1
EXHIBIT 99.1
EXECUTION COPY
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT, dated as of July 9, 2001, among
Broder Bros., Co., a Michigan corporation ("Buyer"), FLD Acquisition Corp., a
Georgia corporation and a wholly owned subsidiary of Buyer ("Merger
Subsidiary"), and the stockholders of Full Line Distributors, Inc., a Georgia
corporation (the "Company"), who are listed on and execute the signature pages
attached hereto (each a "Stockholder" and, collectively, the "Stockholders").
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to them in the Merger Agreement (as defined below).
R E C I T A L S
WHEREAS, Buyer, Merger Subsidiary and the Company propose to
enter into an Agreement and Plan of Merger (as the same may be amended or
supplemented, the "Merger Agreement") providing for, among other things: (i) the
making of a cash tender offer (as such offer may be amended from time to time as
permitted under the Merger Agreement, the "Offer") by Merger Subsidiary for all
the outstanding shares (the "Shares") of common stock, no par value, of the
Company (the "Common Stock") and (ii) the merger of Merger Subsidiary with and
into the Company (the "Merger"), upon the terms and subject to the conditions
set forth in the Merger Agreement;
WHEREAS, each Stockholder is the record owner of the number of
shares of Common Stock set forth on his, her or its signature page attached
hereto (such shares of Common Stock, together with any other shares of capital
stock of the Company acquired by such Stockholder after the date hereof and
during the term of this Agreement (including through the exercise of any stock
options, warrants or similar instruments), being collectively referred to herein
as the "Subject Shares" of such Stockholder); and
WHEREAS, as a condition to their willingness to enter into the
Merger Agreement, Buyer and Merger Subsidiary have requested that each
Stockholder enter into this Agreement.
AGREEMENTS
NOW, THEREFORE, to induce Buyer and Merger Subsidiary to enter
into, and in consideration of their entering into, the Merger Agreement, and in
consideration of the premises and the representations, warranties and agreements
contained herein, the parties agree as follows:
2
1. Agreement to Tender.
(a) Each Stockholder hereby agrees severally (and not
jointly) to accept the Offer with respect to all of the Subject Shares of the
Stockholder and to tender (or cause the record owner of such Shares to tender)
all of his, her or its Subject Shares into the Offer. Such tender shall be made
within 10 business days following the date hereof and shall not be withdrawn.
Subject to Section 9 below, (i) the obligation of any Stockholder to tender and
not withdraw his, her or its Subject Shares is conditioned only upon lawful
commencement of the Offer and otherwise is unconditional and (ii) immediately
following the purchase of any Shares in the Offer, Merger Subsidiary shall
purchase all Subject Shares not purchased in the Offer, if any.
(b) Notwithstanding the foregoing, no Stockholder shall
be required to tender his, her or its Subject Shares, not withdraw his, her or
its Subject Shares or otherwise sell his, her or its Subject Shares in
accordance with the terms of this Agreement in the event that, without the prior
written consent of such Stockholder, any of the following has occurred: (i) a
decrease in the Offer Price or change in the form of consideration payable in
the Offer, (ii) a decrease in the number of Shares sought in the Offer, (iii) an
amendment or waiver of the Minimum Condition, (iv) the imposition of additional
conditions to the Offer or amendment to any condition to the Offer that is
adverse in any material respect to the holders of the Shares, (v) an amendment
of any other term of the Offer in any manner adverse in any material respect to
the holders of Shares or (vi) an extension of the expiration date of the Offer
which requires the consent of the Company under the Merger Agreement.
(c) Merger Subsidiary shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement
such amounts as may be required to be deducted and withheld with respect to the
making of such payment under the Internal Revenue Code of 1986, as amended, or
under any provision of state, local or foreign tax law.
(d) Each of the Stockholders hereby permits Buyer and
Merger Subsidiary to publish and disclose in the Offer Documents (as such term
is defined in Section 1.01(c) of the Merger Agreement) his, her or its identity
and ownership of Subject Shares and the nature of his, her or its commitments,
arrangements and understandings under this Agreement.
