EXHIBIT 99.10
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EXECUTION COPY
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SHAREHOLDERS AGREEMENT
among
the Persons listed on the signature pages hereof
and
Heartland Springs Investment Company
Dated as of April 24, 2001
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS............................................................1
ARTICLE II
REPRESENTATIONS AND WARRANTIES........................................10
Section 2.1. Representations and Warranties of Each Family
Shareholder............................................10
Section 2.2. Representations and Warranties of Each Investor........11
ARTICLE III
COVENANTS.............................................................12
Section 3.1. Covenants of Family Shareholders.......................12
Section 3.2. Covenants of Investors and Newco.......................13
Section 3.3. Mutual Covenants.......................................13
ARTICLE IV
CORPORATE GOVERNANCE AND MANAGEMENT...................................14
Section 4.1. Composition of the Board...............................14
Section 4.2. Removal of Directors...................................15
Section 4.3. Vacancies..............................................15
Section 4.4. Meetings of the Board..................................15
Section 4.5. Action by the Board....................................15
Section 4.6. Board Committees.......................................17
Section 4.7. Chief Executive Officer................................17
Section 4.8. Capitalization.........................................18
Section 4.9. Preemptive Right.......................................18
Section 4.10. Additional Investor Investment.........................19
Section 4.11. Dividend Policy........................................20
ARTICLE V
RESTRICTIONS ON TRANSFER..............................................20
Section 5.1. General................................................20
Section 5.2. Transfers to Permitted Transferees.....................20
Section 5.3. Legend.................................................21
ARTICLE VI
REGISTRATION RIGHTS...................................................21
Section 6.1. Demand Registrations...................................21
Section 6.2. Company Preemption.....................................22
Section 6.3. Piggyback Registrations................................22
Section 6.4. Lock-up................................................23
Section 6.5. The Company's Right to Delay Demand Registration.......24
Section 6.6. Indemnification by the Company.........................24
Section 6.7. Indemnification by the Registration Rights Party.......25
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Section 6.8. Notices of Claims......................................26
Section 6.9. Other Indemnification..................................26
Section 6.10. Indemnification Payments...............................26
Section 6.11. Registration Covenants of the Company..................26
Section 6.12. Shelf Registrations....................................28
Section 6.13. Expenses...............................................28
Section 6.14. Assignment of Registration Rights......................29
Section 6.15. Rule 144...............................................29
ARTICLE VII
REALIZATION Process...................................................29
Section 7.1. Phase One..............................................29
Section 7.2. Phase Two..............................................30
Section 7.3. Rights of First Refusal................................31
Section 7.4. Drag-Along Rights......................................32
Section 7.5. Restrictions on Realization Process....................32
ARTICLE VIII
FEES AND OTHER PAYMENTS...............................................33
Section 8.1. Heartland Fee..........................................33
Section 8.2. Advisors' Fees.........................................33
ARTICLE IX
OTHER COVENANTS AND AGREEMENTS........................................33
Section 9.1. Family Representative..................................33
Section 9.2. Investor Representative................................33
Section 9.3. Confidentiality........................................34
Section 9.4. Financial Information and Other Reports................34
Section 9.5. Further Assurances.....................................35
ARTICLE X
MISCELLANEOUS.........................................................36
Section 10.1. Effectiveness; Termination.............................36
Section 10.2. Governing Law..........................................36
Section 10.3. Jurisdiction; Waiver of Jury Trial.....................36
Section 10.4. Amendment; Waiver......................................37
Section 10.5. Assignment; No Third Party Beneficiaries...............37
Section 10.6. Notices................................................37
Section 10.7. Remedies...............................................39
Section 10.8. Specific Performance...................................39
Section 10.9. Severability...........................................39
Section 10.10. Integration............................................39
Section 10.11. Section Headings.......................................39
Section 10.12. Counterparts...........................................39
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Exhibits
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Exhibit A: Family Shareholders
Exhibit B: Amended and Restated Articles of Incorporation of Springs
Industries, Inc.
Exhibit C: Amended and Restated Bylaws of Springs Industries, Inc.
Exhibit D: Initial Directors
Exhibit E: Form of Joinder Agreement
Exhibit F: Financing and Investment Banking Fees
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SHAREHOLDERS AGREEMENT
SHAREHOLDERS AGREEMENT pursuant to Section 33-7-310 of the South
Carolina Business Corporation Act, dated as of April 24, 2001, among Heartland
Industrial Partners, L.P. ("Heartland") and the other Heartland Entities listed
on the signature pages hereof under the heading "Heartland Entities," the
Persons added as co-investors by Joinder Agreement prior to the Effective Time
(collectively, "Co-Investors"), the Persons listed on the signature pages hereof
under the heading "Family Shareholders" (collectively, the "Family
Shareholders") and Heartland Springs Investment Company, a South Carolina
corporation ("Newco").
RECITALS
A. Concurrently with the execution and delivery of this Agreement,
Springs Industries, Inc., a South Carolina corporation (the "Company"), and
Newco are entering into a Recapitalization Agreement, dated as of the date
hereof (as the same may from time to time be modified, supplemented or restated,
the "Recapitalization Agreement"), providing for a recapitalization transaction
to be effected by means of a merger of Newco with and into the Company (the
"Merger" and, together with the financing thereof and the other transactions
contemplated thereby and hereby to occur on the date of the Merger, the
"Transaction"), upon the terms and subject to the conditions set forth therein.
B. Immediately following the Merger, assuming no Rollover
Elections (as that term is defined in the Recapitalization Agreement) are made,
(i) the Investors, directly or through a subsidiary, will own, beneficially and
of record, approximately 45% of the then outstanding shares of the common stock,
par value $.25 per share, of the Company (the "Company Common Stock") and (ii)
the Family Shareholders will own, beneficially and of record, in the aggregate,
approximately 55% of the then outstanding shares of Company Common Stock.
C. The parties hereto desire to enter into this Agreement to
govern certain of their rights, duties and obligations relating to the Merger
and their ownership of stock of the Company following the Merger. The parties
understand and acknowledge that, except for Articles II and III and the relevant
provisions of Articles I and X, this Agreement shall be effective, and the
rights and obligations of the parties under this Agreement shall commence, as of
the Effective Time.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The following terms, as used in this Agreement, have the following
meanings:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by or under common control with,
such Person. Control of any Person shall consist of the power to direct the
management and policies of such Person (whether through the ownership of voting
securities, by contract, as trustee or executor or otherwise) and shall be
deemed to exist upon the ownership of securities entitling the holder thereof to
exercise
more than 50% of the voting power in the election of directors of such Person
(or other persons or body performing similar functions) under ordinary
circumstances. For purposes of this Agreement, neither the Investors nor any
Family Shareholder shall constitute an Affiliate of the Company or any
Subsidiary or be deemed an Affiliate of one another solely by virtue of this
Agreement.
"Affiliate Agreement" means any agreement, commitment or arrangement
between the Company or any Subsidiary, on the one hand, and any Shareholder or
any Affiliate of a Shareholder, on the other hand.
"Asset Acquisition" means (i) any Investment by the Company or any
Subsidiary in any other Person, or any acquisition or purchase of capital stock
of any other Person by the Company or any Subsidiary, in either case pursuant to
which such Person shall (a) become a Subsidiary or (b) shall be merged with or
into the Company or any Subsidiary or (ii) any acquisition by the Company or any
Subsidiary of the assets of any Person which constitute substantially all the
assets of a division, line of business, operating unit or manufacturing facility
of such Person or which is otherwise outside of the ordinary course of business.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Subsidiary (other than a disposition by a Subsidiary to the
Company or by the Company or a Subsidiary to a wholly owned Subsidiary),
including any disposition by means of a merger, consolidation or similar
transaction (each referred to for the purposes of this definition as a
"disposition"), of:
(i) any shares of capital stock of a Subsidiary (other than
directors' qualifying shares or shares required by applicable law to be
held by a Person other than the Company or a Subsidiary);
(ii) all or substantially all the assets of any division, line
of business, operating unit or manufacturing facility of the Company or any
Subsidiary; or
(iii) any other assets of the Company or any Subsidiary outside
of the ordinary course of business of the Company or such Subsidiary.
"Bank" has the meaning given in Section 7.1.
"Base Amount" means, at any time of determination, the lower of (1)
the largest number of shares of Company Common Stock (appropriately adjusted for
stock splits, stock dividends, combinations, subdivisions and similar events)
owned at any previous time after the Effective Time by the Investors, in the
aggregate, or (2) the largest number of shares of Company Common Stock
(appropriately adjusted for stock splits, stock dividends, combinations,
subdivisions and similar events) owned at any previous time after the Effective
Time by the Family Shareholders, in the aggregate, in each case after taking
into account any sales of shares of Company Common Stock made by the Family
Shareholders to the Investors in connection with, and substantially
contemporaneously with, the completion of the Merger.
"Blackout Period" has the meaning given in Section 6.5.
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"Board" means the board of directors of the Company immediately
following the Effective Time and at all times thereafter.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in the State of New York are authorized or
required by law or executive order to close.
"Charitable Contribution Committee" has the meaning given in
Section 4.6(b).
"Co-Investors" has the meaning given in the Introduction and
includes any Person (other than a Heartland Entity, a Family Shareholder, an
Affiliate of a Family Shareholder or a Direct Permitted Transferee of a Family
Shareholder) that (1) acquires Equity Interests from (a) an Investor (as a
Direct Permitted Transferee of such Investor), (b) the Company (as a result of
the exercise of preemptive rights transferred from an Investor to such Person or
the performance of the obligation set forth in Section 4.10) or (c) a Family
Shareholder (as a Permitted Transferee, but not a Direct Permitted Transferee,
of such Family Shareholder), in each case in accordance with this Agreement and
(2) becomes a party to this Agreement by executing and delivering a Joinder
Agreement substantially in the form attached hereto as Exhibit E.
"Company" has the meaning given in Recital A and includes any
successor thereto, whether by merger, consolidation or otherwise.
"Company Common Stock" has the meaning given in Recital B, and
includes any stock having ordinary power to vote for election of Directors into
which such common stock may thereafter be converted or exchanged.
"Consolidated EBITDA" means for any period, with respect to the
Company and its Subsidiaries, Consolidated Net Income for such period (i) plus,
without duplication and to the extent reflected as a charge in the statement of
such Consolidated Net Income for such period, the sum of (A) total income and
franchise tax expense, (B) interest expense, amortization or writeoff of debt
discount and debt issuance costs and commissions and discounts and other fees
and charges associated with Indebtedness, (C) depreciation and amortization
expense, (D) amortization of intangibles (including, but not limited to,
goodwill), (E) other non-cash charges, (F) any extraordinary expenses or losses
(including losses on sales of assets other than inventory sold in the ordinary
course of business), (G) any fees and expenses associated with the Transaction,
(H) any fees payable pursuant to Section 8.2 or pursuant to the Services
Agreement and (I) charitable contributions made as contemplated by Section
4.6(b), and (ii) minus, without duplication, (A) any extraordinary income or
gains (including gains on the sales of assets, other than inventory sold in the
ordinary course of business) other than any income from discontinued operations
and (B) non-cash income included in Consolidated Net Income, all as determined
on a consolidated basis.
"Consolidated Net Income" means for any period, the consolidated net
after tax income (or loss) of the Company and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Total Indebtedness" means, as of any date of
determination, an amount equal to the aggregate amount of all Indebtedness of
the Company and its Subsidiaries,
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determined on a consolidated basis in accordance with GAAP, outstanding as of
such date, after giving effect to any incurrence of Indebtedness and the
application of the net proceeds therefrom giving rise to such determination.
"Demand" has the meaning given in Section 6.1(a).
"Demanding Party" has the meaning given in Section 6.1(a).
"Demand Registration" has the meaning given in Section 6.1(a).
"Demand Shares" has the meaning given in Section 6.1(a).
"Director" means a member of the Board.
"Direct Permitted Transferee" has, with respect to any Person, the
meaning given under the definition of "Permitted Transferee."
"Drag-Along Notice" has the meaning given in Section 7.4.
"Drag-Along Sellers" has the meaning given in Section 7.4.
"Effective Time" means the effective time of the Merger.
"Eligible Offering" has the meaning given in Section 4.9(a).
"Eligible Shareholder" has the meaning given in Section 4.9(d).
"End Date" has the meaning given in Section 7.1.
"Equity Interests" means (i) shares of Company Common Stock, (ii)
options, warrants or other rights to acquire shares of Company Common Stock,
(iii) any other securities or instruments convertible, exercisable or
exchangeable for shares of Company Common Stock or (iv) any other security or
instrument which provides, directly or indirectly (upon conversion, exercise,
exchange or otherwise) for participation in the earnings or cash flow of the
Company.
"Equity Securities" means any Equity Interest or any shares of other
capital stock, whether common or preferred, of the Company, or options, warrants
or other rights to acquire any such shares or any other securities convertible,
exchangeable or exercisable for any of the foregoing.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Offering" has the meaning given in Section 4.9(c).
"Family Director" has the meaning given in Section 4.1(a).
"Family Representative" has the meaning given in Section 9.1.
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"Family Shareholder" has the meaning given in the Introduction and
includes any Person (other than an Investor, an Affiliate of an Investor or a
Direct Permitted Transferee of an Investor) that (1) acquires Equity Interests
from (a) a Family Shareholder (as a Direct Permitted Transferee of such Family
Shareholder), (b) the Company (as a result of the exercise of preemptive rights
transferred from a Family Shareholder to such Person) or (c) an Investor (as a
Permitted Transferee, but not a Direct Permitted Transferee, of such Investor),
in each case in accordance with this Agreement and (2) becomes a party to this
Agreement by executing and delivering a Joinder Agreement substantially in the
form attached hereto as Exhibit E.
