SHAREHOLDERS' AGREEMENT
THIS SHAREHOLDERS' AGREEMENT, dated as of October __, 1998 (this
"Agreement"), is entered into by and among DREW SHOE CORPORATION, an Ohio
corporation (the "Company"), BCAM INTERNATIONAL, INC., a New York corporation
("BCAM"), and IMPLEO, LLC, a Delaware limited liability company, ("Impleo") BCAM
and Impleo are hereinafter collectively referred to as the "Shareholders").
W I T N E S S E T H:
WHEREAS, BCAM and Impleo have entered into a Stock Purchase and
Restructuring Agreement dated of even date herewith (the "Purchase Agreement");
and
WHEREAS pursuant to the Purchase Agreement, BCAM and Impleo agreed
to enter into a Shareholders' Agreement setting forth the terms and conditions
by which they will hold and may sell their shares of stock in the Company; and
NOW, THEREFORE, in consideration of the premises and of the mutual
promises and obligations set forth herein and in the Purchase Agreement, the
parties hereto hereby agree as follows:
SECTION 1. Definitions. As used herein, the following terms shall
have the following respective meanings:
(a) Affiliate shall mean, with respect to any Shareholder, (i) a
person or entity, and any officers and directors of such person or entity, that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Shareholder and (ii) the
officers and directors of such Shareholder.
(b) Debt shall mean that certain indebtedness owed by BCAM to Impleo
which is evidenced by a certain BCAM 10%/13% Convertible Subordinated Promissory
Note in the aggregate principal amount of $3,073,663.90, together with accrued
interest thereon, dated of even date herewith and which is evidenced by the
"Replacement Note" as referred to in the Purchase Agreement.
(c) Sell, as to any Stock, shall mean to sell, or in any other way
directly or indirectly transfer, assign, distribute, encumber, pledge,
hypothecate or otherwise dispose of, either voluntarily or involuntarily, any
legal or beneficial interest in such Stock. The act of Selling is a Sale.
(d) Stock shall mean any issued and outstanding shares of common
stock, without par value, of the Company.
(e) Shareholders shall mean any shareholder listed above or and any
other holder of any shares of the Stock.
SECTION 2. BCAM's Restrictions on Transfer. The Shareholders agree
that
BCAM may Sell any or all of its shares of Stock to a third party in a bona fide
cash transaction for a purchase price equal to or in excess of the
then-outstanding amount of the Debt, and upon the following terms and
conditions:
(a) Impleo Consent. For so long as any portion of the Debt and/or
accrued interest thereon shall remain outstanding, prior to BCAM's consummation
of a sale of its shares of Stock to a third party, BCAM, by virtue of the fact
that Impleo maintains a security interest in BCAM's Stock, shall be required to
obtain the prior written consent of Impleo, which consent may by withheld by
Impleo in its sole discretion; provided, however, that in the event the
aggregate proceeds of the sale of BCAM's shares of Stock equal or exceed the
then outstanding amount of the Debt, BCAM may consummate the Sale of such Stock
if, simultaneous with or prior to the closing of such Sale of Stock, BCAM pays
to Impleo, in immediately available funds, an amount sufficient to satisfy the
entire outstanding amount of the Debt, together with accrued interest thereon.
BCAM may neither pledge nor otherwise encumber its shares of Stock, nor shall it
dispose of such shares by gift, sale or otherwise, except with the prior written
consent of Impleo, which consent may be withheld by Impleo in its sole
discretion.
(b) Security Interest. With respect to the security interest
referred to in Section 2(a) above, as further described in the Purchase
Agreement, the Shareholders hereby agree that said security interest shall
continue in favor of Impleo until such time as the amount of the Debt, together
with accrued interest thereon, shall be paid in full by BCAM to Impleo and
Impleo shall formally release said security interest. Accordingly, nothing
contained in this Agreement shall be construed as a waiver of, or Impleo's
consent or agreement to, release said security interest.
(c) Notice of Offer; Right of Impleo. BCAM shall deliver written
notice of the proposed sale (the "Notice") to Impleo, which Notice shall state
the name, address, telephone number and principal line(s) of business of the
proposed purchaser or assignee (the "Third Party"), shall specify the number of
shares of Stock to be sold (the "Offered Shares"), the proposed purchase price
per share (the "Offer Price") and all other terms and conditions of the offer,
and shall include a copy of any writings between BCAM and the Third Party
relating to the proposed sale. Within 30 days following the delivery of the
Notice by BCAM to Impleo, Impleo may, by written notice to BCAM, elect to
purchase all or any portion of the Offered Shares at the Offer Price. In the
event Impleo elects to purchase less than all of the Offered Shares following
termination of the 30-day period referred to above, then BCAM may either (i)
withdraw its offer to sell the Offered Shares or (ii) for a period of 60 days
following the expiration of such 30-day period, sell all of the Offered Shares
or, at the option of BCAM, the portion of the Offered Shares not being purchased
by Impleo, to the Third Party at a price per share in cash equal to or greater
than the Offer Price; provided, however, that in the event BCAM exercises its
rights under Section 2(c)(ii) hereof, it shall comply with the notice provisions
of Section 2(a). Any Offered Shares which are not sold to the Third Party within
such time period and at such price shall again be subject to this Section 2.
