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EXHIBIT 10.7
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT dated as of December 10, 1993 by and among
ENTEX HOLDINGS, INC., a Delaware corporation (the "Company"), DORT X. XXXXXXX
III, an individual ("Cameron"), and ENTEX ASSOCIATES, L.P., a Delaware limited
partnership ("ENTEX Associates"), and each of the individuals listed on
Schedule A hereto, who are sometimes collectively referred to herein as the
"Participants".
W I T N E S S E T H :
WHEREAS, pursuant to a Securities Purchase Agreement (the "Securities
Purchase Agreement") dated as of November 30, 1993, the Participants have
purchased from the Company a total of 133,333 shares of Common Stock, par value
$.001 per share ("Common Stock"), of the Company; and
WHEREAS, Cameron owns a total of 70,000 shares of Common Stock and
ENTEX Associates owns a total of 430,000 shares of Common Stock; and
WHEREAS, the parties desire to impose restrictions upon the sale,
transfer, hypothecation, assignment, pledge, negotiation or other disposition
of the Common Stock and upon the voting of the Common Stock; and
WHEREAS, the parties hereto desire to promote the best interests of
the Company and the mutual interests of the stockholders and believe that it is
in their respective interests
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to provide for continuity and control of the Company and the future operations
of its business;
NOW THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties hereto, intending to be legally bound, hereby
agree as follows:
Section 1. Definitions.
Unless the context otherwise requires:
(1) "Adjusted Book Value" on a particular date shall mean an amount
(but not less than $0.01 per share), equal to the Original Purchase Price
increased by an amount (if positive) or decreased by an amount (if negative)
equal to the difference between the Book Value on August 6, 1993 and the Book
Value as of the end of the fiscal quarter ended immediately prior to such date.
(2) "Affiliate" shall have the meaning ascribed to such term by Rule
405 under the Securities Act, as in effect on the date hereof.
(3) "Agreement" means this Stockholders' Agreement, as it may be
amended from time to time, and includes any counterpart of the Agreement when
signed by one or more Stockholders and delivered to the Company.
(4) "Board of Directors" shall mean the Board of Directors of the
Company, as the same shall exist from time to time.
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(5) "Book Value" of shares of Stock shall mean the book value per
share calculated on a Fully Diluted Basis on a consolidated basis, determined
in accordance with GAAP.
(6) "Cameron" shall mean Dort X. Xxxxxxx III.
(7) "Cameron Affiliate" shall mean each of Cameron, ENTEX Associates,
and any Affiliate of Cameron or member of Cameron's family or trust for the
benefit of Cameron or any member of his family that acquires the power to vote,
or direct the voting of, or the power to dispose, or direct the disposition of,
Stock that is the subject of this Agreement.
(8) "Cause" in respect of the termination of the employment of a
particular Participant shall mean termination by reason of (i) the willful
failure by such Participant to perform his duties (other than a failure
resulting from physical or mental disability), it being understood that no act,
or failure to act, by a Participant shall be considered "willful" unless the
Board of Directors, in the reasonable exercise of its business judgment
determines that such act or failure to act was committed without good faith and
without a reasonable belief that such act or failure to act was in the best
interests of the Company (ii) such Participant engaging in gross misconduct
injurious to the Company or (iii) the material breach by such Participant of
any Employment Agreement between the Company or any Affiliate of the Company
and such Participant or (iv) the conviction or admission of guilt in a court of
law of any crime that constitutes a felony in the jurisdiction involved.
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(9) "Change of Control" of a particular corporation shall be deemed
to have occurred at such time that the Cameron Affiliates no longer
collectively directly or indirectly own Voting Securities of such corporation
entitled to cast a majority of votes for the election of the board of directors
of such corporation.
(10) "Commission" shall mean the United States Securities and
Exchange Commission, or any other Federal agency of the United States at the
time administering the Securities Act.
(11) "Common Stock" means the Common Stock, $.001 par value,
authorized to be issued by the Company.
(12) "Company" means ENTEX Holdings, Inc., a Delaware corporation,
and any successor thereof.
(13) "Disability" shall mean the inability of a Participant to
perform his duties and responsibilities to the Company by reason of a physical
or mental disability or infirmity for a continuous period of 180 days.
(14) "Earnings Multiple" shall mean the arithmetic average of the
"price to earnings ratio" of each of the Peer Group Companies (excluding Peer
Group Companies which report losses) as reported in composite transactions in
the Wall Street Journal on the last day of each of the six (6) calendar months
immediately preceding the date on which Stock is purchased pursuant to Section
5.
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(15) "Fully Diluted Basis", for purposes of determining the Book
Value or the Share Value, includes all outstanding Stock and all shares of
Common Stock issuable pursuant to securities exercisable for, convertible into
or exchangeable for shares of Common Stock and all other shares of Common Stock
which have been reserved for issuance pursuant to the ENTEX Information
Services, Inc. Share Plan.
(16) "GAAP" shall mean generally accepted accounting principles as
applicable to the financial statements of the Company, consistently applied.