2. Representations and Warranties of Each Stockholder.
Each Stockholder hereby, severally and not jointly, represents and warrants to
Buyer and Merger Subsidiary as of the date hereof, in respect of himself,
herself or itself as follows (except as to those matters set forth immediately
following such Stockholder's signature):
(a) Authority. Such Stockholder has all requisite power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by such Stockholder, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary action on the
part of such Stockholder.
-2-
3
This Agreement has been duly executed and delivered by such Stockholder and,
assuming due authorization, execution and delivery by Buyer and Merger
Subsidiary, constitutes a valid and binding obligation of such Stockholder
enforceable against such Stockholder in accordance with its terms, subject to
the effect of any applicable bankruptcy, reorganization, insolvency, moratorium,
or similar law affecting creditors' rights generally and subject, as to
enforceability, to the effect of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(b) No Conflicts. Except for (i) the applicable
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the Securities Act of 1933, as amended (the "Securities Act") and (ii)
the applicable requirements of state securities laws, takeover laws or Blue Sky
laws, the execution and delivery of this Agreement do not, and the consummation
by such Stockholder of the transactions contemplated hereby and compliance with
the terms hereof will not, (A) conflict with, or result in any violation of, or
default (with or without notice or lapse of time or both) under, or give rise to
a right of termination, cancellation or acceleration of any obligation or to
loss of a material benefit under, or to increased, additional, accelerated or
guaranteed rights or entitlements of any person under, or result in the creation
of any lien upon any of the properties or assets of such Stockholder under any
provision of, any trust agreement, loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, or instrument, applicable to such
Stockholder or to the property or assets of such Stockholder or (B) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to such
Stockholder or any of the properties or assets of such Stockholder, including
the Subject Shares, except for such conflicts, violations, breaches, defaults or
other occurrences which, individually or the aggregate, have not had and would
not reasonably be expected to prevent or materially delay the ability of the
Stockholder to perform its obligations under this Agreement (a "Stockholder
Material Adverse Effect").
(c) No Consents. The execution and delivery of this
Agreement by such Stockholder does not, and neither the performance of this
Agreement by such Stockholder nor the consummation of the transactions
contemplated hereby by such Stockholder will, require any consent, approval,
authorization, order or permit of, or filing with or notification to, any
Federal, state, local or foreign government or any court of competent
jurisdiction, or other governmental, administrative or regulatory authority,
commission or agency, domestic or foreign (each a "Governmental Entity"), except
for (i) the applicable requirements of the Exchange Act and the Securities Act,
(ii) the applicable requirements of state securities laws, takeover laws or Blue
Sky laws, (iii) in the case of Xxxxxx Xxxxxxx, the consent of Xxxxx X. Xxxxxx,
which consent has been obtained prior to the date hereof, and (iv) such other
consents, approvals, authorizations or permits, filings or notifications, not
obtained or made prior to the date hereof, the failure of which to be obtained
or made would not prevent or delay consummation of the transactions contemplated
hereby, or otherwise prevent such Stockholder from performing its obligations
under this Agreement in any material respect, and which, individually or in the
aggregate, have not had and would not reasonably be expected to have a
Stockholder Material Adverse Effect. If such Stockholder is married and the
Subject Shares of such Stockholder constitute community property or otherwise
need spousal or other approval to be legal, valid and binding, this Agreement
has been duly authorized, executed and delivered by, and, assuming due
authorization, execution and delivery by Buyer and Merger Subsidiary and
-3-
4
the Stockholder, constitutes a valid and binding agreement of, such
Stockholder's spouse enforceable against such spouse in accordance with its
terms, subject to the effect of any applicable bankruptcy, reorganization,
insolvency, moratorium, or similar law affecting creditors' rights generally and
subject, as to enforceability, to the effect of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law). No trust of which such Stockholder is a trustee requires the
consent of any beneficiary to the execution and delivery of this Agreement or to
be the consummation of the transactions contemplated hereby.