(d) Time, Place and Manner of Sale. The closing of the Sale of any
Offered Shares to Impleo shall take place at the principal office of Impleo on
or before the expiration of the applicable option period pursuant to Section
2(c). At such closing, Impleo shall deliver to BCAM, against delivery of
certificates representing the Offered Shares being acquired by Impleo which
shall be duly endorsed or with appropriate stock powers attached, payment for
the Offered Shares in immediately available funds; provided, however, that
Impleo shall at all times have the right to apply, to
the payment of the purchase price for the Offered Share, as a credit, all or any
portion of the then outstanding balance of the Debt, together with accrued
interest thereon, and the amount of any outstanding costs or expenses, if any,
that BCAM may have failed to pay pursuant to the Purchase Agreement, which costs
or expenses shall include, but not be limited to those costs contemplated by
Section 12 of the Purchase Agreement.
(e) Availability to Negotiate, etc. At all times following the
delivery of any Notice and until the expiration of the applicable option period,
each Shareholder agrees to negotiate in good faith a purchase and sale agreement
in respect of any Offered Shares to be purchased by Impleo (the "Purchase and
Sale Agreement"). Pursuant to said Purchase and Sale Agreement, BCAM shall
represent and warrant as to the following: (i) that BCAM is duly authorized to
enter into the Purchase and Sale Agreement, (ii) that BCAM owns the Offered
Shares free and clear of all pledges, liens, claims, encumbrances or any other
restriction or assessments whatsoever, and (iii) that BCAM has received all
necessary consents, authorizations and approvals to Sell the Offered Shares to
Impleo. Pursuant to said Purchase and Sale Agreement, Impleo will represent and
warrant as to the following: (A) that it is duly authorized to purchase the
Offered Shares and (B) that it is purchasing the Offered Shares for investment
purposes only.
(f) Third Party Agreement. Any Third Party purchaser of the Offered
Shares shall be obligated to enter into this Agreement (or a joinder agreement
whereby such Third Party purchaser agrees to be bound by and comply with the
terms and conditions of this Agreement, including the drag along provisions and
right of first refusal provisions in favor of Impleo) on the same terms and
conditions as BCAM is subject to hereunder. BCAM may not Sell any of its shares
of Stock to a Third Party until such time as the Third Party enters into such
joinder agreement or this Agreement and delivers an executed copy of said
agreement to Impleo.
SECTION 3. Drag-Along Rights. If Impleo shall Sell, other than to an
Affiliate of Impleo, all of its shares of Stock in a bona fide arm's length
transaction, Impleo, at its option, may require that (a) BCAM Sell its Stock in
the same transaction at the same price and on the same terms and conditions as
applicable to Impleo and (b) if shareholder approval of the transaction is
required, that BCAM shall vote its shares of Stock in favor thereof. For
purposes of this Section 3, a "Sale" shall also include a merger, consolidation
or similar combination or exchange, sale of assets of the Company followed by a
liquidation, or a combination thereof.
SECTION 4. Tag-Along Rights.
(a) With respect to any proposed Sale by Impleo of more than 50% of
the issued and outstanding Stock, which Proposed Sale is other than to an
Affiliate of Impleo, BCAM shall have the right to require Impleo to cause the
purchaser in such sale to purchase from BCAM a number of shares of Stock equal
to the product (rounded up to the nearest integer) of (i) the quotient
determined by dividing the number of shares of Stock held by BCAM by the
combined number of Shares owned by BCAM and Impleo and (ii) the number of shares
of Stock proposed to be sold in the contemplated Sale, and at the same price per
share and upon the same terms and conditions as to be paid and given to Impleo,
provided that BCAM shall make substantially the same representations,
warranties, covenants and indemnities and other similar agreements as Impleo
agrees to make in connection with
the proposed Sale.
(b) Impleo shall give notice to BCAM of each proposed Sale giving
rise to the rights of BCAM set forth in Section 4 (a) at least 15 days prior to
the proposed consummation of such Sale, setting forth the number of shares of
Stock proposed to be Sold, the name and address of the proposed transferee, the
proposed amount and form of consideration and terms and conditions of payment
offered by such proposed assignee, the number of shares of Stock BCAM may sell
to such proposed transferee (in accordance with Section 4 (a)), and a
representation that the proposed transferee has been informed of the "tag-along"
rights provided for in this Section 4 and has agreed to purchase all shares of
Stock required to be so purchased in accordance with the terms hereof. In order
to exercise its tag-along rights under this Section 4, BCAM shall, within 15
days following receipt of the notice required by the preceding sentence, deliver
a written notice to Impleo indicating BCAM's desire to exercise its rights and
specifying the number of shares of Stock (up to the maximum number of Shares
owned by BCAM) that it desires to sell.
