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EXHIBIT 10.13
ROLLOVER STOCKHOLDERS AGREEMENT
ROLLOVER STOCKHOLDERS AGREEMENT, dated as of December 15, 1998, among
Special Devices, Incorporated, a Delaware corporation (the "Company"), X.X.
Xxxxxx & Co. ("JFL"), the Xxxxxxxx Family Trust, by Xxxxxx Xxxxxxxx trustee (the
"Xxxxxxxx Trust"), and the Xxxxxxx Family Trust, by Xxxxxx X. Xxxxxxx trustee
(the "Xxxxxxx Trust").
On June 19, 1998, the Company entered into an Agreement and Plan of Merger
(the "Merger Agreement") with SDI Acquisition Corp., a Delaware corporation
("Acquisition"). The Merger Agreement, which was amended and restated as of
August 17, 1998, provided for the merger of Acquisition with and into the
Company (the "Merger") and the conversion of each outstanding share of common
stock, par value $0.01 per share, of the Company (the "Common Stock"), into the
right to receive $37.00 in cash payable to the holder thereof other than certain
of the shares held by Messrs. Xxxxxxxx and Xxxxxxx.
On October 27, 1998, the Merger Agreement was further amended (as amended
to date, the "Amended Merger Agreement") (i) to reduce the cash consideration
payable in respect of the shares of the Common Stock from $37.00 to $34.00 per
share, (ii) to provide for the rollover of 735,294 additional shares of Common
Stock held by Messrs. Xxxxxxx and Xxxxxxxx that are described on Schedule 1
hereto (the "Additional Rollover Shares") and (iii) to extend the termination
date under the Merger Agreement to the second business day after approval of
such amendment by the stockholders of the Company.
On October 19, 1998, in connection with the foregoing proposed amendments
to the Merger Agreement, the Company, Acquisition and JFL entered into a letter
agreement (the "Letter Agreement") with Messrs. Xxxxxxxx and Xxxxxxx describing
in principle certain of the agreements set forth herein with respect to the
Additional Rollover Shares.
Concurrently with the execution and delivery of this Agreement, each of
the Xxxxxxxx Trust and the Xxxxxxx Trust is entering into (i) a Pledge Agreement
(each a "Pledge Agreement") pursuant to which it is granting to JFL a first
priority security interest in the Pledged Collateral (as defined in the Pledge
Agreement) to secure its performance of the Purchase Right (as defined herein)
under Section 3 of this Agreement with respect to the Additional Rollover
Shares, and (ii) a Stockholders Agreement (the "Stockholders Agreement") with
the Company, JFL, Paribas Principal Inc., X.X. Xxxxxx Equity Investors I, L.P.
and JFL Co-Invest Partners I, L.P.
On December 15, 1998 Acquisition merged with and into the Company pursuant
to the Amended Merger Agreement, and the Company continued as the surviving
corporation of the Merger.
The parties hereto desire to enter into this Agreement to more completely
set forth the terms and conditions agreed to pursuant to the Letter Agreement
with respect to the Additional Rollover Shares. Certain capitalized terms used
herein without definition shall have the meanings ascribed thereto in Article 1.
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Accordingly, in consideration of the foregoing recitals and the mutual
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following capitalized terms
shall have the following meanings:
"Additional Rollover Securities" means the Additional Rollover
Shares together with all Securities received in exchange therefor.