(d) The Subject Shares. Such Stockholder is the record
and beneficial owner of, or is the trustee that is the record holder of, and
whose beneficiaries are the beneficial owners of, and has good and valid title
to, the Subject Shares set forth on his, her or its signature page attached
hereto, free and clear of any claims, liens, encumbrances, security interests,
options, charges and restrictions of any kind (other than restrictions pursuant
to applicable securities laws or such claims, liens, encumbrances, security
interests, options, charges and restrictions otherwise disclosed on such
Stockholder's signature page hereto). Except as otherwise set forth on his, her
or its signature page attached hereto, such Stockholder does not own, of record
or beneficially, any shares of capital stock of the Company other than the
Subject Shares set forth on the signature pages attached hereto. Such
Stockholder has the sole right to vote such Subject Shares, and none of such
Subject Shares are subject to any voting trust or other agreement, arrangement
or restriction with respect to the voting of such Subject Shares.
(e) No Brokers. Except for CoView Capital, Inc., whose
fees are payable by the Company, there is no investment banker, broker, finder
or other intermediary (other than legal and accounting advisors) which have been
retained by or is authorized to act on behalf of a Stockholder who might be
entitled to any fee or commission from the Stockholder or any of his, her or its
affiliates upon consummation of the transactions contemplated by this Agreement.
3. Representations and Warranties of Buyer and Merger
Subsidiary. Buyer and Merger Subsidiary hereby, jointly and severally, represent
and warrant to each of the Stockholders as of the date hereof as follows:
(a) Authority. Buyer and Merger Subsidiary have all
necessary power and authority to execute and deliver the Merger Agreement and
this Agreement and to consummate the transactions contemplated thereby and
hereby. The execution and delivery of the Merger Agreement and this Agreement by
each of Buyer and Merger Subsidiary, and the consummation of the transactions
contemplated thereby and hereby, have been duly authorized by all necessary
corporate action and no other corporate proceedings on the part of each of Buyer
and Merger Subsidiary are necessary to authorize this Agreement, the Merger
Agreement or to consummate the transactions contemplated hereby or thereby
(other than with respect to the Merger, the filing of the appropriate merger
documents with the Secretary of State of the State of Georgia as required by the
Georgia Business Corporation Code ("Georgia Code")). The Merger Agreement and
this Agreement each has been duly and validly executed and delivered by Buyer
and Merger Subsidiary and approved by Buyer as the sole stockholder of Merger
Subsidiary, and,
-4-
5
assuming due authorization, execution and delivery by the Company and each
Stockholder, respectively, constitutes a legal, valid and binding obligation of
Buyer and Merger Subsidiary enforceable against Buyer and Merger Subsidiary in
accordance with its terms, subject to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium, or similar law affecting creditors'
rights generally and subject, as to enforceability, to the effect of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(b) No Conflicts. The execution and delivery of the
Merger Agreement and this Agreement by Buyer and Merger Subsidiary do not, and
the consummation of the Offer, the Merger and the other Transactions (including
this Agreement) and compliance with the terms thereof and hereof will not, (i)
conflict with or violate the articles of incorporation or by-laws or equivalent
organizational documents of Buyer or Merger Subsidiary, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to Buyer
or any subsidiary of Buyer (each, a "Buyer Subsidiary") or by which any property
or asset of Buyer or any Buyer Subsidiary is bound or affected or (iii) result
in any breach of or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, result in the loss of a material
benefit under or give to others any right of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or other
encumbrance on any property or asset of Buyer or any Buyer Subsidiary pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which Buyer or any Buyer
Subsidiary is a party or by which Buyer or any Buyer Subsidiary or any property
or asset of Buyer or any Buyer Subsidiary is bound or affected, except for (A)
the applicable requirements of the Exchange Act and the Securities Act, (B) the
applicable requirements of state securities laws, takeover laws of Blue Sky laws
and (C) in the case of clauses (ii) and (iii) above, except for any such
conflicts, violations, breaches, defaults or other occurrences which,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Buyer Material Adverse Effect.