"Financing Lease" means any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"GAAP" means the accounting principles and practices generally
accepted from time to time in the United States.
"Heartland" has the meaning given in the Introduction.
"Heartland Entity" means any of (i) Heartland, (ii) Heartland
Industrial Partners (FF), L.P., (iii) Heartland Industrial Partners (E1), L.P.,
(iv) Heartland Industrial Partners (K1), L.P., (v) Heartland Partners (C1),
L.P., (vi) Heartland Industrial Associates L.L.C. and (vii) any Affiliate of
any of the foregoing.
"Indebtedness" means, without duplication, (i) all indebtedness of
the Company and its Subsidiaries for borrowed money or for the deferred purchase
price of property or services (other than current trade liabilities incurred in
the ordinary course of business and payable in accordance with customary
practices and accrued expenses incurred in the ordinary course of business),
(ii) any other indebtedness of the Company and its Subsidiaries which is
evidenced by a note, bond, debenture or similar instrument, (iii) all
obligations of the Company and its Subsidiaries under Financing Leases, (iv) all
obligations of the Company and its Subsidiaries in respect of banker acceptances
issued or created for the account of the Company and its Subsidiaries and (v)
all liabilities secured by any Lien on any property owned by the Company and its
Subsidiaries even though the Company and its Subsidiaries have not assumed or
otherwise become liable for the payment thereof; provided, however, that the
amount of such Indebtedness of the Company and its Subsidiaries described in
this subclause (v) shall, for purpose of this Agreement, be deemed to be equal
to the lesser of (i) the aggregate unpaid amount of such Indebtedness and (ii)
the fair market value of the property or asset encumbered, as determined by the
Company in good faith.
"Initial Price" means $46.00 per share of Company Common Stock.
"Initial Public Offering" means the first registered underwritten
public offering of Company Common Stock on a primary basis following the
Effective Time.
"Investment" in any Person means any, direct or indirect, advance,
loan (other than advances to customers in the ordinary course of business that
are recorded as accounts receivable on the balance sheet of the lender) or other
extension of credit (including by way of guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or
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other property to others or any payment for property or services for the account
or use of others), or any purchase or acquisition of capital stock, Indebtedness
or other similar instruments issued by such Person.
"Investor Director" has the meaning given in Section 4.1(a).
"Investor Representative" has the meaning given in Section 9.2.
"Investors" means the Heartland Entities and the Co-Investors.
"Leverage Ratio" means, at any date of determination, the ratio of
Consolidated Total Indebtedness of the Company and its Subsidiaries on such date
to Consolidated EBITDA of the Company and its Subsidiaries for the period of
four consecutive fiscal quarters of the Company ending most recently prior to or
on such date; provided, however, that:
(i) if since the beginning of such period the Company or any
Subsidiary shall have made any Asset Disposition, the Consolidated EBITDA
for such period shall be reduced by an amount equal to the Consolidated
EBITDA (if positive) directly attributable to the assets that are the
subject of such Asset Disposition for such period or increased by an amount
equal to the Consolidated EBITDA (if negative) directly attributable
thereto for such period;
(ii) if since the beginning of such period, the Company or any
Subsidiary (by merger or otherwise) shall have made an Asset Acquisition,
Consolidated EBITDA for such period shall be calculated after giving pro
forma effect thereto as if such Asset Acquisition occurred on the first day
of such period; and
(iii) if since the beginning of such period, any Person (that
subsequently became a Subsidiary or was merged with or into the Company or
any Subsidiary since the beginning of such period) shall have made any
Asset Disposition or any Asset Acquisition that would have required an
adjustment pursuant to subclause (i) or (ii) above if made by the Company
or a Subsidiary during such period, Consolidated EBITDA for such period
shall be calculated after giving pro forma effect thereto as if such Asset
Disposition or Asset Acquisition had occurred on the first day of such
period.
For purposes of this definition, whenever pro forma effect is to be
given to a transaction, (1) the pro forma calculations shall be determined in
good faith by a responsible financial or accounting officer of the Company and
(2) such pro forma calculation may include adjustments appropriate to reflect,
without duplication, (A) such transaction to the extent such adjustments may be
reflected in the preparation of pro forma financial information in accordance
with the requirements of GAAP and Article 11 of Regulation S-X under the
Exchange Act; and (B) the annualized amount of recurring operating expense
reductions reasonably expected to be realized in the six months following any
such Asset Acquisition made during any of the four fiscal quarters constituting
the four-quarter reference period prior to the date of determination; provided
that, in either case, such adjustments are set forth in a certificate signed by
the Company's Chief Financial Officer which states (a) the amount of such
adjustment or
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adjustments and (b) that such adjustment or adjustments are based on the good
faith beliefs of the Chief Financial Officer executing such certificate at the
time of such execution.
"Lien" means any mortgage, lien, pledge, charge, encumbrance,
security interest or other adverse claim.
"Liquidity Event" has the meaning given in Section 7.1.
"Merger" has the meaning given in Recital A.
"Newco" has the meaning given in the Introduction and shall mean the
Company from and after the Effective Time.
"Permitted Transferee" means
(i) in the case of any Heartland Entity, (A) any Affiliate of
any Heartland Entity; (B) any equity investor in any Heartland Entity or in
any Affiliate of any Heartland Entity and any Affiliate of any such equity
investor; (C) any Co-Investor and any Affiliate of any Co-Investor; (D) any
Family Shareholder and any Affiliate of any Family Shareholder and any
Direct Permitted Transferee of any Family Shareholder; and (E) any other
financially motivated passive co-investor to whom Company Common Stock is
sold within 90 days after its purchase by any Heartland Entity (including
pursuant to the Transaction) that is reasonably acceptable to the Family
Representative (any such Permitted Transferee referred to in subclauses
(A), (B), (C) or (E) of this subclause (i) is referred to as a "Direct
Permitted Transferee" of a Heartland Entity);
(ii) in the case of a Family Shareholder, (A) any other Family
Shareholder and any Affiliate of any Family Shareholder; (B) a spouse or
lineal descendant (whether natural or adopted), sibling (whether natural or
adopted), parent, heir, executor, administrator, testamentary trustee,
lifetime trustee or legatee of such Family Shareholder or of any
beneficiary of such Family Shareholder (if such Family Shareholder is a
trust); (C) any charitable organization described in Section 170(c) of the
U.S. Internal Revenue Code of 1986, as amended; (D) any trust, the trustees
of which include only the Persons named in subclause (A) or (B) and any
financial institution serving as a professional trustee, and the
beneficiaries of which include only the Persons named in subclause (A), (B)
or (C); (E) any corporation, limited liability company or partnership, the
stockholders, members or general or limited partners of which include only
the Persons named in subclause (A), (B) or (D); (F) if such Family
Shareholder is a trust, the beneficiary or beneficiaries authorized or
entitled to receive distributions from such trust; and (G) any Investor and
any Affiliate of any Investor and any Direct Permitted Transferee of any
Investor (any such Permitted Transferee referred to in subclauses (A)-(F)
of this subclause (ii) is referred to as a "Direct Permitted Transferee" of
a Family Shareholder); and
(iii) in the case of any Co-Investor, (A) any Affiliate of such
Co-Investor; (B) any Heartland Entity and any Direct Permitted Transferee
of any Heartland Entity; and (C) any Family Shareholder and any Affiliate
of any Family Shareholder and any Direct
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Permitted Transferee of any Family Shareholder (any such Permitted
Transferee referred to in subclauses (A) or (B) of this subclause (iii) is
referred to as a "Direct Permitted Transferee" of a Co-Investor).
"Person" means an individual, corporation, limited liability
company, partnership, trust or other entity, including a governmental or
political subdivision or an agency or instrumentality thereof.
"Phase One" has the meaning given in Section 7.1.
"Phase One Group" has the meaning given in Section 7.1.
"Phase Two" has the meaning given in Section 7.2.
"Phase Two Group" has the meaning given in Section 7.2.
"Phase Two Shares" has the meaning given in Section 7.3(a).
"Piggybacking Party" has the meaning given in Section 6.3(a).
"Piggyback Registration" has the meaning given in Section 6.3(a).
"Piggyback Shares" has the meaning given in Section 6.3(a).
"Preemptive Issuances" has the meaning given in Section 4.9(a).
"Preemptive Notice" has the meaning given in Section 4.9(b).
"Proportionate Percentage" means, with respect to any Eligible
Shareholder as of any given date with respect to an Eligible Offering, the
number (expressed as a percentage) obtained by dividing (A) the number of shares
of Company Common Stock owned by such Eligible Shareholder as of such date by
(B) the total number of shares of Company Common Stock held by all Eligible
Shareholders, in each case, assuming all Equity Interests convertible into or
exchangeable or exercisable for Company Common Stock have been so converted and
after giving effect to any Preemptive Issuance being subscribed to by Investors
at the time of the Eligible Offering.
"Qualified Public Offering" means one or more underwritten public
offerings of Company Common Stock resulting (i) in the listing of the Company
Common Stock on a national securities exchange or the Nasdaq National Market and
(ii) in shares representing 20% of the outstanding Company Common Stock having
been sold in public offerings.
"Realization Process" has the meaning given in Section 7.1.
"Realization Sale Notice" has the meaning given in Section 7.2.
"Realization Sale Price" has the meaning given in Section 7.2.
"Realization Sale Purchaser" has the meaning given in Section 7.2.
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"Realization Sale Rightholder Option Period" has the meaning given
in Section 7.3(a).
"Realization Sale Rightholders" has the meaning given in
Section 7.3(a).
"Realization Sale Right Notice" has the meaning given in
Section 7.3(b).
"Realization Sale Terms" has the meaning given in Section 7.2.
"Realization Sale Transaction" has the meaning given in Section 7.2.
"Recapitalization Agreement" has the meaning given in Recital A.
"Registrable Shares" means any of (i) the Equity Interests owned by
any Shareholder at the time of determination and (ii) any other securities
issued or issuable with respect to the Equity Interests by way of a stock split,
stock dividend, reclassification, subdivision or reorganization,
recapitalization or similar event. As to any particular Registrable Securities,
such securities shall cease to be Registrable Securities when (a) a registration
statement with respect to the offering of such securities by the holder thereof
shall have been declared effective under the Securities Act and such securities
shall have been disposed of by such holder pursuant to such registration
statement, (b) such securities have been sold to the public pursuant to Rule 144
(or any similar provision then in force) promulgated under the Securities Act,
(c) such securities shall have been otherwise transferred and new certificates
for such securities not bearing a legend restricting further transfer shall have
been delivered by the Company or its transfer agent and subsequent disposition
of such securities shall not require registration or qualification under the
Securities Act or any similar state law then in force or (d) such securities
shall have ceased to be outstanding; provided that any such Equity Interests or
securities held by any Heartland Entity or Family Shareholder shall remain
Registrable Shares so long as held by them.
"Registration Party" means any holder of Registration Shares.
"Registration Shares" means any Demand Shares and any Piggyback
Shares.
"Registration Statement" has the meaning given in
Section 6.11(a)(i).
"Remaining Shares" has the meaning given in Section 4.9(b).
"Representative" means either of the Investor Representative or the
Family Representative.
"Second Round Shareholders" has the meaning given in Section 4.9(b).
"Securities Act" means the Securities Act of 1933, as amended.
"Services Agreement" means the services agreement by and between the
Company and The Heartland Industrial Group LLC, in the form set forth in
Section 9.02(e) of Newco's disclosure schedule to the Recapitalization
Agreement.
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"Shareholder" means each Investor and Family Shareholder. A Person
shall cease to be a Shareholder when such Person ceases to own, beneficially or
of record, any Equity Interests and Registrable Shares.
"Shareholder Representatives" has the meaning given in Section
9.3(b).
"South Carolina Court" has the meaning given in Section 10.3(a).
"Special Approval Committee" has the meaning given in Section
4.5(a).
"Specified Matters" has the meaning given in Section 4.5(b).
"Start Date" has the meaning given in Section 7.1.
"Subsidiary" means any corporation, limited liability company,
partnership or other entity of which the stock or membership, general or limited
partnership or other ownership interests having ordinary power to elect a
majority of the board of directors (or other persons or bodies performing
similar functions) are directly or indirectly owned by the Company.
"Transaction" has the meaning given in Recital A.
"Transfer" has the meaning given in Section 5.1(a).
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of Each Family
Shareholder. Each Family Shareholder, severally and not jointly, hereby
represents and warrants to the Investors as follows:
(a) Authority for this Agreement. Such Family Shareholder has all
requisite power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. This Agreement has been
duly authorized, executed and delivered by such Family Shareholder and, to
the extent of such Family Shareholder's several obligations hereunder,
constitutes a valid and binding obligation of such Family Shareholder
enforceable in accordance with its terms. If such Family Shareholder is
married and the common stock of the Company held by such Family Shareholder
constitutes community property or otherwise needs spousal or other approval
for this Agreement to be legal, valid and binding with respect to such
common stock, this Agreement has also been duly authorized, executed and
delivered by, and constitutes a valid and binding agreement of, such Family
Shareholder's spouse, enforceable against such spouse in accordance with
its terms. If such Family Shareholder is a trust, any consent of any
beneficiary of such trust required for the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby has
been obtained.
(b) No Conflicts. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby,
nor compliance with the
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terms hereof, will violate, conflict with or result in a breach or
constitute a default (with or without notice of lapse of time or both)
under any provision of any trust agreement, partnership agreement, loan or
credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise, license, judgment,
order, notice, decree, statute, law, ordinance, rule or regulation
applicable to such Family Shareholder or to such Family Shareholder's
property or assets.
