Common use of Certain Governance Matters Clause in Contracts

Certain Governance Matters. The Company covenants and agrees that it shall not take, and it shall not permit any Subsidiary to take, any of the following actions without a Special Board Approval, and each of the Stockholders shall not cause or permit the Company, or any Subsidiary, to take any of the following actions without such approval: (a) (i) authorize, issue or sell any Parity Securities or Senior Securities (each as defined in the Certificate of Designations), (ii) other than in connection with Stock Options granted under the Stock Option Plan (and the shares of Common Stock issuable upon exercise of the Stock Options granted thereunder) or upon the conversion of the shares of Preferred Stock into Common Stock, issue or sell any Junior Securities (as defined in the Certificate of Designations), or rights to purchase Junior Securities, that, in the aggregate, would constitute five percent (5%) or more of the Outstanding Equity Securities outstanding on the date of this Agreement, or (iii) grant any Stock Options in excess of the number of Stock Options reserved for grant under the Stock Option Plan (as such number may be adjusted for stock splits, stock distributions and the like); (b) refinance or amend any existing indebtedness with a principal amount in excess of $10,000,000, other than to fund a repurchase of Preferred Stock or Common Stock and transaction expenses in accordance with Section 4.4(c), 4.5(a) or 4.7 hereof or to fund a redemption of the Preferred Stock pursuant to a "Put Offer" pursuant to the Certificate of Designations; (c) incur any indebtedness, other than (i) indebtedness for working capital, in an aggregate principal amount of $10,000,000 or less outstanding at any time, (ii) to finance Permitted Acquisitions, (iii) term and revolving indebtedness and letters of credit under the New Bank Facility, (iv) intercompany indebtedness, (v) hedging obligations solely for the purpose of fixing or hedging interest rate, currency rate or commodity price risk, (vi) indebtedness incurred to fund a repurchase of Preferred Stock or Common Stock and transaction expenses in accordance with Section 4.4(c), 4.5(a) or 4.7 hereof or to fund a redemption of the Preferred Stock pursuant to a "Put Offer" pursuant to the Certificate of Designations, (vii) a guarantee of any indebtedness permitted hereby, (viii) indebtedness under the Dividend Promissory Notes as defined in, and on the terms described in, the Stock Purchase Agreement, or (ix) as permitted by Section 4.3(b); (d) declare or pay any dividends, other than dividends paid by a Subsidiary of the Company to the Company or a Subsidiary of the Company and other than the Transaction Dividend as defined in, and on the terms described in, the Stock Purchase Agreement; (e) repurchase any of the Equity Securities of the Company, except for repurchases of Preferred Stock pursuant to a "Put Offer" pursuant to the Certificate of Designations, repurchases of Preferred Stock and Common Stock in accordance with Section 4.4(c), 4.5(a) or 4.7 hereof and repurchases of shares of Common Stock held by employees of the Company upon termination of their employment with the Company or its Subsidiaries or upon their death, in a manner consistent with the Company's past practices; (f) engage in (i) any Change of Control Transaction or (ii) any sale of the assets of the Company or any of its Subsidiaries in excess of $25 million, other than sales of inventory and equipment in the ordinary course of business; (g) acquire any assets or business, by merger, stock or asset purchase or otherwise, other than (A) inventory and equipment acquired in the ordinary course of business in a manner consistent with the Company's past practices, and (B) Permitted Acquisitions; (h) make any assignment for the benefit of creditors of the Company or any of its Subsidiaries or commence or authorize any proceedings by the Company or any of its Subsidiaries under any bankruptcy, reorganization, insolvency, receivership or other similar law or statute; (i) increase or decrease the number of Directors; (j) beginning with the annual operating budget for fiscal year 2005 and continuing thereafter, adopt an annual operating budget for the Company and its Subsidiaries, or make any expenditures during an applicable fiscal year that, together with other expenditures under the approved operating budget for a fiscal year, would be in excess of 120% of the amount contained in the approved budget; (k) enter into or amend in any material respect any employment arrangement with any person that is or would be a member of the senior management of the Company or any of its Subsidiaries; (l) make any material change or alteration in the wage, salary, compensation, bonus, incentives, pension or other benefits payable or otherwise due to any Executive Officer of the Company or any Subsidiary; (m) make or cause to be made any initial Public Offering of the securities of the Company or any Subsidiary; (n) amend the Certificate of Designation or the Certificate of Incorporation of the Company, whether by operation of law, by merger or otherwise; (o) consummate a Recap Event that is