(c) No Consents. The execution and delivery of the Merger
Agreement and this Agreement by Buyer and Merger Subsidiary do not, and neither
the performance of the Merger Agreement and this Agreement by Buyer and Merger
Subsidiary nor the consummation of the Transactions by the Company will, require
any consent, approval, authorization, order or permit of, or filing with or
notification to, any Governmental Entity, except for (i) applicable requirements
of the Exchange Act and the Securities Act, (ii) filing of appropriate merger
documents with the Secretary of State of the State of Georgia as required by the
Georgia Code, (iii) the applicable requirements of state securities laws,
takeover laws or Blue Sky laws and (iv) such other consents, approvals,
authorizations or permits, filings or notifications, not obtained or made prior
to consummation of the transactions contemplated hereby the failure of which to
be obtained or made would not prevent or delay consummation of the transactions
contemplated hereby, or otherwise prevent Buyer or Merger Subsidiary from
performing its obligations under the Merger Agreement or this Agreement in any
material respect, and which, individually or in the aggregate, have not had and
would not reasonably be expected to have a Buyer Material Adverse Effect.
-5-
6
(d) Financing. Buyer has provided the Company with a copy
of a commitment letter from the parties named therein to Buyer, dated as of July
6, 2001, relating to the debt financing to be provided to the Surviving
Corporation (the "Commitment Letter"), which is in full force and effect as of
the date hereof. The financing contemplated by the Commitment Letter will
provide Buyer, subject to the terms and conditions set forth therein, with
sufficient funds for Buyer to pay the Acquisition Costs provided that (i) the
representations and warranties made by the Company in Sections 4.03 and 4.28 of
the Merger Agreement are true and correct in all respects (other than any
misrepresentation that would not exceed, in the aggregate for all such
representations and warranties in Section 4.03 and Section 4.28, $50,000) and
(ii) the covenant set forth in Section 6.01(h) of the Merger Agreement has not
been breached. The commitment fees set forth in the Commitment Letter which are
due and payable have been paid.
(e) No Brokers. Except for Xxxx Capital, Inc., whose fees
will be paid by Buyer, there is no investment banker, broker, finder or other
intermediary (other than legal and accounting advisors) which have been retained
by or is authorized to act on behalf of Buyer or any of its subsidiaries (or any
director or officer thereof) who might be entitled to any fee or commission from
Buyer, Merger Subsidiary or any of their respective assignees upon consummation
of the transactions contemplated by this Agreement.
4. Covenants of Each Stockholder. Each Stockholder
hereby, severally and not jointly, covenants and agrees as follows:
(a) At any meeting of stockholders of the Company called
to vote upon the Merger and the Merger Agreement or at any adjournment thereof
or in any other circumstances upon which a vote, consent or other approval
(including by written consent) with respect to the Merger and the Merger
Agreement is sought, in each case after such time as Merger Subsidiary has
purchased the Subject Shares of each Stockholder hereunder, and only if the
record date for any such vote precedes the date of the sale of such Subject
Shares to Merger Subsidiary, each Stockholder shall vote (or cause to be voted)
the Subject Shares of such Stockholder, including by executing a written consent
solicitation if requested by Buyer or Merger Subsidiary, in respect of which
such Stockholder then has or exercises voting control in favor of the Merger,
the adoption by the Company of the Merger Agreement and the approval of the
terms thereof and each of the other transactions contemplated by the Merger
Agreement.