"Additional Rollover Stockholder" means each of the Xxxxxxx Trust
and the Xxxxxxxx Trust and all other Persons that acquire any of the Additional
Rollover Securities that agree to be bound by the terms of the Stockholder
Agreement and this Agreement in accordance with the terms and provisions
thereof.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
For the purposes of this definition, "control," when used with respect to any
Person, means the power to direct or cause the direction of the management or
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Change of Control" shall have the meaning set forth in the
Indenture governing the Company's 11 3/8% Senior Subordinated Notes due 2008, as
such Indenture is in effect on the date of this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Involuntary Transfer" means any Transfer, proceeding or action by
or in which an Additional Rollover Stockholder shall be deprived or divested of
any right, title or interest in or to any of the Additional Rollover Securities,
including, without limitation, any seizure under levy of attachment or
execution, any transfer, in connection with bankruptcy (whether pursuant to the
filing of a voluntary or involuntary petition under the United States Bankruptcy
Code of 1978, or any amendments thereto) or other court proceeding to a debtor
in possession, trustee in bankruptcy or receiver or other officer or agency, any
transfer to a state or to a public officer or agency pursuant to any statute
pertaining to escheat or abandoned property and any transfer pursuant to a final
decree of a court in a divorce action.
"Person" means any natural person, firm, corporation, partnership,
limited liability company, trust, incorporated or unincorporated association,
joint venture, joint stock company, governmental body or other entity of any
kind.
"Qualified Public Offering" means the first firm commitment
underwritten public offering by the Company pursuant to an effective
registration statement under the Securities Act
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covering the offer and sale of Common Stock to the public that results in gross
proceeds to the Company in excess of $20 million.
"Rollover Termination Date" means December 14, 2002.
"Securities" means shares of Common Stock (including the Additional
Rollover Shares) together with (i) all shares, securities, monies or property
resulting from any subdivision, combination, revision, reclassification or other
change of the Common Stock or otherwise received in exchange therefor, (ii) any
warrants, options and other rights to purchase shares of Common Stock issued to
the holders Common Stock and (iii) in the event of any consolidation, merger or
other business combination in which the Company is not the surviving entity, all
shares of each class of the capital stock of the successor business entity
formed by or resulting from such transaction issued or issuable in respect of
the Common Stock.
"Securities Act" means the Securities Act of 1933, as amended.
"Triggering Event" means the earliest to occur of the following
events:
(a) the repayment in full of all amounts under and termination of
(i) all indebtedness and other amounts under the Credit Agreement, dated as of
December 15, 1998, among the Company and the lenders parties thereto and any
instrument or agreement evidencing indebtedness incurred for the purpose of
refinancing, extending, renewing, refunding, repaying, prepaying, redeeming,
defeasing, retiring or exchanging such indebtedness and (ii) the Company's 11
3/8% Senior Subordinated Notes due 2008;
(b) the occurrence of a Change of Control; or
(c) the occurrence of a Qualified Public Offering.
2. ROLLOVER PROXY.
(a) Each Additional Rollover Stockholder hereby appoints JFL as such
Additional Rollover Stockholder's lawful attorney and proxy and
attorney-in-fact, with full power of substitution, to vote all Rollover
Additional Securities held by such Additional Rollover Stockholder and to act on
such Additional Rollover Stockholder's behalf and in such Additional Rollover
Stockholder's name, place and stead with respect to the Additional Rollover
Securities held by such Additional Rollover Stockholder, at any annual, special
or other meeting of stockholders of the Company or any successor and at any
adjournment of any such meeting and to act by written consent with respect to
all Additional Rollover Securities held by such Additional Rollover Stockholder,
in each case at all times prior to the Rollover Termination Date, with respect
to any matter on which holders of Additional Rollover Securities are entitled to
vote or act by written consent.
(b) Each Additional Rollover Stockholder acknowledges, consents and
agrees that the proxy and power of attorney (together, with respect to each
Additional Rollover Stockholder, a "Proxy") granted by such Additional Rollover
Stockholder pursuant to this Agreement (i) is
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irrevocable prior to the Rollover Termination Date, (ii) is coupled with an
interest and revokes all prior proxies granted by such Additional Rollover
Stockholder with respect to his Additional Rollover Securities and (iii) shall
not be affected by the disability, death or incompetence of such Additional
Rollover Stockholder. Each Proxy is effective as of the date of this Agreement
and shall remain in force until the Rollover Termination Date.