(c) The Subject Shares. Such Family Shareholder is the record and
beneficial owner of, or is a trust that is the record holder of and whose
beneficiaries are the beneficial owners of, and has good and marketable
title to, the shares of common stock of the Company set forth opposite such
Family Shareholder's name on Exhibit A hereto, in each case free and
clear of all Liens. As of the Effective Time, such Family Shareholder will
have the sole right to vote, or to dispose of, such common stock, and none
of such common stock will be subject to any agreement, arrangement or
restriction with respect to the voting of such common stock, except as
contemplated by this Agreement. Except for this Agreement and, if such
Family Shareholder is a trust, in accordance with the terms of such trust,
(i) there are, and as of the Effective Time there will be, no agreements or
arrangements of any kind, contingent or otherwise, obligating such Family
Shareholder to Transfer any of the common stock of the Company and (ii) no
Person has, nor as of the Effective Time will any Person have, any
contractual or other right or obligation to purchase or otherwise acquire
any of the common stock of the Company held by such Family Shareholder.
From February 19, 2001 until the date hereof, no Family Shareholder has
Transferred any shares of common stock of the Company.
Section 2.2. Representations and Warranties of Each Investor.
Each Investor, severally and not jointly, hereby represents and warrants to each
Family Shareholder as follows:
(a) Authority for this Agreement. Such Investor has all requisite
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by such Investor, and the consummation of the transactions contemplated hereby,
have been duly authorized by all necessary action on the part of the such
Investor. This Agreement has been duly executed and delivered by such Investor
and, to the extent of such Investor's several obligations hereunder, constitutes
a valid and binding obligation of such Investor enforceable in accordance with
its terms.
(b) No Conflicts. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, nor
compliance with the terms hereof, will violate, conflict with or result in a
breach or constitute a default (with or without notice or lapse of time or both)
under any provision of the constitutive documents of such Investor, any trust
agreement, partnership agreement, loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit, concession,
franchise, license, judgment, order, notice, decree, statute, law, ordinance,
rule or regulation applicable to such Investor or to such Investor's property or
assets.
(c) The Subject Shares. Such Investor is not the beneficial owner of
any shares of common stock of the Company.
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ARTICLE III
COVENANTS
Section 3.1. Covenants of Family Shareholders. Each Family
Shareholder, severally and not jointly, hereby covenants as follows:
(a) Dispositions of Company Common Stock. From the date hereof
until the Effective Time, each Family Shareholder will not, directly or
indirectly, offer or Transfer any common stock of the Company held by such
Family Shareholder, or any interest therein (in either case whether owned at the
date hereof or acquired hereafter), except: (i) up to 1,086,956 shares of common
stock of the Company, in the aggregate, may be Transferred by the Family
Shareholders (not including Transfers made pursuant to subclause (ii) of this
Section 3.1(a)); and (ii) by intra-family gift, will or pursuant to the laws of
descent and distribution, or to the intra-family beneficiary of a trust;
provided that any recipient of common stock of the Company pursuant to a
transfer or disposition under this subclause (ii) of this Section 3.1(a) shall
be provided with a copy of this Agreement and bound thereby as if a signatory
hereto by executing and delivering a Joinder Agreement substantially in the form
attached hereto as Exhibit E.
(b) Merger Vote. From the date hereof until October 24, 2001:
(i) Each Family Shareholder, in its capacity as a shareholder,
covenants and agrees to vote (whether by proxy, consent or in
person) all of the common stock of the Company held by such Family
Shareholder (whether owned at the date hereof or acquired
hereafter), other than shares disposed of in accordance with Section
3.1(a), in favor of the Transaction and any other matter which may
be presented to the Company's shareholders during the term of this
Agreement that would facilitate the completion of the Transaction.
(ii) During the term of this Agreement, each Family
Shareholder will not deposit any common stock of the Company held by
such Family Shareholder into any voting trust, or enter into any
voting agreement with respect to any of such common stock or grant
any proxy or otherwise encumber the voting interests therein, except
as expressly provided herein.
(iii) Each Family Shareholder and each Investor will cooperate
fully to effect the Transaction and the Merger. Accordingly, such
Family Shareholder will not, directly or indirectly, (i) solicit any
inquiries or proposals from, or enter into or continue any
discussion, negotiations or agreements relating to a merger,
consolidation or business combination of the Company with, or
acquisition of its voting securities by, or a direct or indirect
acquisition or disposition of a significant amount of assets other
than in the ordinary course of business of the Company from or to,
any person or entity other than Newco or (ii) vote in favor of or
consent to any such proposal or transaction.
(c) Management Equity Schedule. Xxxxxxxx Close Xxxxxx will use her
reasonable best efforts to cooperate with and assist Newco in delivering a
Management Equity
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Schedule (as that term is defined in the Recapitalization Agreement) in
accordance with Section 2.05(a) of the Recapitalization Agreement.
Section 3.2. Covenants of Investors and Newco. The Investors and
Newco hereby covenant as follows:
(a) Newco Capitalization. Immediately prior to the Effective Time,
Newco will have outstanding 4,891,305 shares of common stock, for which the
Investors will have paid, in the aggregate, an amount per share, in cash, equal
to the Initial Price; provided that the foregoing share amount shall be reduced
by the number of shares of common stock of the Company, if any, that (i)
Heartland Entities or Investors designated by Heartland Entities purchase from
the Family Shareholders prior to the Effective Time or (ii) Heartland Entities
or Investors designated by Heartland Entities agree prior to the Effective Time
to purchase from the Family Shareholders immediately after the Effective Time,
in each case pursuant to sales permitted by Section 3.1(a).
(b) Newco Action. From the date hereof until the Effective Time,
Newco shall not, without the prior written consent of the Family Representative,
(i) amend the Recapitalization Agreement or (ii) engage in any activity or incur
any liability not directly related to the Transaction.
(c) Acquisition of Company Common Stock. From the date hereof until
the Effective Time, no Investor shall acquire any shares of common stock of the
Company, other than shares of common stock of the Company Transferred by a
Family Shareholder pursuant to Section 3.1(a)(i).
Section 3.3. Mutual Covenants. Each Shareholder, severally and not
jointly, hereby covenants as follows:
(a) Articles of Incorporation and Bylaws. Each Shareholder, in its
capacity as a shareholder, shall vote its shares of Company Common Stock, and
shall take all other actions reasonably necessary, to ensure that, immediately
after the Effective Time, the articles of incorporation attached hereto as
Exhibit B and the bylaws attached hereto as Exhibit C become the Company's
articles of incorporation and bylaws and that such articles of incorporation and
bylaws (i) facilitate compliance with this Agreement, including the management
and governance of the Company in accordance with Article IV, and (ii) do not at
any time conflict with any provision of this Agreement. Each Shareholder shall
use its reasonable best efforts to adopt and approve the articles of
incorporation attached hereto as Exhibit B by unanimous written consent in
accordance with Section 33-7-104 of the South Carolina Business Corporation Act;
provided that if such consent is not obtained on or before the day following the
date on which the Merger is consummated, Newco shall, in accordance with Section
33-7-105 of the South Carolina Business Corporation Act and Article III, Section
2 of Newco's then current bylaws, notify the Shareholders on the second day
following the date on which the Merger is consummated of the date, time and
place of a special shareholders' meeting to be held ten days following the date
of such notice for the purpose of adopting and approving such articles of
incorporation.
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(b) Amendment of Articles of Incorporation Prior to Initial Public
Offering. Each Shareholder, in its capacity as a shareholder, shall vote its
shares of Company Common Stock, and shall take all other actions reasonably
necessary, to ensure that after the Effective Time, and prior to an Initial
Public Offering or any offering pursuant to a Demand Registration, the articles
of incorporation of the Company are amended (i) to create a new class of common
stock of the Company to be issued in the Initial Public Offering or sold
pursuant to a Registration Statement under Article VI, (ii) to preserve the
dividend policy set forth in, and in accordance with, Section 4.11 solely with
respect to the original class of Company Common Stock, (iii) to provide for the
conversion of each share of original class of Company Common Stock into a share
of the new class of common stock of the Company upon the disposition of such
share of original class of Company Common Stock pursuant to a registration
statement or under Rule 144 of the Securities Act and (iv) to provide for both
classes of common stock of the Company to vote together as a single class and to
be identical in all respects (other than with respect to dividends), in each
case to the greatest extent permitted by law.
ARTICLE IV
CORPORATE GOVERNANCE AND MANAGEMENt
Section 4.1. Composition of the Board. (a) For so long as Xxxxxxxx
Close Xxxxxx is serving as Chief Executive Officer of the Company, the Board
shall consist of six Directors, selected as follows: (i) three Directors (the
"Family Directors") shall be nominated by the Family Representative on behalf of
the Family Shareholders, so long as the Family Shareholders continue to hold at
least 67% of the Base Amount, and (ii) three Directors (the "Investor
Directors") shall be nominated by the Investor Representative on behalf of the
Investors, so long as the Investors continue to hold at least 67% of the Base
Amount. After such time as the Family Shareholders cease to hold at least 67% of
the Base Amount, the number of Family Directors to be nominated by the Family
Representative on behalf of the Family Shareholders shall be (i) two so long as
the Family Shareholders continue to hold at least 33% of the Base Amount and
(ii) none when the Family Shareholders cease to hold at least 33% of the Base
Amount. After such time as the Investors cease to hold at least 67% of the Base
Amount, the number of Investor Directors to be nominated by the Investor
Representative on behalf of the Investors shall be (i) two so long as the
Investors continue to hold at least 33% of the Base Amount and (ii) none when
the Investors cease to hold at least 33% of the Base Amount. The loss by the
Family Representative or the Investor Representative of the ability to nominate
a Director or Directors pursuant to this Section 4.1(a) is not intended to
affect the overall number of Directors of the Company, and any Director whose
nomination is not provided for by this Section 4.1(a) shall be elected in
accordance with the second sentence of Section 4.1(c).
(b) During any period in which Xxxxxxxx Close Xxxxxx is not the
Chief Executive Officer of the Company, the Board shall consist of seven
Directors, including (i) the Directors nominated pursuant to Section 4.1(a), if
any, none of whom may be the Chief Executive Officer, and (ii) the Chief
Executive Officer.
(c) Each Shareholder agrees that it shall vote its shares of Company
Common Stock or execute consents, as the case may be, and take all other
necessary action in order to ensure that the Board is as set forth in this
Section 4.1. If, as a result of dispositions of Company Common Stock by the
Investors or the Family Shareholders, there are positions on the Board for
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which nominations are not supplied pursuant to Section 4.1(a), each Shareholder
may vote its shares of Company Common Stock as it sees fit to fill such
positions. The Board immediately after the Effective Time shall consist of the
individuals listed on Exhibit D.
Section 4.2. Removal of Directors. Each Shareholder agrees that if,
at any time, it is then entitled to vote for the removal of Directors, it will
not vote any of its shares of Company Common Stock in favor of the removal of
any Director who shall have been nominated pursuant to Section 4.1(a) unless the
Representative entitled to nominate such Director shall have consented to such
removal in writing; provided that if the Representative entitled to nominate any
Director pursuant to Section 4.1(a) shall request the removal of such Director
in writing, such Shareholder shall vote its shares of Company Common Stock in
favor of such removal.
Section 4.3. Vacancies. If, as a result of death, disability,
retirement, resignation, removal or otherwise, there shall exist or occur any
vacancy on the Board:
(a) the Representative entitled under Section 4.1(a) to nominate
such Director whose death, disability, retirement, resignation or removal
resulted in such vacancy may, subject to the provisions of Section 4.1(a),
nominate another individual to fill such vacancy and serve out the
remaining term of such Director; and
(b) each Shareholder then entitled to vote for the election of
such nominee as a Director agrees that it will vote its shares of Company
Common Stock, or execute a written consent, as the case may be, in order
to ensure that such nominee is elected to the Board.
Section 4.4. Meetings of the Board. (a) The Board shall meet at
least once in every quarter. At least 30 calendar days' prior notice of such
regular meetings of the Board (or such shorter period consented to by all the
Directors) shall be given. Any two Directors may call a special meeting of the
Board by delivery of at least ten calendar days' prior notice to all Directors
(or such shorter period consented to by all the Directors), which notice shall
specify the subject matter for the special meeting.
(b) A quorum of the Board shall consist of at least four Directors.
If the Family Representative would be entitled to nominate Directors under
Section 4.1(a) on the date of the board meeting, then at least two of the
Directors necessary for a quorum shall be Family Directors. If the Investor
Representative would be entitled to nominate Directors under Section 4.1(a) on
the date of the board meeting, then at least two of the Directors necessary for
a quorum shall be Investor Directors.
Section 4.5. Action by the Board. (a) All actions of the Board
shall require the affirmative vote of at least a majority of the Directors
present in person or by telephone at a duly convened meeting of the Board at
which a quorum is present, subject to the tie-breaking procedures set forth in
this Section 4.5(a), or the unanimous written consent of the Board. Prior to an
Initial Public Offering or a Qualified Public Offering and for so long as
Xxxxxxxx Close Xxxxxx is Chief Executive Officer, the Board shall have a
committee (the "Special Approval Committee") consisting of one Family Director
(other than Xxx. Xxxxxx), one Investor Director
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and Xxx. Xxxxxx. If at a duly convened meeting of the Board at which a quorum of
the Board is present, the Directors cast a tie vote with respect to a proposed
action of the Board (other than an action described in Section 33-8-250(e) of
the South Carolina Business Corporation Act), such action shall be presented to
the Special Approval Committee for approval, and shall be deemed to be approved
by the Board if, and only if, approved by at least two of the Directors serving
on the Special Approval Committee.