(b) At any meeting of stockholders of the Company or at
any adjournment thereof or in any other circumstances upon which such
Stockholder's votes, consents or other approvals are sought, such Stockholder
shall vote (or cause to be voted) the Subject Shares of such Stockholder in
respect of which such Stockholder then has or exercises voting control against
(i) any merger agreement or merger (other than the Merger Agreement and the
Merger), consolidation, combination, sale of substantial assets, reorganization,
recapitalization, dissolution, liquidation or winding up of or by the Company or
any other Acquisition Proposal and (ii) any amendment of the Company's articles
of incorporation or by-laws or other proposal or transaction involving the
Company or any of its subsidiaries, which amendment or other proposal or
transaction would be reasonably likely to impede, frustrate, prevent, delay or
nullify the Offer,
-6-
7
the Merger, the Merger Agreement or any of the other transactions contemplated
by the Merger Agreement or change in any manner the voting rights of any class
of common stock or other voting securities of the Company. The Stockholder
further agrees not to commit or agree to take any action or enter into any
agreement inconsistent with the foregoing.
(c) Except for Xxxxxxx Xxxxxxx'x obligations to Xxxxx X.
Xxxxxx as set forth on the signature page attached hereto, such Stockholder
shall not (i) sell, transfer, give, pledge, assign or otherwise dispose of
(including by gift) (collectively, "Transfer"), or consent to any Transfer of,
any or all of the Subject Shares of such Stockholder or any interest therein or
enter into any contract, option or other arrangement (including any profit
sharing arrangement) with respect to the Transfer of, the Subject Shares to any
person other than Merger Subsidiary or Merger Subsidiary's designee pursuant to
the terms of the Offer or the Merger or otherwise to Merger Subsidiary in
accordance with Section 1 (other than any Transfer pursuant to the laws of
descent or distribution) or (ii) enter into any other voting arrangement,
whether by proxy, voting agreement, voting trust, power-of-attorney or
otherwise, with respect to the Subject Shares. Such Stockholder shall not commit
or agree to take any of the foregoing actions.
(d) Neither such Stockholder nor any of its officers,
directors or employees shall, and such Stockholder shall use its reasonable best
efforts to cause any investment banker, financial advisor, attorney, accountant
or other representative of any such Stockholder not to, directly or indirectly,
(i) solicit, initiate or encourage (including by way of furnishing information),
or take any other action to facilitate, any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal, (ii) participate in any discussions or negotiations
regarding any Acquisition Proposal or (iii) enter into any agreement with
respect to any Acquisition Proposal. Such Stockholder promptly shall advise
Buyer and Merger Subsidiary orally and in writing of any Acquisition Proposal or
inquiry made to such Stockholder with respect to or that could lead to any
Acquisition Proposal, the identity of the person making such Acquisition
Proposal or inquiry (if such identification is not prohibited by the terms of
the Acquisition Proposal) and the material terms of any such Acquisition
Proposal or inquiry. The foregoing provisions of this paragraph (d) shall not,
however, prohibit an individual Stockholder, or any partner, stockholder,
officer or affiliate of a Stockholder that is a legal entity, who is a director
of the Company from performing his or her legally required fiduciary duties as a
director of the Company as permitted or required under the Merger Agreement.
(e) Such Stockholder hereby consents to and approves the
actions taken by the Board of Directors of the Company in approving the Merger
Agreement, the Merger and the other transactions contemplated by the Merger
Agreement for purposes of ensuring that the restrictions on business
combinations set forth in Parts 2 and 3 of Article 11 of the Georgia Code and in
the Bylaws of the Company do not, and will not, apply to this Agreement, the
Merger Agreement or the transactions contemplated thereby. Such Stockholder
hereby waives, and agrees not to exercise or assert, any appraisal rights under
Article 13 of the Georgia Code in connection with the Merger.
-7-
8
5. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) Each Stockholder hereby irrevocably and severally
grants to, and appoints, Buyer and Merger Subsidiary and Xxxxx Xxxx and Xxxx
Xxxxxx, or any of them, in their respective capacities as officers of Merger
Subsidiary, and any individual who shall hereafter succeed to any such office of
Merger Subsidiary, and each of them individually, such Stockholder's proxy and
attorney-in-fact (with full power of substitution), for and in the name, place
and stead of such Stockholder, to vote such Stockholder's Subject Shares, or
grant a consent or approval in respect of such Subject Shares, in a manner
consistent with Section 4(a) and 4(b) hereof.