(c) Each Additional Rollover Stockholder hereby represents, warrants
and covenants that, at all times prior to the Rollover Termination Date, its
Proxy is and will be a valid, binding and enforceable obligation of such
Additional Rollover Stockholder.
(d) Each Additional Rollover Stockholder agrees to take all such
further actions as may be reasonably requested by JFL to ensure the validity of
his Proxy.
3. PURCHASE RIGHT.
(a) Each Additional Rollover Stockholder hereby acknowledges and
agrees that at any time and from time to time prior to the Rollover Termination
Date, JFL or one or more of its assignees or designees (the "Purchaser") shall
have the right (the "Purchase Right") to purchase all or any portion of the
Additional Rollover Securities held by such Additional Rollover Stockholder at a
purchase price per Additional Rollover Security (the "Call Price") initially
equal to $34.00 plus a premium equal to $2.04 for each full six month period
elapsed since the date hereof (subject to adjustment in accordance with
paragraph (d) below). The Purchaser shall exercise its Purchase Right pro rata
with respect to the Additional Rollover Securities held by all of the Additional
Rollover Stockholders, in accordance with the respective ownership of each
Additional Rollover Stockholder.
(b) The Purchaser shall exercise the Purchase Right described in
paragraph (a) above by delivering written notice to each Additional Rollover
Stockholder specifying (i) the total number of Additional Rollover Securities to
be purchased from each Additional Rollover Stockholder, (ii) the Call Price
therefor and (iii) the date that such Additional Rollover Securities shall be
purchased (which date shall be not less than five (5) nor more than sixty (60)
days after the date of such written notice) and may be subject to such
conditions as shall be specified in such notice.
(c) The closing of any purchase under this Article 3, shall be held
at the principal office of the Company at 11:00 o'clock A.M. local time on the
closing date specified in the written notice delivered pursuant to paragraph (b)
above or at such other time and place as the parties to the transaction may
agree upon. The Purchaser shall deliver at the closing, by a certified or bank
check or wire transfer, payment in full for the Additional Rollover Securities
being purchased by it. At such closing, the parties shall execute such
additional documents as are necessary or appropriate to consummate the
transactions.
(d) The Call Price shall be adjusted from time to time as follows:
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(i) In case the Company (A) pays a dividend on any class of
its capital stock payable in shares of its Common Stock, (B) subdivides
its outstanding shares of Common Stock into a greater number of shares or
(C) combines its outstanding shares of Common Stock into a smaller number
of shares, the Board of Directors of the Company shall adjust the Call
Price proportionately to account for such events. The good faith
determination of the Board of Directors shall be conclusive and binding on
the parties.
(ii) In case of (A) any reclassification of the Common Stock,
any consolidation of the Company with, or merger of the Company into, any
other entity, any merger of another entity into the Company (other than a
merger that does not result in any reclassification, conversion, exchange
or cancellation of outstanding shares of Common Stock of the Company), (B)
any sale or transfer of all or a substantial portion of the assets of the
Company, (C) any compulsory share exchange pursuant to which share
exchange the Common Stock is converted into other securities, cash or
other property or (D) any other event as to which the provisions of this
Section 3(d) are not strictly applicable, but the failure to make an
adjustment would not fairly protect the Purchase Right granted by Section
3(a) or the Put Right granted by Section 4(a), as applicable, in
accordance with the essential intent and principles of such Sections, then
the Board of Directors of the Company shall make a good-faith equitable
adjustment to the Call Price or the other terms of this Agreement in a
manner consistent with the essential intent and principles established in
this Section 3 or Section 4, as applicable, necessary to preserve the
Purchase Right granted by Section 3(a) or the Put Right granted by Section
4(a), as applicable. The good faith determination of the Board of
Directors of the Company shall be conclusive and binding on the parties.
