 
41146A106
(CUSIP Number)
 
PHILIP FALCONE
450 PARK AVENUE, 30TH FLOOR
NEW YORK, NEW YORK 10022
(212) 339-5888
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)

 
March 18, 2014
(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 that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box  o
 
Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 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).
 
 


 
 
 

 

 
CUSIP No. 41146A106
SC 13D
Page 2 of 16


 
1
NAME OF REPORTING PERSON
 
Harbinger Capital Partners Master Fund I, Ltd.
 
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
 
 
(a)  o
(b)  x
3
SEC USE ONLY
 
 
 
4
SOURCE OF FUNDS
 
OO
 
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
 
 
x
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
Cayman Islands
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING PERSON
WITH
7
SOLE VOTING POWER
 
0
8
SHARED VOTING POWER
 
39,741,438
9
SOLE DISPOSITIVE POWER
 
0
10
SHARED DISPOSITIVE POWER
 
39,741,438
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
39,741,438
 
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
o
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
27.3% (*)
 
14
TYPE OF REPORTING PERSON
 
CO
 

(*) See Item 5 for discussion of calculation of percentage ownership.
 
 
 

 

 
CUSIP No. 41146A106
SC 13D
Page 3 of 16


 
1
NAME OF REPORTING PERSON
 
Harbinger Capital Partners LLC
 
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
 
 
(a)  o
(b)  x
3
SEC USE ONLY
 
 
 
4
SOURCE OF FUNDS
 
AF
 
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
 
 
x
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
Delaware
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING PERSON
WITH
7
SOLE VOTING POWER
 
0
8
SHARED VOTING POWER
 
39,741,438
9
SOLE DISPOSITIVE POWER
 
0
10
SHARED DISPOSITIVE POWER
 
39,741,438
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
39,741,438
 
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
o
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
27.3% (*)
 
14
TYPE OF REPORTING PERSON
 
CO
 
 
(*) See Item 5 for discussion of calculation of percentage ownership.
 
 
 

 

 
CUSIP No. 41146A106
SC 13D
Page 4 of 16


 
1
NAME OF REPORTING PERSON
 
Harbinger Capital Partners Special Situations Fund, L.P.
 
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
 
 
(a)  o
(b)  x
3
SEC USE ONLY
 
 
 
4
SOURCE OF FUNDS
 
OO
 
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
 
 
x
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
Delaware
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING PERSON
WITH
7
SOLE VOTING POWER
 
0
8
SHARED VOTING POWER
 
6,794,824
9
SOLE DISPOSITIVE POWER
 
0
10
SHARED DISPOSITIVE POWER
 
6,794,824
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
6,794,824
 
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
o
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
4.7% (*)
 
14
TYPE OF REPORTING PERSON
 
PN
 
 
(*) See Item 5 for discussion of calculation of percentage ownership.
 
 
 
 

 

 
CUSIP No. 41146A106
SC 13D
Page 5 of 16


 
1
NAME OF REPORTING PERSON
 
Harbinger Capital Partners Special Situations GP, LLC
 
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
 
 
(a)  o
(b)  x
3
SEC USE ONLY
 
 
 
4
SOURCE OF FUNDS
 
AF
 
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
 
 
x
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
Delaware
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING PERSON
WITH
7
SOLE VOTING POWER
 
0
8
SHARED VOTING POWER
 
6,794,824
9
SOLE DISPOSITIVE POWER
 
0
10
SHARED DISPOSITIVE POWER
 
6,794,824
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
6,794,824
 
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
o
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
4.7% (*)
 
14
TYPE OF REPORTING PERSON
 
CO
 
 
(*) See Item 5 for discussion of calculation of percentage ownership.
 
 
 

 

 
CUSIP No. 41146A106
SC 13D
Page 6 of 16


 
1
NAME OF REPORTING PERSON
 
Global Opportunities Breakaway Ltd.
 
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
 
 
(a)  o
(b)  x
3
SEC USE ONLY
 
 
 
4
SOURCE OF FUNDS
 
OO
 
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
 
 
x
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
Cayman Islands
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING PERSON
WITH
7
SOLE VOTING POWER
 
0
8
SHARED VOTING POWER
 
4,355,475
9
SOLE DISPOSITIVE POWER
 
0
10
SHARED DISPOSITIVE POWER
 
4,355,475
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
4,355,475
 
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
o
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
3.0% (*)
 
14
TYPE OF REPORTING PERSON
 
CO
 
 
(*) See Item 5 for discussion of calculation of percentage ownership.
 
 
 

 

 
CUSIP No. 41146A106
SC 13D
Page 7 of 16


 
1
NAME OF REPORTING PERSON
 
Harbinger Capital Partners II LP
 
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
 
 
(a)  o
(b)  x
3
SEC USE ONLY
 
 
 
4
SOURCE OF FUNDS
 
AF
 
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
 
 
x
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
Delaware
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING PERSON
WITH
7
SOLE VOTING POWER
 
0
8
SHARED VOTING POWER
 
4,355,475
9
SOLE DISPOSITIVE POWER
 
0
10
SHARED DISPOSITIVE POWER
 
4,355,475
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
4,355,475
 
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
o
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
3.0% (*)
 
14
TYPE OF REPORTING PERSON
 
PN
 
 
(*) See Item 5 for discussion of calculation of percentage ownership.

 
 

 

 
CUSIP No. 41146A106
SC 13D
Page 8 of 16


 
1
NAME OF REPORTING PERSON
 
Harbinger Capital Partners II GP LLC
 
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
 
 
(a)  o
(b)  x
3
SEC USE ONLY
 
 
 
4
SOURCE OF FUNDS
 
AF
 
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
 
 
x
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
Delaware
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING PERSON
WITH
7
SOLE VOTING POWER
 
0
8
SHARED VOTING POWER
 
4,355,475
9
SOLE DISPOSITIVE POWER
 
0
10
SHARED DISPOSITIVE POWER
 
4,355,475
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
4,355,475
 
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
o
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
3.0% (*)
 
14
TYPE OF REPORTING PERSON
 
CO
 
 
(*) See Item 5 for discussion of calculation of percentage ownership.

 
 

 

 
CUSIP No. 41146A106
SC 13D
Page 9 of 16


 
1
NAME OF REPORTING PERSON
 
Harbinger Holdings, LLC
 
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
 
 
(a)  o
(b)  x
3
SEC USE ONLY
 
 
 
4
SOURCE OF FUNDS
 
AF
 
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
 
 
x
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
Delaware
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING PERSON
WITH
7
SOLE VOTING POWER
 
0
8
SHARED VOTING POWER
 
46,536,262
9
SOLE DISPOSITIVE POWER
 
0
10
SHARED DISPOSITIVE POWER
 
46,536,262
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
46,536,262
 
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
o
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
32.0% (*)
 
14
TYPE OF REPORTING PERSON
 
CO
 
 
(*) See Item 5 for discussion of calculation of percentage ownership.

 
 

 

 
CUSIP No. 41146A106
SC 13D
Page 10 of 16


 
1
NAME OF REPORTING PERSON
 
Philip Falcone
 
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
 
 
(a)  o
(b)  x
3
SEC USE ONLY
 
 
 
4
SOURCE OF FUNDS
 
AF
 
5
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
 
 
x
6
CITIZENSHIP OR PLACE OF ORGANIZATION
 
United States of America
 
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY EACH
REPORTING PERSON
WITH
7
SOLE VOTING POWER
 
0
8
SHARED VOTING POWER
 
50,891,737
9
SOLE DISPOSITIVE POWER
 
0
10
SHARED DISPOSITIVE POWER
 
50,891,737
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
 
50,891,737
 
12
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
 
o
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
 
34.9% (*)
 
14
TYPE OF REPORTING PERSON
 
IN
 

(*) See Item 5 for discussion of calculation of percentage ownership.

 
 

 

 
CUSIP No. 41146A106
SC 13D
Page 11 of 16

 
Item 1. Security and Issuer.
 
This Amendment No. 21 to Schedule 13D (“Amendment No. 21”) is being filed by the undersigned to amend the Schedule 13D filed by the Reporting Persons on June 19, 2009, as amended by Amendment No. 1, filed on July 13, 2009, Amendment No. 2, filed on November 4, 2009, Amendment No. 3, filed on August 17, 2010, Amendment No. 4, filed on September 15, 2010, Amendment No. 5, filed on January 12, 2011, Amendment No. 6, filed on March 10, 2011, Amendment No. 7, filed on May 16, 2011, Amendment No. 8, filed on May 23, 2011, Amendment No. 9, filed on February 1, 2012, Amendment No. 10, filed on March 14, 2012, Amendment No. 11, filed on June 18, 2012, Amendment No. 12, filed on December 14, 2013, Amendment No. 13 filed on December 19, 2012, Amendment No. 14 filed on January 16, 2013, Amendment No. 15 filed on June 3, 2013, Amendment No. 16 filed on August 14, 2013, Amendment No. 17 filed on September 20, 2013, Amendment No. 18 filed on September 27, 2013, Amendment No. 19 filed on February 6, 2014 and Amendment No. 20 filed on February 18, 2014 (as amended, the “Schedule 13D”), with respect to the Common Stock, par value $0.01 per share (the “Shares”), of Harbinger Group Inc. (the “Issuer”), whose principal executive offices are located at 450 Park Avenue, 30th Floor, New York, New York 10022.
 
Item 2. Identity and Background.
 
No material change.
 
Item 3. Source and Amount of Funds or Other Consideration.
 
Item 3 of the Schedule 13D is hereby amended by adding the following as the last paragraph thereof:
 
“As of the date hereof the Master Fund may be deemed to beneficially own 39,741,438 Shares.
 
As of the date hereof Harbinger LLC may be deemed to beneficially own 39,741,438 Shares.
 
As of the date hereof the Special Fund may be deemed to beneficially own 6,794,824 Shares.
 
As of the date hereof HCPSS may be deemed to beneficially own 6,794,824 Shares.
 
As of the date hereof the Breakaway Fund may be deemed to beneficially own 4,355,475 Shares.
 
As of the date hereof HCP II may be deemed to beneficially own 4,355,475 Shares.
 
As of the date hereof HCP II GP may be deemed to beneficially own 4,355,475 Shares.
 
As of the date hereof Harbinger Holdings may be deemed to beneficially own 46,536,262 Shares.
 
As of the date hereof Philip Falcone may be deemed to beneficially own 50,891,737 Shares.”
 
Item 4.   Purpose of Transaction.
 
Item 4 is amended by adding the following as the last paragraph thereof:
 
“On March 21, 2014, Harbinger Capital Partners Master Fund I, Ltd., Harbinger Capital Partners Special Situations Fund, L.P. and Global Opportunities Breakaway Ltd. (collectively, the “Sellers”) sold an aggregate of 23,000,000 preferred securities of newly formed subsidiaries of each Seller (each, a “Preferred Share”) to Leucadia National Corporation (the “Purchaser”) at a price of $11.00 per Preferred Share. The Preferred Shares were sold in accordance with the terms of a Preferred Securities Purchase Agreement, dated March 18, 2014, by and among the Sellers and the Purchaser. On March 21, 2014, the Sellers and the Purchaser also entered into an Exchange Agreement pursuant which the Purchaser is obligated to exchange each Preferred Share for a share of common stock, par value $0.01, of Harbinger Group Inc. (such securities, the “Subject Shares”) owned by the Sellers upon receipt by the Purchaser of necessary regulatory approvals from the insurance regulators of Harbinger Group Inc.’s subsidiary, Fidelity & Guaranty Life.  Harbinger Group Inc. is not selling any securities in this transaction. While awaiting insurance regulatory approval, the Sellers retain the right to vote the Subject Shares in their sole discretion (subject to certain limited exceptions) and during this period the Purchaser may from time to time sell all or a portion of the Subject Shares and receive the proceeds from such sale for its own account. In connection with the foregoing, the Sellers assigned certain registration rights with respect to the Subject Shares to the Purchaser. Pursuant to a Pledge and Security Agreement and a Cash and Securities Deposit Agreement entered into at closing, the Sellers granted a security interest in the Subject Shares in favor of the Purchaser and agreed to have the Subject Shares held in escrow.”
 
 
 
 

 

 
CUSIP No. 41146A106
SC 13D
Page 12 of 16
 
 
Item 5.   Interest in Securities of the Issuer.
 
Paragraphs (a), (b) and (c) of Item 5 are amended and restated in their entirety with the following:
 
“References to the percentage ownership of Shares in this Schedule 13D is based on the 145,613,286 Shares believed to be outstanding by the Reporting Persons as of March 17, 2014, which amount does not give effect to the conversion of the Company’s outstanding shares of Series A Participating Preferred Stock (the “Series A Shares”) and Series A-2 Participating Preferred Stock (the “Series A-2 Shares,” and together with the Series A Shares, the “Preferred Stock”) or the limitation on voting by the Preferred Stockholders prior to receipt of certain regulatory approvals (the Preferred Stock may be voted only up to 9.9% of the Shares by any one holder). The Preferred Stock is entitled to vote with the Shares on an as-converted basis on all matters submitted to a vote of the Shares. Each share of Preferred Stock may be converted into Shares based on the applicable conversion price.
 
(a, b) As of the date hereof, the Master Fund may be deemed to be the beneficial owner of 39,741,438 Shares, constituting 27.3% of the Shares.
 
The Master Fund has the sole power to vote or direct the vote of 0 Shares; has the shared power to vote or direct the vote of 39,741,438 Shares; has sole power to dispose or direct the disposition of 0 Shares; and has shared power to dispose or direct the disposition of 39,741,438 Shares.
 
The Master Fund specifically disclaims beneficial ownership in the Shares reported herein except to the extent it actually exercises voting or dispositive power with respect to such Shares.
 
(a, b) As of the date hereof, Harbinger LLC may be deemed to be the beneficial owner of 39,741,438 Shares, constituting 27.3% of the Shares. 
 
Harbinger LLC has the sole power to vote or direct the vote of 0 Shares; has the shared power to vote or direct the vote of 39,741,438 Shares; has sole power to dispose or direct the disposition of 0 Shares; and has shared power to dispose or direct the disposition of 39,741,438 Shares.
 
Harbinger LLC specifically disclaims beneficial ownership in the Shares reported herein except to the extent it actually exercises voting or dispositive power with respect to such Shares.
 
(a, b) As of the date hereof, the Special Fund may be deemed to be the beneficial owner of 6,794,824 Shares, constituting 4.7% of the Shares.
 
The Special Fund has the sole power to vote or direct the vote of 0 Shares; has the shared power to vote or direct the vote of 6,794,824 Shares; has sole power to dispose or direct the disposition of 0 Shares; and has shared power to dispose or direct the disposition of 6,794,824 Shares.
 
The Special Fund specifically disclaims beneficial ownership in the Shares reported herein except to the extent it actually exercises voting or dispositive power with respect to such Shares.
 
(a, b) As of the date hereof, HCPSS may be deemed to be the beneficial owner of 6,794,824 Shares, constituting 4.7% of the Shares.
 
HCPSS has the sole power to vote or direct the vote of 0 Shares; has the shared power to vote or direct the vote of 6,794,824 Shares; has sole power to dispose or direct the disposition of 0 Shares; and has shared power to dispose or direct the disposition of 6,794,824 Shares.
 
HCPSS specifically disclaims beneficial ownership in the Shares reported herein except to the extent it actually exercises voting or dispositive power with respect to such Shares.
 
 
 
 

 

 
CUSIP No. 41146A106
SC 13D
Page 13 of 16
 
 
(a, b) As of the date hereof, the Breakaway Fund may be deemed to be the beneficial owner of 4,355,475 Shares, constituting 3.0% of the Shares.
 
The Breakaway Fund has the sole power to vote or direct the vote of 0 Shares; has the shared power to vote or direct the vote of 4,355,475 Shares; has sole power to dispose or direct the disposition of 0 Shares; and has shared power to dispose or direct the disposition of 4,355,475 Shares.
 
The Breakaway Fund specifically disclaims beneficial ownership in the Shares reported herein except to the extent it actually exercises voting or dispositive power with respect to such Shares.
 
(a, b) As of the date hereof, HCP II may be deemed to be the beneficial owner of 4,355,475 Shares, constituting 3.0% of the Shares.
 
HCP II has the sole power to vote or direct the vote of 0 Shares; has the shared power to vote or direct the vote of 4,355,475 Shares; has sole power to dispose or direct the disposition of 0 Shares; and has shared power to dispose or direct the disposition of 4,355,475 Shares.
 
HCP II specifically disclaims beneficial ownership in the Shares reported herein except to the extent it actually exercises voting or dispositive power with respect to such Shares.
 
(a, b) As of the date hereof, HCP II GP may be deemed to be the beneficial owner of 4,355,475 Shares, constituting 3.0% of the Shares.
 
HCP II GP has the sole power to vote or direct the vote of 0 Shares; has the shared power to vote or direct the vote of 4,355,475 Shares; has sole power to dispose or direct the disposition of 0 Shares; and has shared power to dispose or direct the disposition of 4,355,475 Shares.
 
 HCP II GP specifically disclaims beneficial ownership in the Shares reported herein except to the extent it actually exercises voting or dispositive power with respect to such Shares.
 
(a, b) As of the date hereof, Harbinger Holdings may be deemed to be the beneficial owner of 46,536,262 Shares, constituting 32.0% of the Shares.
 
Harbinger Holdings has the sole power to vote or direct the vote of 0 Shares; has the shared power to vote or direct the vote of 46,536,262 Shares; has sole power to dispose or direct the disposition of 0 Shares; and has shared power to dispose or direct the disposition of 46,536,262 Shares.
 