(a) Notwithstanding Section 4.5(a), so long as the Family
Representative and the Investor Representative each have the right to nominate
Directors pursuant to Section 4.1 and so long as the Company has not completed
an Initial Public Offering or a Qualified Public Offering, none of the following
actions (collectively, the "Specified Matters") may validly be taken by the
Company following the Effective Time without the prior approval of at least two
of the Family Directors and two of the Investor Directors at a duly convened
meeting of the Board at which a quorum is present, or the unanimous written
consent of the Board, unless taken in connection with a Realization Process:
(i) the incurrence, refinancing or material restructuring of
indebtedness by the Company or any Subsidiary (other than under
previously approved committed financing, such as a revolving credit
facility) which results, or which could result if such committed
financing is fully drawn, in a Leverage Ratio of 3.5:1 or more;
(ii) acquisitions or sales of assets (including, without
limitation, any Asset Disposition, Asset Acquisition or Investment )
by the Company or any Subsidiary (other than by or between the
Company and any wholly owned Subsidiary) outside of the ordinary
course of business, in a single transaction or related transactions,
involving a purchase price or fair market value in excess of $100
million or more;
(iii) capital expenditures for any one or a series of related
projects projected to involve $100 million or more over any period
of time;
(iv) other than under any employee benefit plan or other
option or compensation plan otherwise approved by the Board, any
issuance of Equity Securities, including without limitation (a) in
an Initial Public Offering, (b) to a seller of a business to be
acquired by the Company or any Subsidiary in any single acquisition
or series of related acquisitions, (c) in a rights offering made to
all holders of shares of Company Common Stock on a pro rata basis
(or as nearly a pro rata basis as practicable) and (d) in any
private issuance;
(v) any action in contravention of Section 4.11;
(vi) any clear and distinct significant deviation from the
broad range of home furnishings businesses currently conducted by
the Company and its Subsidiaries, and ones reasonably related
thereto, when viewed as a whole;
(vii) the submission to shareholders or the authorization of
the amendment of the articles of incorporation or bylaws of the
Company in any
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material respect that is inconsistent with this Agreement,
including any change to the number of Directors;
(viii) the entry into, modification or termination of any
Affiliate Agreement by the Company or any Subsidiary, or the
abandonment of the rights of the Company or any Subsidiary under or
pursuant to any Affiliate Agreement; except that the foregoing shall
not prohibit (A) Affiliate Agreements existing as of the Effective
Time (with only such modifications as are not adverse to the Company
or any Subsidiary), (B) ordinary course transactions among the
Investor Representative's portfolio companies or (C) the fees
contemplated by Section 8.1 or by the Services Agreement;
(ix) the liquidation, petition for bankruptcy, winding-up,
merger or other business combination, consolidation, dissolution,
split up or other similar transaction of or involving the Company or
any Subsidiary;
(x) the selection or removal of the Chief Executive Officer;
and
(xi) changing the location of the Company's corporate
headquarters.
(b) Notwithstanding anything contained in Sections 4.5(a) and (b),
if the Investors cease to hold, in the aggregate, at least 33% of the Base
Amount, the Services Agreement may be terminated if such termination is approved
by a majority of the Directors who are not Investor Directors.
Section 4.6. Board Committees. (a) With the exception of the
Charitable Contribution Committee described in Section 4.6(b), each committee of
the Board, to the extent possible, shall consist of (i) an equal number of
Family Directors and Investor Directors, not including the Chief Executive
Officer, and (ii) the Chief Executive Officer in his or her capacity as a
Director; provided that Investor Directors shall constitute a majority of the
Directors serving on the committee, if any, that determines the compensation of
Xxxxxxxx Close Xxxxxx.
(b) The parties agree that in continuation of the Company's
historical practice of supporting charitable causes, during any time when the
Family Representative has the right to nominate Directors under Section 4.1(a),
the Board shall have a committee (the "Charitable Contribution Committee")
consisting of all of the Family Directors. The Charitable Contribution Committee
shall have the authority to direct charitable contributions to be made by the
Company of up to $3,000,000 per year.
(c) The committees of the Board shall operate in accordance with
Section 33-8-250 of the South Carolina Business Corporation Act.
Section 4.7. Chief Executive Officer. Immediately following the
Effective Time, the Chief Executive Officer of the Company shall be Xxxxxxxx
Close Xxxxxx. In the event that Xxx. Xxxxxx ceases to serve as Chief Executive
Officer for any reason other than death or incapacitation, Xxx. Xxxxxx shall
lead the recruitment process for a new Chief Executive Officer on behalf of the
Company, in consultation with the Investor Directors. In the event of the death
or incapacitation of Xxx. Xxxxxx while Chief Executive Officer, the Investor
Directors shall lead
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the recruitment process for a new Chief Executive Officer on behalf of the
Company, in consultation with the Family Directors. Any interim Chief Executive
Officer shall be selected jointly by the Investor Directors and Family
Directors.
Section 4.8. Capitalization. Following the Effective Time, the
Company shall have one authorized series of Company Common Stock to be held by
the Investors and the Family Shareholders.
Section 4.9. Preemptive Right. (a) If the Company proposes to
issue, sell or grant rights to acquire for cash any Equity Interests, excluding
any Preemptive Issuances to the extent subscribed to by Investors under the
following sentence or any Excluded Offering (an "Eligible Offering"), then the
Company shall be obligated to offer each Eligible Shareholder the right to
purchase at the same price and on substantially the same terms as the proposed
issuance, sale or grant such Eligible Shareholder's Proportionate Percentage of
the securities to be sold in the Eligible Offering pursuant to the procedures
set forth in Section 4.9(b). Notwithstanding anything in this Section 4.9(a) to
the contrary, if the Company proposes to issue, sell or grant rights to acquire
for cash any Equity Interests, the Heartland Entities (and such other Investors
as Heartland may designate) shall be entitled to purchase Equity Interests,
without such issuance, sale or grant being subject to any other Shareholder's
preemptive rights under this Section 4.9, on the first issuances (whether one or
more) (the "Preemptive Issuances") of Equity Interests for which the Company
receives aggregate gross proceeds of $108,604,834 less an amount equal to the
value of the shares of common stock of the Company Transferred by the Family
Shareholders pursuant to Section 3.1(a)(i). Until the third anniversary of the
Effective Time, the Investors will be permitted to exercise their preemptive
rights under the preceding sentence on Preemptive Issuances at the Initial
Price. On and after the third anniversary of the Effective Time, the Investors
will be permitted to exercise their preemptive rights on Preemptive Issuances at
the price paid for the Equity Interests by any unaffiliated third party at such
time or, if no such price has been paid at such time, at fair market value. The
preemptive rights to purchase under this Section 4.9(a) may be assigned by any
Eligible Shareholder to its Direct Permitted Transferees.
(b) The Company shall, before any securities are issued pursuant to
an Eligible Offering, give written notice (a "Preemptive Notice") thereof to
each Eligible Shareholder that is entitled to preemptive rights hereunder. Such
notice shall specify the security or securities proposed to be issued, the
proposed date of issuance, the consideration that the Company intends to receive
therefor and all other material terms and conditions of such proposed issuance.
For a period of 15 Business Days following the date of a Preemptive Notice, each
such Eligible Shareholder shall be entitled, by written notice to the Company,
to elect to purchase all or part of such Shareholder's Proportionate Percentage
of the securities being sold in the Eligible Offering. To the extent that any
Eligible Shareholder fails to elect to purchase all of its Proportionate
Percentage within such 15 Business Day period, then the Company shall re-offer
to each Eligible Shareholder who has elected to purchase its Proportionate
Percentage (collectively, the "Second Round Shareholders") for one additional
three Business Day period, the right to purchase that portion of the Equity
Interests with respect to which no election was made pursuant to the foregoing
sentence (the "Remaining Shares") which is equal to the product obtained by
multiplying (i) the number of Remaining Shares by (ii) a fraction, the numerator
of which is the number of shares of Company Common Stock then owned by such
Second Round
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Shareholder and the denominator of which is the aggregate number of shares owned
by all Second Round Shareholders. To the extent that elections pursuant to this
Section 4.9 shall not be made by an Eligible Shareholder with respect to any
securities included in an Eligible Offering within the periods prescribed by
this Section 4.9(b), then the Company shall not be obligated to issue to such
Eligible Shareholder such securities for which such Eligible Shareholder has
elected not to purchase. To the extent that there are securities that have not
been purchased pursuant to this Section 4.9, then the Company may issue such
securities, but only for consideration not less than, and otherwise on no less
favorable terms to the Company than, those set forth in the Preemptive Notice
and only within 60 days following the date of the Preemptive Notice. In the
event that any such offer is accepted by any such Eligible Shareholder or
Eligible Shareholders, the Company shall sell to such Eligible Shareholder or
Eligible Shareholders, and such Eligible Shareholder or Eligible Shareholders
shall purchase from the Company for the consideration and on the terms set forth
in the Preemptive Notice, the securities that such Eligible Shareholder or
Eligible Shareholders shall have elected to purchase within 15 Business Days of
such Eligible Shareholder's election to purchase such securities (subject to
delay for an additional thirty days for satisfaction of regulatory conditions).
The Company may comply with any applicable securities laws before issuing any
shares of Company Common Stock pursuant to this Section 4.9 and shall not be in
violation of the provisions hereof by reason of such compliance; provided it is
using reasonable best efforts to so comply.
(c) Notwithstanding anything in Section 4.9(a) to the contrary,
preemptive rights will not apply to Equity Interests (i) issued upon the
exercise of options, warrants or convertible securities outstanding immediately
following the Effective Time, (ii) granted under any employee benefit plan or
other option or compensation plan approved by the Board, (iii) issued as
consideration to any seller of securities or assets of any Person in a
transaction approved by the Board, (iv) issued in connection with any stock
split or dividend, reclassification or similar event or (v) issued pursuant to
Section 4.10 (each, an "Excluded Offering").
(d) The preemptive rights provided under this Section 4.9 shall
terminate upon, and shall not apply to, an Initial Public Offering. The
preemptive rights under this Section 4.9 in favor of (i) any Family Shareholder
shall terminate when the Family Representative no longer has the right to
nominate Directors under Section 4.1(a) and (ii) any Investor shall terminate
when the Investor Representative no longer has the right to nominate Directors
under Section 4.1(a). An "Eligible Shareholder" will be any Shareholder as to
whom preemptive rights have not terminated in accordance with the foregoing
sentence.
Section 4.10. Additional Investor Investment. Until the third
anniversary of the Effective Time, the Heartland Entities shall be obligated to
purchase additional shares of Company Common Stock, at a price per share in cash
equal to the Initial Price, to fund an acquisition or capital expenditure
program approved by at least two of the Investor Directors and two of the Family
Directors to the extent and solely to the extent that either (1) such equity is
required by senior lenders under the Company's principal credit facility as a
condition to consenting to such acquisition or program or (2) the Leverage Ratio
would be greater than 3:1 on a pro forma basis taking into account the
Indebtedness to be incurred to finance such acquisition or program and the
additional equity is being used to reduce Indebtedness; provided, however, that
nothing in this Section 4.10 shall obligate the Heartland Entities to purchase
additional shares of Company Common Stock to the extent, but only to the extent,
such purchase would
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cause the Investors' aggregate investment in shares of Company Common Stock to
exceed the lesser of (i) $300 million or (ii) 25% of the total capital
commitment limitation set forth in the Heartland Industrial Investors, L.P.
limited partnership agreement. If, pursuant to this Agreement, the Heartland
Entities Transfer any obligation under this Section 4.10 and the transferee of
such Transfer defaults on such obligation, the Heartland Entities agree to
perform such obligation to the extent that such transferee has so defaulted.
Section 4.11. Dividend Policy. The yearly cash dividend on Company
Common Stock shall be $1.20 per share and shall continue to be paid on a
quarterly basis, subject to such dividend being in compliance with the Company's
debt instruments and the existence of legally available funds to pay such
dividend.
ARTICLE V
RESTRICTIONS ON TRANSFER
Section 5.1. General. (a) Unless mutually agreed to by both
Representatives and subject to Articles VI and VII, none of the Shareholders or
any of their successors in interest may, directly or indirectly, sell, transfer,
assign, grant a participation in, option, pledge, hypothecate or otherwise
dispose of or encumber (collectively, "Transfer") (A) any of their Equity
Interests, except (i) subject to Section 5.2, to a Permitted Transferee of such
proposed transferor, (ii) in the case of Equity Interests that are not Company
Common Stock, pursuant to any additional terms and conditions of the agreement
or instrument pursuant to which the applicable Equity Interests were issued (as
the same may be modified from time to time), (iii) a Transfer by a Shareholder
pursuant to an effective registration statement under the Securities Act or a
Transfer pursuant to Rule 144 under the Securities Act at a time when the
Company is subject to the reporting requirements of Section 13 of 15(d) of the
Exchange Act or (iv) with respect to Family Shareholders, Transfers permitted
under Section 3.1(a), or (B) any of their rights and obligations under this
Agreement prior to the Effective Time, except, subject to Section 5.2, to a
Permitted Transferee of such proposed transferor.
(b) Any attempt by any Shareholder to transfer any Equity Interests
not in compliance with this Agreement shall be null and void, and the Company
shall not, and shall cause any transfer agent not to, give effect in the
Company's stock records to any such attempted Transfer.
Section 5.2. Transfers to Permitted Transferees. No (A) share of
Company Common Stock shall be Transferred pursuant to subclause (A)(i) of
Section 5.1(a) to any Permitted Transferee of the applicable Shareholder or (B)
right or obligation under this Agreement shall be Transferred pursuant to
subclause (B) of Section 5.1(a) to any Permitted Transferee of the applicable
Shareholder, in each case unless and until such Permitted Transferee shall have
executed and delivered a Joinder Agreement substantially in the form attached
hereto as Exhibit E. If a Shareholder wishes to Transfer shares of Company
Common Stock to a Permitted Transferee, such Shareholder shall give notice to
the Company and to the Representatives of its intention to make such a Transfer
not less than five days prior to effecting such Transfer, which notice shall
state the name and address of each Permitted Transferee to whom such Transfer is
proposed, the relationship of such Permitted Transferee to such
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Shareholder and the number of shares of Company Common Stock proposed to be
Transferred to such Permitted Transferee.