4. PUT RIGHT.
(a) The Company hereby covenants and agrees to promptly provide
written notice to the Additional Rollover Stockholders of the occurrence of a
Triggering Event. Within 5 days after receiving written notice from the Company
of the occurrence of the Triggering Event, each Additional Rollover Stockholder
shall have the right (the "Put Right") to require the Company to purchase all or
any portion of its Additional Rollover Securities at a purchase price per
Additional Rollover Security equal to the Call Price (as such price may be
adjusted pursuant to Section 3(d)), in accordance with the terms of this Article
4.
(b) Such Additional Rollover Stockholder shall exercise the Put
Right described in paragraph (a) above by delivering written notice (the "Put
Notice") to the Company specifying (i) the number of Additional Rollover
Securities to be sold to the Company, (ii) the Call Price therefor and (iii) the
date that such Additional Rollover Securities shall be sold to the Company
(which date shall be not less than 30 nor more than 60 days after the date of
such written notice).
(c) The closing of any purchase under this Article 4 shall be held
at the principal office of the Company at 11:00 o'clock A.M. local time on the
date specified in the Put Notice or at such other time and place as the parties
to the transaction may agree upon. The Company shall deliver at the closing by
certified or bank check or wire transfer, payment in full for the Additional
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Rollover Securities being acquired by it. At such closing, the parties shall
execute such additional documents as are otherwise necessary or appropriate to
consummate the transfers.
(d) Notwithstanding anything to the contrary in this Agreement, if
the Company has determined in its reasonable judgment that it does not have
sufficient funds legally available or is otherwise not permitted pursuant to
applicable law or the Credit Agreement, dated as of December 15, 1998, among the
Company and the lenders parties thereto (the "Credit Agreement") or the
indenture relating to the Company's 11 3/8% Senior Subordinated Notes due 2008
(the "Indenture") to make the payment for the purchase of the Additional
Rollover Securities, the Company shall purchase the maximum amount of Additional
Rollover Securities that it can purchase without violating any applicable law or
any of its debt instruments and each Additional Rollover Stockholder (a
"Withdrawing Stockholder") shall be deemed to have automatically withdrawn the
exercise of its Put Right under this Article 4 with respect to those Additional
Rollover Securities not so purchased by the Company. As soon as the Company has
additional funds legally available for the purchase of the remaining Additional
Rollover Securities and is otherwise permitted under the Credit Agreement and
the Indenture and able to make payment for the remaining Additional Rollover
Securities, it shall promptly notify each Withdrawing Stockholder and shall use
its best efforts to either (i) obtain the consents or waivers necessary to
permit the purchase of the remaining Additional Rollover Securities or (ii)
refinance the Credit Agreement or the Indenture to permit the repurchase of the
remaining Additional Rollover Securities. Each Withdrawing Stockholder shall
have 60 days from the date of such notice from the Company to elect to
reexercise its Put Right (at the then applicable Call Price) in accordance with
this Article 4 with respect to all Additional Rollover Securities that the
Company was theretofore unable to purchase. If a Withdrawing Stockholder fails
to exercise such right within that 60 day period, it shall have no further right
to require the Company to purchase any of its Additional Rollover Securities.
Notwithstanding any provision of this Agreement to the contrary, until all
amounts under the Credit Agreement and the Indenture have been repaid in full
and the Credit Agreement and the Indenture have been terminated, the rights and
obligations under this Section 4(d) may be enforced solely by a decree of
specific performance and the Company shall not be liable for any monetary
damages.
(e) Notwithstanding anything to the contrary in this Agreement, the
Put Right shall not apply to any Additional Rollover Securities to be purchased
pursuant to the exercise of the Purchase Right at any time prior to the Rollover
Termination Date and prior to the closing of the purchase pursuant to Section
4(c), whether the Purchase Right is exercised prior to, or after, the exercise
of the Put Right.