(17) "Notes" means the Promissory Notes due 2000 of the Company
issued pursuant to the Securities Purchase Agreement.
(18) "Note Purchaser Note" shall have the meaning ascribed to such
term in the Securities Purchase Agreement.
(19) "Original Purchase Price" of shares of Stock shall mean an
amount equal to the purchase price paid for such shares pursuant to the
Securities Purchase Agreement.
(20) "Ownership" of shares of Stock by a particular Participant shall
include all shares of Stock owned by a Participant together with his Permitted
Transferees.
(21) "Peer Group Companies" shall mean each of Compucom Systems,
Inc., Inacom Corp. and Future Now, Inc. If the common stock of a Peer Group
Company ceases to be Publicly Traded, then the Board of Directors of the
Company with the approval of the designee of the Participants on the Board of
Directors of the Company, shall designate a replacement Peer
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Group Company. If no such replacement is designated, then the Earnings
Multiple shall be determined with reference to the remaining Peer Group
Companies. If no Peer Group Companies remain, then the Earnings Multiple shall
be determined by the Board of Directors in good faith, using such measure of
value as it deems appropriate to carry out the purpose and intent of this
Agreement. Notwithstanding the foregoing, the Board of Directors of the
Company (with the consent of the Participant Designee) shall have the authority
to add or delete Peer Group Companies to assure that the Peer Group Companies
fairly represent companies having businesses that are comparable to the
business of ENTEX Information Services, Inc., and to carry into effect the
intent of this Agreement.
(22) "Permitted Transferee" means, with respect to an individual, the
spouse or children of such individual, or a trust for the benefit of one or
more of such Persons.
(23) "Person" means any individual, partnership, corporation or other
legal entity.
(24) "Pledge Agreement" shall mean the Securities Pledge Agreement,
of even date herewith, between the Company and each of the Participants.
(25) "Public Offering" shall mean the offering by the Company in any
jurisdiction of its securities to the general public, or the consolidation
with, merger with or into, or acquisition of a Company that is Publicly Traded,
with the result that the Common Stock shall be Publicly Traded.
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(26) "Publicly Traded" means traded through the facilities of a
national securities exchange registered as such under the Securities Exchange
Act of 1934, as amended, or traded in the over-the-counter market and reported
in the National Association of Securities Dealers Automated Quotation System,
or traded through the facilities of an established securities exchange outside
the United States.
(27) "Securities Act" shall mean the United States Securities Act of
1933, as amended, and the rules and regulation of the Commission thereunder, as
in effect from time to time on and after the date hereof.
(28) "Securities Purchase Agreement" means the Securities Purchase
Agreement dated as of the date hereof among the Company and the Management
Investors pursuant to which the Company has issued and sold to the Purchasers
(as defined in such Securities Purchase Agreement) $866,667 aggregate principal
amount of Notes and 133,333 shares of Common Stock.
(29) "Share Value" shall mean the amount determined by multiplying
(a) the net income of the Company on a consolidated basis for the four most
recent fiscal quarters of the Company immediately preceding the date of the
termination of a Participant's employment, as shown on the financial statements
of the Company, determined in accordance with GAAP, by (b) the Earnings
Multiple, and dividing the product so obtained by the number of shares of Stock
issued and outstanding on a Fully Diluted Basis. For the period commencing on
the date hereof and
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ending on August 5, 1994, the "Share Value" shall mean the greater of the
purchase price for such shares paid pursuant to the Securities Purchase
Agreement or the Book Value as of the end of the most recent fiscal quarter.
(30) "Stockholder" means each of the Cameron Affiliates, the
Participants, and any Permitted Transferee who is from time to time the owner
of record of shares of Stock.
(31) "Stock" shall mean Common Stock and any securities into which
such Stock shall be changed.
(32) "Unvested Shares" shall mean the number of Shares of Stock Owned
by a particular Participant multiplied by the Vesting Factor.
(33) "Vesting Factor" shall mean a percentage, expressed to the
nearest 0.1%, equal to 100% minus the Vesting Percentage.
(34) "Vesting Percentage" shall mean a percentage equal to (i) 10%,
during the period beginning on the date hereof and through and including
February 6, 1994; (ii) 20%, during the period beginning February 7, 1994 and
through and including August 6, 1994; (iii) 60%, beginning August 7, 1994 and
through and including the date August 6, 1995; (iv) 85%, beginning August 7,
1995 and through and including August 6, 1996; and (v) 100% thereafter;
provided, however, that (w) if the employment of a Participant is terminated
for Cause during a particular Vesting Period, then the Vesting Percentage
applicable to such Participant shall be the Vesting Percentage that would have
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applied on the first day of such Vesting Period; (x) if the employment of a
Participant is terminated as a result of the death or Disability of such
Participant, then the Vesting Percentage applicable to such Participant shall
be the Vesting Percentage that would apply if such Participant had continued to
be employed by the Company on the first day of the Vesting Period immediately
following the Vesting Period during which such termination occurs; (y) if the
employment of a Participant is terminated by the Company for other than Cause,
but not as a result of the death or Disability of such Participant, then the
Vesting Percentage applicable to such Participant shall be a percentage equal
to the sum of (I) the Vesting Percentage that would have applied to such
Participant on the first day of the Vesting Period during which such
termination occurs (the "Start-of-Period Vesting Percentage") plus (II) the
product of the excess of (A) the Vesting Percentage that would apply to such
Participant if such Participant had continued to be employed by the Company on
the first day of the Vesting Period immediately following the Vesting Period
during which such termination occurs over (B) the Start-of-Period Vesting
Percentage, multiplied by the portion (expressed as a fraction) of the Vesting
Period during which such termination occurs that such Participant was employed
by the Company; and (z) at any time following (I) a Change of Control of the
Company, or (II) a Change of Control of ENTEX Information Services, Inc., the
Vesting Percentage shall be 100%.