Harbinger Holdings specifically disclaims beneficial ownership in the Shares reported herein except to the extent it actually exercises voting or dispositive power with respect to such Shares.
 
(a, b) As of the date hereof, Philip Falcone may be deemed to be the beneficial owner of 50,891,737 Shares, constituting 34.9% of the Shares.
 
Mr. Falcone has the sole power to vote or direct the vote of 0 Shares; has the shared power to vote or direct the vote of 50,891,737 Shares; has sole power to dispose or direct the disposition of 0 Shares; and has shared power to dispose or direct the disposition of 50,891,737 Shares.
 
Mr. Falcone specifically disclaims beneficial ownership in the Shares reported herein except to the extent he actually exercises voting or dispositive power with respect to such Shares.
 
(c) Since the filing of the last amendment to this Schedule 13D, the only transaction in the Shares by the Reporting Persons was the transaction described in Item 6 of this Schedule 13D.
 
 
 
 

 
 
CUSIP No. 41146A106
SC 13D
Page 14 of 16
 
 
Item 6.   Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.
 
Item 6 is amended by incorporating by the reference the information added to Item 4 above.
 
Item 7.   Material to be Filed as Exhibits.
 
 
 
 
 
 

 
 

 

 
CUSIP No. 41146A106
SC 13D
Page 15 of 16

SIGNATURE
 
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
 
 
 
HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD.
       
 
By:
Harbinger Capital Partners LLC
 
       
 
By:
Harbinger Holdings, LLC, Manager
 
       
 
By:
/s/ Philip Falcone
 
   
Name:  Philip Falcone
 
   
Title:    Managing Member
 
       
 
 
HARBINGER CAPITAL PARTNERS LLC
       
 
By:
Harbinger Holdings, LLC, Manager
       
 
By:
/s/ Philip Falcone
 
   
Name:  Philip Falcone
 
   
Title:    Managing Member
 
       
 
 
HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS FUND, L.P.
       
 
By:
Harbinger Capital Partners Special Situations GP, LLC
       
 
By:
Harbinger Holdings, LLC, Managing Member
       
 
By:
/s/ Philip Falcone
 
   
Name:  Philip Falcone
 
   
Title:    Managing Member
 
       
 
 
HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS GP, LLC
       
 
By:
Harbinger Holdings, LLC, Managing Member
       
 
By:
/s/ Philip Falcone
 
   
Name:  Philip Falcone
 
   
Title:    Managing Member
 
       
 

 
 

 

 
CUSIP No. 41146A106
SC 13D
Page 16 of 16


 
GLOBAL OPPORTUNITIES BREAKAWAY LTD.
       
 
By:
Harbinger Capital Partners II LP
 
       
 
By:
Harbinger Capital Partners II GP LLC, General Partner
 
       
 
By:
/s/ Philip Falcone
 
   
Name:  Philip Falcone
 
   
Title:    Managing Member
 
       
 
 
HARBINGER CAPITAL PARTNERS II LP
       
 
By:
Harbinger Capital Partners II GP LLC, General Partner
       
 
By:
/s/ Philip Falcone
 
   
Name:  Philip Falcone
 
   
Title:    Managing Member
 
       
 
 
HARBINGER CAPITAL PARTNERS II GP LLC
       
 
By:
/s/ Philip Falcone
 
   
Name:  Philip Falcone
 
   
Title:    Managing Member
 
       
 
 
HARBINGER HOLDINGS, LLC
       
 
By:
/s/ Philip Falcone
 
   
Name:  Philip Falcone
 
   
Title:    Managing Member
 
       
 
 
 /s/ Philip Falcone
 
 
Philip Falcone
 
       
  
March 21, 2014
 
Attention: Intentional misstatements or omissions of fact constitute federal violations (see 18 U.S.C. 1001).
 

 
 

 

JOINT FILING AGREEMENT
 
The undersigned hereby agree that this statement on Schedule 13D with respect to the Common Stock, par value $0.01 per share of Harbinger Group Inc., is, and any amendments thereto signed by each of the undersigned shall be, filed on behalf of each of us pursuant to and in accordance with the provisions of Rule 13d-1(k) under the Securities Exchange Act of 1934.
 
 
 
HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD.
       
 
By:
Harbinger Capital Partners LLC
 
       
 
By:
Harbinger Holdings, LLC, Manager
 
       
 
By:
/s/ Philip Falcone
 
   
Name:  Philip Falcone
 
   
Title:    Managing Member
 
       
 
 
HARBINGER CAPITAL PARTNERS LLC
       
 
By:
Harbinger Holdings, LLC, Manager
       
 
By:
/s/ Philip Falcone
 
   
Name:  Philip Falcone
 
   
Title:    Managing Member
 
       
 
 
HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS FUND, L.P.
       
 
By:
Harbinger Capital Partners Special Situations GP, LLC
       
 
By:
Harbinger Holdings, LLC, Managing Member
       
 
By:
/s/ Philip Falcone
 
   
Name:  Philip Falcone
 
   
Title:    Managing Member
 
       
 
 
HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS GP, LLC
       
 
By:
Harbinger Holdings, LLC, Managing Member
       
 
By:
/s/ Philip Falcone
 
   
Name:  Philip Falcone
 
   
Title:    Managing Member
 
       
 
 
 
A-1

 

 
 
GLOBAL OPPORTUNITIES BREAKAWAY LTD.
       
 
By:
Harbinger Capital Partners II LP
 
       
 
By:
Harbinger Capital Partners II GP LLC, General Partner
 
       
 
By:
/s/ Philip Falcone
 
   
Name:  Philip Falcone
 
   
Title:    Managing Member
 
       
 
 
HARBINGER CAPITAL PARTNERS II LP
       
 
By:
Harbinger Capital Partners II GP LLC, General Partner
       
 
By:
/s/ Philip Falcone
 
   
Name:  Philip Falcone
 
   
Title:    Managing Member
 
       
 
 
HARBINGER CAPITAL PARTNERS II GP LLC
       
 
By:
/s/ Philip Falcone
 
   
Name:  Philip Falcone
 
   
Title:    Managing Member
 
       
 
 
HARBINGER HOLDINGS, LLC
       
 
By:
/s/ Philip Falcone
 
   
Name:  Philip Falcone
 
   
Title:    Managing Member
 
       
 
 
 /s/ Philip Falcone
 
 
Philip Falcone
 
       
  
March 21, 2014
 
 
 
A-2

 
 
 
EXECUTION VERSION


PREFERRED SECURITIES PURCHASE AGREEMENT*
 
 
 
by and among
 
 
 
Harbinger Capital Partners Master Fund I, Ltd.,
 
 
 
Global Opportunities Breakaway Ltd.,
 
 
 
Harbinger Capital Partners Special Situations Fund, L.P.
 
 
 
and
 
 
 
Leucadia National Corporation
 
 
 
March 18, 2014
 
 
 
*Capitalized terms have the meaning ascribed to such terms in this Preferred Securities Purchase Agreement.  This Preferred Securities Purchase Agreement contains a number of representations and warranties which the Sellers and the Purchaser have made to each other.  The assertions embodied in those representations and warranties are qualified by information in confidential disclosure schedules that the Sellers and the Purchaser have exchanged in connection with signing the Preferred Securities Purchase Agreement.  The confidential disclosure schedules may contain information that has been included in the general prior public disclosures of the Company, as well as additional non-public information. Such information may modify, qualify and create exceptions to the representations and warranties set forth in the Preferred Securities Purchase Agreement.  In addition, these representations and warranties were made as of the date of the Preferred Securities Purchase Agreement.  Information concerning the subject matter of the representations and warranties may have changed since the date of the Preferred Securities Purchase Agreement, which subsequent information may or may not be fully reflected in the public disclosures of the Company.  Moreover, representations and warranties are frequently utilized in purchase agreements as a means of allocating risks, both known and unknown, rather than to make affirmative factual claims or statements.  Accordingly, ONLY THE PARTIES TO THIS PREFERRED SECURITIES PURCHASE AGREEMENT SHOULD RELY ON THE REPRESENTATIONS AND WARRANTIES AS CURRENT CHARACTERIZATIONS OF FACTUAL INFORMATION ABOUT THE COMPANY, ITS SUBSIDIARIES, THE SELLERS, AND THE PURCHASERS AND THEIR RESPECTIVE AFFILIATES.
 

 
 

 

TABLE OF CONTENTS
 
 
Page
1
Definitions
1
     
2
Authorization, Purchase and Sale of Preferred Securities
6
     
 
2.1
Authorization, Purchase and Sale
6
 
2.2
Closing
7
 
2.3
Adjustments
8
       
3
Representations and Warranties of the Sellers
8
       
 
3.1
Organization and Power
9
 
3.2
Capitalization
9
 
3.3
Authorization
11
 
3.4
Registration Requirements
11
 
3.5
No Conflict
12
 
3.6
Consents
13
 
3.7
Company SEC Filings
13
 
3.8
Compliance with Law
14
 
3.9
NYSE
14
 
3.10
Investment Company Act
14
 
3.11
Brokers
14
 
3.12
Right of First Refusal; Stockholders Agreement; Voting and Registration Rights
14
 
3.13
Anti-Takeover Statutes
15
 
3.14
Solvency
15
 
3.15
Registration Rights
15
 
3.16
No Other Representations and Warranties
15
     
4.
Representations and Warranties of the Purchaser
16
       
 
4.1
Organization
16
 
4.2
Authorization
16
 
4.3
No Conflict
16
 
4.4
Consents
16
 
4.5
Brokers
17
 
4.6
Purchase Entirely for Own Account
17
 
4.7
Investor Status
17
 
4.8
Securities Not Registered
17
 
4.9
Financing
18
 
4.10
Equity Securities of the Company and its Subsidiaries
18
 
4.11
HSR Act
18
 
4.12
Company Information
18
 
 
i

 
 
 
5.
Covenants and Other Agreements.
18
       
 
5.1
Interim Covenants
18
 
5.2
Commercially Reasonable Efforts; Further Assurances; Notification.
20
     
6.
Conditions to the Obligation of the Parties to Consummate the Closing
22
     
7.
Transfer Restrictions
22
     
8.
Legends; Securities Act Compliance
23
     
9.
Indemnification; Survival
23
       
 
9.1
Sellers Indemnification
23
 
9.2
Survival of Representations and Warranties
24
 
9.3
Purchaser Indemnification
24
 
9.4
Limitations
24
 
9.5
Procedures
24
 
9.6
Additional Limitations
25
 
9.7
Exclusive Remedies
25
     
10.
Termination
26
       
 
10.1
Conditions of Termination
26
 
10.2
Effect of Termination
26
     
11.
Miscellaneous Provisions
26
       
 
11.1
Public Statements or Releases
26
 
11.2
Interpretation
26
 
11.3
Notices
27
 
11.4
Severability
28
 
11.5
Governing Law; Jurisdiction; WAIVER OF JURY TRIAL
28
 
11.6
Specific Performance
29
 
11.7
Delays or Omissions; Waiver
29
 
11.8
Fees; Expenses
29
 
11.9
Assignment
30
 
11.10
No Third Party Beneficiaries
30
 
11.11
Counterparts
30
 
11.12
Entire Agreement; Amendments
30
 
11.13
Freedom to Pursue Opportunities
31
 
11.14
Nature of Sellers’ Obligations and Rights
31
 
11.15
No Personal Liability of Directors, Officers, Owners, Etc
31
 
 
 
ii

 
 
Annex A – Company Shares
Annex B – Security Subsidiaries Capitalization
Annex C – Sellers, Preferred Securities and Preferred Security Purchase Price
Annex D – Form of A&R LLC Agreement for Security Subsidiaries
Exhibit A – Form of Registration Rights Acknowledgement
Exhibit B – Form of Shareholder Side Letter
Exhibit C – Form of Escrow Agreement
Exhibit D – Form of Exchange Agreement
Exhibit E – Form of Pledge Agreement
Exhibit F – Form of Power of Attorney
Exhibit G – Solvency Certificate
 
 
 
 
 
 
 
 
 
 
iii

 
 
 
INDEX OF DEFINED TERMS
(continued)
Section
 
2011 Preferred Stock
3.2(a)
A&R LLC Agreeemnts
2.1(b)
Basket Amount
9.4
Capitalization Date
3.2(a)
Closing
2.2(a)
Closing Date
2.2(a)
CODs
3.2(c)
Consent
3.6
Disclosure Schedule
3
Global Fund
Preamble
GOB Preferred Security
2.1
GOB Securities Subsidiary
2.1
Holder
3.4
Indemnified Party
9.5
Indemnifying Party
9.5
Initiating Holder
3.15
Law
3.5(a)
Laws
3.5(a)
Lien
3.5(a)
Long-Form Registration
3.15
Master Fund
Preamble
MF Preferred Security
2.1
MF Securities Subsidiary
2.1
New York Court
11.5(b)
NYSE
3.9(a)
Permitted Transferee
3.4
Preferred Securities
2.1
Preferred Security Purchase Price
2.1
Preferred Stock
3.2(a)
Purchaser
Preamble
Purchaser Adverse Effect
4.3
Purchaser Indemnified Parties
9.1
Purchaser Indemnified Party
9.1
Registrable Securities
3.4
Rule 144
4.8(a)
Seller
Preamble
Seller Indemnified Parties
9.3
Seller Indemnified Party
9.3
Seller Information
4.12
Sellers
Preamble
Series A Preferred Stock
3.2(a)
Short-Form Registration
3.15
Special Situations Fund
Preamble
 
 
iv

 
 
 
SSF Preferred Security
2.1
SSF Securities Subsidiary
2.1
Survival Period
9.2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
v

 
 
PREFERRED SECURITIES PURCHASE AGREEMENT
 
 
PREFERRED SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated March 18, 2014, by and among Harbinger Capital Partners Master Fund I, Ltd., a company incorporated under the laws of the Cayman Islands as an exempted company with limited liability (the “Master Fund”), Global Opportunities Breakaway Ltd., a company incorporated under the laws of the Cayman Islands as an exempted company with limited liability (“Global Fund ), Harbinger Capital Partners Special Situations Fund, L.P., a Delaware limited partnership (“Special Situations Fund”, together with the Master Fund and Global Fund, the “Sellers,” and each a “Seller”), and Leucadia National Corporation, a New York Corporation (or, at its designation but subject to compliance with the terms and conditions of Section 11.9, one or more of its direct or indirect wholly-owned Subsidiaries, the “Purchaser”).
 
WHEREAS, subject to the terms and conditions set forth herein, the Sellers desire to sell to the Purchaser, and the Purchaser desires to purchase from the Sellers, the Preferred Securities (as defined below);
 
WHEREAS, each Seller has approved the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby in accordance with applicable Law upon the terms and conditions contained herein;
 
WHEREAS, the Purchaser has approved the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby in accordance with applicable Law upon the terms and conditions contained herein;
 
WHEREAS, prior to or concurrently with the execution of this Agreement, the Sellers, the Company and the Purchaser entered into that certain Acknowledgement to the Registration Rights Agreement in the form set forth as Exhibit A (the “Reg Rights Acknowledgement”); and
 
WHEREAS, prior to or concurrently with the execution of this Agreement, the Company and the Purchaser entered into that certain Shareholder Side Letter in the form set forth as Exhibit B (the “Shareholder Side Letter”).
 
NOW THEREFORE, in consideration of the mutual agreements, representations, warranties and covenants herein contained, the parties hereto agree as follows:
 
1. Definitions.  As used in this Agreement, the following terms shall have the following respective meanings:
 
 Affiliate” means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such specified Person.
 
 Agreement shall have the meaning set forth in the preamble.
 
 Ancillary Agreements” shall mean the Shareholder Side Letter, the Escrow Agreement, the Exchange Agreement, the Reg Rights Acknowledgment, the Pledge Agreement, the A&R LLC Agreements and a Power of Attorney from each Seller.
 
 
 
 
1

 
 
 Basket Amount” shall have the meaning set forth in Section 9.4.
 
 Beneficially Own,” “Beneficially Owned,” or “Beneficial Ownership” shall have the meaning set forth in Rule 13d-3 of the rules and regulations promulgated under the Exchange Act; provided, however, that  a Person will be deemed to be the beneficial owner of any security which may be acquired by such Person whether within 60 days or thereafter, upon the conversion, exchange or exercise (without giving effect to any provision governing such security that would limit, reduce or otherwise restrict the conversion, exchange or exercise features of such security) of any rights, options, warrants or similar securities to subscribe for, purchase or otherwise acquire such security.
 
 Business Day” shall mean any day, other than a Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in the State of New York are authorized or required by Law or other governmental action to close.
 
 Capitalization Date shall have the meaning set forth in Section 3.2(a).
 
 Cash Exchange” shall have the meaning set forth in the Exchange Agreement.
 
 Closing shall have the meaning set forth in Section 2.2.
 
 Closing Date shall have the meaning set forth in Section 2.2.
 
 Code” shall mean the Internal Revenue Code of 1986, as amended.
 
 Common Stock” shall mean the common stock, par value $0.01 per share, of the Company.
 
 Company shall mean Harbinger Group Inc., a Delaware corporation.
 
 Company Board” shall mean the board of directors of the Company.
 
 
 Company Option” shall mean an option to acquire shares of Common Stock that was issued under any Company Stock Plan.
 
 Company SEC Filings” shall have the meaning set forth in Section 3.7.
 