5. RESTRICTIONS ON TRANSFER OF SECURITIES.
(a) General. No Additional Rollover Stockholder shall, directly or
indirectly, transfer or otherwise dispose of any Additional Rollover Securities
owned by such Additional Rollover Stockholder, or any interest therein, except
as permitted by the Stockholders Agreement or pursuant to Articles 3 or 4 of
this Agreement or in compliance with the requirements of Section 5(b); provided,
however that any transfer of Additional Rollover Securities other than a
transfer pursuant to Articles 3 or 4 hereof shall be subject to Article 4 of the
Stockholders Agreement. Any attempt by an Additional Rollover Stockholder to
effect a transfer or disposition in violation of this
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Agreement shall be void and ineffective for all purposes. The words "transfer"
and "dispose" mean the making of any sale, exchange, assignment, gift, security
interest, pledge or other encumbrance, or any contract therefor, any voting
trust or other agreement or arrangement with respect to the transfer or voting
rights or any other beneficial interests, the creation of any other claim
thereto or any other transfer or disposition whatsoever, whether voluntary or
involuntary, affecting the right, title, interest or possession in or to the
Additional Rollover Securities.
(b) Registration of Transfer by Company. No transfer of Additional
Rollover Securities by any Additional Rollover Stockholder prior to the Rollover
Termination Date shall be effective (and the Company shall not transfer on its
books any such Additional Rollover Securities) unless
(i) the transferee pledges the Additional Rollover
Securities to be acquired by it to secure the performance of its
obligations under Article 3 of this Agreement, pursuant to a Pledge
Agreement substantially in the form of the Pledge Agreements being
entered into on the date hereof;
(ii) the transferee (if not already a party hereto)
agrees in writing to be bound as an Additional Rollover Stockholder
by the terms and conditions of this Agreement pursuant to a Deed of
Adherence substantially in the form attached hereto as Exhibit A;
(iii) the transferee provides JFL with an opinion of
reputable counsel in form and substance reasonably satisfactory to
JFL as to the continued validity of the Proxy contained in Article
2;
(iv) the transferee agrees to be bound by the
Stockholders Agreement in accordance with the terms thereof; and
(v) such transfer complies with the other provisions of
this Agreement.
(c) Involuntary Transfer of Additional Rollover Securities. If an
Involuntary Transfer of any Additional Rollover Securities owned by any
Additional Rollover Stockholder shall occur prior to the Rollover Termination
Date, (i) JFL shall have the same rights as specified in this Agreement with
respect to such Additional Rollover Securities as if the transferee in such
Involuntary Transfer (and each of its transferees) were an Additional Rollover
Stockholder hereunder and (ii) such transferee in the Involuntary Transfer (and
each of its transferees) shall have none of the rights of an Additional Rollover
Stockholder under this Agreement unless and until it complies with the
provisions of Section 5(b).
6. CERTAIN CLOSING CONDITIONS. At the closing of any transfer or
disposition of Additional Rollover Securities pursuant to this Agreement, in
addition to any other conditions specifically set out herein concerning such
transfer or disposition, the transferor shall (i) deliver the certificates
representing the Additional Rollover Securities that are the subject of the
transfer, duly
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endorsed for transfer and bearing any necessary tax stamps; (ii) by delivering
such certificates, be deemed to have represented and warranted that the
transferor has valid and marketable title to the Additional Rollover Securities
represented by such certificates free of all encumbrances and (iii) deliver such
certificates of authority, tax releases, consents to transfer and evidences of
title as may reasonably be required by the transferee. The transferor shall be
responsible for the payment of all transfer taxes unless otherwise specified.
7. LEGENDS. (a) In addition to any other legends required to be placed
thereon by the terms of any other agreement, each stock certificate representing
shares of Additional Rollover Securities now held or hereafter acquired by any
Stockholder shall bear the following additional legend:
IN ADDITION, THE SECURITIES EVIDENCED BY
THIS CERTIFICATE ARE SUBJECT TO AN
IRREVOCABLE VOTING PROXY GRANTED IN FAVOR
OF X.X. XXXXXX & COMPANY AND A CALL
RIGHT EXERCISABLE BY X.X. XXXXXX &
COMPANY AS MORE FULLY PROVIDED IN THE
ROLLOVER STOCKHOLDERS AGREEMENT, DATED AS
OF DECEMBER 15, AMONG THE COMPANY, X.X.
