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SHAREHOLDERS AGREEMENT
By and among
FIFTH AVENUE GROUP, LLC
A New York limited liability company
XXXXXXX XXXXXXXXXX
and
XXXX XXXXXXXXXX
Dated: as of January 18, 2002
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SHAREHOLDERS AGREEMENT
This Shareholders Agreement (this "AGREEMENT") is made and entered into
on and as of this 18th day of January 2002, by and among FIFTH AVENUE GROUP,
LLC, a New York limited liability company (the "GROUP"), XXXXXXX XXXXXXXXXX
("MT") and XXXX XXXXXXXXXX ("LT").
RECITALS:
WHEREAS, the parties to this Agreement (collectively, the "PARTIES")
are all beneficial owners of the Common Stock of Xxxxxx Xxxxxx International
Inc., a Delaware corporation ("LKI"); and
WHEREAS, MT and LT (collectively, the "TEMPELSMAN PARTIES"), on the one
hand, and the Group, on the other hand, wish to enter into this Agreement for
the purpose of receiving the rights and undertaking the obligations herein
provided for; and
WHEREAS, the Parties wish this Agreement to become effective on and as
of its date as to all provisions except Article II hereof; and
WHEREAS, the Parties wish that Article II of this Agreement shall not
become effective unless and until the consummation of the closing of the
transactions described in Article III of this Agreement (the "CLOSING");
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Defined Terms. Certain capitalized terms used herein shall
have the meaning assigned to such terms in this Section 1.1.
"AGREEMENT" has the meaning assigned to such term in the Introduction
to this Agreement.
"BUSINESS DAY" means any day other than a day on which banks in New
York City are required or authorized by Law to be closed.
"COMMON STOCK" means the Common Stock, par value $1.00 per share, of
LKI.
"CLOSING" has the meaning assigned to such term in the Recitals to this
Agreement.
"DRAG ALONG RIGHTS" has the meaning assigned to such term in Section
2.2(b) hereof.
"GROUP" has the meaning assigned to such term in the Introduction to
this Agreement.
"GROUP INTEREST" means the number or percentage (depending upon the
context) of outstanding Common Stock that is controlled directly or indirectly
by the Group, including the shares of Common Stock subject to the Group Proxy.
"GROUP PROXY" has the meaning assigned to such term in Section 3.2
hereof.
"LKI" has the meaning assigned to such term in the Recitals to this
Agreement.
"LT" has the meaning assigned to such term in the Introduction to this
Agreement.
"MT" has the meaning assigned to such term in the Introduction to this
Agreement.
"NOTICES" has the meaning assigned to such term in Section 4.1 hereof.
"PARTIES" has the meaning assigned to such term in the Recitals to this
Agreement.
"PERSON" means any individual, partnership, firm, corporation, limited
liability company, joint venture, trust, unincorporated organization or
association or other entity.
"RELATED TEMPELSMAN PERSON" means any Person who is related to either
of the Tempelsman Parties by blood, marriage or adoption or which is
wholly-owned and controlled by either or both of the Tempelsman Parties.
"STOCK PURCHASE AGREEMENT" means the Stock Purchase Agreement, dated as
of the date of this Agreement, between the Group and LKI.
"TAG ALONG RIGHTS" has the meaning assigned to such term in Section
2.1(b) hereof.
"TEMPELSMAN INTEREST" means the number or percentage (depending upon
the context) of outstanding Common Stock that is controlled directly or
indirectly by LT and/or MT other than any shares of Common Stock included in the
Group Interest.
"TEMPELSMAN PARTIES" has the meaning assigned to such term in the
Recitals to this Agreement.
Section 1.2 Singular and Plural; Gender. Whenever appropriate in the
context, terms used in the Transaction Documents in the singular also include
the plural, and vice versa, and each masculine, feminine or neuter pronoun shall
also include the other genders.
Section 1.3 Meaning of "INCLUDING". As used herein, the word
"INCLUDING" shall be deemed to mean "including, without limitation," unless
otherwise expressly provided in any instance.
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ARTICLE II
DRAG ALONG/TAG ALONG RIGHTS
Section 2.1 Tag Along Rights. If the Tempelsman Parties propose to sell
any of their shares of Common Stock in a private transaction to any Person, then
the following provisions shall apply to such proposed sale:
(a) Until such time as the Group Interest is equal to or greater
than the Tempelsman Interest, the Group shall have no Tag Along Rights.