not governed by Section 4.4(c) or 4.5 of this Agreement; or (p) any other action that requires a Special Board Approval under this Agreement; provided, however, that notwithstanding the foregoing, (i) the approval of a Director designated by the Investcorp Investors shall not be required under (A) Sections 4.3(b), (c), (f), (g), (j), (k), (l), (m) and (n) above, or (B) with respect to those items requiring Special Board Approval under clause (c) of the definition of "New Securities", the definition of Projected Adjusted Cash Flow, Section 3.1(e) or Section 6.5(b) ((A) and (B) collectively, the "Fall-Away Governance Rights"), at any time after the date on which the Investcorp Investors, and their Permitted Transferees, collectively own or hold in the aggregate a number of Equity Securities then outstanding (on an as-converted basis) that is less than twenty percent (20%) of the total number of Outstanding Equity Securities, and (ii) if an Approved Recapitalization is caused at the election of the Existing Investors pursuant to Section 4.5(a) below and immediately after giving effect to the consummation of such Approved Recapitalization the Existing Investors own or hold in the aggregate a number of Equity Securities and Designated Options that is less than twenty percent (20%) of the total number of Outstanding Equity Securities, the approval of a Director designated by the Harvest Funds shall no longer be required with respect to any of the Fall-Away Governance Rights. Notwithstanding anything else to the contrary in the Certificate of Designations, in connection with any Sale of the Business (as defined in the Certificate of Designations) that requires Special Board Approval or is otherwise approved by at least one director designated by the Investcorp Investors, the Investcorp Investors agree that they cannot exercise the Put Offer rights under Article 7 of the Certificate of Designations.

Certain Governance Matters. The Company covenants and agrees that it shall not take, and it shall not permit any Subsidiary to take, take any of the following actions without the approval of a Special Board Approvalmajority of the Directors, which majority shall include at least one (1) Director designated by the Investcorp Investors and at least one (1) Director designated by the GEI Investors, and each of the Stockholders Shareholders shall not cause or permit the Company, or any Subsidiary, Company to take any of the following actions without such approval: (a) (i) authorize, approve the annual operating budget of the Company and its Subsidiaries; (ii) issue or sell any Parity Securities or Senior Securities (each as defined in the Certificate of Designations), (ii) other than in connection with Stock Options granted under the Stock Option Plan (and the shares of Common Stock issuable upon exercise equity securities of the Stock Options granted thereunderCompany, or options or other rights for the issuance or sale of any equity securities of the Company, except (A) or upon the conversion of the shares of Preferred Stock into Common Stock, issue Shares or sell any Junior Securities (B) pursuant to stock incentive or compensation programs in effect as defined in the Certificate of Designations), or rights to purchase Junior Securities, that, in the aggregate, would constitute five percent (5%) or more of the Outstanding Equity Securities outstanding on date hereof or approved by a majority of the date of this AgreementDirectors, or which majority shall include at least one (1) Director designated by the Investcorp Investors and at least one (1) Director designated by the GEI Investors; (iii) grant any Stock Options in excess of the number of Stock Options reserved for grant under the Stock Option Plan (as such number may be adjusted for stock splits, stock distributions and the like); (b) refinance or amend any existing indebtedness with a principal amount in excess of $10,000,00010 million, other than to fund a repurchase (A) renewal of Preferred Stock the Receivables Purchase Agreement dated as of May 29, 1998 among Xxxxxx Funding Corporation, Xxxxxx Co., Market Street Funding Corporation and PNC Bank, National Association or Common Stock and transaction expenses in accordance with Section 4.4(c), 4.5(a(B) or 4.7 hereof or to fund a redemption of the Preferred Stock pursuant to a "Put Offer" pursuant to Shares in accordance with the Certificate of DesignationsPreferred Statement; (civ) incur any additional indebtedness, other than (iA) indebtedness for working capital, in an aggregate principal the amount of $10,000,000 10 million or less outstanding at any timetime during the term of this Agreement, (iiB) to finance Permitted AcquisitionsAcquisitions (as defined below), (iiiC) term and revolving indebtedness and letters of credit under the New Bank Facility, (ivD) intercompany indebtedness, (vE) hedging obligations solely for the purpose of fixing or hedging interest rate, currency rate or commodity price risk, (viF) indebtedness incurred to fund a repurchase of Preferred Stock or Common Stock and transaction expenses in accordance with Section 4.4(c), 4.5(a) or 4.7 hereof or to fund a redemption of the Preferred Stock pursuant to a "Put Offer" pursuant