Section 5.3. Legend. Any certificate for any share of Company
Common Stock that is issued to any Shareholder on or after the Effective Time
shall bear a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE
OFFERED OR SOLD EXCEPT IN COMPLIANCE THEREWITH. THIS SECURITY IS
ALSO SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN THE
SHAREHOLDERS AGREEMENT DATED AS OF APRIL 24, 2001, AS MAY BE AMENDED
FROM TIME TO TIME, COPIES OF WHICH MAY BE OBTAINED UPON REQUEST FROM
THE COMPANY OR ANY SUCCESSOR THERETO.
ARTICLE VI
REGISTRATION RIGHTS
Section 6.1. Demand Registrations. (a) Subject to Section 6.2, at
any time after the earlier of the third anniversary of the Effective Time and
180 days after an Initial Public Offering, the Company shall, upon the written
demand (the "Demand") of the Investor Representative or the Family
Representative (the "Demanding Party"), use its reasonable best efforts to
effect the registration (a "Demand Registration") under the Securities Act of
such number of Registrable Shares ("Demand Shares") then beneficially owned by
the Demanding Party, and other Investors (if the Demanding Party is the Investor
Representative) or other Family Shareholders (if the Demanding Party is the
Family Representative), as shall be indicated in a written demand by the
Demanding Party sent to the Company and either the Investor Representative (if
the Demanding Party is the Family Representative) or the Family Representative
(if the Demanding Party is the Investor Representative); provided, however, that
as to each of (x) the Investors, as a group, and (y) the Family Shareholders, as
a group, (i) the Company shall be obligated to effect a total of no more than
three Demand Registrations and (ii) a Demand Registration shall not count as
such until it has become effective; provided, that a Demand Registration which
has become effective shall not count as a Demand Registration if: (1) a
Demanding Party determines in its good faith judgment to withdraw the proposed
Demand Registration (x) due to intervening marketing or regulatory reasons,
provided that the Demanding Party (or the Shareholders represented by it)
reimburses the Company for all of its expenses incurred in the preparation,
filing and processing of the Demand Registration, (y) due to a material adverse
change in the Company and the Subsidiaries taken as a whole or (z) if the
Company is in material breach of its obligations under this Article VI; (2) such
Demand Registration is interfered with by any stop order, injunction or other
order or requirement of the Securities and Exchange Commission or other
governmental agency or court for any reason (other than as a result of any
action by the relevant selling Shareholder) and such stop order, injunction or
other order or requirement is not subsequently removed, withdrawn or resolved to
the Demanding Party's reasonable satisfaction; or (3) a closing does not occur
under the underwriting agreement or purchase agreement entered into in
connection with the registration
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relating to any such demand as a result of the failure to satisfy (or waive) a
customary condition to closing (other than as a result of a default or breach
thereunder by the relevant selling Shareholders). Upon receipt of the Demanding
Party's written demand and subject to Section 6.5, the Company shall
expeditiously effect the registration under the Securities Act of the Demand
Shares and use its reasonable best efforts to have such registration become and
remain effective as provided in Section 6.11. The Demanding Party, together with
any other party participating in the Demand Registration pursuant to Section 6.3
(unless such other party is registering less than 80% of the amount of the
Registrable Shares being registered by the Demanding Party), shall have the
right to select the managing underwriters, reasonably acceptable to the Company,
for a Demand Registration.
(b) Notwithstanding anything in Section 6.1(a) to the contrary,
each of the Investors and Family Shareholders shall be entitled to five
short-form registrations on Form S-3 (or any successor form thereto) following a
Qualified Public Offering, of which no more than two may be underwritten.
(c) A Demanding Party may, at any time prior to the effective date
of the registration statement relating to a Demand Registration, revoke such
request by providing a written notice thereof to the Company. Subject to the
last sentence hereof, a Demanding Party who revokes such request shall reimburse
the Company for all of its expenses incurred in the preparation, filing and
processing of the Demand Registration, unless such revocation is due to either
(x) a material adverse change in the Company and the Subsidiaries taken as a
whole or (y) the Company is in breach of its obligations under this Article VI.
If pursuant to the terms of this Section 6.1(c), the Demanding Party reimburses
the Company for all of its reasonable expenses incurred in the preparation,
filing and processing of any registration statement requested and subsequently
revoked by such Demanding Party, the attempted registration by such requested
and subsequently revoked registration statement shall not be deemed to be a
Demand Registration. Notwithstanding the foregoing, a Demanding Party may, at
any time within ten days after the receipt of notice of any Blackout Period or
delay in filing under Section 6.5(b), revoke such request by providing written
notice thereof to the Company and the attempted Demand Registration shall not be
deemed to be a Demand Registration, notwithstanding the fact that such selling
Shareholders shall not reimburse the Company for any expenses incurred in the
preparation, filing and processing of any registration statement.
Section 6.2. Company Preemption. The Company may preempt the first
Demand made by a Shareholder, whether made by the Investor Representative or the
Family Representative, pursuant to Section 6.1(a), if such Demand is made prior
to an Initial Public Offering. If the Company so preempts, then no Demand
Registration shall be deemed to have made for purposes of Section 6.1(a) and the
Shareholders shall be entitled to Piggyback Registration rights pursuant to
Section 6.3.
Section 6.3. Piggyback Registrations. (a) If the Company proposes
to register, or is caused to register pursuant to a Demand Registration, any
Company Common Stock under the Securities Act for sale for cash (otherwise than
in connection with the registration of Common Stock issuable pursuant to an
employee or director stock option, stock purchase or similar plan or pursuant to
a merger, exchange offer or a transaction of the type specified in Rule 145(a)
under the Securities Act), the Company shall give the Investor Representative
and the
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Family Representative notice of such proposed registration at least 15 days
prior to the filing of a registration statement. At the written request of the
Investor Representative or the Family Representative (the "Piggybacking Party")
delivered to the Company within 10 days after the receipt of the notice from the
Company, which request shall state the number of Registrable Shares ("Piggyback
Shares") that the Investors or Family Shareholders, respectively, wish to sell
or distribute publicly under the registration statement proposed to be filed by
the Company, the Company shall use its reasonable best efforts to register under
the Securities Act such Piggyback Shares, and to cause such registration (a
"Piggyback Registration") to become and remain effective as provided in Section
6.11. Notwithstanding the foregoing, a Demanding Party may not also be a
Piggybacking Party and in the event the managing underwriters of an offering
advise the Company in writing that in their opinion the number of shares
requested to be included in the registration exceeds the number which can be
sold in the offering, the relative priority of the shares to be sold shall be
governed by Section 6.3(c). In a Piggyback Registration pursuant to this Section
6.3 (other than a Piggyback Registration on a Demand Registration), the managing
underwriters shall be selected by the Company.
(b) If a Piggyback Registration is an underwritten primary
registration on behalf of the Company (including any underwritten primary
registration resulting from a Demand preempted by the Company pursuant to
Section 6.2), and the managing underwriters thereof advise the Company in
writing that in their opinion the number of shares of Company Common Stock
requested to be included in the registration exceeds the number which can be
sold in the offering, the Company shall include in the registration (i) first,
the shares of Company Common Stock the Company proposes to sell and (ii) second,
the Piggyback Shares that the Investors and/or the Family Shareholders propose
to sell, divided, if necessary, pro rata among the selling Shareholders based on
the total shares proposed to be sold by the selling Shareholders at the time
notice is given to the Company by such managing underwriters. Any Piggybacking
Party shall be given prompt notice by the Company of any such cutback.
(c) If a Piggyback Registration is an underwritten secondary
registration on behalf of a Demanding Party and the managing underwriters
thereof advise the Company in writing that in their opinion the number of shares
of Company Common Stock requested to be included in the registration exceeds the
number which can be sold in the offering, the Company shall include in the
registration the Demand Shares and the Piggyback Shares proposed to be sold,
divided, if necessary, pro rata among the selling Shareholders based on the
total shares proposed to be sold by the selling Shareholders. The Demanding
Party and the Piggybacking Party shall be given prompt notice by the Company of
any such cutback. Subject to Section 6.2, in the event the Company desires to
participate in such a registration of Company Common Stock, the Company shall
include in the registration (A) first, the Demand Shares and Piggyback Shares
and (B) second, the shares of Company Common Stock that the Company proposes to
sell.
Section 6.4. Lock-up. The Registration Parties and the Company each
hereby agree that in connection with any offering effected pursuant to this
Article VI, such Person will, if so requested by the managing underwriters of
such offering, enter into a customary lock-up agreement not to transfer, sell or
issue any Equity Interests held by it for a period of up to 180 days following
such offering (such lock-up agreement in form and substance acceptable to such
managing underwriters); provided that, in the case of any Initial Public
Offering, including an
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Initial Public Offering pursuant to Section 6.2, each Shareholder hereby agrees
that in connection with such Initial Public Offering, such Shareholder will, if
so requested by the managing underwriters of such offering, enter into a
customary lock-up agreement not to transfer, sell or issue any shares of Company
Common Stock held by it for a period of up to 90 days following such offering
(such lock-up agreement in form and substance acceptable to such managing
underwriters).
Section 6.5. The Company's Right to Delay Demand Registration.
(a) The Company shall not be obligated to file a registration statement relating
to any Demand Registration pursuant to Section 6.1 if counsel to the Company
renders a written opinion, in form and substance reasonably satisfactory to the
Demanding Party, to the effect that a post-effective amendment to an existing
registration statement would be sufficient for such proposed transfer (and the
Company files such a post-effective amendment to effect the proposed transfer).
The Company may delay filing the registration statement relating to any Demand
Registration pursuant to Section 6.1 for not more than 60 days (the "Blackout
Period") if the Board determines in good faith, by resolution, that the filing
of a registration statement would, if not so deferred, materially and adversely
affect a then proposed or pending significant business transaction, financial
project, acquisition, merger or corporate reorganization; provided that any
Demanding Party may withdraw all or a portion of its Demand Registration as
provided in Section 6.1.
(b) After providing notice to the Demanding Party, the Company may
delay filing the registration statement relating to any Demand Registration
pursuant to Section 6.1 if, in the case of an underwritten offering, the Company
has filed, or has taken substantial steps toward filing, including having
received an earlier Demand, a registration statement relating to any of the
Company's securities and either (i) the Demand Registration would not be
permitted because of a pending Blackout Period, in which case the Company may
delay the subsequent Demand Registration until the expiration of such Blackout
Period, or (ii) the managing underwriters are of the opinion that the filing of
a registration statement with respect to the subsequent Demand Registration
would adversely affect the offering by the Company of such securities, including
pursuant to the earlier Demand, in which case the Company may delay the
subsequent Demand Registration for not more than 60 days; provided that any
Demanding Party may withdraw all or a portion of its Demand Registration as
provided in Section 6.1.
Section 6.6. Indemnification by the Company. In the event of any
registration of any Registration Shares under the Securities Act, the Company
shall, and hereby does, indemnify and hold harmless each Registration Party, its
directors and officers, each other Person who participates as an underwriter in
the offering or sale of such shares and each other Person, if any, who controls
such Registration Party, as the case may be, or any such underwriter within the
meaning of Section 15 of the Securities Act against any losses, claims, damages
or liabilities, joint or several, to which such Registration Party or any such
director or officer or underwriter or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which the Registration Shares were registered under the Securities Act,
any preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or
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supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances in which they were made not misleading,
and the Company shall reimburse each Registration Party, and each such director,
officer, underwriter and controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability, action or proceeding; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information about a
Registration Party furnished to the Company through an instrument duly executed
by or on behalf of such Registration Party, specifically stating that it is for
use in the preparation thereof; and provided further, however, that the Company
shall not be liable to any Person who participates as an underwriter in the
offering or sale of Registration Shares or any other Person, if any, who
controls such underwriter within the meaning of the Securities Act, in any such
case to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of such Person's failure to
send or give a copy of the final prospectus, as the same may be then
supplemented or amended, to the Person asserting an untrue statement or alleged
untrue statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registration Shares to such Person if such statement
or omission was corrected in such final prospectus. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of
a Registration Party or any such director, officer or controlling person and
shall survive the transfer of the Registration Shares by such Registration
Party.
Section 6.7. Indemnification by the Registration Party. The Company
may require, as a condition to including any Registration Shares in any
registration statement filed pursuant to Section 6.1 or 6.3, that the Company
shall have received an undertaking reasonably satisfactory to it from each
Registration Party to severally and not jointly indemnify and hold harmless (in
the same manner and to the same extent as set forth in Section 6.6) the Company,
each Director, each officer of the Company signing such registration statement
and each other Person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act with respect to any untrue statement or alleged
untrue statement of any material fact in such registration statement, any
preliminary prospectus, final prospectus or summary prospectus contained therein
or any amendment or supplement thereto, or omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
in light of the circumstances in which they were made not misleading, if such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information about a
Registration Party as a shareholder of the Company furnished to the Company
through an instrument duly executed by such Registration Party specifically
stating that it is for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement. Such indemnity shall remain in full force and effect, regardless of
any investigation made by or on behalf of the Company or any such director,
officer or controlling person and shall survive the transfer by the seller of
the securities of the Company being registered.
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Section 6.8. Notices of Claims. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in Section 6.6 or 6.7, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party,
give notice to the latter of the commencement of such action; provided, however,
that the failure of any indemnified party to give notice as provided herein
shall not relieve the indemnifying party of its obligations under Section 6.6 or
6.7, except to the extent that the indemnifying party is actually prejudiced by
such failure to give notice. In case any such action is brought against an
indemnified party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
or the indemnified party may have defenses not available to the indemnifying
party in respect of such claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall be liable for any settlement of any
action or proceeding effected without its written consent. No indemnifying party
shall, without the consent of the indemnified party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect to such claim or litigation.