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(35) "Vested Shares" shall mean all shares of Stock purchased
pursuant to the Securities Purchase Agreement that are Owned by a particular
Participant other than Unvested Shares.
(36) "Vesting Period" shall mean each of the periods referred to in
clauses (i), (ii), (iii) and (iv) of the definition of "Vesting Percentage" in
subparagraph (33).
(37) "Voting Securities" shall mean securities of the Company
entitled to vote in an election of directors of the Company (other than
securities having such power only upon the happening of a contingency).
Section 2. Representations and Warranties.
(a) The Company represents and warrants that (i) it is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware; (ii) the Company possesses the requisite corporate power and
authority to execute, deliver and perform this Agreement; (iii) all corporate
action necessary to authorize the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby has been duly taken by
the Company; (iv) this Agreement has been duly executed and delivered by the
Company; (v) the execution, delivery and performance by the Company of this
Agreement and the consummation of the transactions contemplated hereby do not
violate or conflict with (A) any provision of the Certificate of Incorporation
or By-Laws of the Company or (B) any statute, rule, regulation, contract or any
other legal obligation
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of the Company; and (vi) no consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority is required in connection with the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby.
(b) Each of the Cameron Affiliates that is a party hereto and the
Participants represent and warrant as to such party that (i) if such party is
not a natural person, (A) such entity has been duly organized and is validly
existing and in good standing under the laws of the jurisdiction of its
organization, and (B) the execution of this Agreement and the consummation of
the transactions contemplated hereby are within the organizational powers of
each party; (ii) if such party is not a natural person, all organizational
action necessary to authorize the execution of this Agreement and the
consummation of the transactions contemplated hereby has been duly taken; (iii)
this Agreement has been duly executed and delivered by such party; (iv) the
execution of this Agreement and the consummation by such party of the
transactions contemplated hereby do not violate or conflict with (A) if such
party is not a natural person, any provision of the organizational documents of
such party or (B) any statute, rule, regulation, contract or any other legal
obligation of such party; and (v) no consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority is required in
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connection with the execution, delivery and performance of this Agreement by
such party and the consummation by such party of the transactions contemplated
hereby.
Section 3. Restrictions on Transfer.
(a) No Participant shall sell, transfer, pledge, hypothecate or
otherwise dispose of ("Transfer") any shares of Stock, except to the Company
pursuant to this Agreement, and any such purported Transfer shall be void,
except that a Participant may transfer shares of Stock to a Permitted
Transferee if such Permitted Transferee executes and delivers an agreement in
form and substance satisfactory to the Company to the effect that the shares of
Stock Transferred to such Permitted Transferee shall be bound by the terms of
this Agreement as if such Permitted Transferee were an original party hereto.
(b) Any provision of this Agreement to the contrary notwithstanding,
the Company may acquire shares of Stock Owned by a Participant pursuant to the
terms of the Securities Pledge Agreement between the Company and such
Participant.
(c) The certificate or certificates representing the shares of Stock
issued to the Participants or a Permitted Transferee shall have an appropriate
legend referring to the restrictions upon Transfer set forth herein and shall
be endorsed with substantially the following legend in addition to any other
legend which may appear thereon:
THE SALE, TRANSFER, ASSIGNMENT, PLEDGE OR ENCUMBRANCE OF THE SECURITIES
REPRESENTED BY
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THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF A
STOCKHOLDERS AGREEMENT DATED AS OF DECEMBER 10, 1993, AMONG ENTEX
HOLDINGS, INC. AND CERTAIN HOLDERS OF THE STOCK OF SUCH CORPORATION.
COPIES OF SUCH AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST
MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF
ENTEX HOLDINGS, INC.
Section 4. Voting Agreement.
(a) Each Stockholder agrees to vote his shares of Stock and to take
such other action as may be required to cause the Board of Directors of the
Company to include one Participant nominated by the Participants, acceptable to
the Cameron Affiliates (the "Participant Designee"), who shall initially be
Xxxx X. XxXxxxx, Xx., and all other nominees nominated by the Cameron
Affiliates.