 Company Shares” shall mean the shares of Common Stock set forth on Annex A, as adjusted to reflect any merger, consolidation, recapitalization, reclassification, split-up, stock dividend, rights offering or reverse stock split made, declared or effected on and after the date hereof with respect to the Common Stock.
 
 Company Stock Plans” shall mean the plans listed on Schedule 1.2.
 
 Consent shall have the meaning set forth in Section 3.6(a).
 
 control” (including the terms “controlling” “controlled by” and “under common control with”) with respect to any Person shall mean the possession, directly or indirectly, of the
 
 
 
2

 
 
power to direct or cause the direction of the management policies of such Person, whether through the ownership of voting securities, by contract or otherwise.
 
 DGCL” shall mean the General Corporation Law of the State of Delaware.
 
 Disclosure Schedule shall have the meaning set forth in Section 3.
 
 Equity Securities” shall mean, with respect to any Person, (i) shares of capital stock of, or other equity or voting interest in, such Person, (ii) any securities convertible into or exchangeable for shares of capital stock of, or other equity or voting interest in, such Person, (iii) options, warrants, rights or other commitments or agreements to acquire from such Person, or that obligates such Person to issue, any capital stock of, or other equity or voting interest in, or any securities convertible into or exchangeable for shares of capital stock of, or other equity or voting interest in, such Person, (iv) obligations of such Person to grant, extend or enter into any subscription, warrant, right, convertible or exchangeable security or other similar agreement or commitment relating to any capital stock of, or other equity or voting interest (including any voting debt) in, such Person and (v) the capital stock of such Person.
 
 Escrow Agent” means Deutsche Bank Trust Company Americas, or such other broker-dealer mutually acceptable to the parties hereto.
 
 Escrow Agreement” means the cash and securities deposit agreement in the form attached hereto as Exhibit C.
 
 Exchange” shall have the meaning set forth in the Exchange Agreement.
 
 Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and all of the rules and regulations promulgated thereunder.
 
 Exchange Agreement” means the exchange agreement in the form attached hereto as Exhibit D.
 
 F&G Life” shall mean Fidelity & Guaranty Life Insurance Company.
 
 Fundamental Representations” shall have the meaning set forth in Section 9.2.
 
 GAAP” shall mean United States generally accepted accounting principles applied on a consistent basis.
 
 Governmental Entity” shall mean any United States or non-United States federal, state or local government, or any agency, bureau, board, commission, department, tribunal or instrumentality thereof or any court, tribunal, or arbitral or judicial body.
 
 HSR Act” shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and all of the rules and regulations promulgated thereunder.
 
 Indemnified Party” shall have the meaning set forth in Section 9.5.
 
 
 
 
3

 
 
 Indemnifying Party” shall have the meaning set forth in Section 9.5.
 
 Knowledge” shall mean, with respect to each Seller, the knowledge of the Persons set forth on Schedule 1.1.  Such individuals will be deemed to have “knowledge” of a particular fact or other matter if (i) such individual has or at any time had actual knowledge of such fact or other matter or (ii) a prudent individual would be expected to discover or otherwise become aware of such fact or other matter in the course of conducting a reasonably diligent review concerning the existence thereof with each employee of a Seller or any of their Subsidiaries who reports directly to such individual and who (x) has responsibilities or (y) would reasonably be expected to have actual knowledge of circumstances or other information, in each case, that would reasonably be expected to be pertinent to such fact or other matter. Notwithstanding the foregoing, each Seller will be deemed to have knowledge of any fact or matter of which an officer of such Seller has received written notice (whether in hard copy, digital or electronic format).
 
 Law shall have the meaning set forth in Section 3.5(a).
 
 Lien shall have the meaning set forth in Section 3.5(a).
 
 Losses” shall mean, subject to Section 9.6 of this Agreement, any and all actions, causes of action, suits, claims, liabilities, losses, damages, penalties, judgments, costs and out-of-pocket expenses in connection therewith (including reasonable attorneys’ fees and expenses), it being agreed that Losses may include any losses that any Person deciding any dispute in respect thereof (whether a court, jury or other Person) may determine are recoverable, including if so determined to be recoverable, losses that represent diminution in value.
 
 Material Adverse Effect” shall mean any fact, circumstance, event, change, effect, occurrence or development (each, a “Change”) that, individually or in the aggregate with all other Changes, has a material adverse effect on or with respect to the business, operations, assets (including intangible assets), liabilities, results of operation or financial condition of the Company and its Subsidiaries taken as a whole, provided, however, that a Material Adverse Effect shall not include any Change (by itself or when aggregated or taken together with any and all other Changes) (i) generally affecting the industries in which the Company and its Subsidiaries operate or economic conditions in the United States (including changes in the capital or financial markets generally); (ii) resulting from any outbreak or escalation of hostilities or acts of war or terrorism, political instability or other national or international calamity, crisis or emergency, or any governmental or other response to any of the foregoing, in each case whether or not involving the United States; (iii) resulting from changes (or proposed changes) in Law or GAAP (or authoritative interpretations thereof); (iv) resulting from changes in the market price or trading volume of the Company’s, Spectrum’s or F&G Life’s securities or from the failure of the Company or any of its Subsidiaries to meet projections, forecasts or estimates (it being understood that the causes underlying such failure may be considered in determining whether a Material Adverse Effect has occurred or would reasonably be expected to occur); (v) acts of God (including earthquakes, storms, fires, floods and natural catastrophes); (vi) effects relating to or arising from the announcement of the execution of this Agreement or the transactions contemplated hereby or the identity of the Purchaser or its Affiliates, including the loss of any customers, suppliers or employees; (vii) effects resulting from compliance with the
 
 
 
4

 
 
terms and conditions of this Agreement by the Company or any of its Subsidiaries or consented to in writing by the Purchaser; (viii) the seasonality of the business of the Company or any of its Subsidiaries; or (ix) any breach of this Agreement by the Purchaser, except to the extent that, with respect to clauses (i), (ii), (iii), (iv) and (v), the impact of such Changes is disproportionately adverse to the Company and its Subsidiaries.
 
 New York Court” shall have the meaning set forth in Section 11.5(b).
 
 NYSE” shall have the meaning set forth in Section 3.9(a).
 
 Person” shall mean an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or any other entity or organization.
 
 Pledge Agreement” means the pledge and security agreement in the form attached as Exhibit E hereto to be executed by each Seller in respect of the Company Shares set forth next to such Seller’s name on Annex A.
 
 Power of Attorney” means a power of attorney in the form attached hereto as Exhibit F.
 
 Preferred Security Purchase Price” shall have the meaning set forth in the Section 2.1.
 
 Preferred Stock shall have the meaning set forth in Section 3.2(a).
 
 Purchaser shall have the meaning set forth in the preamble.
 
 Purchaser Adverse Effect” shall have the meaning set forth in the Section 4.3.
 
 Purchaser Indemnified Party shall have the meaning set forth in Section 9.1.
 
 Registration Rights Agreement” shall mean the Registration Rights Agreement dated as of September 10, 2010 between the Sellers and the Company, as amended on May 12, 2011 (as amended, restated, supplemented or otherwise modified from time to time in accordance with its terms).
 
 
 Reg Rights Acknowledgement” shall have the meaning set forth in the preamble.
 
 Rule 144” shall have the meaning set forth in Section 4.8(a).
 
 SEC” shall mean the Securities and Exchange Commission.
 
 Securities Act” shall mean the Securities Act of 1933, as amended, and all of the rules and regulations promulgated thereunder.
 
 Securities Exchange” shall have the meaning set forth in the Exchange Agreement.
 
 Security Subsidiaries” shall have the meaning set forth in Section 2.1.
 
 
 
 
5

 
 
 Seller Indemnified Party” shall have the meaning set forth in Section 9.3.
 
 Seller Information” shall have the meaning set forth in Section 4.12.
 
 Seller Party” means the Sellers and the Security Subsidiaries.
 
 Sellers” shall have the meaning set forth in the preamble.
 
 Shareholder Side Letter” shall have the meaning set forth in the preamble.
 
 Significant Subsidiary” shall mean any Subsidiary or group of Subsidiaries that would, taken together, be a “significant subsidiary” as defined in Article 1, Rule 1-02 (w)(1) or (2) of Regulation S-X promulgated under the Securities Act, as such regulation is in effect from time to time.
 
 Spectrum” shall mean Spectrum Brands Holdings, Inc.
 
 Subsidiary” of any Person shall mean any corporation, partnership, joint venture, limited liability company, trust or other form of legal entity (whether incorporated or unincorporated) of which (or in which) more than 50% of (i) the Total Current Voting Power; (ii) the interest in the capital or profits of such partnership, joint venture or limited liability company; or (iii) the beneficial interest in such trust or estate; is, directly or indirectly, owned or controlled by such Person, by such Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries.
 
 Survival Period” shall have the meaning set forth in Section 9.2.
 
 Taxes” shall mean any and all taxes, levies, fees, imposts, duties and charges of whatever kind (including any interest, penalties or additions to the tax imposed in connection therewith or with respect thereto) imposed by any Governmental Entity, including, without limitation, taxes imposed on, or measured by, income, franchise, profits or gross receipts, and any ad valorem, value added, sales, use, service, real or personal property, capital stock, license, payroll, withholding, employment, social security, workers’ compensation, unemployment compensation, utility, severance, production, excise, stamp, occupation, premium, windfall profits, transfer and gains taxes and customs or duties.
 
 Total Current Voting Power” shall mean, with respect to any entity, at the time of determination of Total Current Voting Power, the total number of votes which may be cast in the general election of directors of such entity (or, in the event the entity is not a corporation, the governing members, board or other similar body of such entity).
 
2. Authorization, Purchase and Sale of Preferred Securities
 
2.1 Authorization, Purchase and Sale
 
(a) On or prior to the date hereof, (i) Master Fund has formed a member-managed, wholly-owned Delaware limited liability company under the name MF/HRG Securities Subsidiary, LLC (the “MF Securities Subsidiary”), (ii) Global Fund has formed a
 
 
 
6

 
 
member-managed, wholly-owned Delaware limited liability company under the name GOB/HRG Securities Subsidiary, LLC (the “GOB Securities Subsidiary”), and (iii) Special Situations Fund has formed a member-managed, wholly-owned Delaware limited liability company under the name SSF/HRG Securities Subsidiary, LLC (the “SSF Securities Subsidiary” and, collectively with the MF Securities Subsidiary and the GOB Securities Subsidiary, the “Security Subsidiaries”).  The capitalization of each Security Subsidiary as of the date hereof is set forth on Annex B.  For the avoidance of doubt and subject to any Exchange consummated by the parties, it is hereby acknowledged and agreed that the Sellers will retain the Company Shares and will not be contributing or otherwise assigning any rights, title or interest in and to the Company Shares to any of the Security Subsidiaries.
 
(b) Subject to and upon the terms and conditions of this Agreement, (w) Master Fund will sell to the Purchaser, and the Purchaser will purchase from Master Fund, at the Closing, the preferred securities of the MF Securities Subsidiary set forth next to Master Fund’s name on Annex C (each, a “MF Preferred Security”), (y) Global Fund will sell to the Purchaser, and the Purchaser will purchase from Global Fund, at the Closing, the preferred securities of the GOB Securities Subsidiary set forth next to Global Fund’s name on Annex C (each, a “GOB Preferred Security”), and (z) Special Situations Fund will sell to the Purchaser, and the Purchaser will purchase from Special Situations Fund, at the Closing, the preferred securities of the SSF Securities Subsidiary set forth next to Special Situations Fund’s name on Annex C (each, a “SSF Preferred Security” and collectively with each MF Preferred Security and each GOB Preferred Security, the “Preferred Securities”).  The form of amended and restated limited liability company agreements for the Security Subsidiaries (including the terms of the Preferred Securities) to be entered into at the Closing is attached as Annex D (the “A&R LLC Agreements”).  The aggregate purchase price (the “Preferred Security Purchase Price”) for the Preferred Securities, and the amount of such Preferred Security Purchase Price to be paid to each Seller shall be the amount set forth on Annex C.
 
2.2 Closing
 
(a) The closing of the purchase and sale of the Preferred Securities (the “Closing”) shall take place at the offices of Leucadia National Corporation, 520 Madison Avenue, New York, New York 10022 immediately upon the later of (i) the satisfaction or waiver of each of the conditions set forth in Section 6 (other than those conditions which, by their terms, are to be satisfied or waived at the Closing) and (ii) 6:00 p.m. Eastern time on the fifth Business Day following the date hereof, or at such other place or such other date as agreed to by the parties hereto in writing (the “Closing Date”).
 
(b) At the Closing:
 
(i) each Seller shall deliver to Purchaser one or more certificates representing the Preferred Securities set forth next to such Seller’s name on Annex C;
 
(ii) each Seller shall deliver to the Escrow Agent one or more certificates (or, at such Seller’s option, through delivery by electronic book entry form) representing the Company Shares set forth next to such Seller’s name on Annex A, along with duly executed instruments of transfer or assignment in blank in respect of such Company Shares,
 
 
 
7

 
 
conveying (in accordance with and subject to the terms of the Exchange Agreement) all right, title and interest to and in the Company Shares, free and clear of all liens;
 
(iii) Sellers shall deliver to the Purchaser a copy of the Escrow Agreement duly executed by the Sellers;
 
(iv) Sellers shall deliver to the Purchaser a copy of the Pledge Agreement duly executed by the Sellers;
 
(v) Sellers shall deliver to the Purchaser a copy of the Exchange Agreement duly executed by the Sellers;
 
(vi) each Seller shall deliver to the Purchaser a Power of Attorney duly executed by such Seller;
 
(vii) each Seller shall deliver to the Purchaser an A&R LLC Agreement for its respective Security Subsidiary duly executed by such Seller;
 
(viii) Purchaser shall deliver to the Sellers a copy of the Escrow Agreement duly executed by the Purchaser and the Escrow Agent;
 
 
(ix) Purchaser shall deliver to the Sellers a copy of the Pledge Agreement duly executed by the Purchaser and the Escrow Agent;
 
(x) Purchaser shall deliver to the Sellers a copy of the Exchange Agreement duly executed by the Purchaser;
 
(xi) Purchaser shall deliver to the Sellers a copy of the A&R LLC Agreements for each of the Security Subsidiaries, in each case duly executed by the Purchaser; and
 
(xii) Purchaser shall deliver, or cause to be delivered by one of its Affiliates, to each Seller an amount equal to the portion of the Preferred Security Purchase Price set forth next to such Seller’s name on Annex C by wire transfer of immediately available funds to an account that such Seller shall designate prior to the Closing Date.
 
2.3 Adjustments.  If between the date of this Agreement and the Closing the outstanding Company Shares shall have been changed into a different number of shares or a different class, solely by reason of any stock dividend, reclassification, recapitalization, split, reverse split, combination, exchange or readjustment of shares or any stock dividend or stock distribution with a record date during such period or any other similar transaction, the Preferred Security Purchase Price shall be correspondingly adjusted to reflect such change.
 
 
3. Representations and Warranties of the Sellers.  Except as set forth in the disclosure schedule delivered by the Sellers to the Purchaser on the date hereof (the “Disclosure Schedule”) (it being agreed that disclosure of any item in any section of the Disclosure Schedule shall also be deemed disclosure with respect to any other Section of this Agreement to which the relevance of such item is reasonably apparent) or as disclosed in the Company SEC Filings, filed
 
 
 
8

 
 
and publicly available prior to the date of this Agreement and only as and to the extent disclosed therein (but excluding any risk factor disclosures contained under the heading “Risk Factors,” any disclosure of risks included in any “forward-looking statements” disclaimer or any other statements that are similarly forward-looking), each Seller hereby represents and warrants, severally and not jointly, to the Purchaser as follows:
 
3.1 Organization and Power.
 
(a) Each of the Sellers and their relevant Security Subsidiary, the Company and the Company’s Significant Subsidiaries is a legal entity duly organized, validly existing and in good standing under the Laws of its respective jurisdiction of organization.  Each of the Sellers and their relevant Security Subsidiary, the Company and the Company’s Subsidiaries has the requisite corporate power and authority to carry on its respective business as it is presently being conducted and to own, lease or operate its respective properties and assets, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
 
(b) Each of the Sellers and their relevant Security Subsidiary, the Company and the Company’s Subsidiaries is duly qualified to do business and is in good standing as a foreign corporation (or other legal entity) in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  The organizational or governing documents of the Sellers and their relevant Security Subsidiary, the Company and each of the Company’s Significant Subsidiaries are in full force and effect.  Neither the Sellers, their relevant Security Subsidiary, the Company nor any Significant Subsidiary of the Company is in violation of its organizational or governing documents.
 
(c) On or prior to the date hereof, the Sellers have delivered or made available to the Purchaser true, accurate and complete copies of the organizational or similar governing documents of each Security Subsidiary, as amended through the date of this Agreement.
 
3.2 Capitalization.
 
(a) As of the date of this Agreement, the authorized shares of capital stock of the Company consist of 500,000,000 shares of Common Stock and 10,000,000 shares of preferred stock, par value $0.01 per share (“Preferred Stock”).  As of the close of business on March 17, 2014 (the “Capitalization Date”), (i) 145,613,286 shares of Common Stock were issued and outstanding, (ii) 4,306,309 shares of Common Stock were reserved for issuance under the Company Stock Plans, (iii) 394,240 shares of Preferred Stock were issued and outstanding, including 280,000 shares of Series A Participating Convertible Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”), and 114,240 shares of Series A-2 Participating Convertible Preferred Stock, par value $0.01 per share (together with the Series A Preferred Stock, the “2011 Preferred Stock”), and (iv) zero shares of Common Stock or Preferred Stock were held by the Company as treasury shares.  As of the date of this Agreement, the Sellers and their Affiliates beneficially own, in the aggregate, 73,891,737 shares of Common Stock and no
 
 
 
9

 
 
shares of Preferred Stock. All outstanding shares of Common Stock are validly issued, fully paid, nonassessable and free of preemptive or similar rights.  Since the Capitalization Date, the Company has not sold or issued or repurchased, redeemed or otherwise acquired any shares of the Company’s capital stock (other than issuances pursuant to the exercise of any Company Option or vesting of any share unit award that had been granted under any Company Stock Plan, or repurchases, redemptions or other acquisitions pursuant to agreements contemplated by a Company Stock Plan).  No Subsidiary of the Company owns any Equity Securities of the Company.
 