to Shares in accordance with the Certificate of Designations, Preferred Statement or (viiG) a the guarantee of any indebtedness permitted hereby, (viii) indebtedness under the Dividend Promissory Notes as defined in, and on the terms described in, the Stock Purchase Agreement, or (ix) as permitted by Section 4.3(b); (dv) declare or pay any dividends, other than dividends payable pursuant to the Preferred Statement or dividends paid by a Subsidiary of the Company to the Company or a Subsidiary of the Company and other than the Transaction Dividend as defined in, and on the terms described in, the Stock Purchase AgreementSubsidiary; (evi) repurchase any of the Equity Securities outstanding equity securities of the Company, other than, except for repurchases during any period after the occurrence of Preferred Stock a Put Event pursuant to Section 7.1(a)(i)(C) of the Preferred Statement and prior to the redemption of any Preferred Shares as and when required pursuant to Section 7.2 of the Preferred Statement (any such period, a "Put Offer" pursuant to the Certificate of Designations, repurchases of Preferred Stock and Common Stock in accordance with Section 4.4(c), 4.5(aCompliance Period") or 4.7 hereof and repurchases of shares of Common Stock Class C common stock held by employees of the Company upon termination of their employment with the Company or its Subsidiaries or upon their deathSubsidiaries, in a manner consistent with the Company's past practices; provided, that such repurchases shall not exceed more than $1 million in any twelve-month period; (fvii) engage in (i) any Change merger, consolidation, reorganization, recapitalization or sale of Control Transaction all or (ii) any sale substantially all of the assets of the Company, provided, however, that the Company or any may engage in such a transaction if (A) a majority of its Subsidiaries in excess the Directors, excluding the Directors designated by the GEI Investors, approves such transaction and (B) the Company offers to repurchase all of $25 million, other than sales the outstanding Preferred Shares as if such transaction constituted a Change of inventory and equipment Control as defined in the ordinary course of businessPreferred Statement and (C) the Company repurchases the Preferred Shares if such offer is accepted by the Preferred Holders; (gviii) acquire any assets or business, by merger, stock or asset purchase or otherwise, business other than (A) inventory and equipment acquired in the ordinary course of business in a manner consistent with the Company's past practices, and (B) except during any Put Compliance Period, Permitted Acquisitions; (h) make any assignment for . For purposes hereof, "Permitted Acquisitions" shall mean the benefit acquisition of creditors assets or businesses from Persons that are not Affiliates of the Company or any of its Subsidiaries or commence or authorize any proceedings by the Company or any of its Subsidiaries under any bankruptcyShareholders; provided, reorganization, insolvency, receivership or other similar law or statute; (i) increase or decrease that the number of Directors; (j) beginning with the annual operating budget for fiscal year 2005 and continuing thereafter, adopt an annual operating budget for the Company and its Subsidiaries, or make any expenditures during an applicable fiscal year that, together with other expenditures under the approved operating budget for a fiscal year, would be in excess of 120% aggregate value of the amount contained in consideration paid for all such assets or businesses acquired shall not exceed $25 million during the approved budget; (k) enter into or amend in any material respect any employment arrangement with any person that is or would be a member of the senior management of the Company or any of its Subsidiaries; (l) make any material change or alteration in the wage, salary, compensation, bonus, incentives, pension or other benefits payable or otherwise due to any Executive Officer of the Company or any Subsidiary; (m) make or cause to be made any initial Public Offering of the securities of the Company or any Subsidiary; (n) amend the Certificate of Designation or the Certificate of Incorporation of the Company, whether by operation of law, by merger or otherwise; (o) consummate a Recap Event that is not governed by Section 4.4(c) or 4.5 term of this Agreement; or (p) any other action that requires a Special Board Approval under this Agreement; provided, however, that notwithstanding the foregoing, (i) the approval of a Director designated by the Investcorp Investors shall not be required under (A) Sections 4.3(b), (c), (f), (g), (j), (k), (l), (m) and (n) above, or (B) with respect to those items requiring Special Board Approval under clause (c) of the definition of "New Securities", the definition of Projected Adjusted Cash Flow, Section 3.1(e) or Section 6.5(b) ((A) and (B) collectively, the "Fall-Away Governance Rights"), at any time after the date on which the Investcorp Investors, and their Permitted Transferees, collectively own or hold in the aggregate a number of Equity Securities then outstanding (on an as-converted basis) that is less than twenty percent (20%) of the