(b) Whenever any vacancy in the Board of Directors of the Company
occurs, the group (i.e., the Participants or the Cameron Affiliates, as the
case may be) which designated such vacating director under the provisions of
this Section 4 will be entitled to designate a successor to fill such vacancy,
and each Stockholder agrees to vote all the Common Stock then Owned or held of
record by such Stockholder so as to elect to the Board of Directors the person
so designated. The Participant Designee shall be selected by the vote of a
majority of the shares of Stock Owned by the Participants (the "Participants
Majority").
(c) The Stockholders agree to instruct their respective designees not
to authorize any proposal for, and the
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Stockholders agree to vote their shares of Common Stock against, any proposal
for the amendment of the Certificate of Incorporation and/or By- laws of the
Company which would render said Certificate of Incorporation and/or By-laws
inconsistent with the provisions of this Agreement.
(d) In the event of (i) any proposed capital reorganization of the
Company, (ii) any reclassification or recapitalization of the Company, (iii)
any transfer of all or substantially all of the assets of the Company, (iv) any
consolidation or merger involving the Company and any other Person, (v) any
dissolution, liquidation or winding-up of the Company, or (vi) any material
transaction affecting the capital stock of the Company which is not in the
ordinary course of business and which is required by the laws of Delaware to be
submitted to a vote of the stockholders of the Company, the Participants agree
to vote their shares of Stock in respect of the authorization of any such
matter in the manner that the Cameron Affiliates vote the shares of Stock owned
by them.
(e) The Stockholders acknowledge their understanding that under the
laws of Delaware, the directors of the Company are obligated to exercise their
independent judgment in discharging their duties as directors and, as a
consequence thereof, may determine to disregard directions given to them by the
Stockholders.
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Section 5. Purchase of Participant Shares.
(a) The Company will purchase from each Participant whose employment
is terminated, other than by reason of death or Disability, on or before August
6, 1996, all of the shares of Stock Owned by such Participant not later than
sixty (60) days after the date of the termination of such Participant's
employment. The purchase price payable for such shares of Stock will be
determined as follows:
(i) in the case of all Unvested Shares, the purchase price shall
be an amount equal to the lesser of (A) the Original Purchase Price or
(B) the Adjusted Book Value of such shares;
(ii) in the case of Vested Shares being purchased from a
Participant whose employment is terminated by the Company without
Cause, the purchase price shall be an amount equal to the greater of
(A) the Original Purchase Price or (B) a price per share equal to the
Share Value; and
(iii) in the case of Vested Shares being purchased from a
Participant whose employment is terminated for Cause or whose
employment is voluntarily terminated by such Participant, the purchase
price shall be an amount equal to the lesser of (A) the Original
Purchase Price or (B) the Adjusted Book Value of such shares.
(b) The closing of any purchase of shares of Common Stock pursuant to
Section 5(a) shall be held at the executive
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offices of the Company, unless the Company otherwise agrees, at a time agreed
upon by the Company and the Participant. At such closing, the Company shall
pay to the Participant the total purchase price to be paid for the Stock being
purchased by wire transfer to an account designated by such Participant of
immediately available funds in an amount equal to the total purchase price,
against delivery by such Participant of a certificate or certificates
representing all of the shares of Stock being purchased from such Participant,
together with a stock power duly executed in blank with signature guaranteed,
free and clear of all liens, claims, charges and encumbrances.
(c) If a Participant dies or a Participant's employment is terminated
by reason of such Participant's Disability, then the Company shall have the
option ("Call Option") to purchase from such Participant or his legal
representative, and the Participant or his legal representative shall have the
option ("Put Option") to require the Company to purchase from such Participant
all shares of Stock Owned by such Participant. The Put Option and the Call
Option shall each be exercisable by delivery of a written notice of exercise to
the other party thereto not later than ninety (90) days after the date of such
Participant's death or the date on which such Participant's employment
terminated. The purchase price payable for such shares of Stock will be (i) in
the case of Unvested Shares, an amount equal to the Original Purchase Price and
(ii) in the case of Vested Shares, an amount equal to the greater of (A) the
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Original Purchase Price or (B) a price per share equal to the Share Value. The
closing of any purchase pursuant to the exercise of a Put Option or a Call
Option shall occur not later than thirty (30) days after the delivery of the
notice of exercise, at the executive offices of the Company, unless the Company
otherwise agrees and at a time agreed upon by the Company and the Participant.
At such closing, the Company shall pay to the Participant or his legal
representative the total purchase price to be paid for the Stock being
purchased by wire transfer to an account designated by such Participant of
immediately available funds in an amount equal to the total purchase price,
against delivery by such Participant or his legal representative of a
certificate or certificates representing all of the shares of Stock being
purchased from such Participant, together with a stock power duly executed in
blank with signature guaranteed, free and clear of all liens, claims, charges
and encumbrances.