(b) As of the Capitalization Date, with respect to the Company Stock Plans, (i) there were 4,763,010 shares of Common Stock underlying outstanding Company Options to acquire shares of Common Stock, such outstanding Company Options having a weighted average exercise price per share as of the Capitalization Date of $8.14, (ii) there were 21,645 shares of Common Stock issuable upon the vesting of outstanding share award units, and (iii) 4,306,309 additional shares of Common Stock were reserved for issuance for future grants pursuant to the Company Stock Plans.  All shares of Common Stock reserved for issuance as noted in the foregoing sentence, when issued in accordance with the respective terms thereof, are or will be validly issued, fully paid, nonassessable and free of preemptive or similar rights.  To the Knowledge of such Seller, each Company Option was granted with an exercise price per share equal to or greater than the per share fair market value (as such term is used in Code Section 409A and the Department of Treasury regulations and other interpretive guidance issued thereunder) of the Common Stock underlying such Company Option on the grant date thereof and was otherwise issued in material compliance with applicable Law.
 
(c) As of the date of this Agreement, except as set forth in Sections 3.2(a) and 3.2(b), there are no outstanding obligations by the Company, including pursuant to any outstanding Equity Securities of the Company, to make any payments in excess of $250,000, in the aggregate, based on the price or value of any Equity Securities of the Company.  Except as set forth in the certificates of designation in respect of the 2011 Preferred Stock (the “CODs”), there are no outstanding agreements of any kind which obligate the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Equity Securities of the Company.
 
(d) Except as set forth herein or in any registration rights agreements, CODs or purchase agreements in respect of the 2011 Preferred Stock, in each case which have been filed as exhibits to the Company SEC Filings, neither the Company nor any of its Subsidiaries is a party to any agreement relating to the voting of, requiring registration of, or granting any preemptive, anti-dilutive rights or rights of first refusal or other similar rights with respect to any Equity Securities of the Company.
 
(e) All of the outstanding Equity Securities of MF Securities Subsidiary are owned by Master Fund, all of the outstanding Equity Securities of GOB Securities Subsidiary are owned by Global Fund and all of the outstanding Equity Securities of SSF Securities Subsidiary are owned by Special Situations Fund.  Other than any agreement entered into in connection with the transactions contemplated hereby, no Security Subsidiary shall be party to any contract nor shall any Security Subsidiary conduct any activities other than in connection with the organization of such Security Subsidiary and the consummation of the
 
 
 
10

 
 
transactions contemplated by this Agreement and the Ancillary Agreements.  No Security Subsidiary shall own any Equity Securities of any other Person.
 
(f) The capitalization of the Security Subsidiaries is set forth on Annex B.  The terms of the Preferred Securities are set forth in the form of the A&R LLC Agreements attached hereto as Annex D.
 
(g) All of the Company Shares and Preferred Securities are duly authorized, validly issued, fully paid, nonassessable and free of preemptive or similar rights except as set forth in this Agreement, the Registration Rights Agreement or the Ancillary Agreements.
 
3.3 Authorization.  Such Seller has all requisite corporate or limited partnership power to enter into this Agreement and any applicable Ancillary Agreement and to consummate the transactions contemplated hereby and thereby and to carry out and perform its obligations hereunder and thereunder, including in each case the consummation of each Exchange.  All requisite action on the part of such Seller, its officers and directors necessary for the authorization, execution, delivery and performance of this Agreement and any applicable Ancillary Agreement (including the consummation of each Exchange) has been taken.  The execution, delivery and performance by such Seller of this Agreement and any applicable Ancillary Agreement and the consummation of the transactions contemplated hereby and thereby (including the consummation of each Exchange) do not require any approval of such Seller’s equity holders, the Company or the Company’s stockholders.  Upon its execution by such Seller and the other parties hereto and assuming that it constitutes a legal and binding agreement of the Purchaser, this Agreement and any applicable Ancillary Agreement will constitute a legal, valid and binding obligation of such Seller, enforceable against such Seller in accordance with its terms, except that such enforceability (a) may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar Laws affecting or relating to creditors’ rights generally, and (b) is subject to general principles of equity (regardless of whether considered in a proceeding in equity or at Law).
 
 
3.4 Registration Requirements.  Subject to the accuracy of the representations and warranties made by the Purchaser in Section 4, the offer and sale of the Preferred Securities and each Exchange (i) has been and will be made in compliance with applicable exemptions from the registration and prospectus delivery requirements of the Securities Act and (ii) will have been registered or qualified (or are exempt from registration and qualification) under the registration, permit or qualification requirements of all applicable state securities Laws.  The Reg Rights Acknowledgment has been duly and validly executed and delivered by the Company and each of the Sellers and constitutes a valid and binding obligation of the Company and each of the Sellers, enforceable against the Company and each of the Sellers in accordance with its terms, except that such enforceability (a) may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar Laws affecting or relating to creditors’ rights generally, and (b) is subject to general principles of equity (regardless of whether considered in a proceeding in equity or at Law).  The Company Shares to be delivered to the Escrow Agent hereunder constitute “Registrable Securities” (as defined in the Registration Rights Agreement) under the Registration Rights Agreement and shall continue to be Registrable Securities immediately following the purchase of the Preferred Securities hereunder and each Exchange.  
 
 
 
11

 
 
The Purchaser shall be a “Permitted Transferee” and a “Holder” (each as defined in the Registration Rights Agreement) under the Registration Rights Agreement.
 
3.5 No Conflict.
 
(a) Subject to the accuracy of the representations and warranties made by the Purchaser in Section 4.11, the execution, delivery and performance of this Agreement and any applicable Ancillary Agreement by such Seller and the consummation of the transactions contemplated hereby and thereby will not (i) conflict with or result in any violation of any provision of the limited liability company agreement or limited partnership agreement (or similar governing documents) of such Seller Party, the Company or any of the Company’s Subsidiaries or Affiliates, (ii) result in any breach or violation of, or default (with or without notice or lapse of time, or both) under, require consent under, or give rise to a right of termination, cancellation, modification or acceleration of any obligation or to the loss of any benefit under any mortgage, contract, purchase or sale order, instrument, permit, concession, franchise, right or license binding upon the Company, such Seller or any of their Subsidiaries, or any judgment, decree or settlement binding upon the Company, or any of the Sellers or any of their Affiliates, or result in the creation of any liens, claims, mortgages, encumbrances, pledges, security interests, equities or charges of any kind (each, a “Lien”) upon any of the properties, assets or rights of the Company, such Seller or any of their Subsidiaries, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or to prevent or materially delay or hinder the ability of such Seller to perform its obligations under this Agreement, or (iii) subject to the matters referred to in Section 3.6, conflict with or violate any applicable material law, statute, code, ordinance, rule, regulation, or agency requirement of or undertaking to or agreement with any Governmental Entity, including common law (collectively, “Laws“ and each, a “Law”) or any judgment, order, injunction or decree issued by any Governmental Entity.
 
(b) To the Knowledge of such Seller, the execution, delivery and performance of the Reg Rights Acknowledgment by the Purchaser and the consummation of the transactions contemplated thereby will not (i) conflict with or result in any violation of any provision of the certificate of incorporation or bylaws (or similar governing documents) of the Company, (ii) result in any breach or violation of, or default (with or without notice or lapse of time, or both) under, require consent under, or give rise to a right of termination, cancellation, modification or acceleration of any obligation or to the loss of any benefit under any mortgage, contract, purchase or sale order, instrument, permit, concession, franchise, right or license binding upon the Company, such Seller or any of their Subsidiaries, or any judgment, decree or settlement binding upon the Company, or any of the Sellers or any of their Affiliates, or result in the creation of any Lien upon any of the properties, assets or rights of the Company, such Seller or any of their Subsidiaries, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or to prevent or materially delay or hinder the ability of such Seller to perform its obligations under this Agreement, or (iii) conflict with or violate any applicable material Law or any judgment, order, injunction or decree issued by any Governmental Entity.
 
3.6 Consents.
 
(a) Subject to the accuracy of the representations made by the Purchaser in Section 4.11, no consent, approval, order, or authorization of, or filing or registration with, or notification to (any of the foregoing being a “Consent”), any Governmental Entity, including any court or administrative or regulatory agency, or other third-party on the part of the Company, or any of the Sellers or any of their Affiliates, is required on the part of the Company, such Seller or their Subsidiaries in connection with the execution, delivery or performance of this Agreement and the consummation of the transactions contemplated hereby, including in each case the consummation of each Exchange; other than (i) those to be obtained, in connection with the registration of the Company Shares under the Registration Rights Agreement, under the applicable requirements of the Securities Act and any related filings and approvals under applicable state securities Laws, (ii) such filings as may be required pursuant to the formation of the Security Subsidiaries under Section 2.1, (iii) such filings as may be required under any applicable requirements of the Exchange Act or the rules of the NYSE, (iv) such filings and approvals as may be required by any insurance regulatory authorities in order to consummate the transactions contemplated by this Agreement and (v) such Consents the failure of which to make or obtain would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or to prevent or materially delay or hinder the ability of such Seller to perform its obligations under this Agreement.
 
(b) To the Knowledge of such Seller, no Consent of or to any Governmental Entity, including any court or administrative or regulatory agency or other third-party on the part of the Company, or any of the Sellers or any of their Affiliates, is required on the part of the Company, such Seller or their Subsidiaries in connection with the execution, delivery or performance of the Reg Rights Acknowledgment and the consummation of the transactions contemplated thereby.
 
3.7 Company SEC Filings.  To the Knowledge of such Seller, each of the Company and its Subsidiaries has filed all forms, reports and documents with the SEC that have been required to be filed by it under applicable Laws since January 1, 2011 (collectively, the “Company SEC Filings”).  Each Company SEC Filing complied as of its filing date as to form in all material respects with the applicable requirements of the Securities Act or the Exchange Act, as the case may be, each as in effect on the date such Company SEC Filing was filed (and, if amended or superseded by a filing prior to the date of this Agreement, on the date of such amended or superseded filing).  As of its filing date (and, if amended or superseded by a filing prior to the date of this Agreement, on the date of such amended or superseded filing), each Company SEC Filing did not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.  Since January 1, 2011, to the Knowledge of such Seller, no executive officer of the Company or any of its Subsidiaries has failed to make the certifications required by him or her under Section 302 and 906 of the Sarbanes Oxley Act of 2002 with respect to any Company SEC Filing.  To the Knowledge of such Seller, there are no transactions that have occurred since January 1, 2011 that are required to be disclosed in the Company SEC Filings pursuant to Item 404 of Regulation S-K that have not been disclosed in the Company SEC Filings.
 
 
 
 
12

 
 
3.8 Compliance with Law.  To the Knowledge of such Seller, the Company and each of its Subsidiaries are in compliance with and are not in default under or in violation of, and have not received any written notices of non-compliance, default or violation with respect to, any material Laws, in each case, except as, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect or to materially delay or hinder the ability of such Seller to perform its obligations under this Agreement.
 
3.9 NYSE.
 
(a) Shares of the Common Stock are registered pursuant to Section 12(b) of the Exchange Act and are listed on The New York Stock Exchange (the “NYSE”), and to the Knowledge of such Seller, there is no action pending by the Company or any other Person to terminate the registration of the Common Stock under the Exchange Act or to delist the Common Stock from the NYSE, nor has the Company received any notification that the SEC or the NYSE is currently contemplating terminating such registration or listing.
 
(b) The representations and warranties expressly set forth in this Section 3.9 shall be the only representations and warranties, express or implied, written or oral, with respect to the subject matter contained in this Section 3.9.
 
3.10 Investment Company Act.  The Company is not an “investment company” within the meaning of, and required to be registered under, the Investment Company Act of 1940, as amended.
 
 
3.11 Brokers.  The Sellers have not retained, utilized or been represented by any broker or finder who is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement.
 
 
3.12 Right of First Refusal; Stockholders Agreement; Voting and Registration Rights.  Except as set forth in this Agreement, any Ancillary Agreement, the CODs or the purchase agreements in respect of the 2011 Preferred Stock (other than the related tag-along rights letter agreements), no party has any right of first refusal, right of first offer, right of co-sale, preemptive right, anti-dilution right, tag-along rights or other rights of limited partners or other similar right regarding Equity Securities of the Company, including the Company Shares, or regarding the Preferred Securities.  Except as set forth in this Agreement, any Ancillary Agreement, Article IX of the Company’s certificate of incorporation, the CODs or the purchase agreements in respect of the 2011 Preferred Stock (other than the related tag-along rights letter agreements), there are no provisions of the Company’s organizational documents and no contracts to which the Company or any of its Subsidiaries is a party, which (a) may affect or restrict the voting rights of the Purchaser with respect to any Company Shares received pursuant to a Securities Exchange in their capacity as stockholders of the Company, (b) restrict the ability of the Purchaser, or any successor thereto or assignee or transferee thereof, to transfer the Company Shares received pursuant to a Securities Exchange, or restrict the ability of the Purchaser and the Sellers, or any successor thereto or assignee or transferee thereof, to effectuate a Cash Exchange, (c) would adversely affect such Seller’s or the Purchaser’s right or ability to comply with this Agreement or to consummate the transactions contemplated hereby or thereby (including each Exchange), (d) require the vote of the equityholders of any of the Sellers or more
 
 
 
13

 
 
than a majority of the Company’s issued and outstanding Common Stock or require a separate class vote, voting together as a single class, to take or prevent any corporate action (other than those matters expressly requiring a different vote under the provisions of the DGCL) or (e) entitle any party to nominate or elect any director of the Company or require any of the Company’s stockholders to vote for any such nominee or other person as a director of the Company.  Each of the items set forth in Schedule 3.12 has been waived, or satisfied in a manner to enable the execution of this Agreement and the consummation of the transaction contemplated herein.
 
3.13 Anti-Takeover Statutes.  Except as set forth in Article IX of the Company’s certificate of incorporation, the Company has elected in its certificate of incorporation not to be governed by Section 203 of the DGCL and, except for any approvals as may be required by any insurance regulatory authorities in order to consummate the transactions contemplated hereby, on the date hereof no other state takeover statute or similar regulation applies to or purports to apply to this Agreement, the Ancillary Agreements, the Registration Rights Agreement or the transactions contemplated hereby or thereby (including each Exchange).
 
3.14 Solvency.  On the date hereof, before and after giving effect to the transactions contemplated by this Agreement, (a) the fair value of such Seller Party, on an individual basis, is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Seller Party individually; (b) the present fair saleable value of the assets of each Seller Party, on an individual basis, is not less than the amount that will be required to pay the probable liability of such Seller Party individually on its debts as they become absolute and matured; and (c) such Seller Party is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which its property would constitute unreasonably small capital. Such Seller Party, on an individual basis, does not intend to and does not believe that it will incur debts or liabilities that will be beyond its respective ability to pay such debts and liabilities as they mature. The amount of contingent liabilities of such Seller Party at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that would be reasonably be expected to become an actual or matured liability.
 
3.15 Registration Rights.  Pursuant to the Reg Rights Acknowledgment, the Sellers and, to the Knowledge of the Sellers, the Company have taken all actions that are necessary (a) for the Purchaser to be deemed to be a “Holder” (as defined in the Registration Rights Agreement) under the Registration Rights Agreement in respect of the Company Shares and (b) to reserve for the Purchaser the registration rights described in the Reg Rights Acknowledgment.
 
3.16 No Other Representations and Warranties.  Except for the representations and warranties contained in Section 3 (including, or as qualified by, the Disclosure Schedule) the Sellers make no other representation or warranties, express or implied, written or oral, and hereby, to the maximum extent permitted by applicable Law, disclaim any such representations or warranties, whether by the Sellers or any other Person with respect to the Sellers, the Security Subsidiaries, the Company or the Company’s Subsidiaries or with respect to any other information (including, without limitation, pro forma financial information, financial projections
 
 
 
14

 
 
or other forward-looking statements) provided to or made available to the Purchaser in connection with the transactions contemplated hereby.  Neither the Sellers or any other Person will have or be subject to any liability or indemnification obligation to the Purchaser or any other Person resulting from any other express or implied representation or warranty with respect to the Sellers, the Security Subsidiaries, the Company or the Company’s Subsidiaries, unless any such information is expressly included in a representation or warranty contained in Section 3 or in an applicable section of the Disclosure Schedule.
 
4. Representations and Warranties of the Purchaser.  The Purchaser represents and warrants to the Sellers as follows:
 
4.1 Organization.  The Purchaser is a legal entity duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization.
 
4.2 Authorization.  The Purchaser has all requisite corporate power to enter into this Agreement and any applicable Ancillary Agreement and to consummate the transactions contemplated hereby and thereby and to carry out and perform its obligations hereunder and thereunder.  All corporate or member action on the part of the Purchaser or the holders of the capital stock or other equity interests of the Purchaser necessary for the authorization, execution, delivery and performance of this Agreement and any applicable Ancillary Agreement has been taken.  Upon their respective execution by the Purchaser and the other parties thereto and assuming that they constitute legal and binding agreements of the Sellers, this Agreement and any applicable Ancillary Agreement will constitute a legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except that such enforceability (a) may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar Laws affecting or relating to creditors’ rights generally, and (b) is subject to general principles of equity (regardless of whether considered in a proceeding in equity or at Law).
 