(b) Each Stockholder severally represents that any
proxies heretofore given in respect of such Stockholder's Subject Shares are not
irrevocable or if irrevocable, that the valid consent to the revocation of such
proxies from the party or parties to whom such proxies were heretofore granted
will be obtained, and that any such proxies are hereby revoked to the extent
necessary to effect the transactions contemplated by Sections 1, 4 and 5 hereof.
Each Stockholder understands and acknowledges that Buyer and Merger Subsidiary
are entering into the Merger Agreement in reliance upon such Stockholder's
execution and delivery of this Agreement.
(c) Each Stockholder hereby affirms that the irrevocable
proxy set forth in this Section 5 is given in connection with the execution of
the Merger Agreement, and that such irrevocable proxy is given to secure the
performance of the duties of such Stockholder in accordance with this Agreement.
Such Stockholder hereby further affirms that the irrevocable proxy is coupled
with an interest and may under no circumstances be revoked. Such irrevocable
proxy is executed and intended to be irrevocable in accordance with the
provisions of Section 14-2-722(d) of the Georgia Code. Such irrevocable proxy
shall be valid until the earlier to occur of (i) eleven months from the date
hereof and (ii) the termination of this Agreement pursuant to Section 9.
6. Further Assurances. Upon the terms and subject to the
conditions set forth in this Agreement, each of Buyer and Merger Subsidiary
agrees to comply with its obligations under the Merger Agreement and each of the
parties agrees to use all reasonable best efforts to consummate and make
effective the other transactions contemplated by this Agreement. The foregoing
provisions of this Section shall not, however, prohibit an individual
Stockholder, or any partner, stockholder, officer or affiliate of a Stockholder
that is a legal entity, who is a director of the Company from performing his or
her legally required fiduciary duties as a director of the Company as permitted
or required under the Merger Agreement. Buyer shall cause Merger Subsidiary to
consummate the transactions contemplated hereby on the terms and subject to the
conditions set forth in this Agreement.
-8-
9
7. Certain Events.
(a) Each Stockholder agrees that all of the Stockholder's
obligations hereunder shall be binding upon any person or entity to which legal
or beneficial ownership of such Subject Shares shall pass, whether by operation
of law or otherwise, including such Stockholder's administrators or successors.
In the event of any stock split, stock dividend, merger, reorganization,
recapitalization or other change in the capital structure of the Company
affecting the Common Stock or the acquisition of additional shares of Common
Stock or other securities of the Company by any Stockholder, the number of
Subject Shares listed on the Stockholders' signature page shall be deemed
adjusted appropriately and this Agreement and the obligations hereunder shall
attach to any additional shares of Common Stock or other securities of the
Company issued to or acquired by such Stockholder.
(b) Each Stockholder agrees that it will deliver to the
Company, within 10 business days after the date of the commencement of the Offer
(or, in the event Subject Shares are acquired subsequent to the date hereof
within 10 business days after the date of such acquisition), any and all
certificates representing such Stockholder's Subject Shares solely for the
purpose of the Company inscribing upon such certificates the following legend:
"The shares of Common Stock, no par value, of Full Line
Distributors, Inc., represented by this certificate are
subject to a Stockholders' Agreement, dated as of July 9,
2001, and may not be sold or otherwise transferred, except in
accordance therewith. Copies of such Agreement may be obtained
at the principal executive offices of Full Line Distributors,
Inc."
Upon request of the holder of any Subject Shares at any time after termination
of this Agreement, the Company shall issue to such holder in exchange for such
certificates new certificates of like tenor but not bearing the foregoing
legend.
8. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties, except
that (i) Merger Subsidiary may assign, in its sole discretion, any or all of its
rights, interests and obligations hereunder to any U.S. subsidiary of Buyer that
may be substituted for Merger Subsidiary in accordance with the terms of the
Merger Agreement so long as such subsidiary assumes all obligations of Merger
Subsidiary and Merger Subsidiary remains liable for all such obligations, and
(ii) Buyer may assign, in its sole discretion, any and all of its rights,
interests and obligations hereunder to any direct or indirect wholly-owned
subsidiary of Buyer that assumes all of Buyer's obligations hereunder, provided
that Buyer will remain liable for its obligations hereunder. Subject to the
preceding sentence, this Agreement will be binding upon, inure to the benefit of
and be enforceable by the parties and their respective successors and assigns.
-9-
10
9. Termination. This Agreement shall terminate: (A)
immediately upon (i) the termination of the Merger Agreement by Buyer or Merger
Subsidiary in accordance with the terms of the Merger Agreement or (ii) the
termination of the Merger Agreement by the Company in accordance with Section
10.01(i) of the Merger Agreement; (B) upon delivery by Stockholders holding
Shares representing a majority of the Subject Shares ("Majority Stockholders")
of a notice of termination to Buyer or Merger Subsidiary at any time more than
180 days after the termination of the Merger Agreement by the Company in
accordance with Section 10.01(g) thereof; or (C) upon delivery by Buyer of a
notice of termination to the Company at any time contemporaneously with or after
the termination of the Merger Agreement by the Company in accordance with the
terms of the Merger Agreement. Notwithstanding the foregoing, Sections 8, 9, 10,
11, 12 and 13 hereof shall survive any termination of this Agreement. No
termination of this Agreement shall relieve any party from liability for breach
of this Agreement or failure by such party to perform its obligations hereunder.
10. Effectiveness. This Agreement shall be effective upon
the execution of the Merger Agreement by all parties thereto.
11. Several Obligations. Notwithstanding any other
provision hereof, each Stockholder's obligations hereunder are several, and not
joint and several. Upon execution hereof by Buyer, Merger Subsidiary and any
Stockholder, this Agreement shall be binding upon and inure to the benefit of
Buyer, Merger Subsidiary and each such Stockholder, regardless of the failure of
any other party listed on the signature page hereto to execute this Agreement.
12. General Provisions.
(a) Amendments. This Agreement may not be amended except
by an instrument in writing signed by each of the parties hereto.
(b) Notice. All notices, requests and other
communications to any party hereunder shall be in writing, including facsimile,
telex or similar writing, and shall be deemed given if delivered to Buyer and
Merger Subsidiary at the address or telecopier number set forth in Section 11.01
of the Merger Agreement and to the Stockholder at its address or telecopier
number set forth on Schedule A attached hereto (or at such other address or
telecopier number for a party as shall be specified by like notice). Each such
notice, request or other communication shall be effective (i) if given by
facsimile and received at or prior to 5:00 p.m. local time on a business day,
upon confirmation of receipt, and if given by facsimile and received at any
other time, upon the next business day or (ii) if given by any other means, when
delivered at the address specified in this Section 12(b).
(c) Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section to this Agreement
unless otherwise indicated. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of
-10-
11
this Agreement. Wherever the words "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation."
(d) Counterparts. This Agreement may be executed in two
or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when two or more of the counterparts have
been signed by each of the parties and delivered to the other party, it being
understood that each party need not sign the same counterpart.
(e) Entire Agreement; No Third-Party Beneficiaries. This
Agreement (including the documents and instruments referred to herein) (i)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and (ii) is not intended to confer upon any person other
than the parties hereto any rights or remedies hereunder.
(f) GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED IN ALL RESPECTS, INCLUDING VALIDITY, INTERPRETATION
AND EFFECT, BY THE LAW OF THE STATE OF GEORGIA WITHOUT GIVING EFFECT TO THE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
(g) Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
(h) Survival of Representations, Warranties and
Covenants. The representations and warranties contained herein shall not survive
the Effective Time. Unless otherwise provided for herein, the covenants and
agreements contained herein shall not survive the Effective Time or the
termination of this Agreement.