total number of Outstanding Equity Securities, and (ii) if an Approved Recapitalization is caused at the election of the Existing Investors pursuant to Section 4.5(a) below and immediately after giving effect to the consummation of such Approved Recapitalization the Existing Investors own or hold in the aggregate a number of Equity Securities and Designated Options that is less than twenty percent (20%) of the total number of Outstanding Equity Securities, the approval of a Director designated by the Harvest Funds shall no longer be required with respect to any of the Fall-Away Governance Rights. Notwithstanding anything else to the contrary in the Certificate of Designations, in connection with any Sale of the Business (as defined in the Certificate of Designations) that requires Special Board Approval or is otherwise approved by at least one director designated by the Investcorp Investors, the Investcorp Investors agree that they cannot exercise the Put Offer rights under Article 7 of the Certificate of Designations.;

Certain Governance Matters. The Company covenants and agrees that it following actions shall not take, and it shall not permit any Subsidiary to take, any require the affirmative vote or consent of the following actions without holders of not less than a Special Board Approval, and each majority of the Stockholders shall not cause or permit the Company, or any Subsidiary, to take any of the following actions without such approval:issued and outstanding Class A Preferred Shares. (a) (i) authorizeAny amendment or modification of this Agreement that alters or changes the voting powers, issue preferences, or sell any Parity Securities other special rights or Senior Securities (each as defined in the Certificate of Designations)privileges, (ii) other than in connection with Stock Options granted under the Stock Option Plan (and the shares of Common Stock issuable upon exercise or restrictions of the Stock Options granted thereunder) Class A Preferred Shares or upon the conversion of the shares of Preferred Stock into Common Stock, issue or sell any Junior Securities (as defined in the Certificate of Designations), or rights to purchase Junior Securities, that, in the aggregate, would constitute five percent (5%) or more of the Outstanding Equity Securities outstanding on the date of this Agreement, or (iii) grant any Stock Options in excess of the number of Stock Options reserved for grant under the Stock Option Plan (as such number may be adjusted for stock splits, stock distributions and the like)Shares; (b) refinance Any increase or amend any existing indebtedness with a principal amount decrease in excess the authorized number of $10,000,000, other than to fund a repurchase of Class A Preferred Stock Shares or Common Stock and transaction expenses in accordance with Section 4.4(c), 4.5(a) or 4.7 hereof or to fund a redemption of the Preferred Stock pursuant to a "Put Offer" pursuant to the Certificate of DesignationsShares; (c) incur any indebtednessCreating, other than (i) indebtedness for working capital, in an aggregate principal amount of $10,000,000 authorizing or less outstanding at any time, (ii) to finance Permitted Acquisitions, (iii) term and revolving indebtedness and letters of credit under the New Bank Facility, (iv) intercompany indebtedness, (v) hedging obligations solely for the purpose of fixing or hedging interest rate, currency rate or commodity price risk, (vi) indebtedness incurred to fund a repurchase of Preferred Stock or Common Stock and transaction expenses in accordance with Section 4.4(c), 4.5(a) or 4.7 hereof or to fund a redemption of the Preferred Stock pursuant to a "Put Offer" pursuant to the Certificate of Designations, (vii) a guarantee of any indebtedness permitted hereby, (viii) indebtedness under the Dividend Promissory Notes as defined in, and on the terms described in, the Stock Purchase Agreementissuing, or (ix) as permitted by Section 4.3(b)obligating itself to issue, any other equity security, including any other security convertible into or exercisable for any equity security; (d) declare Selling, conveying, or pay otherwise disposing of or encumbering all or substantially all of its property or business or merging into or consolidating with any dividends, other entity (other than dividends paid by a Subsidiary wholly owned subsidiary) or effecting any transaction or series of related transactions in which more than 50% of the Company to the Company or a Subsidiary voting power of the Company and other than the Transaction Dividend as defined in, and on the terms described in, the Stock Purchase AgreementLLC is disposed of; (e) Making a distribution on any Class A Preferred Shares or Common Shares or redeeming, purchasing or otherwise acquiring (or paying into or setting aside for a sinking fund for such purpose) any Class A Preferred Shares or Common Shares, provided, however, that this restriction shall not apply to the repurchase of Common Shares from employees, officers, directors, consultants or any of other persons or entities performing services for the Equity Securities of the Company, except for repurchases of Preferred Stock LLC or any subsidiary pursuant to a "Put