4.3 No Conflict.  The execution, delivery and performance of this Agreement and any applicable Ancillary Agreement by the Purchaser and the consummation of the transactions contemplated hereby and thereby will not (i) conflict with or result in any violation of any provision of the certificate of incorporation or by-laws or other equivalent organizational document, in each case as amended, of the Purchaser, (ii) result in any breach or violation of, or default (with or without notice or lapse of time, or both) under, require consent under, any contract binding upon the Purchaser or (iii) subject to the matters referred to in Section 4.4, conflict with or violate any applicable Laws or any judgment, order, injunction or decree issued by any Governmental Entity, except in the case of each of clauses (i), (ii) and (iii) of this Section 4.3 as would not, individually or in the aggregate, be reasonably expected to materially delay or hinder the ability of the Purchaser to perform its obligations hereunder (a “Purchaser Adverse Effect”).
 
4.4 Consents.  No Consent of any Governmental Entity is required on the part of the Purchaser in connection with the execution, delivery or performance of this Agreement or any applicable Ancillary Agreement or the consummation of the transactions contemplated hereby or thereby, other than (i) those to be obtained in connection with the registration of the Company Shares under the Registration Rights Agreement, under the applicable requirements
 
 
 
15

 
 
of the Securities Act and any related filings and approvals under applicable state securities Laws, (ii) such filings and approvals as may be required by any federal or state securities Laws, including compliance with any applicable requirements of the Exchange Act, (iii) such filings and approvals as may be required by any insurance regulatory authorities in order to consummate a Securities Exchange and (iv) such other Consents the failure of which to make or obtain would not, individually or in the aggregate, reasonably be expected to have a Purchaser Adverse Effect.
 
4.5 Brokers.  The Purchaser has not retained, utilized or been represented by any broker or finder in connection with the transactions contemplated by this Agreement whose fees any Seller would be required to pay.
 
4.6 Purchase Entirely for Own Account.  The Purchaser is acquiring the Preferred Securities (and following each Securities Exchange, the Company Shares) for its own account solely for the purpose of investment, not as nominee or agent, and not with a view to, or for sale in connection with, any distribution of the Preferred Securities (and following each Securities Exchange, the Company Shares) in violation of the Securities Act, and the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same, in violation of the Securities Act.  The Purchaser has no present agreement, undertaking, arrangement, obligation or commitment providing for the disposition of the Preferred Securities (and following each Securities Exchange, the Company Shares).
 
4.7 Investor Status.  The Purchaser certifies and represents to the Sellers that the Purchaser is an “accredited investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act.  The Purchaser’s financial condition is such that it is able to bear the risk of holding the Preferred Securities and the Company Shares for an indefinite period of time and the risk of loss of its entire investment.  The Purchaser has been afforded the opportunity to receive information from, and to ask questions of and receive answers from the management of, the Sellers, the Security Subsidiaries, Company and its Subsidiaries concerning this investment so as to allow it to make an informed investment decision prior to its investment and has sufficient knowledge and experience in investing in companies similar to the Security Subsidiaries and the Company so as to be able to evaluate the risks and merits of its investment in the Security Subsidiaries and the Company.
 
 
4.8 Securities Not Registered.
 
(a) The Purchaser understands that neither the Preferred Securities nor the Company Shares have been approved or disapproved by the SEC or by any state securities commission nor have the Preferred Securities and the Company Shares been registered under the Securities Act, by reason of their issuance by the Security Subsidiaries or the Company, as applicable, in a transaction exempt from the registration requirements of the Securities Act, and that the Preferred Securities and following each Securities Exchange the Company Shares must continue to be held by the Purchaser unless a subsequent disposition thereof is registered under the Securities Act or is exempt from such registration.  The Purchaser understands that the exemptions from registration afforded by Rule 144 under the Securities Act (“Rule 144”) (the provisions of which are known to it) depend on the satisfaction of various conditions, and that, if applicable, Rule 144 may afford the basis for sales only in limited amounts.
 
 
 
16

 
 
(b) It is understood that the Preferred Securities and any securities issued in respect thereof or in exchange therefor (including the Company Shares) may bear one or all of the legends set forth in Section 8.
 
4.9 Financing.  Purchaser at the Closing will have an amount of cash sufficient to enable it to consummate the transactions contemplated hereunder (including the purchase of the Preferred Securities set forth on Annex C) on the terms and conditions set forth in this Agreement.
 
4.10 Equity Securities of the Company and its Subsidiaries.  None of the Purchaser or any of its Affiliates Beneficially Owns any Equity Securities of the Company or any of its Subsidiaries, except for not more than 18,632,180 shares of Common Stock, and, as of the Closing Date, the Company Shares.
 
4.11 HSR Act.  The waiting period under the HSR Act has expired prior to the date of this Agreement.
 
4.12 Company Information.  The Sellers may receive or may have received, may have access to, and may be in possession of material, non-public, confidential information concerning the Company Shares, the Company, and the Company’s and/or its affiliates’ financial condition, results of operations, businesses, properties, active or pending litigation, assets, liabilities, management, projections, appraisals, plans and prospects (“Seller Information”) that has not been disclosed to the Purchaser.  The Seller Information may be indicative of a value of the Preferred Securities (taking into account the ability to Exchange) that is substantially different from the Preferred Security Purchase Price to be paid by the Purchaser to the Sellers in the transaction contemplated hereby.  The Purchaser expressly waives and releases the Sellers from any and all claims and liabilities arising from the Sellers’ failure to disclose, or the Purchaser’s failure to obtain and review, the Seller Information, and the Purchaser agrees to make no claim against the Sellers in respect of the transactions contemplated hereby relating to the Sellers’ failure to disclose, or the Purchaser’s failure to obtain and review, such Seller Information; provided, however, the Sellers expressly acknowledge and agree that the foregoing shall not prevent Purchaser from bringing any claim for (i) indemnification pursuant to Section 9.1 or (ii) intentional fraud.  The Purchaser acknowledges that the Sellers are relying on the representations and warranties set forth in this Section 4.12 in engaging in the transactions contemplated hereby, and would not engage in such transactions in the absence of such representations and warranties.
 
5. Covenants and Other Agreements.
 
5.1 Interim Covenants.  During the period from the date of this Agreement until the Purchaser no longer holds Preferred Securities, except (x) as explicitly required by this Agreement or (y) as the Purchaser otherwise consents in writing in advance (which consent may be given or withheld in the Purchaser’s sole discretion):
 
(a) Master Fund shall not vote any of its equity securities of the MF Securities Subsidiary, or take any action in its capacity as manager of MF Securities Subsidiary, in favor of:
 
 
 
 
17

 
 
(i) any amendment to the organizational or other governing documents of the MF Securities Subsidiary or the terms of the MF Preferred Securities; or
 
(ii) the adoption of any plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization, merger, consolidation or other reorganization of the MF Securities Subsidiary;
 
(b) Global Fund shall not vote any of its equity securities of the GOB Securities Subsidiary, or take any action in its capacity as manager of GOB Securities Subsidiary, in favor of:
 
 
(i) any amendment to the organizational or other governing documents of the GOB Securities Subsidiary or the terms of the GOB Preferred Securities; or
 
(ii) the adoption of any plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization, merger, consolidation or other reorganization of the GOB Securities Subsidiary;
 
(c) Special Situations Funds shall not vote any of its equity securities of the SSF Securities Subsidiary, or take any action in its capacity as manager of SSF Securities Subsidiary, in favor of:
 
(i) any amendment to the organizational or other governing documents of the SSF Securities Subsidiary or the terms of the SSF Preferred Securities; or
 
(ii) the adoption of any plan or agreement of complete or partial liquidation, dissolution, restructuring, recapitalization, merger, consolidation or other reorganization of the SSF Securities Subsidiary;
 
(d) (i) Master Fund will not take any action to cause the MF Securities Subsidiary to not remain solvent, (ii) Global Fund will not take any action to cause the GOB Securities Subsidiary to not remain solvent and (iii) Special Situations Fund will not take any action to cause the SSF Securities Subsidiary to not remain solvent;
 
(e) no Seller shall take any action that would reasonably be expected to cause any Closing condition set forth in Section 6 to not be satisfied at or prior to the Closing;
 
(f) (i) Master Fund will take all action necessary to ensure that the MF Securities Subsidiary shall not issue any additional MF Preferred Securities, (ii) Global Fund will take all action necessary to ensure that the GOB Securities Subsidiary shall not issue any additional GOB Preferred Securities and (iii) Special Situations Fund will take all action necessary to ensure that the SSF Securities Subsidiary shall not issue any additional SSF Preferred Securities;
 
(g) (i) Master Fund shall not sell, transfer or otherwise dispose of any of its Equity Securities of MF Securities Subsidiary, (ii) Global Fund shall not sell, transfer or otherwise dispose of any of its Equity Securities of GOB Securities Subsidiary and (iii) Special
 
 
 
18

 
 
Situations Fund shall not sell, transfer or otherwise dispose of any of its Equity Securities of SSF Securities Subsidiary; and
 
(h) (i) Master Fund will take all action necessary to ensure that the MF Securities Subsidiary does not enter into or become obligated under any contract or conduct any activities, other than in connection with the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements, (ii) Global Fund will take all action necessary to ensure that the GOB Securities Subsidiary does not enter into or become obligated under any contract or conduct any activities, other than in connection with the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements and (iii) Special Situations Fund will take all action necessary to ensure that the SSF Securities Subsidiary does not enter into or become obligated under any contract or conduct any activities, other than in connection with the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements.
 
5.2 Commercially Reasonable Efforts; Further Assurances; Notification.
 
(a) Upon the terms and subject to the conditions set forth in this Agreement, the Purchaser and each of the Sellers shall use commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties or parties hereto in doing, all things reasonably necessary, proper or advisable under applicable Law to consummate and make effective, in the most expeditious manner practicable, the transactions contemplated by this Agreement and the Ancillary Agreements (including each Exchange), including doing all things reasonably necessary to effect a Securities Exchange or a Cash Exchange in accordance with the Exchange Agreement, in each case, as reasonably requested by the Purchaser and using commercially reasonable efforts to:  (i) cause the conditions to the Closing set forth in Section 6 to be satisfied; (ii) obtain all necessary actions or non-actions, waivers, consents, approvals, orders and authorizations from Governmental Entities and make all necessary registrations, declarations and filings with Governmental Entities (including, following the Closing, in respect of filings required to be made by the Purchaser with insurance regulators in order to effectuate a Securities Exchange under applicable Law); and (iii) execute or deliver any additional instruments reasonably necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement.  Further, the Sellers shall use commercially reasonable efforts to cause the Company and its Subsidiaries to support, and not oppose, any application, form or other filing made by the Purchaser with insurance regulators in connection with the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements.
 
(b) Each party agrees to cooperate with each other and their respective officers, employees, attorneys, accountants and other agents, and, generally, do such other reasonable acts and things in good faith as may be reasonably necessary to effectuate the transactions contemplated by this Agreement and the Ancillary Agreements (including each Exchange) subject to the terms and conditions hereof and thereof and compliance with applicable Law, including taking reasonable action to facilitate the filing of any document or the taking of reasonable action to assist the other parties hereto in complying with the terms hereof and thereof.
 
 
 
 
19

 
 
(c) The Purchaser and each of the Sellers shall consult with each other with respect to the obtaining of all approvals from insurance regulators necessary to consummate the Securities Exchange and each party will keep the other reasonably apprised of the status of matters relating to such approvals.  The Purchaser and each of the Sellers shall have the right to review in advance, and to the extent practicable, and subject to any restrictions under applicable Law, each will consult the other on, any filings with insurance regulators in connection with such approvals; provided, however, that neither the Purchaser nor the Sellers shall have the right to review, or to be so consulted regarding, any such draft filings to the extent relating to any legally privileged, commercially sensitive, trade secret or personal information (collectively “Confidential Information”).  The Purchaser and each of the Sellers shall promptly furnish to each other copies of all such filings and written materials after their filing or submission, in each case subject to applicable Laws; provided, however, that neither the Purchaser nor the Sellers shall be required to provide to the other party the portions of any such filings that contain Confidential Information of the Purchaser or the Sellers, as applicable.  The Purchaser and each of the Sellers shall as promptly as practicable advise each other upon receiving any written or electronic, or any material telephonic, communication from any insurance regulator in connection with any such filing, including promptly furnishing each other copies of any such written or electronic communications; provided, however, that neither the Purchaser nor the Sellers shall be required to furnish any Confidential Information to the other party that is contained in such communications.  The Purchaser and the Sellers shall use commercially reasonable efforts to provide the other party with the opportunity to attend and participate in any live or telephonic meeting with any insurance regulator in respect of any such filings (other than routine, administrative matters and other than a telephone call initiated by such insurance regulator and not scheduled in advance); provided, however, that neither the Purchaser nor the Sellers shall be required to use such efforts to provide the other with the opportunity to attend the portions of any such meetings in which any Confidential Information of the Purchaser or the Sellers, as applicable, shall be discussed.
 
(d) Notwithstanding anything to the contrary herein, the parties hereto acknowledge and agree that the Sellers and their Affiliates, on the one hand, and the Purchaser and its Affiliates, on the other hand, are not a “group” (within the meaning of Section 13(d) of the Exchange Act) and therefore neither the Sellers nor the Purchaser shall have any responsibility for or liability to the other or any other Person under Section 13 and Section 16 of the Exchange Act arising from or in connection with the consummation of the transactions contemplated hereby or under any Ancillary Agreement or otherwise related to the acquisition or disposition by or on behalf of the Purchaser or its Affiliates of shares of the Common Stock (including the Company Shares).
 
(e) Notwithstanding the generality of the foregoing or anything to the contrary herein or in any of the Ancillary Agreements, the Purchaser shall be obligated to take, or to cause its Affiliates to take, all action necessary to consummate the Securities Exchange in its entirety as promptly as practicable following receipt of all approvals necessary from the applicable insurance regulators for the Purchaser to hold the Company Shares.
 
 
 
 
 
 
20

 
 
6. Conditions to the Obligation of the Parties to Consummate the Closing.
 
(a) The obligations of the Purchaser to consummate the transactions to be consummated at the Closing, and to purchase and pay for the Preferred Securities pursuant to this Agreement, are subject to the satisfaction of the following conditions precedent:
 
(i) the Purchaser shall have received from the Chief Financial Officer of each Seller the duly executed solvency certificate in the form attached hereto as Exhibit G;
 
(ii) each of the representations and warranties of the Sellers set forth in this Agreement shall be true and correct as of the Closing Date as though made on and as of the Closing Date (except for representations and warranties expressly stated to relate to a specific date, in which case each such representation and warranty shall be true and correct as of such earlier date);
 
(iii) each Seller shall have performed in all material respects all obligations required to be performed by it under this Agreement on or prior to the Closing Date;
 
(iv) no Material Adverse Effect shall have occurred since the date of this Agreement that is continuing.
 
(b) The obligations of the Sellers to consummate the transactions to be consummated at the Closing, and to sell the Preferred Securities pursuant to this Agreement, are subject to the satisfaction of the following conditions precedent:
 
(i) each of the representations and warranties of the Purchaser set forth in this Agreement shall be true and correct as of the Closing Date as though made on and as of the Closing Date (except for representations and warranties expressly stated to relate to a specific date, in which case each such representation and warranty shall be true and correct as of such earlier date);
 
(ii) the Purchaser shall have performed in all material respects all obligations required to be performed by it under this Agreement on or prior to the Closing Date;  and
 
(iii) no Material Adverse Effect shall have occurred since the date of this Agreement that is continuing.
 
7. Transfer Restrictions.
 
(a) The Purchaser understands and agrees that the Preferred Securities (and, following each Securities Exchange, the Company Shares) may be offered, resold, pledged or otherwise transferred only (a) in a transaction not involving a public offering, (b) pursuant to an exemption from registration under the Securities Act provided by Rule 144 thereunder (if available), (c) pursuant to an effective registration statement under the Securities Act, (d) to the Company or one of its Subsidiaries, or (e) to any Affiliate of the Purchaser (provided such
 
 
 
21

 
 
Person is an institutional investor); in each case, in accordance with any applicable state and federal securities laws; provided that as a condition precedent to a transfer of any the Preferred Securities (and, following each Securities Exchange, the Company Shares) to an Affiliate of the Purchaser pursuant to clause (e), any such Affiliate shall assume, on a several and not joint basis, all then continuing obligations of the Purchaser hereunder pursuant to a written agreement reasonably acceptable to the Company.  Any purported transfer of Company Shares other than in compliance with the terms hereof shall be void ab initio.
 
(b) The Purchaser hereby acknowledges that it is aware that the United States securities law restricts the activities of persons in possession of Material (as defined under applicable federal and state securities laws regulations, and interpretations thereof) non-public information about the Company and its Subsidiaries and restrict the communication of such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities in reliance upon such information.
 
(c) The Sellers agree not to sell, pledge, dispose of or otherwise transfer any of the Company Shares or any rights relating to the Company Shares, except (i) to the Purchaser or one of its Affiliates in accordance with this Agreement and the Ancillary Agreements or (ii) at the direction of, or with the prior written consent of, the Purchaser, in each case subject to applicable Law.
 