(d) If a Participant's employment is terminated by the Company for
Cause on or after August 7, 1996, then the Company shall have the option to
purchase from such Participant or his legal representative all shares of Stock
Owned by such Participant. Such option shall be exercisable by delivery by the
Company of a written notice of exercise to the Participant not later than
ninety (90) days after the date on which such Participant's employment
terminated. The purchase price payable for such shares of Stock will be the
Share Value. The closing of any purchase pursuant to the exercise of this
option shall occur
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not later than thirty (30) days after the delivery of the notice of exercise,
at the executive offices of the Company, unless the Company otherwise agrees
and at a time agreed upon by the Company and the Participant. At such closing,
the Company shall pay to the Participant or his legal representative the total
purchase price to be paid for the Stock being purchased by wire transfer to an
account designated by such Participant of immediately available funds in an
amount equal to the total purchase price, against delivery by such Participant
of a certificate or certificates representing all of the shares of Stock being
purchased from such Participant, together with a stock power duly executed in
blank with signature guaranteed, free and clear of all liens, claims, charges
and encumbrances.
(e) If the Company is unable to pay the full amount of the total
purchase price required to be paid in cash pursuant to Section 5(a) or 5(c) due
to a restriction imposed upon it by a bank loan or other financing agreement or
by any instrument evidencing any indebtedness or similar obligation or by an
applicable provision of the Delaware General Corporation Law, then, it will
offer such Shares of Stock to Cameron by delivering to Cameron written notice
of such offer. Cameron shall have the right to assign his rights to purchase
shares of Stock under this Section 5(e) to one or more Cameron Affiliates.
Cameron and/or the Cameron Affiliates may exercise the rights to purchase
shares of Stock to be purchased by delivery of a notice of exercise to the
Company and the Participant not later than fifteen (15) days
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after delivery by the Company of its offer notice to Cameron. If Cameron
and/or the Cameron Affiliates exercise such right, then Cameron and/or the
Cameron Affiliates exercising such right shall purchase such shares of Stock
from the Participant for a total purchase price equal to the total purchase
price payable pursuant to Section 5(a) or 5(c), by wire transfer of immediately
available funds to an account designated by the Participant, or his legal
representative, as the case may be, and the Participant or his legal
representative, as the case may be, shall deliver to the purchaser certificates
representing the shares of Stock being purchased together with stock powers
duly endorsed in blank with signatures guaranteed, free and clear of all liens,
claims, charges and encumbrances.
(f) If Stock is purchased from a Participant pursuant to this Section
5, then, simultaneously with such purchase of Stock, such Participant shall
prepay all unpaid principal of, and interest on, such Participant's Note
Purchaser Note by wire transfer of immediately available funds to an account
designated by the Company.
(g) If the Company is unable to pay the full amount of the total
purchase price required to be paid in cash pursuant to Section 5(a) or 5(c) due
to a restriction imposed upon it by a bank loan or other financing agreement or
by any instrument evidencing any indebtedness or similar obligation or by an
applicable provision of the Delaware General Corporation Law, and a
Participant's Stock is not purchased by Cameron or one or more
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Cameron Affiliates pursuant to Section 5(d), then the Company shall have no
further obligation to the Participant under this Section 5.
Section 6. Redemptions.
(a) If at any time the Company shall desire to redeem any of the
shares of Stock then outstanding, other than pursuant to a Call, it shall
deliver to the Participants notice of such proposed redemption (the "Notice of
Redemption") including the proposed price and proposed terms and conditions,
and each Participant shall have the right to sell to the Company, as a
condition to such redemption at the same price per share and on the same terms
and conditions as involved in such redemption, that number of shares of Stock
which equals the total number of shares of Stock the Company desires to redeem
multiplied by the percentage of the then Stock ownership of such Management
Investor.
(b) If any Participant desires to so participate in any redemption
under this Section 6(b), such Participant shall notify the Company in writing
of such intention within 10 days of receipt of the Notice of Redemption.
(c) The Company shall then redeem all of the shares of Stock proposed
to be redeemed by the Company and requested to be redeemed by such Participant
at not less than the price stated in the Notice of Redemption; provided,
however, that the Company may elect to withdraw the Notice of Redemption or
amend it by notice
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to the Participants, and all rights theretofore existing shall be restored.
(d) Each Participant who has notified the Company that such
Participant desires to have his shares redeemed shall cause to be surrendered
to the Company upon the closing of the redemption and against receipt of
appropriate payment therefor, a certificate or certificates evidencing the
number of shares of Stock Owned by such Participant which such Participant is
entitled to have redeemed, together with stock powers duly endorsed in blank,
and with signature guaranteed.
Section 7. Sales to Third Parties.
(a) If at any time until seven years from the date hereof, the Cameron
Affiliates shall desire to sell all or any portion of the shares of Stock owned
by them at such time, they shall deliver to the Participants written notice of
such proposed sale which shall set forth the proposed purchaser, purchase price
and the other terms and conditions of the purchase ("Notice of Intent to
Sell"), and each Participant shall have the opportunity, subject to the terms
of this Section 7, to sell to such proposed purchaser, at the same price per
share and on the same terms and conditions as the Cameron Affiliates, that
number of shares of Stock which equals the total number of shares of Stock the
Cameron Affiliates desire to sell multiplied by the percentage of the then
Stock Ownership of such Participant.