Section 6.9. Other Indemnification. Indemnification similar to that
specified in Section 6.6 and 6.7 (with appropriate modifications) shall be given
by the Company and each Registration Party with respect to any required
registration or other qualification of Registration Shares under any federal or
state law or regulation of any governmental authority other than the Securities
Act.
Section 6.10. Indemnification Payments. The indemnification
required by Section 6.6 shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills are
received or expense, loss, damage or liability is incurred.
Section 6.11. Registration Covenants of the Company. In the event
that any Registration Shares of a Registration Party are to be registered
pursuant to Section 6.1 or 6.3, the Company covenants and agrees that it shall
use its reasonable best efforts to effect the registration and cooperate in the
sale of the Registration Shares to be registered and shall as expeditiously as
possible:
(a) (i) prepare and file with the Securities and Exchange
Commission a registration statement with respect to the Registration
Shares (as well as any necessary amendments or supplements thereto) (a
"Registration Statement") and (ii) use its reasonable best efforts to
cause the Registration Statement to become effective;
(b) prior to the filing described in Section 6.11(a), furnish
to the Demanding Party and each Piggybacking Party copies of the
Registration Statement and any amendments or supplements thereto and any
prospectus forming a part thereof, which documents shall be subject to the
review of counsel for the Demanding Party and each
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Piggybacking Party (but not approval of such counsel except with respect
to any statement in the Registration Statement which relates to such
party);
(c) notify the Demanding Party and each Piggybacking Party,
promptly after the Company shall receive notice thereof, of the time when
the Registration Statement becomes effective or when any amendment or
supplement or any prospectus forming a part of the Registration Statement
has been filed;
(d) notify the Demanding Party and each Piggybacking Party
promptly of any request by the Securities and Exchange Commission for the
amending or supplementing of the Registration Statement or prospectus or
for additional information;
(e) (i) advise the Demanding Party and each Piggybacking Party
after the Company shall receive notice or otherwise obtain knowledge of
the issuance of any order by the Securities and Exchange Commission
suspending the effectiveness of the Registration Statement or any
amendment thereto or of the initiation or threatening of any proceeding
for that purpose and (ii) promptly use its reasonable best efforts to
prevent the issuance of any stop order or to obtain its withdrawal
promptly if a stop order should be issued;
(f) (i) prepare and file with the Securities and Exchange
Commission such amendments and supplements to the Registration Statement
and the prospectus forming a part thereof as may be necessary to keep the
Registration Statement effective for the lesser of (A) a period of time
necessary to permit each Registration Party to dispose of all its
Registration Shares and (B) 60 days and (ii) comply with the provisions of
the Securities Act with respect to the disposition of all Registration
Shares covered by the Registration Statement during such period in
accordance with the intended methods of disposition by the Registration
Parties set forth in the Registration Statement;
(g) furnish to each Registration Party such number of copies
of the Registration Statement, each amendment and supplement thereto, the
prospectus included in the Registration Statement (including each
preliminary prospectus) and such other documents as such party may
reasonably request in order to facilitate the disposition of the
Registration Shares owned by such party;
(h) use its reasonable best efforts to register or qualify such
Registration Shares under such other securities or blue sky laws of such
jurisdictions as determined by the underwriters after consultation with
the Company, the Demanding Party and each Piggybacking Party and do any
and all other acts and things which may be reasonably necessary or
advisable to enable the Registration Parties to consummate the
disposition in such jurisdictions of the Registration Shares (provided
that the Company shall not be required to (i) qualify generally to do
business in any jurisdiction in which it would not otherwise be required
to qualify but for this Section 6.11(h), (ii) subject itself to taxation
in any such jurisdiction or (iii) consent to general service of process
in any such jurisdiction);
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(i) notify the Demanding Party and each Piggybacking Party, at
any time when a prospectus relating thereto is required to be delivered
under the Securities Act, of the happening of any event as a result of
which the Registration Statement would contain an untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and,
at the request of the Demanding Party or a Piggybacking Party, prepare a
supplement or amendment to the Registration Statement so that the
Registration Statement shall not, to the Company's knowledge, contain an
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading;
(j) provide a transfer agent and registrar, which may be a single
entity, for all the Registration Shares not later than the effective date
of the Registration Statement;
(k) enter into such customary agreements (including an
underwriting agreement in customary form) and take all such other action,
if any, as the Demanding Party, a Piggybacking Party or the underwriters
shall reasonably request in order to expedite or facilitate the
disposition of the Registration Shares pursuant to this Article VI;
(l) (i) make available for inspection by the Demanding Party, each
Piggybacking Party, any underwriter participating in any disposition
pursuant to the Registration Statement and any attorney, accountant or
other agent retained by the Demanding Party, a Piggybacking Party or any
such underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and (ii) cause the
Company's officers, directors and employees to supply all relevant
information reasonably requested by the Demanding Party, a Piggybacking
Party or any such underwriter, attorney, accountant or agent in
connection with the Registration Statement;
(m) use its reasonable best efforts to cause the Registration
Shares covered by the Registration Statement to be registered with or
approved by such other governmental authorities as may be necessary to
enable the Registration Parties to consummate the disposition of such
Registration Shares;
(n) cause the Company's independent public accountants to
provide a comfort letter in customary form and covering such matters of
the type customarily covered by comfort letters; and
(o) use its reasonable best efforts to conduct a customary road
show for any underwritten demand offering.
Section 6.12. Shelf Registrations. If a Demanding Party shall
demand a shelf registration pursuant to Section 6.1 or a Piggybacking Party
shall piggyback on a shelf registration pursuant to Section 6.3, such Demanding
Party or Piggybacking Party shall have 30 days from the time such shelf
registration is declared effective by the Securities and Exchange Commission to
distribute all Registration Shares so registered.
Section 6.13. Expenses. In connection with any Registration
pursuant to Article VI, the Company shall pay all registration, filing, NYSE and
NASD fees, all fees and out-of-
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pocket expenses of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, all messenger and delivery
expenses, the reasonable fees and disbursements of the Company's independent
public accountants for services required because of the Registration (including
the expenses of comfort letters required for the Registration) and any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities. In any registration, (i) each Registration Party shall pay for its
own underwriting discounts and commissions and transfer taxes and (ii) the
Company and each Registration Party shall pay for its own counsel.
Section 6.14. Assignment of Registration Rights. Any Investor and
any Family Shareholder may assign their rights under this Article VI in whole or
in part to anyone to whom such Investor or Family Shareholder, respectively,
sells, transfers or assigns any of the Registrable Shares (other than in sales
pursuant to Rule 144 under the Securities Act or a registered public sale);
provided, however, that (i) an assignment of rights under Section 6.3 shall
occur automatically without the necessity of any action whatsoever and (ii) no
assignment shall increase the Company's obligations to effect registrations or
pay expenses thereof.
Section 6.15. Rule 144. After a period of three years following the
Effective Time, so long as the Company is subject to the reporting requirements
of Section 13 or 15(d) of the Exchange Act, the Company shall take all actions
reasonably necessary to enable the Shareholders to sell the Registrable Shares
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the Securities and Exchange Commission, including filing on a timely basis
all reports required to be filed by the Company by the Exchange Act. Upon the
request of the Investor Representative or the Family Representative, the Company
shall deliver to the Investor Representative or the Family Representative a
written statement as to whether it has complied with such requirements.
ARTICLE VII
REALIZATION Process
Section 7.1. Phase One. If there has not been a Qualified Public
Offering prior to the fifth anniversary of the Effective Time and neither
Representative has ceased to have the right to nominate Directors pursuant to
Section 4.1(a), then either the Investor Representative on behalf of the
Investors or the Family Representative on behalf of the Family Shareholders (as
applicable, the "Phase One Group") may initiate, by written notice (the date of
such notice, the "Start Date") to the Company and either the Family
Representative (if the Investors are the Phase One Group) or the Investor
Representative (if the Family Shareholders are the Phase One Group), the first
stage ("Phase One") of a process (a "Realization Process") to seek the
realization of value on their Equity Securities on a private basis, whether
through the sale of such Equity Securities, a sale of the Company as an
entirety, a merger, a recapitalization or other business combination (in any
such case, a "Liquidity Event"). Once a Phase One Group has initiated a
Realization Process, it may not initiate another Realization Process for a
period of 15 months from the last Start Date of a Realization Process it has
initiated. Within 15 days of the Start Date, the Shareholders will cause the
Company to retain, and the Company will retain at its expense, an investment
banking firm (the "Bank") of recognized international standing with knowledge
and experience in business combinations involving the home furnishings industry
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that is mutually satisfactory to the Investor Representative and the Family
Representative. The Bank shall be engaged to undertake a review of the Company,
its businesses, assets, liabilities and prospects and to report to the Investor
Representative, the Family Representative and the Company as soon as reasonably
practicable, but in any case within 30 calendar days after its engagement on (i)
various alternatives and strategies for the realization of value by the Phase
One Group and all the shareholders of the Company with respect to their Equity
Securities and (ii) the ranges of values, including utilized methodologies, for
the Equity Securities with respect to each such alternative. The Company shall
agree to fully cooperate, subject to applicable confidentiality restrictions, in
providing customary and reasonable information and access to the Bank. Based
upon the Bank's review and report, the Investor Representative and the Family
Representative shall negotiate for a period not to extend past the 180th day
following the Start Date (the "End Date") as to how and what basis a Liquidity
Event should proceed, which may include a negotiation concerning the terms and
conditions for a sale of the Equity Securities of the Phase One Group to the
other Shareholders.
Section 7.2. Phase Two. If the Investor Representative and the
Family Representative have not agreed on a mutually satisfactory Liquidity Event
by the End Date, then either the Investor Representative on behalf of the
Investors or the Family Representative on behalf of the Family Shareholders (as
applicable, the "Phase Two Group") may, within 15 days of the End Date, initiate
(and thereby preclude any other Shareholder from initiating), by written notice
to the Family Representative (if the Investors are the Phase Two Group) or the
Investor Representative (if the Family Shareholders are the Phase Two Group),
with a copy to the Company, the second stage ("Phase Two") of the Realization
Process; provided that for the first ten days of the 15-day period provided
above, only the Phase One Group shall have the right to initiate Phase Two;
provided, further, that the Phase Two Group shall be required to use its
reasonable best efforts to seek a Realization Sale Transaction until the
termination of Phase Two as provided in the last sentence of this Section 7.2 or
such earlier time as mutually determined by both Representatives. Phase Two
shall involve the sale of all of the Equity Securities held by the Shareholders
for cash. During the course of seeking or arranging a fully financed, negotiated
and documented transaction (the "Realization Sale Transaction") involving the
sale of all of the Equity Securities held by the Shareholders to any Person
(other than to its or their Permitted Transferree) (a "Realization Sale
Purchaser") for cash, the Phase Two Group shall keep the other Shareholders and
the Company (including the Board) fully informed of the progress of the
potential Realization Sale Transaction on an ongoing, regular basis and shall
make available all material information and documentation, including draft term
sheets and draft agreements, regarding the potential Realization Sale
Transaction to the other Shareholders and the Company. If the Phase Two Group is
prepared to accept a bona fide Realization Sale Transaction offered by a
Realization Sale Purchaser, the Phase Two Group shall send written notice (an
"Realization Sale Notice") to the Family Representative (if the Investors are
the Phase Two Group) or the Investor Representative (if the Family Shareholders
are the Phase Two Group), with a copy to the Company, which notice shall (i)
state the proposed purchase price per share for the Equity Securities (the
"Realization Sale Price"), (ii) state the material terms and conditions of such
Realization Sale Transaction (the "Realization Sale Terms") and (iii) include
all material documents relating to the Realization Sale Transaction. The
Realization Sale Notice shall constitute an offer by the Phase Two Group to sell
all (but not less than all) of their Equity Securities to the other Shareholders
at a purchase price equal to the Realization Sale Price and on terms
substantially similar to the Realization Sale Terms, and such offer shall be
irrevocable
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unless and until the rights of first refusal provided for in Section 7.3 shall
have been waived or shall have expired. In the event an agreement regarding the
Realization Sale Transaction is not signed within 180 days of the initiation of
Phase Two and completed within 60 days thereafter, Phase Two shall terminate;
provided that such 60-day period shall be extended as necessary to permit
regulatory approvals, consents or actions to be obtained, granted or taken (if
available without undue burden or cost), including without limitation the
declaration of effectiveness of any registration statement by the Securities and
Exchange Commission.
Section 7.3. Rights of First Refusal. (a) For a period of 30 days
after the giving of the Realization Sale Notice pursuant to Section 7.2 (the
"Realization Sale Rightholder Option Period"), the Family Shareholders (if the
Investors are the Phase Two Group) or the Investors (if the Family Shareholders
are the Phase Two Group) (the "Realization Sale Rightholders") shall have the
right to purchase all (but not less than all) of the Equity Securities of the
Phase Two Group (the "Phase Two Shares") at a purchase price per share equal to
the Realization Sale Price and upon terms substantially similar to the
Realization Sale Terms; provided that if any such sale involves the sale of
Equity Securities of the Investors to the Family Shareholders, the Investors
shall agree to take, at the option of the Family Shareholders, up to one third
of the value of their consideration in non-cash form (with the value thereof to
be determined by the Bank, if requested by the Investor Representative), so long
as (i) such non-cash consideration matures within three years of its issuance,
(ii) the issuer or obligor in respect thereof is the Company or another entity
reasonably acceptable to the Investor Representative and (iii) the financial and
other terms and conditions are consistent with market terms for similar "bridge"
financing instruments, including with respect to increasing interest rates and
prepayment provisions, and are otherwise reasonably acceptable to the Investor
Representative. It is agreed that any subset of the Realization Sale
Rightholders may exercise the rights under this Section 7.3 in any manner which
does not alter the requirement that all (but not less than all) Phase Two Shares
be purchased as provided above.