XXXXXX & COMPANY AND THE STOCKHOLDERS
THEREUNDER. A COPY OF SUCH AGREEMENT IS
ON FILE AT THE REGISTERED OFFICES OF THE
COMPANY.
(b) Legend. In the event that any Securities become free of the
rights and restrictions imposed by this Agreement, the Stockholders holding such
Securities shall be entitled to receive, promptly upon presentment to the
Company of the certificate or certificates evidencing the same, a new
certificate or certificates not bearing the restrictive legend provided for in
Section 7(a).
8. TERMINATION. (a) This Agreement shall terminate and be of no further
force and effect with respect to any Additional Rollover Securities transferred
pursuant to (i) the Purchase Right, (ii) a bona fide registered public offering,
or (iii) the exercise of a Tag-Along Right (as defined in the Stockholders
Agreement) if, after such transfer, the Additional Rollover Stockholder
exercising such Tag-Along Right no longer owns any Securities other than
Additional Rollover Securities.
(b) This Agreement shall terminate and be of no further force and
effect on the earlier of (i) the date that all of the Additional Rollover
Securities shall have been sold pursuant to the Purchase Right or the Put Right
and (ii) the date that is five days after the Additional Rollover Stockholders
receive notice of the Triggering Event; provided, however that Section 4(d)
shall
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survive the termination of this Agreement with respect to Additional Rollover
Securities that the Company is unable to purchase pursuant to the exercise of
the Put Right under Article 4.
9. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS. Each Additional
Rollover Stockholder represents and warrants to the other parties hereto that:
(a) Such Person has full power and authority, and has taken all
action necessary, to execute and deliver this Agreement and to fulfill his
obligations under, and consummate the transactions contemplated by, this
Agreement;
(b) The making and performance by such Person of this Agreement does
not and will not violate any law or regulation, or any agreement or other
instrument, applicable to such Person;
(c) The Additional Rollover Securities are owned by such Person free
and clear of any Lien, and are not subject to any shareholders' agreement or
other contractual restrictions binding on such Person (other than this Agreement
and the Stockholders Agreement);
(d) This Agreement has been duly executed and delivered by such
Person and constitutes the legal, valid and binding obligation of such Person,
enforceable against such Person in accordance with its terms, subject to the
effects of (i) bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and (ii) general equitable principles (whether considered in a
proceeding in equity or at law);
(e) all approvals and authorizations of, all filings with and all
actions by any governmental or other administrative or judicial authority
necessary for the execution and delivery by such Person of this Agreement and
the validity or enforceability of the obligations of such Person under this
Agreement have been obtained; and
(f) Such Person has fully reviewed the terms of this Agreement and
has independently and without any reliance whatsoever upon any other party
hereto and based on such information as such Person has deemed appropriate, made
his or its own analysis and decision to enter into this Agreement.
10. MISCELLANEOUS PROVISIONS.
(a) Further Action. Each party hereto agrees to execute and deliver
any instrument and take any action that may reasonably be requested by any other
party for the purpose of effectuating the provisions of this Agreement.
(b) Incorporation of Schedule and Exhibits. The schedule and
exhibits attached hereto are incorporated into this Agreement and shall be
deemed a part hereof as if set forth herein in full. References herein to "this
Agreement" and the words "herein," "hereof" and words of similar import refer to
this Agreement (including its schedules and exhibits) as an entirety. In the
event of
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any conflict between the provisions of this Agreement and any such schedule or
exhibit, the provisions of this Agreement shall control.