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(b) If any Participant wishes to participate in any sale under Section
7(a), such Participant shall notify the Cameron Affiliates in writing of such
intention within ten business days of receipt of the Notice of Intent to Sell.
(c) Such Participants as have elected to participate shall sell to the
purchaser all, or at the option of the purchaser any, portions of the shares of
Stock proposed to be sold by them at not less than the price stated in the
Notice of Intent to Sell; provided, however, that any purchase of Stock from
Participants pursuant to Section 7(a) of less than all of such shares of Stock
by the purchaser shall be made pro rata among the Participants electing to
participate based upon the relative amounts of shares of Stock that each such
Participant then Owns.
(d) Notwithstanding any other provision of this Agreement, if Cameron
and/or the Cameron Affiliates shall propose to sell or exchange (in a business
combination or otherwise) all of their shares of Stock in a bona fide
arm's-length transaction, Cameron, at his option, may require that each
Participant and his Permitted Transferees sell all of their shares of Stock in
the same transaction and, if stockholder approval of the transaction is
required, that each Participant and his Permitted Transferees vote their shares
of Stock in favor thereof. In any such sale or exchange, the Participants and
their Permitted Transferees shall receive for their shares the identical
consideration payable per share of Stock to all other holders of shares of
Stock.
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Section 8. Reissuance of Shares to Participants.
If any shares of Stock are purchased by the Company from Participants
pursuant to Section 5, then, not later than one hundred twenty (120) days after
such purchase is consummated, the Company shall offer such shares to one or
more employees of the Company (which employees may be Participants) upon such
terms and conditions as the Board of Directors of the Company shall determine.
Section 9. Specific Performance.
The Stock of the Company cannot be readily purchased or sold in the
open market, and for that reason, among other things, the Company and the
Stockholders will be irreparably damaged in the event that this Agreement is
not specifically enforced. Should any controversy arise concerning a sale or
disposition pending the resolution thereof, this Agreement shall be enforceable
in a court of equity by a decree of specific performance. Such remedy shall,
however, be cumulative and not exclusive, and shall be in addition to any other
remedies which the parties may have.
Section 10. Amendments and Termination.
(a) No amendment to this Agreement or any waiver or discharge of any
provision hereof shall be made without the prior written consent of Cameron and
by a majority in interest of the Participants whose rights would be adversely
affected thereby.
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(b) This Agreement shall terminate upon the consummation of a Public
Offering; provided, however, that the provisions of Section 4 shall terminate
upon the earlier to occur of (A) the consummation of a Public Offering, or (B)
seven years from the date hereof, and (ii) the provisions of Section 3 shall
terminate upon the earlier to occur of (A) the consummation of a Public
Offering, or (B) three years from the date hereof; provided, however,
notwithstanding the foregoing, Section 3 shall not terminate with respect to
any Purchaser until the Purchaser has paid in full his Purchaser Note, as
defined in the Securities Purchase Agreement.
Section 11. Notices.
All notices and other communications shall be in writing and shall be
deemed to have been duly given if delivered by hand or mailed by first class,
registered or certified mail, return receipt requested, postage prepaid and
addressed as follows:
(a) If to the Company:
ENTEX Holdings, Inc.
Xxx Xxxxxxxxxxxxx Xxxxx
Xxx Xxxxx, Xxx Xxxx 00000
Attention: President
(b) If to Cameron or any Cameron Affiliates:
Xx. Xxxx X. Xxxxxxx III
c/o Airlie Group, L.P.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
25
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in each case with a copy to:
Xxxx & Priest
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
(c) If to any Participant,
to the address of such Participant
as shown in the records of the Company.
The addresses above may be changed by notice to the Company.
Section 12. Miscellaneous.
(a) Each individual Participant acknowledges and agrees that only the
number of shares of Common Stock Owned by such individual Participant is being
disclosed to such Participant, and, accordingly, waives such Participant's
right to receive a complete copy of Schedule A to this Agreement. The Company
agrees to keep Schedule A to this Agreement confidential, to retain such
Schedule A in the files of the Company, and to disclose such Schedule A only as
may be expressly authorized by the President of the Company.
(b) This Agreement represents the entire understanding of the parties
hereto and supersedes all other previous agreements among them with respect to
the subject matter hereof.
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be
performed entirely in such state.
(d) The headings contained herein are for convenience of reference
only, are not a part of this Agreement and shall not limit or otherwise affect
the meaning hereof.
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(e) Whenever the context requires, references in this Agreement to
the singular number shall include the plural and, likewise, the plural number
shall include the singular, and words denoting gender shall include the
masculine, feminine and neuter.
(f) If any provision of this Agreement shall, for any reason, be
adjudged by any court of competent jurisdiction to be invalid or unenforceable,
such judgment shall not affect, impair or invalidate the remainder of this
Agreement but shall be confined in its operation to the provisions of this
Agreement directly involved in the controversy in which such judgment shall
have been rendered.
(g) This Agreement may be executed in several counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
27
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ENTEX HOLDINGS, INC.
By:
---------------------------------
Name:
Title:
ENTEX ASSOCIATES, L.P.