(b) From and after such time as the Group Interest is equal to or
greater than the Tempelsman Interest, and so long as the Group Interest remains
equal to or greater than the Tempelsman Interest, as a condition to the closing
of the proposed sale of shares of Common Stock by the Tempelsman Parties, the
Tempelsman Parties shall cause the proposed purchaser to offer to purchase from
the Group the same number of shares of Common Stock as the number of shares of
Common Stock proposed to be purchased by such purchaser from the Tempelsman
Parties, such purchase to be made on the same terms, conditions and price, and
at the same time, as the proposed purchase from the Tempelsman Parties;
provided, however, that the Group need not make any representations or
warranties about LKI. If the Group wishes to sell any of its shares of Common
Stock to the proposed purchaser of the Tempelsman Parties' shares of Common
Stock, it shall, within three Business Days of its receipt of the written terms
of the purchase and sale, notify the proposed purchaser and the Tempelsman
Parties in writing of its irrevocable commitment to sell the same number of
shares of Common Stock to the proposed purchaser as the Tempelsman Parties are
selling to the proposed purchaser. The rights provided to the Group in this
Section 2.1(b) are herein referred to as the "TAG ALONG RIGHTS".
Section 2.2 Drag Along Rights. (a) If the Tempelsman Parties propose to
sell all of their shares of Common Stock to any Person other than a Related
Tempelsman Person, upon demand by the Tempelsman Parties, the Group shall sell
all of its shares of Common Stock to the proposed purchaser, such sale to be
made on the same terms, conditions and price, and at the same time, as the
proposed sale by the Tempelsman Parties; provided, however, that the Group need
not make any representations or warranties about LKI.
(b) If the Tempelsman Parties propose to sell less than all of
their shares of Common Stock to any Person, upon demand by the Tempelsman
Parties, the Group shall sell the same percentage of its shares of Common Stock
as the Tempelsman Parties are proposing to sell, such sale to be made on the
same terms, conditions and price, and at the same time, as the proposed sale by
the Tempelsman Parties provided, however, that the Group need not make any
representations or warranties about LKI. The rights provided to the Tempelsman
Parties in this Section 2.2 are herein referred to as the "DRAG ALONG RIGHTS".
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ARTICLE III
CLOSING; GROUP PROXY
Section 3.1 Closing. The Closing shall take place at the offices of
Xxxxxxx Xxxxxxxx Xxxxx Xxxxxxxxxxx & Kuh, LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX
00000 commencing at 10:00 a.m. local time on February 11, 2002, immediately
following the closing of the Stock Purchase Agreement.
Section 3.2 Group Proxy. At the Closing, the Group shall deliver to LT
and MT a fully executed and notarized irrevocable proxy in the form of Annex A
hereto (the "GROUP PROXY"). LT or MT shall promptly notify the Group in writing
after each use of the Group Proxy, such notice to include the matters with
respect to which the Group Proxy was voted (including action taken by consent),
and whether such vote or consent was affirmative or negative.
ARTICLE IV
MISCELLANEOUS
Section 4.1 Notices All notices, requests, claims, demands and other
communications ("NOTICES") given under this Agreement shall be effective if in
writing and sent to the Party to whom notice is intended to be given at the
address(es) specified on the signature page hereto (or at such other address as
a Party may hereafter designate by notice to the other Party as provided herein)
by: (i) United States registered or certified mail, return receipt requested;
(ii) a nationally recognized overnight courier service; (iii) hand delivery; or
(iv) facsimile transmission confirmed by U.S. mail. Notice given by mail shall
be effective on the date of delivery or refused delivery indicated on the return
receipt. Notice given by overnight courier shall be effective on the next
business day after delivery thereof to an authorized representative of the
courier service in a properly addressed and prepaid enclosure marked for next
day delivery. Notice given by hand delivery shall be effective when delivered to
the Party to whom it is addressed or to an actual or apparent officer, director,
employee or agent of such party at the address set forth above. Notice given by
facsimile transmission shall be effective when received, and if not during a
business day, the next business day after receipt, at the facsimile machine at
the fax number specified on the signature page hereof (or at such other fax
number as a Party may hereafter designate by notice to the other Parties as
provided herein), as evidenced by the sender's failure to receive an electronic
error message on the sending facsimile machine that the facsimile was not
received.
Section 4.2 Specific Performance. Each Party recognizes and agrees that
a breach by such Party of any of the covenants set forth in this Agreement could
cause irreparable harm to one or more other Parties, that such other Party's or
Parties' remedies at law in the event of such breach would be inadequate, and
that, accordingly, in the event of such breach a restraining order or injunction
or both may be issued against such Party, in addition to any other rights and
remedies which are available to such other Party or Parties. If this Section 4.2
is more restrictive
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than permitted by the laws of the State of New York, this Section 4.2 will be
limited to the extent required to permit enforcement under the laws of the State
of New York.
Section 4.3 Attorneys' Fees. In the event of any action for breach of
this Agreement, the prevailing party shall be entitled to reasonable attorneys'
fees, costs and expenses incurred in such action. The provisions of this Section
4.3 are intended to be severable from the other provisions of this Agreement and
to survive any judgment and, to the maximum extent permitted by Law, shall not
be deemed merged into any such judgment.