13. Confidentiality; Public Announcements.
(a) Each Stockholder recognizes that successful
consummation of the transactions contemplated by this Agreement (including the
Offer and the Merger) may be dependent upon confidentiality with respect to the
matters referred to herein. In this connection, pending public disclosure
thereof by Buyer, Merger Subsidiary and the Company, each Stockholder hereby
agrees not to issue any press release or make any other public statement or
disclose or discuss such matters with anyone not a party to this Agreement
(other than such Stockholder's counsel and advisors, if any) without the prior
-11-
12
written consent of Buyer and the Company, except for filings required pursuant
to the Exchange Act and the rules and regulations thereunder or as required by
law.
(b) Subject to clause (a) above, Buyer and Merger
Subsidiary, on the one hand, and the Stockholder, on the other hand, will
consult with each other before issuing, and provide each other with a reasonable
opportunity to review and comment upon, any press release or other public
statements with respect to the transactions contemplated by this Agreement and
the Merger Agreement, including the Offer and the Merger, and shall not issue,
and Buyer shall ensure that none of its subsidiaries shall issue, any such press
release or make any such public statement prior to such consultation, except as
may be required by applicable law, court process or by obligations pursuant to
any listing agreement with any national securities exchange or national
securities quotation system, in which case the party making such release will
use reasonable efforts to obtain comments from the other party before issuance
of such release or statement.
-12-
13
IN WITNESS WHEREOF, Buyer, Merger Subsidiary and each
Stockholder listed on the attached signature pages have caused this Agreement to
be duly executed and delivered as of the date first written above.
BRODER BROS., CO.
By: /s/ Xxxxxxx Xxxx
--------------------------------------
Name: Xxxxxxx Xxxx
--------------------------------------
Title: Chief Executive Officer
--------------------------------------
FLD ACQUISITION CORP.
By: /s/ Xxxxxxx Xxxx
--------------------------------------
Name: Xxxxxxx Xxxx
--------------------------------------
Title: Chief Executive Officer
--------------------------------------
-13-
14
SIGNATURE PAGE TO STOCKHOLDERS' AGREEMENT
Name of Stockholder:
J. Xxxxx Xxxxxx
-------------------------------------------------
(please print legal name or entity or individual)
By: /s/ J. Xxxxx Xxxxxx
---------------------------------------------
Number of Subject Shares owned as of July 9,
2001:
650,651 shares of Common Stock
Notice Address:
J. Xxxxx Xxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000
with a copy to:
Xxxxx Xxxxxxxx & Xxxxxxx, LLP
1230 Peachtree Street, N.E.
Suite 3100, Promenade II
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxx Xxxxxxxx
Xxxxxx X. Xxxxx
-14-
15
SIGNATURE PAGE TO STOCKHOLDERS' AGREEMENT
Name of Stockholder:
Xxxxxx X. Xxxxxxx
-------------------------------------------------
(please print legal name or entity or individual)
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------------------
Number of Subject Shares owned as of July 9,
2001:
1,955,944 shares of Common Stock*
Notice Address:
Xxxxxx X. Xxxxxxx
0000 Xxxxx Xxxxxx Xxxxx Xxxx
Xxxxxxx, XX 00000
with a copy to:
Xxxxx Xxxxxxxx & Xxxxxxx, LLP
1230 Peachtree Street, N.E.
Suite 3100, Promenade II
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxx Xxxxxxxx
Xxxxxx X. Xxxxx
*The obligations of Xxxxxx Xxxxxxx are subject to the following: Xxxxxx X.
Xxxxxxx granted to Xxxxx X. Xxxxxx the option to purchase 19,500 shares of the
Common Stock of the Company owned by Xx. Xxxxxxx at a price of $1.21 per share
pursuant to the terms of that certain Third Amended and Restated Option
Agreement dated April 4, 1996.
-15-