(c) Assignment. Except as otherwise provided in this Section 10(c)
or in Article 3 hereof, no right under this Agreement shall be assignable and
any attempted assignment, in violation of this provision shall be void. The
Company shall have the right to assign its rights and obligations hereunder to
any successor entity (including any entity acquiring substantially all of the
assets of the Company), whereupon references herein to the Company shall be
deemed to be to such successor. Except as expressly otherwise provided herein,
this Agreement, and the rights and obligations of the parties hereunder, shall
be binding upon and inure to the benefit of any and all transferees of the
Additional Rollover Securities pursuant to transfers permitted under this
Agreement, in each case with the same force and effect as if such transferees
were named herein as parties hereto.
(d) Enforcement. The parties recognize that irreparable damage will
result in the event that this Agreement shall not be specifically performed.
Should any dispute arise concerning the disposition of any Additional Rollover
Securities hereunder, the parties hereto agree that an injunction may be issued
restraining such disposition pending determination of such controversy and that
no bond or other security may be required in connection therewith. Should any
dispute arise concerning the right or obligation of the Additional Rollover
Stockholders, JFL or the Company to purchase or sell any of the Additional
Rollover Securities subject hereto, such right or obligation shall be
enforceable by a decree of specific performance. Such remedies shall, however,
not be exclusive and shall be in addition to any other remedy which the parties
may have.
(e) Notices. Any notice or other communication required or which may
be given hereunder shall be in writing by hand delivery, registered or certified
first class mail, telecopier or air courier guaranteeing overnight delivery:
(i) if to the Company, to:
Special Devices, Incorporated
00000 Xxxx Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: The President
Fax: (000) 000-0000
with a courtesy copy to:
c/o X.X. Xxxxxx & Company
000 Xxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx
Fax: (000) 000-0000
(ii) if to JFL, to:
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c/o X.X. Xxxxxx & Company
000 Xxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx
Fax: (000) 000-0000
in either case, with a courtesy copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
Xxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
(iii) if to the Xxxxxxx Trust to:
c/o Xxxxxx X. Xxxxxxx
Special Devices, Incorporated
00000 Xxxx Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
or if to the Xxxxxxxx Trust, to:
c/o Xxxxxx Xxxxxxxx
Ordnance Products, Inc.
00000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
in either case, with a courtesy copy to:
Jeffer, Mangels, Xxxxxx & Marmaro
2121 Avenue of the Stars, tenth floor
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxx, Esq.
Fax: (000) 000-0000
or at such other address, notice of which is given in accordance with the
provisions of this Section 10(e). All such notices shall be deemed to have been
duly given when delivered by hand, if personally delivered; five (5) business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged, if telecopied; and on the next business day, if timely
delivered to an air courier guaranteeing overnight delivery.
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(f) Applicable Law; Consent to Jurisdiction.
(i) This Agreement shall be governed by, and construed and
enforced in accordance with and subject to, the laws of the State of Delaware
applicable to agreements made and to be performed entirely within such State.
(ii) Each party to this Agreement agrees that all disputes
between them arising out of or relating to the relationship established between
them in connection with this Agreement, whether arising in contract, tort,
equity, or otherwise, shall be resolved only by federal courts located in New
York, New York, to the extent such courts have jurisdiction. Each of the parties
hereto waives any objection that each may have (including, without limitation,
any objection to the laying of venue or based on forum non conveniens) to the
location of the court in which any proceeding is commenced in accordance with
this paragraph. Each party hereto waives personal service of any process upon
him or it and irrevocably consents to service of process of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage pre-paid, to such Person=s
address specified in this Agreement or such other address designated by such
Person in accordance with the terms of this Agreement.
(g) Amendment and Waiver
(i) No failure or delay on the part of any party hereto in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the parties
hereto at law, in equity or otherwise.
(ii) Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by any party hereto from the terms of any provision
of this Agreement, shall be effective (i) only if it is made or given in writing
and signed by all of the parties hereto and (ii) only in the specific instance
and for the specific purpose for which made or given.