8. Legends; Securities Act Compliance.  Each certificate (or electronic book entry form) representing the Preferred Securities (and, following each Securities Exchange, the Company Shares) will bear a legend conspicuously thereon to the following effect:
 
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE (OR ELECTRONIC BOOK ENTRY FORM) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS THE SAME ARE REGISTERED AND QUALIFIED IN ACCORDANCE WITH THE SAID ACT AND ANY OTHER APPLICABLE STATE SECURITIES LAWS OR SUCH OFFER, SALE, TRANSFER OR OTHER DISPOSITION IS EXEMPT FROM REGISTRATION UNDER SUCH ACT AND ANY OTHER APPLICABLE STATE SECURITIES LAWS.”
 
The Purchaser acknowledges that before the foregoing legend is removed from any certificate (or electronic book entry form) representing the Preferred Securities or the Company Shares, it shall be required to deliver such instructions, certificates and opinions of counsel as the Company may reasonably request.
 
9. Indemnification; Survival.
 
9.1 Sellers Indemnification.  Each Seller, severally and not jointly, shall defend, indemnify, exonerate and hold free and harmless the Purchaser and its Affiliates and
 
 
 
22

 
 
their respective directors, officers and employees (each, a “Purchaser Indemnified Party” and, collectively, the “Purchaser Indemnified Parties”) from and against any and all Losses actually incurred by such Indemnified Parties that arise out of, or result from:  (i) any inaccuracy in or breach of such Seller’s representations or warranties in this Agreement, (ii) such Seller’s breach of its agreements or covenants in this Agreement or any Ancillary Agreement or (iii) any violation of the Sellers of the terms of the Preferred Securities.
 
9.2 Survival of Representations and Warranties.  The representations and warranties contained herein shall survive until 5:00 p.m. EDT on the fifteen (15) month anniversary of the Closing, other than the representations and warranties set forth in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6, 3.10 and 3.14 (the “Fundamental Representations”) which shall survive indefinitely (the “Survival Period”).  For the avoidance of doubt, all other covenants, agreements and obligations contained in this Agreement shall survive indefinitely (unless a different period is specifically provided for pursuant to the provisions of this Agreement expressly relating thereto).
 
 
9.3 Purchaser Indemnification.  The Purchaser shall defend, indemnify, exonerate and hold free and harmless each Seller and its Affiliates and their respective directors, officers and employees (each a “Seller Indemnified Party“ and collectively, the “Seller Indemnified Parties”) from and against any and all Losses actually incurred by such Seller Indemnified Parties that arise out of, or result from:  (i) any inaccuracy in or breach of the Purchaser’s representations or warranties in this Agreement or (ii) the Purchaser’s breach of its agreements or covenants in this Agreement or any Ancillary Agreement.
 
9.4 Limitations.  Notwithstanding anything in this Agreement to the contrary, (i) no indemnification claims for Losses shall be asserted by the Purchaser Indemnified Parties under Section 9.1 or by the Seller Indemnified Parties under Section 9.3 unless and until the aggregate amount of Losses that would otherwise be payable under Section 9.1 or Section 9.3, as applicable, exceeds $2,000,000 (the “Basket Amount”), whereupon the Purchaser Indemnified Party or Seller Indemnified Party, as applicable, shall be entitled to receive only amounts for Losses in excess of the Basket Amount and (ii) the aggregate liability of any Seller or the Purchaser for Losses under Section 9.1 or Section 9.3, as applicable, shall in no event exceed, in the case of a Seller, the applicable Preferred Security Purchase Price allocated on Annex C to such Seller, or, in the case of the Purchaser, the aggregate Preferred Security Purchase Price; provided that the limitations in clause (i) of this Section 9.4 shall not apply to the breach of any Fundamental Representation.
 
9.5 Procedures.  A party entitled to indemnification hereunder (each, an “Indemnified Party”) shall give written notice to the party from whom indemnification is sought (the “Indemnifying Party”) of any claim with respect to which it seeks indemnification promptly after the discovery by such Indemnified Party of any matters giving rise to a claim for indemnification hereunder; provided, that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 9 unless and to the extent that the Indemnifying Party shall have been materially prejudiced by the failure of such Indemnified Party to so notify such party.  Such notice shall describe in reasonable detail such claim.  In case any such action, suit, claim or proceeding is brought against an Indemnified Party, the Indemnifying Party shall be entitled to assume and conduct the
 
 
 
23

 
 
defense thereof, with counsel reasonably satisfactory to the Indemnified Party unless (i) such claim seeks remedies, in addition to or other than, monetary damages that are reasonably likely to be awarded, (ii) such claim involves a criminal proceeding or (iii) counsel to the Indemnified Party advises such Indemnifying Party in writing that such claim involves a conflict of interest that would reasonably be expected to make it inappropriate for the same counsel to represent both the Indemnifying Party and the Indemnified Party.  If any one of the foregoing clauses (i) through (iii) applies, the Indemnified Party shall be entitled to retain its own counsel at the cost and expense of the Indemnifying Party (except that the Indemnifying Party shall only be liable for the legal fees and expenses of one law firm for all Indemnified Parties, taken together with respect to any single action or group of related actions, other than local counsel).  If the Indemnifying Party assumes the defense of any claim, the Indemnified Party shall nevertheless be entitled to hire, at its own expense, separate counsel and participate in the defense thereof; provided, that all Indemnified Parties shall thereafter deliver to the Indemnifying Party copies of all notices and documents (including court papers) received by the Indemnified Party relating to the claim, and each Indemnified Party shall reasonably cooperate in the defense or prosecution of such claim.  Such reasonable cooperation shall include the retention and (upon the Indemnifying Party’s reasonable request) the provision to the Indemnifying Party of records and information that are reasonably relevant to such 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 not be liable for any settlement of any action, suit, claim or proceeding affected without its prior written consent (not to be unreasonably withheld, conditioned or delayed).  The Indemnifying Party further agrees that it will not, without the Indemnified Party’s prior written consent (which shall not be unreasonably withheld, conditioned or delayed), settle or compromise any claim or consent to entry of any judgment in respect thereof in any pending or threatened action, suit, claim or proceeding in respect of which indemnification has been sought or may be hereunder unless such settlement or compromise includes an unconditional release of such Indemnified Party from all liability arising out of such action, suit, claim or proceeding and is solely for monetary damages.
 
9.6 Additional Limitations.  Notwithstanding anything contained herein to the contrary, “Losses” shall not include (i) any Losses to the extent such Losses could not have been reasonably foreseen by the parties as of the Closing, and (ii) punitive damages, except to the extent payable by an Indemnified Party to a third party.  No party hereto shall be obligated to indemnify any other Person with respect to any representation, warranty, covenant or condition specifically waived in writing by any other party on or prior to the Closing.
 
9.7 Exclusive Remedies.  Notwithstanding anything to the contrary herein, the provisions of Section 9 and Section 11.6 shall be the sole and exclusive remedies of parties under this Agreement following the Closing for any and all breaches or alleged breaches of any representations or warranties, covenants or agreements of the parties contained in this Agreement.  For the avoidance of doubt, this Section 9 shall not prevent the parties from obtaining specific performance or other non-monetary remedies in equity or at Law pursuant to Section 11.6 of this Agreement and shall not limit other remedies that may be available to the parties under the Registration Rights Agreement or any other agreement.
 
 
 
 
 
 
24

 
 
10. Termination.
 
10.1 Conditions of Termination.  Notwithstanding anything to the contrary contained herein, this Agreement may be terminated at any time before the Closing by (i) mutual written agreement of the Purchaser and the Sellers, (ii) the Purchaser if there shall have been a breach of any of the covenants or agreements or any of the representations or warranties set forth in this Agreement on the part of any Seller, which breach, either individually or in the aggregate, would result in the failure of any conditions set forth in Section 6, or (iii) either party, if the Closing has not occurred on or before the sixth Business Day following the date hereof, at 6:00 p.m. (in New York, New York) (provided, that the right to terminate this Agreement under this Section 10.1(iii) shall not be available to any party whose breach of this Agreement primarily results in or primarily causes the failure of the transactions contemplated by this Agreement to be consummated prior by such date and time).
 
10.2 Effect of Termination.  In the event of any termination pursuant to Section 10.1 hereof, this Agreement shall become null and void and have no further effect, with no liability on the part of any Seller or the Purchaser, or their directors, partners, members, employees, affiliates, officers, stockholders or agents or other representatives, with respect to this Agreement, except for the terms of this Section 10.2 and Section 11 (Miscellaneous Provisions), which shall survive the termination of this Agreement.
 
11. Miscellaneous Provisions.
 
11.1 Public Statements or Releases.  Neither the Purchaser nor any Seller shall make any public release or announcement with respect to the existence or terms of this Agreement, the Ancillary Agreements or the transactions provided for herein or therein without the prior approval of the other parties, which shall not be unreasonably withheld, conditioned or delayed.  Notwithstanding the foregoing, nothing in this Section 11.1 shall prevent any party from making any public release required (in the exercise of its reasonable judgment) in order to satisfy its obligations under Law or under the rules or regulations of the SEC or any United States national securities exchange, in which case the party or parties, as applicable, required to make the release or announcement shall, to the extent reasonably practicable, allow the other party or parties, as applicable, reasonable time to comment on such release or announcement in advance of such issuance.
 
11.2 Interpretation.  The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement will refer to this Agreement as a whole and not to any particular provision of this Agreement, and section and subsection references are to this Agreement unless otherwise specified.  The headings in this Agreement are included for convenience of reference only and will not limit or otherwise affect the meaning or interpretation of this Agreement.  Whenever the words “include,” “includes” or “including” are used in this Agreement, they will be deemed to be followed by the words “without limitation.”  The phrases “the date of this Agreement,” “the date hereof” and terms of similar import, unless the context otherwise requires, will be deemed to refer to the date set forth in the first paragraph of this Agreement.  The meanings given to terms defined herein will be equally applicable to both the singular and plural forms of such terms.  All matters to be agreed to by any party hereto must be agreed to in writing by such party unless otherwise indicated herein.  Except as specified
 
 
 
 
25

 
 
otherwise herein, references to agreements, policies, standards, guidelines or instruments, or to statutes or regulations, are to such agreements, policies, standards, guidelines or instruments, or statutes or regulations, as amended or supplemented from time to time (or to successors thereto).  All references herein to the Subsidiaries of a Person shall be deemed to include all direct and indirect Subsidiaries of such Person, unless otherwise indicated or the context otherwise requires.  The parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any Law, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.
 
11.3 Notices.  All notices, requests, consents, and other communications under this Agreement and the Ancillary Agreements (other than the Escrow Agreement) shall be in writing and shall be deemed delivered (a) three (3) Business Days after being sent by registered or certified mail, return receipt requested, postage prepaid (b) one (1) Business Day after being sent via a reputable nationwide overnight courier service guaranteeing next business day delivery, (c) on the date of delivery if delivered personally, or (d) if by facsimile or email, upon written confirmation of receipt, in each case to the intended recipient as set forth below:
 
 
(a)    if to Sellers, addressed as follows:
 
Harbinger Capital Partners Master Fund I, Ltd.
Global Opportunities Breakaway Ltd.
Harbinger Capital Partners Special Situations Fund, L.P.
450 Park Avenue
30th Floor
New York, NY 10022
 
Attention: 
Chief Financial Officer; Legal Department
 
Email:
khladek@harbingercapital.com;
Compliance@harbingercapital.com
 
Facsimile:
(212) 658-9311
 
with copies (which shall not constitute notice) to:
 
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019-10236
 
Attention: 
Jeffrey D. Marell
 
Email: 
jmarell@paulweiss.com
 
Facsimile: 
(212) 492-0105
 
(b)       if to Purchaser, to:
 
Leucadia National Corporation
520 Madison Avenue
 
 
 
26

 
 
New York, NY 10022
 
Attention:
General Counsel
 
Email:
Msharp@jefferies.com
 
with copies (which shall not constitute notice) to:
 
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
 
Attention:
Andrea Bernstein
Matthew Gilroy
 
Email:
andrea.bernstein@weil.com
matthew.gilroy@weil.com
 
Facsimile:
(212) 310-8007
 
Any party may change the address to which notices, requests, consents or other communications hereunder are to be delivered by giving the other parties notice in the manner set forth in this Section 11.3.
 
11.4 Severability.  In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto.  The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.
 
11.5 Governing Law; Jurisdiction; WAIVER OF JURY TRIAL.
 
(a) This Agreement shall be governed by and construed in accordance with the laws of the State of New York, regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof.
 
(b) Each of the parties hereto irrevocably (i) agrees that any legal suit, action or proceeding brought by any party hereto against arising out of or based upon this Agreement may be instituted in any United States federal court or New York State court located in the Borough of Manhattan in The City of New York (a “New York Court”), (ii) waives, to the fullest extent it may effectively do so, any objection which it may now or hereafter have to the laying of venue of any such proceeding and (iii) submits to the non-exclusive jurisdiction of a New York Court in any such suit, action or proceeding.
 
(c) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF ANY
 
 
 
27

 
 
SELLER OR THE PURCHASER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
 
11.6 Specific Performance.  The parties hereto agree that the obligations imposed on them in this Agreement and the Ancillary Agreements are special, unique and of an extraordinary character, and that irreparable damages for which money damages, even if available, would not be an adequate remedy, would occur in the event that the parties hereto do not perform the provisions of this Agreement and the Ancillary Agreements in accordance with their respective specified terms or otherwise breach such provisions.  The parties acknowledge and agree that the parties shall be entitled to seek an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and the Ancillary Agreements and to enforce specifically the terms and provisions hereof and thereof, this being in addition to any other remedy to which they are entitled, at law or in equity; and the parties hereto further agree to waive any requirement for the securing or posting of any bond or other security in connection with the obtaining of any such injunctive or other equitable relief.  Each of the parties agrees that it will not oppose the granting of an injunction, specific performance and other equitable relief as provided herein on the basis that (x) either party has an adequate remedy at law or (y) an award of specific performance is not an appropriate remedy for any reason at law or equity.
 
11.7 Delays or Omissions; Waiver.  No delay or omission to exercise any right, power, or remedy accruing to a party upon any breach or default of another party under this Agreement shall impair any such right, power, or remedy of such party, nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  No waiver of any term, provision or condition of this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or be construed as, a further or continuing waiver of any such term, provision or condition or as a waiver of any other term, provision or condition of this Agreement.  Any agreement on the part of a party or parties hereto to any waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party or parties, as applicable.  Any delay in exercising any right under this Agreement shall not constitute a waiver of such right.
 
 
11.8 Fees; Expenses.
 
(a) Except as set forth in this Section 11.8 or in any Ancillary Agreement, all fees and expenses incurred in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby shall be paid by the party or parties, as applicable, incurring such expenses whether or not the transactions contemplated hereby are consummated; provided, that the Purchaser shall be responsible for fifty percent of the fees and expenses of the Escrow Agent and the Sellers shall be jointly and severally responsible for the other fifty percent of the fees and expenses of the Escrow Agent, in each case until the first anniversary of the Closing and thereafter the Purchaser shall be responsible for one-hundred percent of the fees and expenses of the Escrow Agent.
 
(b) The Sellers shall pay any and all documentary, stamp or similar issue or transfer Tax payable in connection with this Agreement and the Ancillary Agreements,
 
 
 
28

 
 
including in respect of the sale of the Preferred Securities at the Closing and in connection with the consummation of any Exchange.
 
(c) Each party shall pay for any filing fees associated with any filings made by it in connection with this Agreement, the Ancillary Agreements and the transactions contemplated hereby and thereby.
 
11.9 Assignment.  None of the parties may assign its rights or obligations under this Agreement without the prior written consent of the other parties, provided, however, that the Purchaser may assign its right and obligations hereunder to an Affiliate of the Purchaser without the prior written consent of any Seller; provided, further, that as a condition precedent to such assignment (x) any such Affiliate shall assume, on a several and not joint basis, all then continuing obligations of the Purchaser hereunder pursuant to a written agreement reasonably acceptable to the Sellers, and (y) no assignment and assumption shall relieve the Purchaser from any liability hereunder; provided, further, that any assignment to an Affiliate shall only be effective for so long as such Person remains an Affiliate of the Purchaser and the rights assigned to such Person shall cease to be of further force and effect when such Person ceases to be an Affiliate of the Purchaser.  Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties to this Agreement and their respective successors and permitted assigns.  Any purported assignment other than in compliance with the terms hereof shall be void ab initio.
 
11.10 No Third Party Beneficiaries.  Except for Section 9 (with respect to which all Indemnified Parties shall be third party beneficiaries), this Agreement and the Ancillary Agreements do not create any rights, claims or benefits inuring to any Person that is not a party hereto or thereto nor create or establish any third party beneficiary hereto or thereto.  Without limiting the foregoing, the representations and warranties in this Agreement are the product of negotiations among the parties hereto and are for the sole benefit of the parties hereto. In some instances, the representations and warranties in this Agreement may represent an allocation among the parties hereto of risks associated with particular matters regardless of the knowledge of any of the parties hereto. Consequently, Persons other than the parties hereto may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.
 
11.11 Counterparts.  This Agreement may be executed and delivered (including by facsimile or electronic transmission) in any number of counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed an original, but all of which taken together shall constitute a single instrument.
 