By: THE XXXXXX GROUP, INC.,
General Partner
By:
---------------------------------
Name:
Title:
------------------------------------
Dort X. Xxxxxxx III
------------------------------------
[Name of Participant]
28
SCHEDULE A
Number of Shares
Name of Participant of Common Stock
------------------- ----------------
29
AMENDMENT TO STOCKHOLDERS' AGREEMENT
AMENDATORY AGREEMENT dated as of December 1, 1994 by and among ENTEX
HOLDINGS, INC., a Delaware corporation (the "Company"), DORT X. XXXXXXX III,
an individual ("Cameron"), and ENTEX ASSOCIATES, L.P., a Delaware limited
partnership ("ENTEX Associates"), and each of the individuals listed on
Schedule A hereto, who are sometimes collectively referred to herein as the
"Plan 2 Participants".
W I T N E S S E T H :
WHEREAS, the Company, Cameron, ENTEX Associates, and the individual
stockholders of the Company (which stockholders include the Plan 2
Participants) are parties to that certain Stockholders' Agreement dated as of
December 10, 1993 (the "Existing Agreement"), pursuant to which the parties
agreed to certain restrictions upon the sale, transfer, hypothecation,
assignment, pledge, negotiation or other disposition of the Common Stock and
upon the voting of the Common Stock, all as set forth in the Existing
Agreement; and
WHEREAS, the Company, Cameron, ENTEX Associates and the Plan 2
Participants have determined that it will promote the best interests of the
Company and the mutual interests of the Participants (including the Plan 2
Participants) to amend the Existing Agreement as provided herein, it being
understood that the amendment of the Existing Agreement does not adversely
affect the interests of the Plan 1 Participants (as hereinafter defined);
30
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NOW THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the parties hereto, intending to be legally bound, hereby
agree that the Existing Agreement is amended as follows:
1. Amendment of Section 1 of the Existing Agreement.
(a) Section 1 of the Existing Agreement is hereby amended (i) by
renumbering subsections (24) through (37) as they currently exist as
subsections (26) through (39) respectively, and (ii) by adding thereto the
following new subsections (24) and (25), reading in their entirety as follows:
(24) "Plan 1 Participant" shall mean a Participant whose shares
of Stock are subject to repurchase as provided in Section 5 hereof.
Unless a Participant has agreed in writing to be treated as a Plan 2
Participant, each Participant shall be deemed to be a Plan 1
Participant.
(25) "Plan 2 Participant" shall mean each Participant who has
elected in writing to be treated as a Plan 2 Participant.
(b) Subsection (36) as renumbered (being the definition of "Vesting
Percentage"), is hereby amended by adding the following new sentence at the end
thereof:
"Notwithstanding the foregoing, the Vesting Percentage for Plan 2
Participants shall be 100%."
(c) Subsection (37), as renumbered, being the definition of "Vested
Shares", as amended by adding the following new sentence at the end thereof:
"All shares of Stock Owned by a Plan 2 Participant shall be Vested Shares."
2. Amendment of Section 5 of the Existing Agreement.
31
-3-
(a) Section 5 of the Existing Agreement is hereby amended (i) by
recaptioning such Section 5 as "Purchase of Plan 1 Participant Shares", and by
inserting the words "Plan 1" immediately before the word "Participant" or
"Participant's" wherever such words appear in such Section 5.
(b) Section 5 of the Existing Agreement is hereby amended by inserting
the words "Plan 1" immediately before the words "Put Option" and "Call Option"
wherever such words appear in such Section 5.
3. Addition of New Section 6 Regarding Stock Owned by Plan 2 Participants.
The Existing Agreement is hereby amended by renumbering Sections 6 through 12
as they currently exist as Sections 7 through 13, respectively, and by adding
the following new Section 6, reading in its entirety as follows:
"Section 6. Right of First Refusal with Respect to Shares Owned by Plan 2
Participants.
(a) If the employment of a Plan 2 Participant is terminated for
any reason, then the Company shall have the option ("Plan 2 Call
Option") to purchase from such Plan 2 Participant or his legal
representative, all shares of Stock Owned by such Plan 2 Participant.
The Plan 2 Call Option shall be exercisable by delivery by the Company
of a written notice of exercise to the Plan 2 Participant or his or
her legal representative not later than ninety (90) days after the
date on which such Plan 2 Participant's employment is terminated. The
purchase price payable for such shares of Stock will be (i) if the
Plan 2 Participant's employment was terminated for any reason other
than Cause (including death or Disability), an amount equal to the
Book Value of the Shares as of the end of the most recent fiscal year
for which
32
-4-
audited financial statements are available; and (ii) if the Plan 2
Participant's employment was terminated for Cause, an amount equal to
the lesser of (A) the Original Purchase Price or (B) a price per share
equal to the Book Value of the Shares as of the end of the most recent
fiscal year for which audited financial statements are available. The
closing of any purchase pursuant to the exercise of a Plan 2 Call
Option shall occur not later than thirty (30) days after the delivery
of the notice of exercise, at the executive offices of the Company,
unless the Company otherwise agrees and at a time agreed upon by the
Company and the Plan 2 Participant or his or her legal representative.