(b) The right of the Realization Sale Rightholders to purchase the
Phase Two Shares under Section 7.3(a) shall be exercisable by delivering written
notice (the "Realization Sale Right Notice") of the exercise thereof, prior to
the expiration of the Realization Sale Rightholder Option Period, to the Phase
Two Group, with a copy to the Company; provided that if the Family Shareholders
are the Realization Sale Rightholders, the Family Representative shall deliver
one Realization Sale Right Notice to the Investor Representative on behalf of
the Family Shareholders, and if the Investors are the Realization Sale
Rightholders, the Investor Representative shall deliver one Realization Sale
Right Notice to the Family Representative on behalf of the Investors. The
Realization Sale Right Notice shall break down the total number of Phase Two
Shares by the number of Phase Two Shares each Realization Sale Rightholder has
agreed to purchase pursuant to this Section 7.3. The giving of such Realization
Sale Right Notice shall constitute a binding obligation to purchase the Phase
Two Shares in accordance with Section 7.3(c). The failure of the Realization
Sale Rightholders to respond within the Realization Sale Rightholder Option
Period to the Realization Sale Notice shall be deemed to be a waiver of the
Realization Sale Rightholders' rights under this Section 7.3; provided that the
Realization Sale Rightholders may waive their rights under this Section 7.3 by
giving written notice to the Phase Two Group, with a copy to the Company.
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(c) The closing of the purchase of Phase Two Shares subscribed
for by the Realization Sale Rightholders under this Section 7.3 shall be held at
the executive offices of the Company at, not later than the sixtieth day after
the giving of the Realization Sale Notice pursuant to Section 7.2 or at such
other time and place as the Investor Representative and the Family
Representative may mutually agree. At such closing, the Phase Two Group shall
deliver certificates representing the Phase Two Shares, duly endorsed for
transfer and accompanied by all requisite transfer taxes, if any, and such Phase
Two Shares shall be free and clear of all Liens (other than those arising
hereunder and those attributable to actions by the purchasers thereof) and the
Phase Two Group shall so represent and warrant, and shall further represent and
warrant that it is the sole beneficial and record owner of such Phase Two
Shares. Each Realization Sale Rightholder purchasing Phase Two Shares shall
deliver at the closing payment in full for the Phase Two Shares purchased by it
or him. At such closing, all of the parties to the transaction shall take such
other action and execute such additional documents as are otherwise necessary or
appropriate.
(d) Upon delivery of the Realization Sale Right Notice, the
Company shall, if requested by the Phase Two Group, pay as compensation to any
Realization Sale Purchaser whose offer as set forth in a Realization Sale Notice
is matched by the Realization Sale Rightholders under this Section 7.3 a fee
equal to 2% of the total equity value of the Company implied by proposed
Realization Sale Transaction, plus reimbursement of such Realization Sale
Purchaser's reasonable out-of pocket expenses excluding any third party
investment banking, financing or commitment fees.
Section 7.4. Drag-Along Rights. If the Realization Sale Notice has
been given pursuant to Section 7.2 and the Realization Sale Rightholders do not
elect to exercise their rights under Section 7.3, the Phase Two Group shall
accept the Realization Sale Transaction offered by the Realization Sale
Purchaser and shall send written notice (the "Drag-Along Notice") to the other
Shareholders (the "Drag-Along Sellers"), with a copy to the Company, notifying
them that they will be required to sell all (but not less than all) of their
Equity Securities in the Realization Sale Transaction. Upon receipt of a
Drag-Along Notice, each Drag-Along Seller receiving such notice shall be
obligated to (i) sell all of its Equity Securities in the Realization Sale
Transaction at a purchase price per share equal to the Realization Sale Price
and upon the Realization Sale Terms (including payment of its pro rata share of
all costs associated with such transaction) and (ii) otherwise take all
necessary action in its capacity as a shareholder to cause the consummation of
such Realization Sale Transaction, including voting its Equity Securities in
favor of such Realization Sale Transaction and not exercising any appraisal
rights in connection therewith. The obligations of the Drag-Along Sellers in
respect of such Realization Sale Transaction are subject to the condition that
no Drag-Along Seller shall be obligated under the terms of any agreement
respecting such Realization Sale Transaction to indemnify any Person in an
amount greater than the proceeds to be received by such Drag-Along Seller in
such Realization Sale Transaction.
Section 7.5. Restrictions on Realization Process. Notwithstanding
anything in this Article VII to the contrary, (i) the provisions of this Article
VII shall terminate upon the earlier of a Qualified Public Offering or either
Representative ceasing to have the right to nominate Directors pursuant to
Section 4.1(a); (ii) the Board shall not be obligated to approve any Liquidity
Event resulting from Phase One or any Realization Sale Transaction resulting
from
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Phase Two; (iii) the Family Representative has the right to reject, in its sole
discretion, any Person as a Realization Sale Purchaser for non-commercial
reasons; and (iv) no Liquidity Event or Realization Sale Transaction may be
consummated if it would result in a default, acceleration or debt repurchase
event under any material financing instrument of the Company, unless all
necessary consents and/or waivers relating to such instrument have been
obtained.
ARTICLE VIII
FEES AND OTHER PAYMENTS
Section 8.1. Heartland Fee. Immediately after the Effective Time,
the Company shall pay a fee related to obtaining financing, meeting with rating
agencies and other expenses of 1% of the total enterprise value of the Company
(calculated as of the Effective Time) to Heartland Industrial Associates L.L.C.
or its designated affiliates.
Section 8.2. Advisors' Fees. At or immediately following the
Effective Time, the Company shall reimburse the Investor Representative and the
Family Representative for all out-of-pocket expenses, including without
limitation legal and investment banking fees and expenses, incurred at or prior
to the Effective Time by the Investors and the Family Shareholders,
respectively, with respect to this Agreement and the transactions contemplated
hereby, and the Recapitalization Agreement and the transactions contemplated
thereby and the other elements of the Transaction. Notwithstanding the foregoing
sentence, financing and investment banking fees and expenses shall be limited to
the amounts set forth on Schedule F.
ARTICLE IX
OTHER COVENANTS AND AGREEMENTS
Section 9.1. Family Representative. Each Family Shareholder
constitutes and appoints Xxxxxxxx Close Xxxxxx, or any successor as determined
by the following sentence, as his, her or its representative and agent in
connection with this Agreement (the "Family Representative") and hereby grants
unto said Family Representative full power and authority to do and perform each
and every act and thing specified in this Agreement to be done or performed by
the Family Representative; provided that nothing herein shall preclude the
Family Representative from entering into separate agreements with any Family
Shareholder for the purpose of allocating any rights of the Family Shareholders
among the Family Shareholders; provided, however, that no such agreement may
relieve any Family Shareholder of its obligations as a Shareholder hereunder.
Family Shareholders holding a majority of the shares of Company Common Stock
held by all Family Shareholders may, at any time, replace the then current
Family Representative with a successor Family Representative by providing
written notice of such succession to the Company and the Investor
Representative.
Section 9.2. Investor Representative. Each Investor constitutes and
appoints Heartland, or any successor thereto or other Heartland Entity
identified in a written notice to the Company and the Family Representative, as
its representative and agent in connection with this Agreement (the "Investor
Representative") and hereby grants unto said Investor Representative full power
and authority to do and perform each and every act and thing specified in this
Agreement to be done or performed by the Investor Representative; provided that
nothing herein shall preclude the Investor Representative from entering into
separate agreements with any
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Investor for the purpose of allocating any rights of the Investors among the
Investors; provided, however, that no such agreement may relieve any Investor of
its obligations as a Shareholder hereunder.
Section 9.3. Confidentiality. (a) No Shareholder shall, and each
Shareholder shall cause its Affiliates not to, use for any purpose or disclose
to any Person (other than to other Shareholders and advisors retained in
connection with this Agreement and in connection with any proposed Transfer of
Equity Interests permitted hereby if the proposed transferor agrees to be bound
by the provisions hereof), any Confidential Information, except as required by
applicable laws or regulations. In the event any Shareholder or any of its
Affiliates is required to disclose any Confidential Information under any law or
regulation (including complying with any oral or written questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or process to which a Shareholder is subject), such Person
shall, to the extent practicable, promptly notify the other Shareholders of such
requirement so that such other Shareholders may seek an appropriate protective
order or similar relief.
(b) "Confidential Information" means (i) any information concerning
the Company and Subsidiaries, and Persons which become Subsidiaries, or the
financial condition, business, operations or prospects of the Company and
Subsidiaries, and Persons which become Subsidiaries, in the possession of or
furnished to any Shareholder (including by virtue of its present or former right
to designate a Director) and (ii) any information concerning this Agreement or
the transactions contemplated by this Agreement; provided that the term
"Confidential Information" does not include information which (x) is or becomes
generally available to the public other than as a result of a disclosure by a
Shareholder or its partners, directors, officers, employees, agents, counsel,
investment advisors or representatives (collectively, "Shareholder
Representatives") in violation of this Agreement, (y) is or was available to
such Shareholder on a non-confidential basis prior to its disclosure to such
Shareholder or Shareholder Representatives by the Company or (z) was or becomes
available to such Shareholder on a non-confidential basis from a source other
than the Company, provided that such source is or was (at the time of receipt of
the relevant information) not, to the best of such Shareholder's knowledge,
bound by a confidentiality agreement with (or other confidentiality obligation
to) the Company or another Person with respect to such information.
Section 9.4. Financial Information and Other Reports. The Company
shall prepare and furnish to the Investor Representative and the Family
Representative:
(a) for delivery to all Shareholders, as soon as available, and in
any event within 90 days, after the end of each fiscal year of the
Company, an audited consolidated balance sheet of the Company and the
consolidated Subsidiaries as at the end of such year and the related
audited consolidated statement of operations, changes in equity (deficit)
and cash flows for such year, setting forth in each case in comparative
form the figures for the previous year, together with all notes and
schedules required by GAAP, and audited by a nationally recognized
independent auditing firm;
(b) for delivery to all Shareholders, as soon as available, and in
any event within 45 days, after the end of each fiscal quarter, except the
fourth fiscal quarter, an unaudited consolidated balance sheet of the
Company and the consolidated Subsidiaries
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as of the end of such quarter, and the related unaudited consolidated
statement of operations, changes in equity (deficit) and cash flows for
such quarter and for the current fiscal year to date, setting forth in
each case in comparative form the figures for such quarter in the previous
fiscal year and for the corresponding portion of the previous fiscal year;
(c) as soon as available, and in any event within 15 days, after
the end of each month, except for any month the end of which corresponds
to the end of a fiscal quarter, a consolidated balance sheet of the
Company and the consolidated Subsidiaries as of the end of such month, and
the related consolidated statement of operations for such month and for
the current fiscal year to date, setting forth in each case in comparative
form the figures for such month in the previous fiscal year and the
corresponding portion of the previous fiscal year; and
(d) such other business and financial data as the Investor
Representative or Family Representative may reasonably request from time
to time; provided that access to highly confidential proprietary
information and facilities need not be provided to Persons other than the
Representatives and their agents, employees and advisors.
All such financial statements shall present fairly in all material respects the
consolidated financial condition of the Company and the consolidated
Subsidiaries as at the applicable dates, and the consolidated results of their
operations, changes in equity (deficit) and cash flows for the periods reflected
therein, and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (in the case of the financial statements referred to in Sections 7.3(b),
(c) and (d), subject to normal year-end adjustments). In addition, the Company
shall make its senior management available to the Investors and the Family
Shareholders at reasonable times and upon reasonable notice and, in any event,
for an annual meeting among management, the Investors and the Family
Shareholders at which the budget for the following fiscal year shall be
presented and for quarterly meetings among management, the Heartland Entities
and the Family Representative.
Section 9.5. Further Assurances. Each Shareholder shall, from time
to time, take such other action and execute and deliver, or cause to be executed
and delivered, such additional documents and instruments as the other parties
may reasonably request to carry out the intent and purposes of this Agreement
and consummate the transactions contemplated by this Agreement.
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ARTICLE X
MISCELLANEOUS
Section 10.1. Effectiveness; Termination. (a) Except for
Articles II and III and the relevant provisions of Article I and this Article X,
which are effective as of the date hereof, this Agreement shall be effective,
and the rights and obligations of the parties under this Agreement shall
commence, without any action or notice by any party, as of the Effective Time.
No party shall have any right or obligation under this Agreement prior to the
Effective Time, other than for any inaccuracy in or breach of any representation
or warranty provided in Article II or breach of any covenant provided in Article
III.
(b) This Agreement shall terminate without any action or notice by
any party (i) upon either the Investors or the Family Shareholders ceasing to
hold at least 3% of the shares of Company Common Stock outstanding, calculated
on a fully diluted basis, following the Effective Time, (ii) at any time by
written agreement of the Investor Representative (on behalf of the Investors),
the Family Representative (on behalf of the Family Shareholders), Newco and, in
the event such termination occurs prior to the Effective Time, the Company and
(iii) upon the termination of the Recapitalization Agreement in accordance with
the terms thereof; provided that (x) in the case of subclause (i), the
registration rights of the Investors and the Family Shareholders provided under
Article VI and related provisions under this Article X shall survive the
termination of this Agreement and (y) in the case of subclause (iii), Section
3.1(b) shall survive the termination of this Agreement until October 24, 2001.
(c) All of the provisions of this Agreement shall apply to all
Equity Interests now owned or which may be issued or Transferred hereafter to,
or owned by, any Shareholder.
Section 10.2. Governing Law. (a) THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF SOUTH CAROLINA,
WITHOUT REGARD TO ANY PRINCIPLES OR RULES OF CONFLICTS OF LAWS THEREOF.