(h) Entire Agreement. This Agreement contains the entire agreement
among the parties hereto with respect to the transactions contemplated herein
and understandings among the parties relating to the subject matter hereof. Any
and all previous agreements and understandings between or among the parties
hereto regarding the subject matter hereof are, whether written or oral,
superseded by this Agreement; provided, however that (i) this Agreement shall
not be deemed to supersede the Stockholders Agreement and (ii) the execution of
this Agreement is not a waiver by any of the parties hereto of any of the terms
or provisions of the Stockholders Agreement.
(i) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
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(j) Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
(k) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
SPECIAL DEVICES, INCORPORATED
By: /s/ Xxxx X. Xxxxx
-----------------------------
Name: Xxxx X. Xxxxx
Title: Chief Financial Officer
X.X. XXXXXX & CO.
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------
Name: Xxxxxx Xxxxxxxx
Title: Partner
THE XXXXXXXX FAMILY TRUST
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------
Xxxxxx Xxxxxxxx
Trustee
THE XXXXXXX FAMILY TRUST
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Xxxxxx X. Xxxxxxx
Trustee
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SCHEDULE 1
Additional Rollover Shares
EXISTING STOCKHOLDER NUMBER OF SHARES CERTIFICATE NUMBER(S)
-------------------- ---------------- ---------------------
Xxxxxx Xxxxxxxx 367,647
Xxxxxx Xxxxxxx 367,647
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EXHIBIT A
DEED OF ADHERENCE
THIS DEED OF ADHERENCE is made the __________ day of _________
AMONG:
(1) Special Devices, Incorporated, a Delaware corporation (the "Company");
(2) X.X. Xxxxxx & Company, a [ ] ("JFL"); and
(3) [Name of New Stockholder] (the "New Stockholder").
WHEREAS:
(A) On the 15th day of December 1998, the Company, JFL, the Xxxxxxxx Family
Trust, by Xxxxxx Xxxxxxxx trustee, and the Xxxxxxx Family Trust, by Xxxxxx
X. Xxxxxxx trustee, entered into a Rollover Stockholders Agreement (the
"Agreement") to which a form of this Deed is attached as Exhibit A.
(B) The New Stockholder wishes to [have transferred to him/her/it] [______]
shares of Common Stock of the Company, par value $0.01 per share [or
insert name of other Security] (the "Shares") which constitute Additional
Rollover Securities from [Name of Old Stockholder] (the "Old Stockholder")
and in accordance with Article 5 of the Agreement has agreed to enter into
this Deed.
(C) The Company enters this Deed on behalf of itself and as agent for all the
Additional Rollover Stockholders of the Company.
NOW THIS DEED WITNESSES as follows:
1. Interpretation.
In this Deed, except as the context may otherwise require, all capitalized
terms used but not otherwise defined herein shall have the meanings
ascribed to them in the Agreement.
2. Covenant.
The New Stockholder hereby covenants with (i) JFL and (ii) the Company in
its own capacity and as trustee for all other persons who are at present
bound by the Agreement as Additional Rollover Stockholders or who may
hereafter become bound by the Agreement as Additional Rollover
Stockholders, to adhere to and be bound by all the duties, burdens and
obligations of an Additional Rollover Stockholder under the Agreement and
all documents
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expressed in writing to be supplemental or ancillary thereto as if the New
Stockholder had been an Additional Rollover Stockholder under the
Agreement since the date thereof.
3. Enforceability.
Each other Additional Rollover Stockholder, JFL and the Company shall be
entitled to enforce the Agreement against the New Stockholder, and the New
Stockholder shall be entitled to all rights and benefits of the Old
Stockholder (other than those that are non-assignable) under the Agreement
in each case as if the New Stockholder had been an Additional Rollover
Stockholder under the Agreement since the date thereof.
4. Governing Law.
THIS DEED OF ADHERENCE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
IN WITNESS WHEREOF, this Deed of Adherence has been executed as a
deed on the date first above written.
SPECIAL DEVICES, INCORPORATED
By: _________________________
Name:
Title:
X.X. XXXXXX & COMPANY
By: _________________________
Name:
Title:
[Name of New Stockholder]
By:______________________________
Name:
Title:
2