11.12 Entire Agreement; Amendments.  This Agreement, the Ancillary Agreements and the documents and instruments and other agreements among the parties hereto as contemplated by or referred to herein, including the Disclosure Schedule and the Annexes and Exhibits hereto, constitute the entire agreement between the parties hereto respecting the subject matter hereof and supersede all prior agreements, negotiations, understandings, representations and statements respecting the subject matter hereof, whether written or oral.  No modification, alteration, waiver or change in any of the terms of this Agreement shall be valid or binding upon
 
 
 
29

 
 
the parties hereto unless made in writing and duly executed by the Sellers, on the one hand, and the Purchaser, on the other hand.
 
11.13 Freedom to Pursue Opportunities.  Each of the parties hereto expressly acknowledges and agrees that:  (i) the Purchaser has the right to, and shall have no duty (contractual or otherwise) not to, directly or indirectly engage in the same or similar business activities or lines of business as the Company or any of its Subsidiaries, including those deemed to be competing with the Company or any of its Subsidiaries; and (ii) in the event that the Purchaser acquires knowledge of a potential transaction or matter (other than to the extent knowledge of such transaction or matter was acquired by such Person solely in their capacity as a director or board observer) that may be a corporate opportunity for each of the Company and the Purchaser, such Person shall have no duty (contractual or otherwise) to communicate or present such corporate opportunity to the Company or any of its Subsidiaries, as the case may be, and, notwithstanding any provision of this Agreement to the contrary, shall not be liable to the Company or its Affiliates for breach of any duty (contractual or otherwise) by reason of the fact that the Purchaser, directly or indirectly, pursues or acquires such opportunity for itself, directs such opportunity to another Person, or does not present such opportunity to the Company.
 
11.14 Nature of Sellers’ Obligations and Rights.  The obligations of each Seller under this Agreement and each applicable Ancillary Agreement are several (in proportion to the number of Company Shares being delivered to the Escrow Agent by such Seller) and not joint with the obligations of any other Seller, and no Seller shall be responsible in any way for the performance of the obligations of any other Seller under this Agreement or any Ancillary Agreement.  Nothing contained herein or in any Ancillary Agreement, and no action taken by any Seller pursuant hereto or thereto, shall be deemed to constitute the Sellers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Sellers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by this Agreement and each applicable Ancillary Agreement.  Each Seller confirms that it has independently participated in the negotiation of the transactions contemplated hereby and has been represented by separate counsel.  All rights, powers and remedies provided to the Sellers under this Agreement and each applicable Ancillary Agreement or otherwise available in respect hereof and thereof at law or in equity shall be cumulative and not alternative or exclusive, and the exercise or beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later exercise of any other rights, powers or remedies by such party or any other party.
 
11.15 No Personal Liability of Directors, Officers, Owners, Etc.  No director, officer, employee, incorporator, shareholder, managing member, member, general partner, limited partner, principal or other agent of any of the named parties hereto shall have any liability for any obligations of such party under this Agreement or for any claim based on, in respect of, or by reason of, the obligations of such party, under this Agreement.  The Purchaser and the Sellers each hereby waive and release all such liability.  This waiver and release is a material inducement to each party’s entry into this Agreement.
 
[Remainder of the Page Intentionally Left Blank]
 
 
 
30

 
 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
 
 
 
Harbinger Capital Partners Master Fund I, Ltd.
   
 
By:  Harbinger Capital Partners, LLC, its investment manager
     
     
 
By:
 /s/ Keith Hladek  
 
Name:
 Keith Hladek
 
Title:
Authorized Signatory
   
   
 
Global Opportunities Breakaway Ltd.
 
By:  Harbinger Capital Partners II, LP, its investment manager
   
   
 
By:
 /s/ Keith Hladek  
 
Name:
Keith Hladek
 
Title:
Authorized Signatory
     
     
 
Harbinger Capital Partners Special Situations Fund, L.P.
   
 
By:  Harbinger Capital Partners Special Situations GP, LLC,  its general partner
   
 
By:
      /s/  Keith Hladek
 
Name:
Keith Hladek
 
Title:
Authorized Signatory
   
   



 
 

 
Signature Page to Stock Purchase Agreement
 
 

 
 
 
 
Leucadia National Corporation
   
   
 
By:
   /s/  Michael J. Sharp
 
Name:
Michael J. Sharp
 
Title:
Executive Vice President & General Counsel

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Signature Page to Stock Purchase Agreement
 
 
 

 
 
Annex A
 
Company Shares
 
 
 
Seller
 
Shares
 
Harbinger Capital Partners Master Fund I, Ltd.                                                                                    
    14,658,345  
Global Opportunities Breakaway Ltd.
    3,258,376  
Harbinger Capital Partners Special Situations Fund, L.P.
    5,083,279  
TOTAL:                                                                                    
    23,000,000  
 
 
 
 
 
 
 
 
 
 
 
 

 
 
Annex B
Security Subsidiaries Capitalization
 
 
 
Security Subsidiary
 
Preferred Units
   
Common Units
 
MF Subsidiary
    14,658,345         1,000    
GOB Subsidiary
    3,258,376         1,000    
SSF Subsidiary
    5,083,279         1,000    
 
 
 
 
 
 
 
 
 
 

 
 
 

 
 
Annex C
 
Sellers, Preferred Securities and Preferred Security Purchase Price
 
Seller
 
Security Subsidiary
 
Preferred
Securities
   
Preferred Security
Purchase Price
 
Harbinger Capital Partners Master Fund I, Ltd. 
 
MF Subsidiary
    14,658,345       $ 161,241,795.00    
Global Opportunities Breakaway Ltd.
 
GOB Subsidiary
    3,258,376       $ 35,842,136.00    
Harbinger Capital Partners Special Situations Fund, L.P.
 
SSF Subsidiary
     5,083,279       $ 55,916,069.00    
TOTAL: 
        23,000,000       $ 253,000,000.00    

 
 
 
 
 
 
 
 

 
 
Annex D
 
 
Form of A&R LLC Agreement for Security Subsidiaries
 
See attached.
 
 
 
 
 
 
 
 
 

 
 
AGREED FORM

 
MF/HRG SECURITIES SUBSIDIARY, LLC
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
 
 
This AMENDED AND RESTATED LIABILITY COMPANY AGREEMENT of MF/HRG Securities Subsidiary, LLC (the “Company”), dated as of March [•], 2014, is entered into by and among the Company, Harbinger Capital Partners Master Fund I, Ltd., a company incorporated under the laws of the Cayman Islands as an exempted company with limited liability (the “Master Fund” or in its capacity as managing member, the “Managing Member”), and LUK HRG LLC, a Delaware limited liability company (“LUK-HRG”).1
 
R EC I T A L S
 
A. In anticipation of the entry into that certain Preferred Securities Purchase Agreement (the “PSPA”), by and among the Master Fund, Global Opportunities Breakaway Ltd. (“Global Fund”), Harbinger Capital Partners Special Situations Fund, L.P. (“Special Situations Fund” and, together with the Master Fund and Global Fund, the “Funds”) and Leucadia National Corporation (“Leucadia”), the Company was formed as a Delaware limited liability company named “MF/HRG Securities Subsidiary, LLC” effective by the filing of a Certificate of Formation with the Delaware Secretary of State on March 13, 2014.
 
B. Master Fund adopted an initial limited liability company agreement of the Company, dated as of March [•], 2014 (the “Original Agreement”).
 
C. Pursuant to the PSPA, LUK-HRG, as assignee of Leucadia, has purchased certain Preferred Units of the Company from the Master Fund as set forth on Schedule 2.02 hereto.
 
D. In connection with the transactions contemplated by the PSPA, the Funds and Leucadia have entered into that certain Exchange Agreement, dated as of March [•], 2014 (the “Exchange Agreement”).
 
E. In connection with the transactions contemplated by the PSPA, the parties hereto desire to amend and restate the Original Agreement in its entirety.
 
A G R E E M E N T S
 
NOW THEREFORE, in consideration of the mutual promises contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree that the Original Agreement is amended and restated in its entirety to read as follows:
 
_____________________
1
NTD: This draft agreement for the new subsidiary of the Master Fund will be conformed as necessary to create the A&R LLC Agreement for the new subsidiaries of Global Fund and Special Situations Fund.
 
1

 
 
ARTICLE I
 
ORGANIZATIONAL MATTERS AND CERTAIN DEFINITIONS
 
1.01 Organization of Company. The Company was organized as a limited liability company on March 13, 2014.
 
1.02 Legal Status. The Company is a limited liability company organized and existing under the Delaware Limited Liability Company Act, as amended (the “Act”). The Managing Member shall take such steps as are necessary to permit the Company to legally conduct business, to maintain its status as a limited liability company formed under the laws of the State of Delaware and to ensure that the Company shall continue to be treated as a partnership for tax purposes except as otherwise contemplated herein.
 
1.03 Name. The name of the Company is “MF/HRG Securities Subsidiary, LLC,” or such other name as the Managing Member shall hereafter designate.
 
1.04 Registered Office and Registered Agent. The address of the registered office of the Company in the State of Delaware shall be 1209 Orange Street, Wilmington, Delaware 19801, and the initial registered agent for service of process on the Company in the State of Delaware at such registered office shall be The Corporation Trust Company.
 
1.05 Purpose. The Company was formed for the purpose of effectuating the sale of certain shares of common stock, $0.01 par value per share, of Harbinger Group Inc. owned by the Managing Member. In addition, the Company shall possess and may exercise all the powers and privileges granted by the Act or by any other applicable law and by this Agreement, together with any powers incidental thereto, including such powers and privileges as are necessary or convenient to the purposes of the Company.
 
1.06 Term. Unless terminated in accordance with Article VI, the existence of the Company shall be perpetual.
 
1.07 Certain Definitions. Certain capitalized terms used in this Agreement are defined in Appendix I hereto.
 
1.08 Liability to Third Parties.
 
(a) Except as otherwise provided by the Act, the liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the liabilities of the Company, and no Member, nor any director, manager, officer, employee or agent of any of the Members, shall be obligated personally for any such liability of the Company solely by reason of being a Member, acting as a Managing Member or serving in a representative capacity on behalf of any of the Members.
 
(b) Notwithstanding the provisions of Section 1.08(a), a Member may agree in writing to be obligated personally for any or all of the liabilities of the Company; provided, however, that such obligation shall only arise if it is consented to in writing by such Member, and nothing in this Agreement shall constitute such consent.
 
 
 
2

 
 
1.09 Exchange Agreement. The Master Fund and Leucadia are each party to the Exchange Agreement, and the terms of the Exchange Agreement shall control with respect to the Master Fund, on the one hand, and Leucadia and LUK-HRG, on the other hand, in the event any conflict or inconsistency exists between the Exchange Agreement, on the one hand, and this Agreement, on the other hand.
 
1.10 Indemnification.
 
(a) The Company shall indemnify any person (each, an “Indemnitee”) who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding brought by or against the Company or otherwise, whether civil, criminal, administrative or investigative, including, without limitation, any action by or in the right of the Company to procure a judgment in its favor, by reason of the fact that such Indemnitee is or was a Member or an officer or employee of the Company, or at the relevant time, being or having been such a Member or officer or employee, that such Indemnitee is or was serving at the request of the Company as a partner, director, officer or trustee of another corporation, limited liability company, partnership, joint venture, trust or other enterprise, against all expenses (including attorneys' fees and disbursements), judgments, fines and amounts paid in settlement, actually and reasonably incurred by such Indemnitee in connection with such action, suit or proceeding. Notwithstanding the foregoing, no indemnification shall be provided to or on behalf of any Indemnitee if a judgment or other final adjudication adverse to such Indemnitee establishes that such Indemnitee's acts were fraudulent, grossly negligent or the result of willful malfeasance and, in each case, were material to the cause of action so adjudicated.
 
(b) The Company may, in the discretion of the Member, pay expenses incurred by any Indemnitee in defending any action, suit or proceeding described in Section 1.10(a) in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such Indemnitee to repay such advance if it shall ultimately be determined that such Indemnitee is not entitled to be indemnified by the Company pursuant to this Section 1.10.
 
(c) The indemnification provided by this Section 1.10 shall not be deemed exclusive of any other rights to indemnification to which those seeking indemnification may be entitled under any agreement, determination of a Member or otherwise. The rights to indemnification and reimbursement or advancement of expenses provided by, or granted pursuant to, this Section 1.10 shall continue as to an Indemnitee who has ceased to be a Member, or an officer or employee of the Company (or other person indemnified hereunder) and shall inure to the benefit of the executors, administrators, legatees and distributees of such person.
 
1.11 Waiver. The provisions of this Agreement, to the extent that they restrict or reduce the duties and/or liabilities of a Member or the Managing Member (in its capacity as such) otherwise existing at law or in equity (including under the Act), shall replace the other duties and liabilities of such Member or Managing Member (in its capacity as such) (as the case may be). Notwithstanding anything to the contrary contained in this Agreement and to the fullest extent permitted by the Act, no Member or Managing Member (in its capacity as such) shall have any fiduciary duties to any other Member or other Person bound by this Agreement, and each Member hereby disclaims, eliminates, and shall not be liable under any circumstances for,
 
 
 
 
 
3

 
 
any actual or claimed breach of any such duties of a Member, Managing Member (in its capacity as such) or authorized person within the meaning of the Act (or an agent of any of the foregoing). To the extent any individual serving as a Member, within the meaning of the Act or authorized person within the meaning of the Act (or as an agent of any of the foregoing) has any liabilities or duties at law or in equity, including fiduciary duties or any other standard of care, more expansive than those set forth in this Section 1.11, such liabilities and duties are hereby modified to the extent permitted under the Act to those set forth in the second sentence of this Section 1.11. Wherever in this Agreement a Person is empowered to take or make a decision, direction, consent, vote, determination, election, action or approval, whether in such Person’s capacity as a Member, Managing Member (in its capacity as such) or authorized person within the meaning of the Act, such Person is entitled to consider, favor and further such interests and factors as it desires, including its own interests and the interests of its Affiliates, and has no duty or obligation to consider, favor or further any other interest of the Company, any subsidiary or any other Member or Person. This Section 1.11 shall not eliminate the implied contractual covenant of good faith and fair dealing. To the fullest extent permitted by law, including Section 18-1101(e) of the Act, no Member, Managing Member (in its capacity as such) or authorized person within the meaning of the Act shall be liable to the Company, any Member or any other Person bound by this Agreement for breach of fiduciary duties unless such Member, Managing Member (in its capacity as such) or authorized person within the meaning of the Act acted in bad faith or engaged in willful misconduct.
 
 
ARTICLE II
 
CAPITAL CONTRIBUTIONS; ISSUANCES OF UNITS
 
2.01 Units Generally. The economic interests of the Members in the Company shall be represented by Units. Units, in turn, shall consist of Preferred Units and Common Units. References herein to Units, without distinction as to series or class, shall constitute references to all Preferred Units and Common Units.
 
2.02 Capital Contributions; Capital Accounts. Subject to the terms and conditions thereof and this Section 2.02, (a) in connection with the transactions contemplated by the PSPA, LUK-HRG as of the date hereof owns the number of Preferred Units set forth on Schedule 2.02 and has the deemed Capital Contributions set forth on Schedule 2.02 hereto and (b) pursuant to the PSPA, the Master Fund owns the number of Common Units set forth on Schedule 2.02 and has the deemed Capital Contributions set forth on Schedule 2.02 hereto. A capital account shall be maintained for each Member.
 
2.03 Other Contributions. No Member shall be required to make any contributions to the Company. Subject to Section 2.05, the Company shall not accept any Capital Contributions from a Member or any other Person unless the terms and conditions of any such Capital Contribution and related issuance of Units are substantially similar to those that would have been achieved through arm’s-length negotiation with an unaffiliated third party.
 
2.04 Return of Capital Contributions; Interest. No Member shall have a separate right to receive a return of such Member’s Capital Contribution or to receive interest thereon, but
 
 
 
 
 
4

 
 
each Member shall have such Distribution rights as are provided herein. No Member shall have personal liability for the repayment of the Capital Contribution of any other Members.
 
2.05 Issuances of Units. Subject to the limitations set forth in this Agreement, the Managing Member shall have discretion in determining whether to issue Units, the number and type of Units to be issued at any particular time, the Capital Contribution for any Units issued, and all other terms and conditions governing the issuance of Units; provided, that the Company shall not issue any Units (whether denominated as Units or otherwise) to any Person unless such Person shall have agreed to be bound by this Agreement and shall have executed such documents or instruments as the Managing Member determines to be necessary or appropriate to effect such Person’s admission as a Member.
 
2.06 Certificates; Unit Ledger. The Company may, but shall not be required to, issue certificates representing Units (“Certificated Units”). Regardless of whether the Company shall issue Certificated Units, it shall maintain a ledger on which all issuances, Transfers, conversions and repurchases of Units shall be properly recorded; and, in addition to all other restrictions on Transfer set forth in this Agreement, a Transfer of Units shall not be effective unless and until such Transfer has been recorded in said ledger; provided, that any unreasonable delay in properly recording a Transfer of Units in accordance with the terms hereof shall not be given effect in relation to the effective date of any such Transfer.
 
ARTICLE III
 
DISTRIBUTIONS
 
3.01 Distributions. All Distributions shall be made, at the sole discretion of the Managing Member, to the Persons who are the holders of Units at the time such Distributions are made.
 
3.02 Timing of Distributions. Subject to the requirements of applicable law, the Managing Member shall determine whether, when and to what extent Distributions shall be made.
 
3.03 Distributions In-Kind. Distributions of property other than cash, including securities, may be made under this Agreement with the approval of the Managing Member. Except as otherwise required by the Act, no Member shall be entitled to Distributions of property other than cash.
 