Section 4.4 Incorporation of Certain Sections of the Stock Purchase
Agreement. MT and LT hereby agree to be bound by the provisions of Sections 8.2,
8.3, 8.4, 8.5, 8.6, 8.8, 8.9, 8.10 and 8.12 as if they were a Party to the Stock
Purchase Agreement
Section 4.5 Effectiveness. All provisions of this Agreement other than
Article II hereof shall become effective on and as of the date of this
Agreement. Article II hereof shall become effective upon consummation of the
closing under the Stock Purchase Agreement and the delivery of the Group Proxy
to LT and MT pursuant to Section 3.2 hereof.
IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of
the date first stated above.
FIFTH AVENUE GROUP, LLC
By: /s/ Xxxxxxx Xxxxxxxx
Name: Xxxxxxx Xxxxxxxx
Title: Member
Address:1 Rockefeller Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax Number: (000) 000-0000
/s/ Xxxx Xxxxxxxxxx
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Xxxx Xxxxxxxxxx
Address: 000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax Number:(000) 000-0000
/s/ Xxxxxxx Xxxxxxxxxx
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Xxxxxxx Xxxxxxxxxx
Address: 000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax Number:(000) 000-0000
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ANNEX A
IRREVOCABLE PROXY
The undersigned, Fifth Avenue Group, LLC, a New York limited liability
company (the "Undersigned"), hereby irrevocably appoints Xxxx Xxxxxxxxxx and
Xxxxxxx Xxxxxxxxxx, or either of them, each with the power to instruct another
individual how to vote this proxy, proxy for the Undersigned (the "PROXY
HOLDER"), to appear and vote 1,180,000 shares of common stock, par value $1.00
per share ("COMMON STOCK"), of Xxxxxx Xxxxxx International Inc., a Delaware
corporation ("LKI"), to be purchased directly from LKI on February 11, 2002
pursuant to a Stock Purchase Agreement, dated as of January 18, 2002, between
the Undersigned and LKI, together with any other shares of any class of LKI that
may be received as a stock dividend thereon or that may result from a stock
split or combination affecting the Common Stock of LKI, to the same extent which
the Undersigned would be entitled to vote if personally present, at any Special
Meeting or Annual Meeting of Stockholders of LKI, and at any adjournments
thereof and including any action taken by written consent of stockholders.
This proxy is an irrevocable proxy coupled with an interest and shall
also constitute a power of attorney with respect to the execution of any
documentation in connection with a vote, consent or approval of the holders of
common stock of the LKI. The Undersigned covenants and agrees to execute all
such further documents and instruments, including without limitation, specific
written consents of stockholders and replacements renewing this proxy,
throughout the term of this power at the request of LKI.
This proxy shall expressly be binding upon the successors and assigns
of the Undersigned.
This proxy shall be effective until the earlier of (i) the eight year
anniversary of the date of this proxy or (ii) the date on which neither Xxxx
Xxxxxxxxxx ("LT") nor Xxxxxxx Xxxxxxxxxx ("MT") shall be the chief executive
officer or the President or the Chairman of LKI possessing managerial control
over the operations of LKI, subject to the direction of the Board of Directors
of LKI or (iii) the date on which the aggregate number of shares of common stock
of LKI of which LT and/or MT is the Beneficial Owner (exclusive of the shares
covered by this proxy) shall be less than the aggregate number of shares of
common stock of which the Undersigned is the Beneficial Owner.
As used in the immediately preceding paragraph, the term "BENEFICIAL
OWNER" means a "beneficial owner" within the meaning of Rule 13d-3 promulgated
under the Securities Exchange Act of 1934. An executive officer of LKI other
than LT or MT shall determine the number of shares of common stock of LKI of
which each of the Undersigned, LT and MT is the Beneficial Owner based on
ownership reports filed with the Securities and Exchange Commission under the
Securities Exchange Act of 1934 (subject to the exclusion contained in the
immediately preceding paragraph), and such determination, in the absence of
manifest error, shall be final and binding on the Undersigned, LT and MT.
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IN WITNESS WHEREOF, the undersigned has executed this, proxy and power
of attorney the ____ day of February 2002.
FIFTH AVENUE GROUP, LLC
By:
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Name: Xxxxxxx Xxxxxxxx
Title: Member
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of February, 2002, before me, the undersigned,
personally appeared Xxxxxxx Xxxxxxxx, personally known to me or proved to me on
the basis of satisfactory evidence to be the individual whose name is subscribed
to the within instrument and acknowledged to me that he executed the same in his
capacity and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.
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Notary Public
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