(b) Nothing herein shall be construed to limit the discretion of
any individual acting in his or her capacity as a director of the Company.
Section 10.3. Jurisdiction; Waiver of Jury Trial. (a) Each of the
parties hereto irrevocably and unconditionally (i) agrees that any legal suit,
action or proceeding brought by any party hereto arising out of or based upon
this Agreement or the transactions contemplated hereby may be brought in the
federal or state courts of South Carolina (each, a "South Carolina Court"), (ii)
waives, to the fullest extent it may effectively do so, any objection which it
may now or hereafter have to the laying of venue of any such proceeding brought
in any South Carolina Court, and any claim that any such action or proceeding
brought in any South Carolina Court has been brought in an inconvenient forum,
and (iii) submits to the non-exclusive jurisdiction of South Carolina Courts in
any suit, action or proceeding. Each of the parties agrees that a judgment in
any suit, action or proceeding brought in a South Carolina Court shall be
conclusive and binding upon it and may be enforced in any other courts to whose
jurisdiction it is or may be subject, by suit upon such judgment.
-36-
(b) Each of the parties agrees and acknowledges that any controversy
that may arise under this Agreement is likely to involve complicated and
difficult issues, and therefore each such party hereby irrevocably and
unconditionally waives any right such party may have to a trial by jury in
respect of any litigation directly or indirectly arising out of or relating to
this Agreement, or the breach, termination or validity of this Agreement.
Section 10.4. Amendment; Waiver Neither this Agreement nor any
term hereof may be amended or otherwise modified other than by an instrument in
writing signed by (i) Family Shareholders holding a majority of the shares of
Company Common Stock held by all Family Shareholders, (ii) the Investor
Representative on behalf of the Investors and (iii) the Company. No provision of
this Agreement may be waived, discharged or terminated other than by an
instrument in writing signed by the party against whom the enforcement of such
waiver, discharge or termination is sought.
Section 10.5. Assignment; No Third Party Beneficiaries. (a) Except
as permitted by Section 5.1, this Agreement shall not be assignable or otherwise
transferable by a party without the prior consent of the other parties, and any
attempt to so assign or otherwise transfer this Agreement without such consent
shall be void and of no effect; provided that any Person acquiring Equity
Interests in accordance with the provisions hereof shall, upon the delivery of
the Joinder Agreement contemplated by Section 5.2, become a "Shareholder,"
"Investor" or "Family Shareholder," as applicable.
(b) This Agreement shall be binding upon the respective heirs,
successors, legal representatives and permitted assigns of the parties hereto.
Nothing in this Agreement shall be construed as giving any Person, other than
the parties hereto and their heirs, successors, legal representatives and
permitted assigns, any right, remedy or claim under or in respect of this
Agreement or any provision hereof, except that Sections 3.1, 3.2(c), 3.3, 10.1,
10.4 and 10.6 and this Section 10.5(b) are also for the benefit of, and may be
enforced by, the Company.
Section 10.6. Notices. All notices, consents, requests,
instructions, approvals and other communications provided for in this Agreement
shall be in writing and shall be deemed duly and validly given on the date of
delivery if delivered personally or by telecopy (upon confirmation of delivery)
or one day after being sent by overnight courier service, at the following
address or telecopy number, or at such other address or telecopy number as a
party may designate to the other parties:
(i) if to any Investor to:
Heartland Industrial Partners, L.P.
00 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Fax: (000) 000-0000
with a copy to:
-00-
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: W. Xxxxxx Xxxxx, Esq.
Xxxxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
(ii) if to any Family Shareholder to:
Springs Industries, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxx Xxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxx
Fax: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxxx Xxxxx
Fax: (000) 000-0000
(iii) if to Newco (prior to the Effective Time) to:
Heartland Springs Investment Company, Inc.
c/o Heartland Industrial Partners, L.P.
00 Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: W. Xxxxxx Xxxxx, Esq.
Xxxxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
(iv) if to the Company (prior to the Effective Time) to:
Springs Industries, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxx Xxxx, Xxxxx Xxxxxxxx 00000
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Attn: Xxxxxxx X. Xxxxx
Fax: (000) 000-0000
(v) if to the Company (after the Effective Time) to:
Springs Industries, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxx Xxxx, Xxxxx Xxxxxxxx 00000
Attn: Secretary
Fax: (000) 000-0000
Section 10.7. Remedies. No failure or delay by any party in
exercising any right, power or privilege under this Agreement shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies provided herein shall be cumulative and not
exclusive of any rights or remedies provided by law.
Section 10.8. Specific Performance. Each of the parties hereto
acknowledges that there may be no adequate remedy at law for the failure by such
party to comply with the provisions of this Agreement and that such failure
would cause immediate harm that would not be adequately compensable in damages.
Accordingly, each of the parties hereto agrees that its agreement contained
herein may be specifically enforced without the requirement of posting a bond or
other security, in addition to all other remedies available to the parties
hereto under this Agreement or otherwise.
Section 10.9. Severability. If any provision of this Agreement is
held to be invalid or unenforceable for any reason, it shall be adjusted rather
than voided, if possible, in order to achieve the intent of the parties hereto
to the maximum extent possible. In any event, the invalidity or unenforceability
of any provision of this Agreement in any jurisdiction shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of this Agreement, including that
provision, in any other jurisdiction.
Section 10.10. Integration. This Agreement, including the
Schedules hereto, constitute the full and entire understanding and agreement of
the parties with respect to the subject matter hereof and thereof and supersede
any and all prior understandings or agreements relating to the subject matter
hereof and thereof.
Section 10.11. Section Headings. The article and section headings
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
Section 10.12. Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and date above written.
Heartland Entities
HEARTLAND INDUSTRIAL PARTNERS, L.P.
By: Heartland Industrial Associates L.L.C.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Managing Director
HEARTLAND INDUSTRIAL PARTNERS (F1), L.P.
By: Heartland Industrial Associates
L.L.C., its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Managing Director
HEARTLAND INDUSTRIAL PARTNERS (E1), L.P.
By: Heartland Industrial Associates L.L.C.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Managing Director
HEARTLAND INDUSTRIAL PARTNERS (K1), L.P.
By: Heartland Industrial Associates L.L.C.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Managing Director
HEARTLAND INDUSTRIAL PARTNERS (C1), L.P.
By: Heartland Industrial Associates L.L.C.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Managing Director
Family Shareholders
XXXXXXXX X. XXXXXX
SIGNATURE
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx
XXXXX X. CLOSE
SIGNATURE
By: /s/ Xxxxx X. Close
------------------------------------
Name: Xxxxx X. Close
THE SPRINGS COMPANY
SIGNATURE
THE SPRINGS COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
KANAWHA INSURANCE COMPANY
SIGNATURE
KANAWHA INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Director
TRUST NO. 3-M
SIGNATURES
THE SPRINGS COMPANY, as Trustee
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
TRUST NO. T-3
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxxxx X. Close
-------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxxx X. Close
------------------------------------
Name: Xxxxx X. Close, as Trustee
By: /s/ Xxxxxxx Close
------------------------------------
Name: Xxxxxxxx Close, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxx X. Close, Jr.
------------------------------------
Name: Xxxx X. Close, Jr., as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 3-3
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxxx X. Close
------------------------------------
Name: Xxxxx X. Close, as Trustee
By: /s/ Xxxxxxx Close
------------------------------------
Name: Xxxxxxxx Close, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxx X. Close, Jr.
------------------------------------
Name: Xxxx X. Close, Jr., as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-A-3
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-B-3
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-C-3
SIGNATURES
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx, as Trustee
TRUST NO. 12-3
SIGNATURES
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx, as Trustee
TRUST NO. 4-M
SIGNATURES
THE SPRINGS COMPANY, as Trustee
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
TRUST NO. T-4
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxx X. Close
------------------------------------
Name: Xxxxx X. Close, as Trustee
By: /s/ Xxxxxxx Close
------------------------------------
Name: Xxxxxxxx Close, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxx X. Close, Jr.
------------------------------------
Name: Xxxx X. Close, Jr., as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 3-4
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxx X. Close
------------------------------------
Name: Xxxxx X. Close, as Trustee
By: /s/ Xxxxxxx Close
------------------------------------
Name: Xxxxxxxx Close, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxx X. Close, Jr.
------------------------------------
Name: Xxxx X. Close, Jr., as Trustee
By: /s/ Xxxxxx X. Close
------------------------------------
Name: Xxxxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-A-4
SIGNATURES
By: /s/ Xxxx X. Close
-----------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
-----------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-B-4
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-C-4
SIGNATURES
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 12-4
SIGNATURES
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 5-M
SIGNATURES
THE SPRINGS COMPANY, as Trustee
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
TRUST NO. T-5
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxxxxxx Close
------------------------------------
Name: Xxxxxxxx Close, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxx X. Close, Jr.
------------------------------------
Name: Xxxx X. Close, Jr., as Trustee
By: /s/ Xxxxxx X. Close
------------------------------------
Name: Xxxxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 3-5
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxxxxx Close
------------------------------------
Name: Xxxxxxxx Close, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxx X. Close, Jr.
------------------------------------
Name: Xxxx X. Close, Jr., as Trustee
By: /s/ Xxxxxx X. Close
------------------------------------
Name: Xxxxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-A-5
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-B-5
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-C-5
SIGNATURES
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 12-5
SIGNATURES
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 6-M
SIGNATURES
THE SPRINGS COMPANY, as Trustee
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
TRUST NO. T-6
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxxx X. Close
------------------------------------
Name: Xxxxx X. Close, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxx X. Close, Jr.
------------------------------------
Name: Xxxx X. Close, Jr., as Trustee
By: /s/ Xxxxxx X. Close
------------------------------------
Name: Xxxxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 3-6
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxxx X. Close
------------------------------------
Name: Xxxxx X. Close, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxx X. Close, Jr.
------------------------------------
Name: Xxxx X. Close, Jr., as Trustee
By: /s/ Xxxxxx X. Close
------------------------------------
Name: Xxxxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-A-6
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-B-6
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-C-6
SIGNATURES
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 12-6
SIGNATURES
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. T-7
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxxx X. Close
------------------------------------
Name: Xxxxx X. Close, as Trustee
By: /s/ Xxxxxxxx Close
------------------------------------
Name: Xxxxxxxx Close, as Trustee
By: /s/ Xxxx X. Close, Jr.
------------------------------------
Name: Xxxx X. Close, Jr., as Trustee
By: /s/ Xxxxxx X. Close
------------------------------------
Name: Xxxxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 3-7
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxxx X. Close
------------------------------------
Name: Xxxxx X. Close, as Trustee
By: /s/ Xxxxxxxx Close
------------------------------------
Name: Xxxxxxxx Close, as Trustee
By: /s/ Xxxx X. Close, Jr.
------------------------------------
Name: Xxxx X. Close, Jr., as Trustee
By: /s/ Xxxxxx X. Close
------------------------------------
Name: Xxxxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-A-7
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-B-7
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-C-7
SIGNATURES
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 12-7
SIGNATURES
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 8-M
SIGNATURES
THE SPRINGS COMPANY, as Trustee
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
TRUST NO. T-8
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxxx X. Close
------------------------------------
Name: Xxxxx X. Close, as Trustee
By: /s/ Xxxxxxxx Close
------------------------------------
Name: Xxxxxxxx Close, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close., as Trustee
By: /s/ Xxxxxx X. Close
------------------------------------
Name: Xxxxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 3-8
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxxx X. Close
------------------------------------
Name: Xxxxx X. Close, as Trustee
By: /s/ Xxxxxxxx Close
------------------------------------
Name: Xxxxxxxx Close, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxxxx X. Close
------------------------------------
Name: Xxxxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-A-8
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-B-8
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-C-8
SIGNATURES
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 12-8
SIGNATURES
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 9-M
SIGNATURES
THE SPRINGS COMPANY, as Trustee
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
TRUST NO. T-9
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxxx X. Close
------------------------------------
Name: Xxxxx X. Close, as Trustee
By: /s/ Xxxxxxxx Close
------------------------------------
Name: Xxxxxxxx Close, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxx X. Close, Jr.
------------------------------------
Name: Xxxx X. Close, Jr., as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 3-9
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxxx X. Close
------------------------------------
Name: Xxxxx X. Close, as Trustee
By: /s/ Xxxxxxxx Close
------------------------------------
Name: Xxxxxxxx Close, as Trustee
By: /s/ Xxxxxxx X. Close
------------------------------------
Name: Xxxxxxx X. Close, as Trustee
By: /s/ Xxxx X. Close, Jr.
------------------------------------
Name: Xxxx X. Close, Jr., as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-A-9
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-B-9
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-C-9
SIGNATURES
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 12-9
SIGNATURES
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 10-M
SIGNATURES
THE SPRINGS COMPANY, as Trustee
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
TRUST NO. 10-A
SIGNATURES
By: /s/ Xxxx X. Close
-----------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 10-D
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 10-E
SIGNATURES
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-A-10
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-B-10
SIGNATURES
By: /s/ Xxxx X. Close
------------------------------------
Name: Xxxx X. Close, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 11-C-10
SIGNATURES
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
TRUST NO. 12-10
SIGNATURES
By: /s/ Xxxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxxx X. Xxxxxx, as Trustee
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx, as Trustee
HEARTLAND SPRINGS INVESTMENT COMPANY, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
The undersigned hereby acknowledges
and accepts her appointment as the Family
Representative pursuant to Section 9.1.
/s/ Xxxxxxxx X. Xxxxxx
-----------------------------
Xxxxxxxx X. Xxxxxx
Heartland Industrial Partners, L.P. hereby
acknowledges and accepts its appointment
as the Investor Representative pursuant to
Section 9.2.
By: Heartland Industrial Associates L.L.C.,
its General Partner
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Senior Managing Director