 
ARTICLE IV
 
MANAGEMENT; FISCAL YEAR
 
4.01 Management. The business and affairs of the Company shall be managed by the Master Fund as Managing Member, which shall direct, manage and control the business of the Company. Except as otherwise set forth herein, no Member shall have the right to manage or bind the Company in dealings with third parties. The Managing Member may appoint individuals as officers or agents with such titles as it may elect to act on behalf of the Company with such power and authority as the Managing Member may delegate to any such persons. All
 
 
 
 
 
5

 
 
of the actions of Justin Fraterman as an authorized person, within the meaning of the Act, in the execution and filing of the certificate of formation of the Company are hereby approved and ratified. Except as otherwise set forth herein, the Managing Member shall have full and complete authority, power and discretion to make any and all decisions and to take any and all actions which the Managing Member deems necessary or desirable for that purpose. The Managing Member shall be responsible for the Company’s complying with all requirements of the Act and any other applicable laws, rules, and/or regulations.
 
4.02 Fiscal Year. The fiscal year of the Company shall end on December 31 of each year.
 
 
ARTICLE V
 
TRANSFERS OF COMPANY INTERESTS
 
5.01 Limitations on Transfer. Other than Transfers contemplated by the Exchange Agreement, Members shall not Transfer any Units without the approval of the other Member; provided, that the Preferred Member may Transfer Units to the Managing Member and any Member may Transfer Units to an Affiliate thereof without obtaining the approval of the other Member (such transferees, a “Permitted Transferee”); provided, that for the avoidance of doubt, a Permitted Transferee may only Transfer Units to another Permitted Transferee.
 
5.02 Certain Requirements of Prospective Members. As a condition to admission to the Company as a Member, a prospective Member shall execute and deliver a counterpart of this Agreement. Such execution and delivery shall constitute a representation and warranty that such prospective Member has the authority to enter into this Agreement.
 
 
ARTICLE VI
 
DISSOLUTION
 
6.01 Events of Dissolution. The Company shall be dissolved upon the occurrence of any of the following events and its business and affairs shall thereafter be liquidated and wound up pursuant to the Act:
 
(a) upon the unanimous approval of all Preferred Members and Common Members;
 
(b) upon the issuance of a final and nonappealable judicial decree of dissolution; or
 
(c) as otherwise required by the Act, except that the death, retirement, resignation, expulsion, bankruptcy or dissolution of a Member shall not result in dissolution of the Company.
 
6.02 Liquidation and Termination. On dissolution of the Company, the Managing Member shall act as the liquidator or may appoint one or more designees as liquidator (the “Liquidator”). The Liquidator shall proceed diligently to wind up the affairs of the Company and
 
 
 
6

 
 
make final distributions as provided herein and in the Act. The costs of liquidation shall be borne as a Company expense. Until final distribution, the Liquidator shall continue to operate the Company properties with all of the power and authority of the Managing Member.
 
6.03 Cancellation of Certificate. On completion of the distribution of Company assets as provided herein, the Company shall be terminated, and the Managing Member (or such other Person or Persons as the Act may require or permit) shall file a certificate of cancellation with the Secretary of State of Delaware, and take such other actions as may be necessary to terminate the Company.
 
 
ARTICLE VII
 
GENERAL PROVISIONS
 
7.01 No Third Party Rights. Nothing in this Agreement shall be construed to grant rights to any Person who is not a party to this Agreement.
 
7.02 Notices. Notices shall be addressed and delivered:
 
(a) If to the Company, to:
 
c/o Harbinger Capital Partners Master Fund I, Ltd.
450 Park Avenue
30th Floor
New York, NY 10022
Attention: Chief Financial Officer; Legal Department
Email: khladek@harbingercapital.com;
          Compliance@harbingercapital.com
Facsimile: (212) 658-9311
 
with copies (which shall not constitute notice) to:
 
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019-10236
Attention: Jeffrey D. Marell
Email: jmarell@paulweiss.com
Facsimile: (212) 492-0105
 
(b) If to a Member, to such Member or its personal representative at its last address known to the Company as disclosed on the records of the Company.
Notices shall be in writing and shall be sent by facsimile or pdf e-mail, by mailed postage prepaid, registered or certified, by United States mail, return receipt requested, by nationally recognized private courier or by personal delivery. Notices shall be effective, if sent by facsimile, pdf e-mail or nationally recognized private courier, upon receipt; if mailed, three (3) business days after mailing; and if personally delivered, when delivered.
 
 
 
7

 
 
7.03 Facsimile and PDF E-Mail Signatures. This Agreement, the agreements referred to herein, and each other agreement or instrument entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine or electronic transmission in portable document format (“pdf”), shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or electronic transmission in pdf to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or electronic transmission in pdf as a defense to the formation or enforceability of a contract and each such party forever waives any such defense.
 
7.04 Amendment; Waiver. This Agreement may not be amended without the written consent of each Member. Any waiver, permit, consent or approval of any kind or character on the part of any such Member of any provisions or conditions of this Agreement must be made in writing and shall be effective only to the extent specifically set forth in such writing.
 
7.05 Miscellaneous.
 
(a) Descriptive Headings. The article or section titles or captions contained in this Agreement are for convenience only and shall not be deemed a part of this Agreement.
 
(b) Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be unenforceable or invalid under applicable law, such provision shall be ineffective only to the extent of such unenforceability or invalidity and the remaining provisions of this Agreement shall continue to be binding and in full force and effect.
 
(c) Waiver. The failure of any Person to insist in one or more instances on performance by another Person of any obligation, condition or other term of this Agreement in strict accordance with the provisions hereof shall not be construed as a waiver of any right granted hereunder or of the future performance of any obligation, condition or other term of this Agreement in strict accordance with the provisions hereof, and no waiver with respect thereto shall be effective unless contained in a writing signed by or on behalf of the waiving party. The remedies in this Agreement shall be cumulative and are not exclusive of any other remedies provided by law.
 
(d) Successor and Assigns. This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, representatives, successors and permitted assigns.
 
(e) Entire Agreement. This Agreement (including the appendices, exhibits and schedules attached hereto, which are hereby incorporated herein by reference) constitutes the
 
 
 
8

 
 
entire agreement of the parties with respect to the subject matter hereof and thereof and supersedes all prior agreements, negotiations or representations with respect to the subject matter hereof and thereof.
 
(f) Governing Law. This Agreement and all claims or causes of action (whether in contract, in tort, at law or otherwise) that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution, performance, validity, interpretation, construction or enforcement of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement) shall be construed and governed in accordance with the Laws of the State of Delaware, including the Act, without regard to its laws regarding conflicts of law.
 
(g) Construction. The parties acknowledge and agree that each has negotiated and reviewed the terms of this Agreement, assisted by such legal and tax counsel as they desired, and has contributed to its revisions. The parties further agree that the rule of construction that any ambiguities are resolved against the drafting party will be subordinated to the principle that the terms and provisions of this Agreement will be construed fairly as to all parties and not in favor of or against any party. The word “including”, means “including, without limitation.” All pronouns shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the Person may require in the context thereof.
 
(h) Non-Circumvention. The parties shall act in good faith in the implementation of the provisions of this Agreement, and no party shall engage, directly or indirectly, in any act, transaction or artifice a principal purpose of which is the avoidance of any of the provisions of this Agreement, including to effectuate any alteration of any of the Units.
 
(i) Venue; Waiver of Jury Trial. This Agreement has been executed and delivered in and shall be deemed to have been made in Delaware. Each Member agrees to the exclusive jurisdiction of any state or Federal court within Delaware, with respect to any claim or cause of action or proceeding (whether in contract, in tort, at law or otherwise) arising under or relating to this Agreement, agrees not to bring any action or proceeding (whether in contract, in tort, at law or otherwise) in any other court and waives personal service of any and all process upon it, and consents that all services of process be made by registered mail, directed to it at its address as set forth in Section 7.02, and service so made shall be deemed to be completed when received. Each Member waives any objection based on forum non conveniens, waives any bond, surety or other security that might be required of any other Member with respect thereto and waives any objection to venue of any action instituted hereunder. Nothing in this paragraph shall affect the right to serve legal process in any other manner permitted by law. EACH OF THE PARTIES HERETO (INCLUDING EACH MEMBER) IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY SUIT, ACTION OR OTHER PROCEEDING (WHETHER IN CONTRACT, IN TORT, AT LAW OR OTHERWISE) INSTITUTED BY OR AGAINST SUCH PARTY IN RESPECT OF ITS OBLIGATIONS HEREUNDER.
 
(j) Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one
 
 
 
9

 
 
instrument. This Agreement may be executed through the exchange of facsimile or pdf e-mail signature pages, which shall have the same legal effect as manual signatures.
 
7.06 Creditors. None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditors of the Company or any of its Affiliates, and no creditor who makes a loan to the Company or any of its Affiliates may have or acquire (except pursuant to the terms of a separate agreement executed by the Company in favor of such creditor) at any time as a result of making the loan any direct or indirect interest in profits, losses, Distributions, capital or property other than as a secured creditor.
 
7.07 Remedies. The Company and the Members shall be entitled to enforce their respective rights under this Agreement specifically, to recover damages by reason of any breach of any provision of this Agreement (including costs of enforcement) and to exercise any and all other rights at law or at equity existing in their respective favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement (and thus waive as defense that there is an adequate remedy at law), and that the Company or any Member may in its sole discretion apply to any court of law or equity of competent jurisdiction for specific performance or injunctive relief (without posting a bond or other security) in order to enforce or prevent any violation or threatened violation of the provisions of this Agreement. The remedies in this Agreement shall be cumulative and are not exclusive of any other remedies provided by law.
 
7.08 Further Assurances. In connection with this Agreement and the transactions contemplated hereby, each Member shall execute and deliver any additional documents and instruments and perform any additional acts that may be necessary or appropriate to effectuate and perform the provisions of this Agreement and those transactions.
 
[signature page follows]
 

 
10

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

 
COMPANY:
 
MF/HRG SECURITIES SUBSIDIARY, LLC
     
     
 
By:
 
   
Name:
 
   
Title:
 
   
   
 
PREFERRED MEMBER:
 
LUK HRG LLC
     
     
 
By:
 
   
Name:
 
   
Title:
 
   
   
 
COMMON MEMBER:
 
HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD.
     
     
 
By:
 
   
Name:
 
   
Title:
 


[SIGNATURE PAGE TO AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT]
 
 
 
 

 

Appendix I
For the purposes of this Agreement:
 
(a) Affiliate shall mean, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person, and the term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through voting securities, by contract or otherwise.
 
(b) Agreement” shall mean this Amended and Restated Limited Liability Company Agreement, including all appendices, exhibits and schedules hereto, as it may be amended from time to time.
 
(c) Capital Contribution” shall mean a transfer of money or property by a Member to the Company, either as consideration for Units or as additional capital without a requirement for the issuance of additional Units.
 
(d) Common Member” shall mean each Person admitted to the Company as a Member and who holds Common Units.
 
(e) Control” (and the correlative terms, Controlled and Controlling) means the power, direct or indirect, to direct or cause the direction of the management and policies of a Person through voting securities, contract or otherwise.
 
(f) Distribution” shall mean each distribution made by the Company to a holder of Units, whether in cash, property or securities of the Company and whether by liquidating distribution, redemption, repurchase or otherwise; provided, that none of the following shall be a Distribution: any recapitalization, exchange or conversion of Units, and any subdivision (by unit split or otherwise) or any combination (by reverse unit split or otherwise) of any outstanding Units.
 
(g) Member” shall mean an owner of a Unit and shall include the Master Fund, LUK-HRG and any other Person admitted as a member in accordance with this Agreement.
 
(h) Person” shall mean an individual, a partnership, a corporation, a limited liability company or limited partnership, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or the United States of America or any other any government or governmental or regulatory body thereof, or political subdivision thereof, whether foreign, federal, state, or local or any agency, instrumentality or authority thereof or any court.
 
(i) Preferred Member” shall mean each Person admitted to the Company as a Member and who holds Preferred Units.
 
(j) Transfer” shall mean any issuance, transfer, sale, assignment, pledge, encumbrance or other disposition, directly or indirectly (by merger or sale of equity in any direct or indirect holding company (including a corporation) or otherwise), irrespective of whether any
 
A-1
 
 

 
 
of the foregoing are effected voluntarily or involuntarily, by operation of law or otherwise, or whether inter vivos or upon death.
 
(k) Unit” shall mean a Member’s interest in the Company pursuant to Section 2.01 of this Agreement or the Act.
 
Other defined terms are contained in the following sections of this Agreement:
 
Defined Term
Section Where Found
Act
1.02
Certificated Units
2.06
Company
Preamble
Funds
Recitals
Global Fund
Recitals
Leucadia
Recitals
Liquidator
6.02
LUK-HRG
Preamble
Managing Member
Preamble
Master Fund
Preamble
Original Agreement
Recitals
Permitted Transferee
5.01
PSPA
Recitals
Special Situations Fund
Recitals
 
 
 
 
 
A-2
 
 
 

 

SCHEDULE 2.02
 
Name and Address of Member
Capital Contribution
Number of Preferred Units
Number of Common Units
Harbinger Capital Partners Master Fund I, Ltd.
450 Park Avenue
30th Floor
New York, NY 10022
Attention: Chief Financial Officer; Legal Department
Email: khladek@harbingercapital.com;
Compliance@harbingercapital.com
Facsimile: (212) 658-9311
with copies (which shall not constitute notice) to:
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, NY 10019-10236
Attention: Jeffrey D. Marell
Email: jmarell@paulweiss.com
Facsimile: (212) 492-0105
$[500]
0
1,000
LUK HRG LLC
 
520 Madison Avenue
New York, NY 10022
Attention: General Counsel
Email: Msharp@jefferies.com
 
with copies (which shall not constitute notice) to:
 
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attention: Andrea Bernstein
Matthew Gilroy
Email: andrea.bernstein@weil.com
matthew.gilroy@weil.com
Facsimile: (212) 310-8007
$[500]
[•]*
0
Total
$[1,000]
[•]
1,000
 
* To be equal to the number of shares of HRG common stock to be sold by the Master Fund.
 
 
 
 
 
 

 
 
EXHIBIT A
 
Form of Acknowledgement to the Registration Rights Agreement
 
See attached.
 
 
 
 
 
 
 
 
 
 
 

 
 
 
EXECUTION VERSION
 
ACKNOWLEDGEMENT TO THE
 
REGISTRATION RIGHTS AGREEMENT
 
Dated as of March 18, 2014
 
THIS ACKNOWLEDGEMENT to the Registration Rights Agreement (this “Acknowledgement”) is made and entered into as of the date hereof by and among Leucadia National Corporation (the “Purchaser”), Harbinger Group Inc. (the “Company”) and Harbinger Capital Partners Master Fund I, Ltd. (“Master Fund”), Global Opportunities Breakaway Ltd. (“Global Fund”), and Harbinger Capital Partners Special Situations Fund, L.P. (“Special Situations Fund” and together with Master Fund and Global Fund, the “Sellers”).  All capitalized terms used but not otherwise defined herein shall have the meaning given to such terms in the Registration Rights Agreement (as defined below).
 
W I T N E S S E T H:
 
WHEREAS, the Company and the Sellers entered into that certain Registration Rights Agreement, dated as of September 10, 2010, as amended on May 12, 2011 (as amended, modified or amended and restated, the “Registration Rights Agreement”);
 
WHEREAS, the Purchaser acquired shares of Common Stock of the Company pursuant to that certain Stock Purchase Agreement, dated as of September 21, 2013 (the “2013 Acquisition Agreement”);
 
WHEREAS, in connection with the consummation of the 2013 Acquisition Agreement, the Purchaser and the Company entered into that certain Joinder to the Registration Rights Agreement, dated as of September 27, 2013 (the “Joinder”), pursuant to which the Purchaser, as a holder of Registrable Securities, became a party to the Registration Rights Agreement in accordance with the Registration Rights Agreement and the terms of the Joinder;
 
WHEREAS, the Purchaser and Sellers have entered into that certain Preferred Securities Purchase Agreement, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time in accordance with its terms, the “New Purchase Agreement”), pursuant to which the Purchaser has agreed to acquire certain preferred securities from the Sellers that are exchangeable into shares of Common Stock of the Company (such shares of Common Stock deliverable upon such exchange, the “Company Shares”) pursuant to that certain Exchange Agreement to be entered into by and among the Purchaser and the Sellers (as amended, restated, supplemented or otherwise modified from time to time in accordance with its terms, the “Exchange Agreement”); and
 
WHEREAS, the parties hereto desire to acknowledge and agree that, upon acquisition of beneficial ownership of the Company Shares (which shall occur upon the closing under the New Purchase Agreement) by the Purchaser, (i) the Company Shares will be “Registrable Securities” under the Registration Rights Agreement and the Purchaser will be deemed to have acceded to (or obtain equivalent rights to) all of the Sellers’ rights and interests in the Registration Rights Agreement with respect to the Company Shares to the intent and effect that the Purchaser shall be deemed to be a “Holder” (as defined in the Registration Rights
 
 
 
 

 
 
Agreement) under the Registration Rights Agreement in respect of the Company Shares, (ii) the Company will take instruction from the Purchaser as the “Holder” of the Company Shares for purposes of the Registration Rights Agreement in lieu of taking instruction from the record holder of such Company Shares and (iii) subject to the provisions set forth herein, the Purchaser shall have the exclusive right under Section 3(a)(i) of the Registration Rights Agreement to