Offer" pursuant agreements under which the LLC has the option to repurchase such shares upon certain events if required by the Certificate relevant agreement and approved by the LLC’s Board of Designations, repurchases of Preferred Stock and Common Stock in accordance with Section 4.4(c), 4.5(a) or 4.7 hereof and repurchases of shares of Common Stock held by employees of the Company upon termination of their employment with the Company or its Subsidiaries or upon their death, in a manner consistent with the Company's past practicesDirectors; (f) engage in (i) any Change Except with the approval of Control Transaction or (ii) any sale a majority of the assets members of the Company or Board of Directors including the Housatonic Director (as hereinafter defined), incurring any of its Subsidiaries indebtedness (other than indebtedness outstanding under Senior Subordinated Notes in excess the principal amount of $25 million7,537,500 due 2008 , under the notes which may be issued under the Asset Purchase Agreement or in respect of working capital financing from a bank or other than sales of inventory and equipment in the ordinary course of businessfinancial institution); (g) acquire any assets or business, by merger, stock or asset purchase or otherwise, other than (A) inventory and equipment acquired in Increasing the ordinary course size of business in a manner consistent with the Company's past practices, and (B) Permitted AcquisitionsBoard of Directors; (h) make Selling, licensing, leasing or otherwise disposing of, in a single transaction or a series of related transactions, any assignment for the benefit of creditors material assets of the Company or any of its Subsidiaries or commence or authorize any proceedings by the Company or any of its Subsidiaries under any bankruptcy, reorganization, insolvency, receivership or other similar law or statuteLLC; (i) increase Acquiring any other assets for consideration in excess of $3.0 million or decrease the any operating business whether by acquiring all or substantially of its assets, a material number of Directors;the outstanding securities of such entity, or by merger or consolidation or otherwise; or (j) beginning with Changing the annual operating budget for fiscal year 2005 and continuing thereafter, adopt an annual operating budget for the Company and its Subsidiaries, or make any expenditures during an applicable fiscal year that, together with other expenditures under the approved operating budget for a fiscal year, would be in excess of 120% of the amount contained in the approved budget; (k) enter into or amend in any material respect any employment arrangement with any person that is or would be a member of the senior management of the Company or any of its Subsidiaries; (l) make any material change or alteration in the wage, salary, compensation, bonus, incentives, pension or other benefits payable or otherwise due to any Executive Officer of the Company or any Subsidiary; (m) make or cause to be made any initial Public Offering of the securities of the Company or any Subsidiary; (n) amend the Certificate of Designation Chairman/President or the Certificate of Incorporation of the Company, whether by operation of law, by merger or otherwise; (o) consummate a Recap Event that is not governed by Section 4.4(c) or 4.5 of this Agreement; or (p) any other action that requires a Special Board Approval under this Agreement; provided, however, that notwithstanding the foregoing, (i) the approval of a Director designated by the Investcorp Investors shall not be required under (A) Sections 4.3(b), (c), (f), (g), (j), (k), (l), (m) and (n) above, or (B) with respect to those items requiring Special Board Approval under clause (c) of the definition of "New Securities", the definition of Projected Adjusted Cash Flow, Section 3.1(e) or Section 6.5(b) ((A) and (B) collectively, the "Fall-Away Governance Rights"), at any time after the date on which the Investcorp Investors, and their Permitted Transferees, collectively own or hold in the aggregate a number of Equity Securities then outstanding (on an as-converted basis) that is less than twenty percent (20%) of the total number of Outstanding Equity Securities, and (ii) if an Approved Recapitalization is caused at the election of the Existing Investors pursuant to Section 4.5(a) below and immediately after giving effect to the consummation of such Approved Recapitalization the Existing Investors own or hold in the aggregate a number of Equity Securities and Designated Options that is less than twenty percent (20%) of the total number of Outstanding Equity Securities, the approval of a Director designated by the Harvest Funds shall no longer be required with respect to any of the Fall-Away Governance Rights. Notwithstanding anything else to the contrary in the Certificate of Designations, in connection with any Sale of the Business (as defined in the Certificate of Designations) that requires Special Board Approval or is otherwise approved by at least one director designated by the Investcorp Investors, the Investcorp Investors agree that they cannot exercise the Put Offer rights under Article 7 of the Certificate of DesignationsChief Executive Officer.