At such closing, the Company shall pay to the Plan 2 Participant or
his or her legal representative the total purchase price to be paid
for the Stock being purchased by wire transfer to an account
designated by such Plan 2 Participant of immediately available funds
in an amount equal to the total purchase price, against delivery by
such Plan 2 Participant or his or her legal representative of a
certificate or certificates representing all of the shares of Stock
being purchased from such Plan 2 Participant, together with a stock
power duly executed in blank with signature guaranteed, free and clear
of all liens, claims, charges and encumbrances.
(b) If the Company desires to exercise a Plan 2 Call Option but
is unable to pay the full amount of the total purchase price required
to be paid in cash pursuant to Section 6(a) due to a restriction
imposed upon it by a bank loan or other financing agreement or by any
instrument evidencing any indebtedness or similar obligation or by an
applicable provision of the Delaware General Corporation Law, then, it
will assign the Plan 2 Call Option with respect to such Shares of
Stock to Cameron by delivering to Cameron written notice of such
offer. Cameron shall have the right to assign his rights to purchase
shares of Stock under this Section 6(b) to one or more Cameron
Affiliates. Cameron and/or the Cameron Affiliates may exercise the
rights to purchase shares of Stock to be purchased by delivery of a
notice of exercise to the Company and the Plan 2 Participant not later
than fifteen (15) days after delivery by the Company of its assignment
notice to Cameron. If Cameron and/or the Cameron Affiliates exercise
such right, then Cameron and/or the Cameron Affiliates exercising such
right shall purchase such shares of Stock from the Plan 2 Participant
for a total purchase price equal to the total purchase price payable
pursuant to Section 6(a), by wire transfer of immediately available
funds to an account designated by the Plan 2 Participant, or his or
her legal representative, as the case may be, and the Plan 2
Participant or his or her legal representative, as the case may be,
shall deliver to the purchaser certificates representing the shares of
Stock being purchased together with stock powers duly endorsed in
33
-5-
blank with signatures guaranteed, free and clear of all liens, claims,
charges and encumbrances.
(c) If Stock is purchased from a Plan 2 Participant pursuant to
this Section 6, then, simultaneously with such purchase of Stock, such
Plan 2 Participant shall prepay all unpaid principal of, and interest
on, such Plan 2 Participant's Note Purchaser Note by wire transfer of
immediately available funds to an account designated by the Company."
4. Conforming Amendments.
(a) Section 7 (as renumbered) of the Existing Agreement, being the
Section captioned "Redemptions," is hereby amended (i) by deleting the word
"Call" in Section 7(a) (as renumbered) and inserting the words "Plan 1 Call
Option or Plan 2 Call Option" in lieu thereof, and (ii) by deleting the
reference to "Section 6(b)" thereof in Section 7(b) (as renumbered) and in
inserting "Section 7(b)" in lieu thereof.
(b) All references in Section 8 (as renumbered) are hereby amended by
deleting the references to "Section 7" or "Section 7(a)" as they now exist and
inserting in lieu thereof "Section 7" or "Section 7(a)", as the context
requires.
(c) Section 9 (as renumbered) is hereby amended by adding the words
"or Section 6" immediately after the words "Section 5".
5. Amendment of Termination Provisions. Section 11 (as renumbered),
being the Section entitled "Amendments and Termination," is amended by amending
Section 11(b) (as renumbered) to read in its entirety as follows:
(b) This Agreement shall terminate upon the consummation of a
Public Offering; provided, however, that the provisions of Section 4
shall terminate upon
34
-6-
the earlier to occur of (A) the consummation of a Public Offering or
(B) seven years from the date hereof, (ii) the provisions of Section 3
shall terminate upon the earlier to occur of (A) the consummation of a
Public Offering or (B) three years from the date hereof, and (iii) the
provisions of Section 6 shall terminate upon the earlier to occur of
(A) the consummation of a Public Offering or (B) a Change of Control;
provided further, however, that notwithstanding the foregoing, Section
3 shall not terminate with respect to any Participant until the
Participant has paid in full his or her Note Purchaser Note, as
defined in the Securities Purchase Agreement.
6. Existing Agreement Remains in Force. Except as expressly set forth in
this Amendatory Agreement, the Existing Agreement remains unmodified and in
full force and effect.
7. Counterparts. This Amendatory Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
35
-7-
IN WITNESS WHEREOF, the parties hereto have executed this Amendatory
Agreement as of the day and year first above written.
ENTEX HOLDINGS, INC.
By:
---------------------------------
Xxxx X. XxXxxxx, Xx.
President
ENTEX ASSOCIATES, L.P.
By: THE XXXXXX GROUP, INC.,
General Partner
By:
---------------------------------
Dort X. Xxxxxxx III
President
------------------------------------
Dort X. Xxxxxxx III
------------------------------------
[Name of Participant]
36
SCHEDULE A
Number of Shares
Name of Participant of Common Stock
------------------- ----------------