SECTION 5. Additional Financing. In the event that the Company shall
seek additional financing, whether in the form of equity or debt financing,
Impleo shall have the right, but not the obligation, to provide such financing
on such commercially reasonable terms as it shall see fit; provided, however,
that in the event that BCAM wishes to provide a portion of such financing on
such terms as are offered to the Company by Wexford, or the subject Affiliate of
Impleo, BCAM may provide a portion of such financing equal to or less than the
amount determined by multiplying (a) BCAM's Pro-Rata Percentage by (b) the total
amount of financing offered to the Company. For purposes of this Section, BCAM's
Pro-Rata Percentage shall mean the percentage arrived at by dividing (i) the
number of shares of Stock owned by BCAM by (ii) the number of shares of Stock
outstanding.
SECTION 6. Shareholder Vote. For so long as Impleo shall own a
majority of the Stock, and in connection with the nomination of members of the
Company's board of directors, BCAM agrees that in lieu of the calling of a
special meeting of the Shareholders, BCAM shall promptly execute such
shareholder resolutions as Impleo may propose.
SECTION 7. Term. This Agreement shall expire upon the earlier of
either (a) the date of the acquisition of either Shareholder and/or its
Affiliates acquiring 100% of the Stock or (b) the written termination hereof by
all Shareholders.
SECTION 8. Legend on Stock Certificates. Each certificate
representing shares of Stock held by each Shareholder who is a party to or bound
by this Agreement shall bear substantially the following legend, until such time
as the shares represented thereby are no longer subject to the provisions
hereof:
"THE RIGHTS OF THE HOLDER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF A
SHAREHOLDERS' AGREEMENT DATED AS OF OCTOBER __, 1998, AMONG THE
COMPANY AND ITS SHAREHOLDERS. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED AT NO COST BY WRITTEN REQUEST MADE TO THE COMPANY BY THE
HOLDER OF
RECORD OF THIS CERTIFICATE."
SECTION 9. Severability; Governing Law. If any provision of this
Agreement shall be determined to be illegal and unenforceable by any court of
competent jurisdiction, the remaining provisions shall be severable and
enforceable in accordance with their terms. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York without
reference to such State's choice of law principles.
SECTION 10. Notices. All notices, or other communications to be
given or otherwise made to any party under this Agreement shall be deemed to be
sufficient if contained in a written instrument given by personal delivery,
telex, telecopier or telegram or duly sent by overnight courier or first class
registered or certified mail, return receipt requested, postage prepaid,
addressed to such party at the address set forth below or at such other address
as may hereafter be designated in writing by the addressee to the addressor
listing all parties:
If to the Company:
Drew Shoe Corporation
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If to BCAM:
BCAM International, Inc.
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx, 00000
Attention: Xxxxxxx Xxxxxxx, Chairman
and Chief Executive Officer
Fax: (000) 000-0000
If to Impleo:
IMPLEO, LLC
c/o Wexford Management, LLC
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx, President
Fax: (000) 000-0000
All such notices, and communications shall be deemed to have been delivered and
received (a) in the case of personal delivery, telex, telecopier, or telegram on
the date of such delivery, (b) in the case of overnight courier, on the next
business day after being deposited with the courier service, and (c) in the case
of mailing, on the third business day following such mailing; provided, that in
the case of delivery by mail to an address in a country other than the country
from which mailing is made, all such notices and communications shall be deemed
to have been delivered and received
on the fourteenth business day following the date of such mailing.
SECTION 11. Amendments and Modifications. No amendment or
modification of this Agreement shall be valid unless made in writing and signed
by the Company and all Shareholders.
SECTION 12. Non-Assignability; Binding Effect. Neither this
Agreement, nor any of the rights or obligations of the parties hereunder, shall
be assignable by any party hereto without the prior written consent of all other
parties hereto.
SECTION 13. Effect of Headings. The Section headings used in this
Agreement are included for purposes of convenience only, and shall not affect
the construction or interpretation of any of the provisions hereof.
SECTION 14. Entire Agreement; Waivers. This Agreement constitutes
the entire agreement between the parties pertaining to the subject matter
hereof, and supersede all prior agreements or understandings as to such subject
matter. No party hereto has made any representation or warranty or given any
covenant to the other except as set forth in this Agreement. No waiver of any of
the provisions of this Agreement shall be deemed, or shall constitute, a waiver
of any other provisions, whether or not similar, nor shall any waiver constitute
a continuing waiver. No waiver shall be binding unless executed in writing by
the party making the waiver.
SECTION 15. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which taken together shall constitute one and the same instrument.
SECTION 16. Choice of Forum; Waiver of Trial by Jury. Any suit,
action or proceeding brought by either Shareholder against the other Shareholder
for claims arising out of this Agreement shall be brought and enforced
exclusively in the United States District Court for the Southern District of New
York, or in the event that court lacks jurisdiction to hear the claim, in the
New York State Supreme Court in New York County. In any such suit, action or
proceeding, each Shareholder waives, to the fullest extent it may effectively do
so, its right to a trial by jury.
IN WITNESS WHEREOF, the parties hereto have executed this
Shareholders' Agreement as of the date first set forth above.
DREW SHOE CORPORATION
By:
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Name:
Title:
IMPLEO, LLC
By:
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Name:
Title:
BCAM INTERNATIONAL, INC.
By:
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Name:
Title:
