Exhibit 10.8
SECURITIES PURCHASE AND HOLDERS AGREEMENT
SECURITIES PURCHASE AND HOLDERS AGREEMENT, dated July 29, 1994 (the
"Agreement"), by and among DR INTERNATIONAL, INC., a Delaware corporation (the
"Company"), CITICORP VENTURE CAPITAL LTD., a New York corporation ("CVC"), WORLD
EQUITY PARTNERS, L.P., a Delaware limited partnership ("WEP"), MASCOTECH
AUTOMOTIVE SYSTEMS GROUP, INC., a Michigan corporation ("Masco"), XXXXXX X.
XXXXXXXX ("Xxxxxxxx"), XXXXX X. XXXXXXX ("Xxxxxxx") and the individuals listed
on Schedule I hereto as "Management Investors" (the "Management Investors").
CVC, WEP and Masco are sometimes referred to hereinafter individually as an
"Institutional Investor" and together as the "Institutional Investors"; and CVC,
WEP, Masco, Gerrity, Xxxxxxxx and the Management Investors are sometimes
referred to hereinafter individually as an "Investor" and collectively as the
"Investors."
Background
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A. Following the Closing (as hereinafter defined) hereunder, the
Company will acquire (the "Acquisition") through its subsidiary DRA, Inc., a
Delaware corporation ("DRA"), substantially all of the assets of the heavy duty
starter motors and generators business, the remanufacturing heavy duty starter
motors and generators business, the light duty starter motors business, the
remanufacturing light duty starter motors business and the powder metal forge
business of the Delco Remy Division of General Motors Corporation ("GM")
(collectively, the "Businesses") pursuant to an Asset Purchase Agreement, dated
July 13, 1994 (the "Asset Purchase Agreement"), among GM, the Company and DRA.
B. The Company, which as of the date hereof has not issued any
securities, desires to sell, and (i) each of CVC, Masco, Xxxxxxx and Xxxxxxxx
desires to purchase, the number of shares of the Company's Class A Common Stock,
par value $.01 per share ("Class A Common Stock"), and Class B Common Stock, par
value $.01 per share ("Class B Common Stock") (collectively hereinafter referred
to as the "Common Stock" or "Shares"), set forth opposite their respective names
on Exhibit A attached hereto and (ii) each of CVC and Masco desires to purchase
the principal amount of the Company's 11% Junior Subordinated Notes due July 31,
2004 (the "Debentures"), set forth opposite their respective names on Exhibit A
attached hereto.
C. WEP has acquired a warrant ("the Warrant") exercisable for
100,000 shares of Class A Common Stock pursuant to the Warrant Agreement of even
date herewith between the Company and WEP.
D. The Management Investors will be employed by the Company and/or
DRA upon consummation of the Acquisition. The Board of Directors of the Company
wishes to grant the opportunity to the Management Investors to make an
investment in the Company, and thereby to acquire an increased personal and
proprietary interest in the Company's success and progress through the purchase
of securities pursuant to this Agreement.
E. Each of the Management Investors desires to purchase the number
of shares of Class A Common Stock set forth opposite his or her name on Exhibit
A attached hereto.
F. As used herein, the term "Securities" shall mean the Debentures,
the Warrant (including shares of Common Stock to be issued upon exercise
thereof) and the Common Stock held by any party hereto, including shares of
Common Stock and all other securities of the Company (or a successor to the
Company) received on account of ownership of the Common Stock, including all
securities issued in connection with any merger, consolidation, stock dividend,
stock distribution, stock split, reverse stock split, stock combination,
recapitalization, reclassification, subdivision, conversion or similar
transaction in respect thereof.
G. The Investors and the Company wish to set forth certain
agreements regarding their future relationships and their rights and obligations
with respect to the Securities.
Terms
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In consideration of the mutual covenants contained herein and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
PURCHASE OF SECURITIES
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1.1 Sale and Purchase of Common Stock and Debentures.
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Subject to the terms and conditions set forth herein, at the Closing
the Company will issue and sell (a) to each of the
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Investors (other than WEP) the number of shares of Common Stock set forth
opposite such Investor's name on Exhibit A and (b) to each of CVC and Masco the
principal amount of Debentures set forth opposite such Institutional Investor's
name on Exhibit A. The purchase price for the Common Stock shall be $2.00 per
share; and the purchase price for the Debentures sold pursuant to this Agreement
shall be 100% of the principal amount thereof.
1.2 Closing; Termination. The closing (the "Closing") of the
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purchase and sale of the Common Stock and Debentures will take place on July 29,
1994 or at such other time or on such other date as may be agreed by the parties
hereto (the "Closing date"). At the Closing, the Company will deliver (a) to
each Investor (other than WEP), certificates evidencing the number of Shares to
be purchased by such Investor and (b) to CVC and Masco, the Debentures, in each
case registered in such Investor's name, against payment of the purchase price
therefor in cash, by certified or bank cashier's check or by federal wire
transfer of immediately available funds, with confirmed receipt or, in the case
of each Management Investor, against payment of a portion of the purchase price
therefor (equal to the aggregate par value of the Shares to be issued) in cash
and the balance by delivery of a promissory note (the "Promissory Note")
substantially in the form of Exhibit B hereto in the principal amount set forth
opposite such Management Investor's name on Exhibit A. In the event that the
Closing under the Asset Purchase Agreement does not occur on or prior to August
15, 1994, this Agreement will terminate and be of no further force and effect,
all amounts paid by each Investor (other than WEP) pursuant to this Agreement
for the Common Stock and the Debentures shall be returned to such Investor upon
surrender to the Company of the Common Stock and Debentures held by him, her or
it, and there shall be no further liability on the part of any party hereto
except for breaches of this Agreement prior to the time of such termination.
1.3 Conditions to Certain Investor's Obligations. The obligation of
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each Investor (other than WEP) to purchase and pay for the Common Stock and
Debentures at the Closing is subject to the satisfaction on or prior to the
Closing Date of the following conditions:
(a) The representations and warranties of the Company set forth in
Article II shall be true and correct in all material respects on and as of the
Closing Date as though then made, and all covenants of the Company set forth in
Article II required to be
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performed on or prior to the Closing shall have been performed in all material
respects.
(b) The Company's Certificate of Incorporation and Bylaws shall be
substantially in the forms of Exhibits C-1 and C-2, respectively.
(c) The Company shall have delivered to each of the Investors
certificates for the Common Stock and the Debentures required pursuant to
Section 1.1.
(d) No preliminary or permanent injunction or order, decree or
ruling of any nature issued by any court or governmental agency of competent
jurisdiction, nor any statute, rule, regulation or executive order promulgated
or enacted by any United States federal, state or local governmental authority,
shall be in effect, that would prevent the consummation of the transactions
contemplated by this Agreement or the Asset Purchase Agreement.
(e) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not violate the
Company's Certificate of Incorporation or Bylaws, any applicable laws or orders,
regulations, rules or requirements of a court, public body or authority by which
the Company is bound.
(g) All corporate and other proceedings, if any, taken or to be
taken by the Company in connection with the transactions contemplated hereby to
be consummated at the Closing and all documents incident thereto shall be
reasonably satisfactory in form and substance to the Investors (other than WEP),
and the Investors (other than WEP) shall have received from the Company all such
counterpart originals or certified or other copies of such documents as they may
reasonably request.
1.4 Conditions to the Company's Obligations. The obligations of the
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Company to issue and sell the Common Stock to each Investor (other than WEP) and
the Debentures to CVC and Masco as set forth herein at the Closing are subject
to the satisfaction on or prior to the Closing of the following conditions:
(a) The representations and warranties of each Investor set forth in
Article III shall be true and correct in all material respects at and as of the
Closing Date as though then made, and all covenants of each Investor required to
be performed at or prior to the Closing shall have been performed in all
material respects.
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(b) The conditions set forth in paragraph (d) of Section 1.3 shall
have been satisfied, and the Investor shall have purchased or shall
simultaneously purchase the Securities set forth opposite its name on Exhibit A.
(c) All corporate and other proceedings, if any, taken or to be
taken by Investors in connection with the transactions contemplated hereby to be
consummated at the Closing and all documents incident thereto shall be
reasonably satisfactory in form and substance to the Company, and the Company
shall have received from each Investor all such counterpart originals or
certified or other copies of such documents as it may reasonably request.
(d) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not violate any
applicable laws or orders, regulations, rules or requirements of a court, public
body or authority by which the Investor is bound.
(e) The Investors shall have paid or shall pay concurrently the
purchase prices required of them pursuant to this Article I.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF THE COMPANY
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2.1 Representations and Warranties of the Company. The Company
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represents and warrants to, and covenants and agrees with, each of the Investors
as follows:
(a) The Company is a corporation validly existing and in good
standing under the laws of the State of Delaware.
(b) The Company has full corporate power and corporate authority to
make, execute, deliver and perform this Agreement and to carry out all of the
transactions provided for herein.
(c) The Company has taken such corporate action as is necessary or
appropriate to enable it to perform its obligations hereunder, including, but
not limited to, the issuance and sale of the Common Stock and the Debentures to
be issued by it, and this Agreement constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
terms hereof.
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(d) The Shares when issued in compliance with the provisions of this
Agreement will be validly issued, fully paid and non-assessable.
(e) The Debentures when issued in compliance with the provisions of
this Agreement will constitute the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms.
(f) Prior to the date hereof, the Company has not (i) incurred any
liabilities or obligations; (ii) engaged in any business or activities of any
kind whatsoever; (iii) entered into any agreement or arrangements with any
person or entity, or (iv) been subject to or bound by any obligation or
undertaking, except in each case as incurred in connection with its
incorporation, capitalization or the negotiation and consummation of the
transactions contemplated by this Agreement and the Asset Purchase Agreement
including, but not limited to, the financing relating to the Acquisition.
(g) As of the Closing, the authorized capital stock of the Company
will consist of (i) 1,000,000 shares of Class A Common Stock, of which the
number of shares reflected in Exhibit A will be issued and outstanding
immediately after the Closing and (ii) 1,000,000 shares of Class B Common Stock,
of which the number of shares reflected in Exhibit A will be issued and
outstanding immediately after the Closing. Except for the Warrant and as
otherwise set fourth herein, as of the Closing Date, there will be no rights,
subscriptions, warrants, options, conversion rights, or agreements of the kind
outstanding to purchase from the Company, or otherwise require the Company to
issue, any shares of capital stock of the Company or securities or obligations
of any kind convertible into or exchangeable for any shares of capital stock of
the Company; the Company will not be subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of its
capital stock; and the Shares will constitute all of the outstanding shares of
the Company's capital stock.
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ARTICLE III
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF EACH INVESTOR
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3.1 Representations, Warranties and Covenants of Each Investor.
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Each of the Investors severally represents and warrants to, and covenants and
agrees with, the Company that:
(a) Such Investor has full legal right, power and authority
(including the due authorization by all necessary corporate action) to enter
into this Agreement and to perform such Investor's obligations hereunder without
the need for the consent of any person, and this Agreement has been duly
authorized, executed and delivered and constitutes the legal, valid and binding
obligation of such Investor enforceable against such Investor in accordance with
the terms hereof.
(b) The Securities are being acquired by such Investor for
investment, and not with a view to any distribution thereof that would violate
the Securities Act of 1933, as amended (the "Securities Act"), or the applicable
state securities laws of any state; and such Investor will not distribute the
Securities in violation of the Securities Act or the applicable securities laws
of any state.
(c) Such Investor understands the Securities have not been
registered under the Securities Act or the securities laws of any state and must
be held indefinitely unless subsequently registered under the Securities Act and
applicable state securities laws or unless an exemption from such registration
becomes or is available.
(d) Such Investor is financially able to hold the Securities for
long-term investment, believes that the nature and amount of the Securities
being purchased are consistent with such Investor's overall investment program
and financial position, and recognizes that there are substantial risks involved
in the purchase of the Securities.
(e) Such Investor confirms that (i) such Investor is familiar with
the proposed business of the Company and DRA, (ii) such Investor has had the
opportunity to ask questions of the officers and directors of the Company and
DRA and to obtain (and that such Investor has received to its satisfaction) such
information about the business and financial condition of the
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Company and DRA as it has reasonably requested, and (iii) such Investor, either
alone or with such Investor's representative (as defined in Rule 501(h)
promulgated under the Securities Act), if any, has such knowledge and experience
in financial and business matters that such Investor is capable of evaluating
the merits and risks of the prospective investment in the Securities.
3.2 Legend. The Debentures, the Warrant and the certificates
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representing the Shares shall bear the following legend in addition to any other
legend required under applicable law:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF
ANY STATE AND MAY NOT BE TRANSFERRED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OR STATE SECURITIES LAWS OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
THE TERMS AND CONDITIONS OF A SECURITIES PURCHASE AND HOLDERS
AGREEMENT BY AND AMONG THE COMPANY AND THE HOLDERS SPECIFIED THEREIN,
A COPY OF WHICH AGREEMENTS ON FILE AT THE PRINCIPAL OFFICE OF THE
COMPANY. THE SALE, TRANSFER OR OTHER DISPOSITION OF THE SECURITIES IS
SUBJECT TO THE TERMS OF SUCH AGREEMENT AND THE SECURITIES ARE
TRANSFERABLE ONLY UPON PROOF OF COMPLIANCE THEREWITH.
3.3 Management Investor Representations and Warranties. Each
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Management Investor severally represents and warrants to the Company that:
(a) such Management Investor has full legal right, power and
authority to enter into the promissory Note and to perform such Management
Investor's obligations thereunder without the need for the consent of any other
person; and the Promissory Note issued by him or her has been duly executed and
delivered by him or her and constitutes the legal, valid and binding obligation
of such management Investor in accordance with the terms thereof;
(b) such Management Investor's residence, business address, business
and residence telephone numbers and social
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security number are as set forth below his or her signature to this Agreement;
and
(c) in formulating a decision to enter into this Agreement, such
Management Investor has relied solely upon an independent investigation of the
Company's and DRA's business and upon consultations with his or her legal and
financial advisers with respect to this Agreement and the nature of his or her
investment; and that in entering into this Agreement no reliance was placed upon
any representations or warranties other than those contained in this Agreement.
3.4 Representations and Warranties of Certain Investors Other than
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the Management Investors.
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(a) CVC, Masco, Xxxxxxx and Xxxxxxxx each severally represent and
warrant to, and covenant and agree with, the Company that each of CVC, Masco,
Xxxxxxx and Xxxxxxxx qualifies as an "accredited investor" within the meaning of
Rule 501(a) of Regulation D under the Securities Act, and has such knowledge and
experience in financial and business matters that each of CVC, Masco, Xxxxxxx
and Xxxxxxxx is capable of evaluating the merits and risks of its purchase of
the Securities.
(b) The execution, delivery and performance of this Agreement by
each of CVC, Masco, Xxxxxxx and Xxxxxxxx do not contravene or violate any laws,
rules or regulations applicable to him or it.
3.5 Restrictions on Transfers of Securities.
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The following restrictions on Transfer shall apply to all Shares
owned by any Investor:
(a) No Investor or Permitted Transferee (except a Permitted
Transferee by virtue of Section 3.5(b)(iv) hereof) shall Transfer (other than in
connection with a redemption or purchase by the Company) any Securities other
than to a person or entity approved in advance in writing by the holders of at
least forty percent (40%) of the outstanding Common Stock (including shares held
by the transferor) so long as such Transfer complies with the provisions of
Article IV, this Section 3.5, and, in addition, in the case of Management
Investors, Article VI of this Agreement; provided, however, that such advance
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written approval shall not be required with respect to a Transfer of Securities
pursuant to and in compliance with Section 4.7. Any purported Transfer in
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violation of this Agreement shall be null and void and of no force and effect
and the purported transferee shall have no rights or privileges in or with
respect to the Company. As used herein, "Transfer" includes the making of any
sale, exchange, assignment, hypothecation, gift, security interest, Pledge or
other encumbrance, or any contract therefor, any voting trust or other
agreement or arrangement with respect to the transfer of voting rights or any
other beneficial interest in any of the Securities, 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 such
Securities.
Prior to any proposed Transfer of any Securities the holder thereof
shall give written notice to the Company describing the manner and circumstances
of the proposed Transfer accompanied by a written opinion of legal counsel,
addressed to the Company and the transfer agent, if other than the Company, and
reasonably satisfactory in form and substance to each addressee, to the effect
that the proposed Transfer of the Securities may be effected without
registration under the Securities Act and applicable state securities laws.
Each certificate evidencing the Securities transferred shall bear the legends
set forth in Section 3.2, except that such certificate shall not bear such
legend if the opinion of counsel referred to above is to the further effect that
such legend is not required in order to establish compliance with any provison
of the Securities Act or applicable state securities laws.
Nothing in this Section 3.5(a) shall prevent the Transfer, free of
any restrictions under this Agreement, of Securities by an Investor or a
Permitted Transferee to one or more of its Permitted Transferees, or to the
Company; provided, however, that each such Investor or Permitted Transferee
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(except a Permitted Transferee by virtue of Section 3.5(b)(iv) hereof) shall
take such Securities subject to and be fully bound by the terms of this
Agreement applicable to it with the same effect as if it were a party hereto;
and provided, further, that (i) no entity or person (other than a Permitted
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Transferee by virtue of Section 3.5(b)(iv) hereof) shall be a Permitted
Transferee unless such transferee executes a joinder to this Agreement
satisfactory in form and substance to the Company, and (ii) no Transfer shall be
effected except in compliance with the registration requirements of the
Securities Act or pursuant to an available exemption therefrom.
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(b) As used herein, "Permitted Transferee" shall mean:
(i) in the case of any Investor or Permitted Transferee who is
a natural person, his spouse or children or grandchildren (in each case, natural
or adopted), any trust for his benefit or the benefit of his spouse or children
or grandchildren (in each case, natural or adopted), or any corporation or
partnership in which the direct and beneficial owner of all of the equity
interest is such individual Investor or Permitted Transferee or his spouse or
children or grandchildren (in each case, natural or adopted) (or any trust for
the benefit of such persons);
(ii) in the case of any Investor or Permitted Transferee who
is, in each case, a natural person, the heirs, executors, administrators or
personal representatives upon the death of such Investor or Permitted Transferee
or upon the incompetency or disability of such Investor or Permitted Transferee
for purposes of the protection and management of his assets;
(iii) in the case of an Investor or Permitted Transferee who is
not a natural person, any Affiliate (as hereinafter defined) of such Investor;
(iv) in the case of any Investor or Permitted Transferee, any
person or other entity if such person or other entity takes such Securities
pursuant to a sale in connection with a public offering under the Securities Act
or following a public offering in open market transactions or under Rule 144
under the Securities Act;
(v) in the case of CVC, any of its employees, officers or
directors;
(vi) in the case of Masco and its Permitted Transferees,
MascoTech Corporation, a Delaware corporation ("MC"), and any corporation in
which MC owns, directly or indirectly through one or more intermediaries, one
hundred percent (100%) of the outstanding capital stock of such corporation; and
(vii) in the case of WEP, a distribution of Securities to its
limited partners.
(c) As used herein, "Affiliate" means with respect to any person
other than Masco or its Permitted Transferees, a corporation in which such
person owns, directly or indirectly
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through one or more intermediaries, fifty percent (50%) or more of the
outstanding capital stock of such corporation.
3.6 Notation. A notation will be made in the appropriate transfer
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records of the Company with respect to the restriction on transfer of the
Securities referred to in this Agreement.
ARTICLE IV
OTHER COVENANTS AND REPRESENTATIONS
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4.1 Observers' Rights. So long as CVC or its Affiliates own at
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least 5% of the Common Stock outstanding, if no employee of CVC or its
Affiliates is a member of the Company's Board of Directors, CVC shall have the
right to designate two observers (the "Observers") to attend meetings of the
Company's Board of Directors and committees thereof. If at least one employee
of CVC is a member of the Company's Board of Directors, CVC shall have the right
to designate one Observer to attend meetings of the Company's Board of Directors
and committees thereof. The Observers shall not have the right to vote on any
matter presented to the Board of Directors or any committee thereof. The
Company shall give each Observer written notice of each meeting of the Board of
Directors and committees thereof at the same time and in the same manner as the
members of the Board of Directors or such committee receive notice of such
meetings, and the Company shall permit each Observer to attend as an observer
all meetings of its Board of Directors and committees thereof. Each Observer
shall be entitled to receive all written materials and other information given
to the directors in connection with such meetings at the same time such
materials and information are given to the directors, and each Observer shall
keep such materials and information confidential. If the Company proposes to
take any action by written consent in lieu of a meeting of its Board of
Directors or a committee thereof, the Company shall give written notice thereof
to each Observer prior to the effective date of such consent. The Company shall
provide to each Observer all written materials and other information given to
the directors in connection with such action by written consent at the same time
such materials and information are given to the directors, and each Observer
shall keep such materials and information confidential. The Company shall pay
the reasonable out-of-pocket expenses of each Observer incurred in connection
with attending such meetings.
4.2 Financial Statements and Other Information. So long as any
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Institutional Investor, Xxxxxxx or Xxxxxxxx, as the case may
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be, owns any of the Securities, the Company shall deliver to such Institutional
Investor, Xxxxxxx and Xxxxxxxx:
(a) as soon as available and in any event within 45 days after the
end of each of the first three quarters of each fiscal year of the Company,
consolidated balance sheets of the Company and its subsidiaries as of the end of
such period, and consolidated statements of income and cash flows of the Company
and its subsidiaries for the period then ended prepared in conformity
with generally accepted accounting principles applied on a consistent basis,
except as otherwise noted therein, and subject to the absence of footnotes and
to year-end adjustments; and
(b) as soon as available and in any event within 90 days after the
end of each fiscal year of the Company, a consolidated and consolidating balance
sheet of the Company and its subsidiaries as of the end of such year, and
consolidated and consolidating statements of income and cash flows of the
Company and its subsidiaries for the year then ended prepared in conformity with
generally accepted accounting principles applied on a consistent basis, except
as otherwise noted therein, together with an auditor's report thereon of a firm
of established national reputation.
4.3 Regulatory Compliance Cooperation. So long as CVC or its
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Affiliates beneficially own any of the Securities, before the Company redeems,
purchases or otherwise acquires, directly or indirectly, or converts or takes
any action with respect to the voting rights of, any shares of any class of its
capital stock or any securities convertible into or exchangeable for any shares
of any class of its capital stock, the Company shall give CVC thirty (30) days
prior written notice of such pending action. Upon the written request of CVC
made within thirty (30) days after its receipt of any such notice, stating that
after giving effect to such action CVC would have a Regulatory Problem (as
described below), the Company will defer taking such action for such period (not
to extend beyond ninety (90) days after CVC's receipt of the Company's original
notice) as CVC requests to permit it and its Affiliates to reduce the quantity
of Securities held by it and its Affiliates in order to avoid the Regulatory
Problem. In addition, the Company will not be a party to any merger,
consolidation, recapitalization or other transaction pursuant to which CVC would
be required to take any voting securities or any securities convertible into
voting securities, which might reasonably be expected to cause CVC to have a
Regulatory Problem. For purposes of this paragraph, a person will be deemed to
have a "Regulatory
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Problem" when such person and such person's Affiliates would own, control or
have power over a greater quantity of securities of any kind issued by the
Company than are permitted to be owned under any requirement of any governmental
authority applicable to such person.
4.4 Sale of the Company.
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(a) If the Board of Directors and holders of at least fifty percent
(50%) of the Company's Common Stock then outstanding approve the sale of the
Company to a person (whether by merger, consolidation, sale of all or
substantially all of its assets or sale of all of the outstanding capital stock)
(an "Approved Sale"), each Investor and Permitted Transferee will consent to,
vote for, and raise no objections against, and waive dissenters and appraisal
rights (if any) with respect to, the Approved Sale, and if the Approved Sale is
structured as a sale of stock, each Investor and Permitted Transferee will agree
to sell and will be permitted to sell all of such Investor's and Permitted
Transferee's Common Stock on the terms and conditions approved by the Board of
Directors and the holders of a majority of the Common Stock then outstanding.
Each Investor and Permitted Transferee will take all necessary and desirable
actions in connection with the consummation of an Approved Sale.
(b) The obligations of each of the Investors with respect to an
Approved Sale are subject to the satisfaction of the conditions that: (i) upon
the consummation of the Approved Sale all of the Investors and Permitted
Transferees will receive the same form and amount of consideration per share of
Common Stock, or if any holder of Common Stock is given an option as to the form
and amount of consideration to be received, all Investors and Permmitted
Transferees will be given the same option; and (ii) the terms of sale shall not
include any indemnification, guaranty or the similar undertaking of the Investor
(other than undertakings of Management Investors in respect of continued
employment) that (A) is not made or given pro rata with other Investors on the
basis of share ownership or (B) could result in liability to such Investor that
is in excess of the fair market value on the consideration to be received by
such Investor in the Approved Sale.
4.5 Tag-Along
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(a) (i) On or after the "Tag-Along Date" (as defined), except as
otherwise provided in Section 4.5(a)(v), no "Seller" (as hereinafter defined)
shall sell any Common Stock in
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any transaction or series of related transactions unless all "Holders" (as
hereinafter defined) are offered an equal opportunity to participate in such
transaction or transactions on a pro-rata basis and on identical terms
(including price and type of consideration paid). As used in this Section 4.5,
"Tag-Along Date" means, as to each Institutional Investor, the date on which
such Institutional Investor and its corporate Affiliates own, or would own as a
result of a sale of Common Stock or Warrant, as the case may be, less than 20%
of the outstanding Common Stock of the Company; "Seller" shall mean the
Institutional Investors and their respective corporate Affiliates; and "Holders"
shall mean the Investors and their Permitted Transferees.
(ii) Prior to any sale of Common Stock or Warrant subject to
these provisions, the Seller shall notify the Company in writing of the proposed
sale. Such notice (the "Seller's Notice") shall set forth: (A) the number of
shares of Common Stock subject to the proposed sale; (B) the name and address of
the proposed purchaser; and (C) the proposed amount of consideration and terms
and conditions of payment offered by such proposed purchaser. The Company shall
promptly, and in any event within 15 days, mail or cause to be mailed the
Seller's Notice to each Holder. A Holder may exercise the tag-along right by
delivery of a written notice (the "Tag-Along Notice") to the Seller within 15
days of the date the Company mailed or caused to be mailed the Seller's Notice.
The Tag-Along Notice shall state the number of shares of Common Stock that the
Holder proposes to include in the proposed sale, If no Tag-Along Notice is
received during the 15-day period referred to above, the Seller shall have the
right for a 120-day period to effect the proposed sale of shares of Common Stock
or Warrant, as the case may be, on terms and conditions no more favorable than
those stated in the notice and in accordance with the provisions of this Section
4.5.
(iii) Notwithstanding anything to the contrary, a Seller may
make any of the following sales without offering the Holders the opportunity to
participate: (a) sales by a Seller to any Affiliate or Permitted Transferee,
provided that the proposed purchase (except a Permitted Transferee by virtue of
--------
Section 3.5(b)(iv) hereof) agrees in writing to be bound by the provisions of
this Agreement; (b) sales pursuant to an effective registration statement under
the Securities Act; (c) sales pursuant to an Approved Sale or a Required Sale;
and (d) sales by Masco pursuant to Section 4.7.
-15-
(iv) Each Investor acknowledges for itself and its transferees
that CVC may grant in the future tag-along rights to other holders of Common
Stock and such holders will (a) have substantially the same opportunity to
participate in sales by CVC as provided to the parties hereto, and (b) be
included in the calculation of the pro rata basis upon which Holders may
participate in a sale.
(v) The tag-along obligations of the Sellers and the rights of
the Holders with respect thereto provided under this Section 4.5 shall terminate
upon the earlier of (a) such time as at least 10% of the outstanding shares of
Common Stock shall have been sold publicly pursuant to an effective registration
statement under the Securities Act and (b) as to each Institutional Investor,
the day after the date on which such Institutional Investor and its corporate
Affiliates own less than 10% of the Common Stock.
(vi) Notwithstanding the requirements of this Section 4.5, a
Seller may sell Common Stock at any time without complying with the requirements
of Section 4.5 (a)(ii) so long as the Seller deposits into escrow with an
independent third party at the time of sale that amount of the consideration
received in the sale equal to the "Escrow Amount." The "Escrow Amount" shall
equal that amount of consideration as all the Holders would have been entitled
to receive if they had the opportunity to participate in the sale on a pro rata
basis, determined as if each Holder (A) delivered a Tag-Along Notice to the
Seller in the time period set forth in Section 4.5(a)(ii) and (B) proposed to
include all of its shares of Common Stock in the sale.
No later than the date of the sale, the Seller shall
notify the Company in writing of the proposed sale. Such notice (the "Escrow
Notice") shall set forth the information required in the Seller's Notice, and in
addition, such notice shall state the name of the escrow agent and, if the
consideration (in whole or in part) for the sale was cash, then the account
number of the escrow account. The Company shall promptly, and in any event
within 10 days, mail or cause to be mailed the Escrow Notice to each Holder.
A Holder may exercise the tag-along right by delivery to
the Seller, within 15 days of the date the Company mailed or caused to be mailed
the Escrow Notice, of (i) a written notice specifying the number of shares of
Common Stock it proposes to sell, and (ii) the certificates for such Common
Stock, with stock powers duly endorsed in blank.
-16-
Promptly after the expiration of the 15th day after the
Company has mailed or caused to be mailed the Escrow Notice, (A) the Seller
shall purchase that number of shares of Common Stock as Seller would have been
required to include in the sale had Seller complied with the provisions of
Section 4.5(a)(ii), (B) all shares of Common Stock not required to be purchased
by Seller shall be returned to the Holders thereof, and (C) all remaining funds
and other consideration held in escrow shall be released to Seller. If Seller
received consideration other than cash in its sale, Seller shall purchase the
shares of Common Stock tendering by paying to the Holders non-cash consideration
and cash in the same proportion as received by Seller in the sale.
4.6 Take-Along Rights.
-----------------
(a) If the holders of at least sixty-six percent (66%) of the
Company's Common Stock then outstanding approve the sale of the Company to a
person or entity (whether by merger, consolidation, sale of all or substantially
all of its assets or sale of all of the outstanding capital stock) (a "Required
Sale"), each Investor and Permitted Transferee will consent to, vote for and
raise no objections against, waive dissenters and appraisal rights (if any) with
respect to, the Required Sale of the Company, and if the Required Sale of the
Company is structured as a sale of stock, each Investor and Permitted
Transferee will agree to sell and will be permitted to sell all of such
Investor's and Permitted Transferee's Common Stock on the terms and conditions
approved by the holders of at least sixty-six percent (66%) of the Common Stock
then outstanding. Each Investor and Permitted Transferee will take all
necessary and desirable actions in connection with the consummation of a
Required Sale of the Company.
(b) The obligations of each of the Investors with respect to the
Required Sale of the Company are subject to the satisfaction of the conditions
that: (i) upon the consummation of the Required Sale all of the Investors and
Permitted Transferees will receive the same form and amount of consideration per
share of Common Stock, or if any holder of Common Stock is given an option as to
the form and amount of consideration to be received, all Investors and Permitted
Transferees will be given the same option; and (ii) the terms of sale shall not
include any indemnification, guaranty or the similar undertaking of the Investor
(other than undertakings of Management Investors in respect of continued
employment) that (A) is not made or given pro rata with other Investors on the
basis of share ownership or (B) could result in liability to such Investor that
is in excess of the fair market
- 17 -
value of the consideration to be received by such Investor in the Required Sale.
4.7 Right of First Refusal on Transfer of Common Stock owned by
-----------------------------------------------------------
Masco.
-----
(a) Right of First Refusal. In the event that at any time after
----------------------
the occurrence of a Masco Divestiture Condition (as hereinafter defined), Masco
(or its Permitted Transferees) receives a bona fide offer (a "Transfer Offer")
to purchase any or all of the Common Stock (the "Transfer Shares") then owned by
Masco (or its Permitted Transferees) from any person (the "Offeror") which Masco
(or its Permitted Transferees) wishes to accept, then Masco (and its Permitted
Transferees) shall give CVC written notice thereof ("Transfer Notice"), which
Transfer Notice shall state in reasonable detail all material terms of such
proposed sale or other transfer, the identity of the proposed purchaser or other
transferee, the price or other consideration for which the Common Stock is
proposed to be sold or transferred, and the number of shares of Common Stock to
be sold or transferred, and shall also contain an irrevocable offer to sell the
Transfer Shares to CVC at the price and on the terms contained in the Transfer
Offer. After its receipt of the Transfer Notice, CVC (and/or its designee(s))
shall have the right and option to purchase any or all of the Transfer Shares at
the price and on the terms of the Transfer Offer set forth in the Transfer
Notice; provided that if CVC purchases less than all of the Transfer Shares, the
Company must purchase the remaining Transfer Shares. Within thirty (30) days
after receipt of the Transfer Notice, CVC shall notify Masco (or its Permitted
Transferees) whether or not it wishes to purchase the Transfer Shares and, if
so, indicating the number of Transfer Shares desired to be purchased. The
closing of the purchase and sale shall be held at the place and date established
by CVC, which in no event shall be earlier than five (5) business days or later
than fifteen (15) days from the date on which CVC gives notice of its election
to purchase the Transfer Shares.
In the event that CVC (or its designee(s)) does not elect to purchase
all such Transfer Shares, Masco (or its Permitted Transferees) shall give notice
of such failure to the Company, and the Company shall thereupon have the right
and option to purchase in the aggregate all, but not less than all, of the
Transfer Shares not being purchased by CVC (or its designee(s)) and may give
notice to Masco (or its Transferees) of such intention at any time not later
than fifteen (15) days after the date on which such notice is sent by Masco (or
its Permitted Transferees) to the Company. The
- 18 -
Company's notice shall indicate the number of Transfer Shares that the Company
desires to purchase. The closing of the purchase and sale of the Transfer
Shares pursuant of any such option exercise shall be held at the principal
office of the Company on a date to be established by the Company in its notice
to Masco in response to the Transfer Notice, which in no event shall be earlier
than five (5) business days or later than fifteen (15) days from the date of
such notice.
(b) Failure to Exercise Right of First Refusal. In the event
------------------------------------------
neither CVC nor the Company exercises the purchase option provided for in
Section 4.7(a), the, subject to the other provisions of this Agreement, for a
period of sixty (60) days, the Transfer Shares may be sold or transferred by or
on behalf of Masco (or its Permitted Transferees) to the transferee(s) specified
in the Transfer Notice at a price not less than the price per share of Common
Stock specified therein and otherwise on terms no less favorable to Masco and no
more favorable to the transferees than those contained in the Transfer Notice.
Any Transfer Shares not sold during such 60-day period shall be subject to the
provisions of this Agreement.
(c) Masco Divestiture Condition. A "Masco Divestiture Condition"
---------------------------
shall exist if Masco concludes in good faith upon the written advice of
independent outside antitrust counsel that Masco's continued investment in the
Company would present an unacceptable risk of noncompliance with applicable
antitrust law or impose unacceptable constraints on Masco's then current and
then proposed business activities under applicable antitrust law.
(d) Applicability to Other Securities. This Section 4.7 shall be
---------------------------------
equally applicable to Securities held by Masco other than Common Stock in the
event such other Securities are the subject of any such Transfer Offer.
ARTICLE V
CORPORATE ACTIONS
-----------------
5.1 Certificate of Incorporation and Bylaws. Each Investor has
---------------------------------------
reviewed the Certificates of Incorporation and Bylaws of each of the Company and
DRA in the forms attached hereto as Exhibits C-1, C-2, C-3 and C-4,
respectively, and hereby approves and ratifies the same.
- 19 -
5.2 Directors and Voting Agreements. Each Investor and Permitted
-------------------------------
Transferee agrees that it shall take, at any time and from time to time, all
action necessary (including voting the Class A Common Stock owned by him, her or
it, calling special meetings of stockholders and executing and delivering
written consents) to ensure that the Board of Directors of the Company is
composed at all times of six to nine persons as follows: Xxxxxxxx (so long as he
continues to serve as Chairman of the Board of Directors of the Company); one
individual designated by Masco who shall initially be X. X. Xxxxxx; two
individuals designated by CVC; Xxxxxxx (so long as he continues to serve as an
officer of or a consultant to the Company); Xxxxxx X. Xxxxxx (so long as he
continues to serve as President of the Company, and when he ceases to serve in
such office, his successor in such office); and up to three independent
directors, who shall be designated by CVC (to the extent permitted by applicable
law as determined by CVC in its sole discretion), subject to the right of the
holders of a majority of the outstanding shares of Class A Common Stock
(including any shares of Class A Common Stock held by CVC) to veto the election
of any such independent director, provided, that in the event that CVC concludes
--------
that it is unable to designate, or elects not to designate for any reason, one
or more of such independent directors or the election of any such independent
director is not approved by the holders of a majority of the outstanding shares
of Class A Common Stock, such directorship(s) shall not be filled by the
remaining members of the Company's Board of Directors but shall remain vacant
until the election of a director designated by CVC to fill such vacancy in
accordance with this Section 5.2.
5.3 Right to Remove Certain of the Company's Directors. Each of
--------------------------------------------------
CVC and Masco, as the case may be, may request that any director designated by
it be removed (with or without cause) by written notice to the other Investors,
and, in any such event, each Investor shall promptly consent in writing or vote
or cause to be voted all shares of Class A Common Stock now or hereafter owned
or controlled by it for the removal of such person as a director. In the event
any person ceases to be a director, such person shall also cease to be a member
of any committee of the Board of Directors of the Company.
5.4 Right to Fill Certain Vacancies in Company's Board. In the
--------------------------------------------------
event that a vacancy is created on the Company's Board of Directors at any time
by the death, disability, retirement, resignation or removal (with or without
cause) of a director designated by CVC or Masco, as the case may be, or if
otherwise there shall exist or occur any vacancy on the Company's Board of
- 20 -
Directors in a directorship subject to designation by CVC or Masco, as the case
may be, such vacancy shall not be filled by the remaining members of the
Company's Board of Directors but each Investor hereby agrees promptly to consent
in writing or vote or cause to be voted all shares of Class A Common Stock now
or hereafter owned or controlled by it to elect that individual designated to
fill such vacancy and serve as a director, as shall be designated by CVC or
Masco, as the case may be.
5.5 Directors of DRA and Voting Agreements. The Company shall take, and
--------------------------------------
each of the Investors agrees that it shall cause the Company to take, at any
time and from time to time, all action necessary (including voting all shares of
common stock of DRA owned by the Company, calling special meetings of
stockholders and executing and delivering written consents) to ensure that the
Board of Directors of DRA is composed at all times of six to nine persons as
follows: Xxxxxxxx (so long as he continues to serve as Chairman of the Board of
Directors of the Company and DRA); one individual designated by Masco who shall
initially be X. X. Xxxxxx; two individuals designated by CVC; Xxxxxxx (so long
as he continues to serve as an officer of or a consultant to the Company);
Xxxxxx X. Xxxxxx (so long as he continues to serve as President of DRA, and when
he ceases to serve in such office, his successor in such office); and up to
three independent directors, who shall be designated by CVC (to the extent
permitted by applicable law as determined by CVC in its sole discretion),
subject to the right of the holders of a majority of the outstanding shares of
Class A Common Stock (including shares of Class A Common Stock held by CVC) to
vote the election of any such independent director to the Board of Directors of
DRA, provided, that in the event that CVC concludes that it is unable to
--------
designate, or elects not to designate for any reason, one or more of such
independent directors or the election of any such independent director is not
approved by the holders of a majority of the outstanding shares of Class A
Common Stock, such directorship(s) shall not be filled by the remaining members
of DRA's Board of Directors but shall remain vacant until the election of a
director designated by CVC to fill such vacancy in accordance with this Section
5.5.
5.6. Right to Remove Certain DRA Directors. Each of CVC and Masco, as
-------------------------------------
the case may be, may request that any director designated by it to serve on the
Board of Directors of DRA be removed (with or without cause) by written notice
to the Company and, in such event, the Company shall promptly consent in writing
or vote or cause to be voted all shares of common stock of DRA now or hereafter
owned or controlled by the Company for the removal of
- 21 -
such person as a director. In the event any person ceases to be a director, such
person shall also cease to be a member of any committee of the Board of
Directors of DRA.
5.7 Right to Fill Certain Vacancies in DRA's Board. In the event that a
----------------------------------------------
vacancy is created on the Board of Directors of DRA at any time by the death,
disability, retirement, resignation or removal (with or without cause) of a
director designated by CVC or Masco, as the case may be, or if otherwise there
shall exist or occur any vacancy on the Board of Directors of DRA in the
directorship subject to designation by CVC or Masco, as the case may be, such
vacancy shall not be filled by the remaining members of DRA's Board of Directors
but the Company shall promptly consent in writing or vote or cause to be voted
all shares of common stock of DRA now or hereafter owned or controlled by it to
elect that individual designated to fill such vacancy and serve as a director,
as shall be designated by CVC or Masco, as the case may be.
5.8 Amendment of Certificate and Bylaws. Each Investor agrees that it
-----------------------------------
shall not consent in writing or vote or cause to be voted any shares of Common
Stock now or hereafter owned or controlled by it in favor of any amendment,
repeal, modification, alteration or rescission of, or the adoption of any
provision in the Company's Certificate of Incorporation or Bylaws inconsistent
with this Agreement unless CVC consents in writing to such action or votes or
cause to be voted all of the shares of Common Stock held by it in favor of such
action; provided that CVC shall not consent to any amendment which would
--------
adversely affect Masco's right to designate a director to the Company's Board of
Directors or remove, or fill any vacancy created with respect to, any director
designated by Masco as set forth in Sections 5.2, 5.3, and 5.4 of this
Agreement. The Company hereby agrees that it shall not consent in writing or
vote or cause to be voted any shares of common stock of DRA held by the Company
in favor of any amendment, repeal, modification, alteration or rescission of, or
the adoption of any provision in DRA's Certificate of Incorporation or Bylaws
inconsistent with this Agreement unless the directors of the Company designated
by CVC consent in writing to, or vote in favor of, such action; provided that
--------
such directors shall not consent to any amendment which would adversely affect
Masco's rights to designate a director to DRA's Board of Directors or remove, or
fill any vacancy created with respect to, any director designated by Masco as
set forth in Section 5.5, 5.6 and 5.7 of this Agreement.
5.9 Termination of Voting Agreements. The voting agreements in Section
--------------------------------
5.2, 5.3, 5.4, 5.5, 5.6, 5.7 and 5.9 shall
- 22 -
terminate ten (10) years from the date of this Agreement unless extended in the
manner provided in Section 218 of General Corporation Law of the State of
Delaware.
5.10 Officers. Each Investor approves the election of the following
--------
officers of the Company, together with such other officers as may be elected or
appointed by the Company or its Board of Directors:
Name Position
---- --------
Xxxxxx X. Xxxxxxxx Chairman
Xxxxx X. Xxxxxxx Executive Vice President
Chief Financial Officer
and Treasurer
Xxxxxx X. Xxxxxx President and Chief
Operating Officer
Xxxxx X. Xxxxx Vice President,
Controller and Secretary
ARTICLE VI
ADDITIONAL RESTRICTIONS OF TRANSFERS OF
SECURITIES HELD BY MANAGEMENT INVESTORS
---------------------------------------
6.1 Certain Definitions. The terms defined below shall have the
-------------------
following meanings when used in this Article VI:
(a) "Company" means the Company and all other entities in which the
Company from time to time owns, directly or indirectly, fifty percent (50%) or
more of the stock or assets.
(b) "Cause", when used in connection with the termination of a
Management Investor's employment with the Company, means the Management
Investor's (i) act or acts of dishonesty, moral turpitude or criminality, (ii)
failure to perform his duties as an employee as reasonably determined by the
Board of Directors of the Company acting in good faith after reasonable notice
to such employee by the Board of Directors of the Company and, if so recommended
by the Board of Directors, after such employee has not cured such failure after
30 days opportunity to do so, or (iii) willful or deliberate violations of his
obligations to the Company
- 23 -
(whether such obligations are designated by the Board of Directors or are set
forth in an employment agreement) that result in injury to the Company.
(c) "Public Offering" means a successfully completed firm commitment
underwritten public offering pursuant to an effective registration statement
under the Securities Act in respect of the offer and sale of shares of Common
Stock for the account of the Company resulting in aggregate net proceeds to the
Company and any stockholder selling shares of Common Stock in such offering of
not less than $20,000,000.
(d) "Securities" means any and all of the Shares and all other
securities of the Company (or a successor to the Company) received on account of
ownership of the Shares, including any and all securities issued in connection
with any merger, consolidation, stock dividend, stock distribution, stock split,
reverse stock split, stock combination, recapitalization, reclassification,
subdivision, conversion or similar transaction in respect thereof.
6.2 Restrictions on Transfer. In addition to the restrictions imposed by
------------------------
Section 3.5, and notwithstanding anything to the contrary contained herein, no
Management Investor shall effect a Transfer of any Securities prior to the fifth
anniversary of the Closing Date other than (i) pursuant to Section 4.4 in
connection with an Approved Sale, (ii) pursuant to Section 4.5 in connection
with the exercise of "Tag-Along Rights", (iii) pursuant to Section 4.6 in
connection with a Required Sale, (iv) pursuant to Section 6.3 in connection with
the Purchase Option (as hereinafter defined), (v) with the consent of the
Company (as evidenced by a resolution duly adopted by at least a majority of the
non-employee members of the Company's Board of Directors), (vi) to a Permitted
Transferee of the Management Investor in question or (vii) in connection with a
Public Offering in which such Management Investor is permitted to participate.
In exercising the consent and approval provided for in clause (v), the Company
may employ its sole discretion in evaluating the nature of the proposed
transferee and the Company may impose such conditions on Transfer as it deems
appropriate in its sole discretion, including, but not limited to, requirements
that the transferee be an employee of the Company or DRA and that the transferee
purchase the Management Investor's Securities as a "Management Investor" subject
to the restrictions of this Article VI. In the event any Transfer is authorized
pursuant to clause (v) to an employee of the Company as a "Management Investor,"
such employee shall execute an agreement, in form and substance satisfactory to
the Company, pursuant to which
- 24 -
such employee shall agree to be bound by the terms and conditions of this
Agreement, and such other provisions as the Company may determine, and upon such
execution such employee shall be entitled to the benefit of such provisions
hereof and such other provisions as the Company determines and are set forth in
such agreement. Any purported Transfer in violation of this Agreement shall be
null and void and of no force and effect and the purported transferees shall
have not rights or privileges in or with respect to the Company.
Notwithstanding the foregoing provisions, each Management Investor agrees that
he will not effect a Transfer of any Securities prior to the lapse of such
period of time following acquisition thereof as may be required to comply with
applicable state securities laws.
For the purposes of this Agreement, the "Permitted Transferees" of a
Management Investor shall be (1) the executors, administrators, heirs and
distributees of the Management Investor or her or his transferees to whom the
Common Stock are Transferred by will or the laws of descent and distribution on
account of death, (2) the Management Investor's spouse or children or
grandchildren (in each case, natural or adopted) and (3) a trust the
beneficiaries of which, a corporation the stockholders and directors of which,
or a partnership the limited and general partners of which include only the
Management Investor, her or his spouse or her or his children or grandchildren
(in each case, natural or adopted); provided, that, as a condition to Transfer
-------- ----
to any Permitted Transferee such permitted Transferee shall agree, in writing
and in form and substance reasonably satisfactory to the Company, to become
bound, and thereby shall become bound, by all the terms of this Agreement
applicable to the Management Investor transferring such Securities. The
Termination Date (as hereinafter defined) for a permitted Transferee shall be
the Termination Date with respect to the Management Investor who first acquired
the Common Stock held by such Permitted Transferee pursuant to this Agreement.
6.3 Purchase Option.
---------------
(a) General Terms. In the event that on or prior to the fifth
-------------
anniversary of the Closing Date, any Management Investor shall cease to be
employed by the Company or DRA for any reason (including, but not limited to,
death, temporary or permanent disability, retirement at age 65 or more under the
Company's or DRA's normal retirement policies, resignation or termination by the
Company or DRA, as the case may be, with or without Cause), other than by reason
of a leave of absence approved by the Company or DRA, as the case may be such
Management Investor (or his heirs,
- 25 -
executors, administrators, transferees, successors or assigns) shall give prompt
notice to the Company of such termination (except in the case of termination by
the Company with or without Cause), and the Company, or one or more designee(s)
selected by a majority of the members of the Board of Directors, shall have the
right and option at any time within 90 days after the later of the effective
date of such termination of employment (the "Termination Date") or the date of
the Company's receipt of the aforesaid notice, to purchase from such Management
Investor, or his heirs, executors, administrators, transferees, successors or
assigns, as the case may be, any or all of the Securities then owned by such
Management Investor (and his Permitted Transferees) at a purchase price equal to
the Option Purchase Price (as hereinafter defined). The Company or its
designee(s) shall give notice to the terminated Management Investor (or his
heirs, executors, administrators, transferees, successors or assigns) of its
intention to purchase Securities at any time not later than 90 days after the
Termination Date. (The right of the Company and its designee(s) set forth in
this Section 6.3 to purchase a terminated Management Investor's Securities is
hereinafter referred to as the "Purchase Option"). As a condition to purchasing
a Management Investor's Securities pursuant to this Section 6.3, any designee(s)
selected by the Board of Directors must agree in writing to assume the Company's
obligations under Section 6.3(a)(iii). A designee's agreement to assume such
obligation will relieve the Company of its obligations under Section 6.3(a)(iii)
with regard to the particular terminated Management Investor and such Management
Investor shall thereafter have no recourse against the Company under Section
6.3(a)(iii).
(i) Exercise of Purchase Option. The Purchase Option shall be
---------------------------
exercised by written notice to the terminated Management Investor (or his heirs,
executors, administrators, transferees, successors or assigns) signed by an
officer of the Company on behalf of the Company or by its designee(s), as the
case may be. Such notice shall set forth the number of shares of Common Stock
desired to be purchased and shall set forth a time and place of closing which
shall be no earlier than 10 days and no later than 60 days after the date such
notice is sent. At such closing, the seller shall deliver the certificates
evidencing the number of shares of Common Stock to be purchased by the Company
and/or its designee(s), accompanied by stock powers duly endorsed in blank or
duly executed instruments of transfer, and any other documents that are
necessary to transfer to the Company and/or its designee(s) good title to such
of the Securities to be transferred, free and clear of all pledges, security
interests, liens, charges, encumbrances, equities, claims and options of
whatever nature other
- 26 -
than those imposed under this Agreement, and concurrently with such delivery,
the Company and/or its designee(s) shall deliver to the seller the full amount
of the Option Purchase Price for such Securities in cash by certified or bank
cashier's check.
(ii) Option Purchase Price. Subject to Section 6.3(a)(iv) below, if
---------------------
the Management Investor shall be terminated by the Company without Cause or
shall cease to be employed by the Company or DRA by reason of death, normal
retirement at age 65 or more under the Company's or DRA's normal retirement
policies, or temporary or permanent disability, the "Option Purchase Price" for
the Common Stock to be purchased from such Management Investor pursuant to the
Purchase Option (such number of shares of Common Stock being the "Purchase
Number") shall equal the price calculated as set forth in the table below
opposite the applicable Termination Date of such Management Investor:
Option
If the Termination Date Occurs: Purchase Price
------------------------------ --------------
On or prior to the first Adjusted Cost Price
anniversary of the Closing multiplied by the
Date Purchase Number
After the first anniversary Adjusted Cost
of the Closing Date, and on or Price multiplied by
prior to the second anniversary 80% of the Purchase
of the Closing Date Number, plus Adjusted Book
Value Price multiplied by 20%
of the Purchase Number
After the second anniversary of Adjusted Cost Price multiplied
of the Closing Date, and on or by 60% of the Purchase Number,
prior to the third anniversary plus Adjusted Book Value Price
of the Closing Date multiplied by 40% of the
Purchase Number
After the third anniversary of Adjusted Cost Price
the Closing Date, and on or multiplied by 40% of the
prior to the fourth anniversary Purchase Number, plus
of the Closing Date Adjusted Book Value Price
multiplied by 60% of the
Purchase Number
- 27 -
After the fourth anniversary of Adjusted Cost Price
the Closing Date and on or prior multiplied by 20% of the
to the fifth anniversary of the Purchase Number, plus
Closing Date Adjusted Book Value Price
multiplied by 80% of the
Purchase Number
Notwithstanding anything to the contrary contained herein, (A) if the
Management Investor shall cease to be employed by the Company or DRA for any
reason other than those set forth in the first sentence of this Section
6.3(a)(ii) (including, but not limited to, termination for Cause), the Option
Purchase Price for all shares of Company Stock to be purchased from the
Management Investor (and his Permitted Transferees) pursuant to the Purchase
Option shall equal the Adjusted Cost Price multiplied by the Purchase Number;
and (B) in connection with the exercise of any Purchase Option pursuant to
Section 6.3, the Company may deduct from the Option Purchase Price paid to any
Management Investor the aggregate amount of the outstanding principal and
accrued but unpaid interest due on any Promissory Note of such Management
Investor to the Company.
As used herein:
(A) "Adjusted Cost Price" for each share of Common Stock means the
original purchase price per share for the Management Investors Common Stock as
set forth in Section 1.1 (including any shares of Common Stock which have been
converted into other shares of capital stock of the Company, and adjusted for
any stock dividend payable upon, or subdivision or combination of, the Common
Stock); and
(B) "Adjusted Book Value Price" for each share means the
consolidated net worth of the Company per common share (adjusted to reflect the
pro forma exercise in full of any dilutive securities, regardless of whether
such securities are exercisable at the time or would otherwise satisfy any
requirements under generally accepted accounting principles as they relate to
the determination of "dilutive securities") reflected in the Company's
consolidated financial statements as of the end of the fiscal quarter
immediately preceding the Termination Date (as hereinafter defined); provided,
--------
however, that in reflecting the pro forma exercise of dilutive securities no
-------
amount shall be added to the consolidated net worth of the Company on account of
the assumed exercise of dilutive securities that is in excess, on a per share
basis, of the consolidated net worth per share of the Company
- 28 -
calculated without regard to the exercise of any dilutive securities; and
provided, further, that if any of the Common Stock is traded on a national
-------- -------
securities exchange or reported on the National Association of Securities
Dealers, Inc. Automated Quotation System, then the "Adjusted Book Value Price"
shall equal for each Common Stock the closing price per common share on such
exchange or as so reported on the Management Investor's Termination Date.
(iii) Adjustments to Options Purchase Price. If the Company
-------------------------------------
its designee exercises the Purchase Option with respect to any or all of the
Common Stock of any Management Investor whose employment with the Company was
terminated by the Company without Cause (the "Called Shares"), and if within
twelve months after the closing pursuant to such exercise of the Purchase Option
by the Company or its designee:
(A) the Company is merged into, consolidated with or otherwise
combined with or acquired by another person or entity, or there is a
liquidation of the Company, or there is a Public Offering (a
"Subsequent Offering") of the Company's Common Stock pursuant to an
effective registration statement under the Securities Act in which
other Management Investors participate as selling stockholders (other
than (1) a Special Registration Statement (as hereinafter defined) or
(2) a registration statement relating to a Unit Offering (as
hereinafter defined)), and
(B) the per share consideration received by the stockholders of the
Company in such transaction, or the per share net proceeds received
by the Management Investors for the Company's Common Stock in the
Subsequent Offering, as the case may be (in each case after being
adjusted downward to reflect what the per share consideration or per
share net offering proceeds, as the case may be, would have been had
the Shares of such termination Management Investor purchased by the
Company or its designee pursuant to the Purchase Option been
outstanding on the date of the closing of such transaction or
Subsequent Offering) exceeds the Adjusted Book Value Price used in
calculating the Option Purchase Price pursuant to the exercise of the
Purchase Option,
- 29 -
then such Management Investor shall be entitled to receive from the Company or
its designee an amount per share equal to such excess multiplied by the
applicable Adjusted Book Value Price Percentage (as hereinafter defined) within
30 days after the closing of any such transaction or Subsequent Offering.
As used herein:
"Special Registration Statement" means (i) a registration statement
------------------------------
on Forms S-8 or S-4 or any similar or successor form or any other registration
statement relating to an exchange offer or an offering of securities solely to
the Company's employees or security holders or (ii) a registration statement
registering a Unit Offering; and
"Unit Offering" shall mean a Public Offering of a combination of debt
and equity securities of the Company in which (i) not more than 10% of the
gross proceeds received from the sale of such securities is attributed to such
equity securities, and (ii) after giving effect to such offering, the Company
does not have a class of equity securities required to be registered under the
Securities Exchange Act of 1934, as amended.
(iv) Sale in Public Offering. Shares sold in a Public
-----------------------
Offering will be sold free of the restrictions contained in this Article VI, but
this Article VI shall continue to apply in accordance with its terms to all
Common Stock not sold in such offering. If less than all of a management
Investor's shares of Common Stock are sold in such an offering, for purposes of
any subsequent calculation hereunder of the Option Purchase Price, the Option
Purchase Price shall equal: (a) the Adjusted Cost Price multiplied by the
product of the Adjusted Cost Price Percentage and the Adjusted Purchase Number
(as hereinafter defined), plus (b) the Adjusted Book Value Price multiplied by
----
the product of the Adjusted Book Value Price Percentage and the Adjusted
Purchase Number, less (c) the product of the Publicly-Sold stock (as hereinafter
----
defined) and the Adjusted Book Value Price, where: (w) "Publicly-Sold Stock"
means the total number of shares of Common Stock previously sold by the
respective Management Investor in a public offering, (x) "Adjusted Purchase
Number" means the sum of the Purchase Number and the Publicly-Sold Stock, (y)
"Adjusted Book Value Price Percentage" means 20% multiplied by the number of
full years elapsed since the Closing Date, and (z) "Adjusted Cost Price
Percentage" means 100% minus the Adjusted Book Value Price Percentage.
Notwithstanding the foregoing, the Option Purchase Price at all times shall
equal
-30-
or exceed the product of the Adjusted Cost Price and the Purchase Number.
(b) Company's Right of First Refusal. In the event that, on or
--------------------------------
prior to the fifth anniversary of the Closing Date, (i) a Management Investor is
no longer employed by the Company; (ii) the Company or its designee has declined
to exercise the Purchase Option with respect to any of such Management
Investor's Common Stock; and (iii) the Management Investor thereafter proposes
to sell any or all of such Common Stock to a third party in a bona fide
transaction, the Management Investor may not Transfer such Common Stock without
first offering to sell such Common Stock to the Company pursuant to this
Section 6.3(b).
The Management Investor shall deliver a written notice (a "Sale
Notice") to the Company describing in reasonable detail the Securities being
offered, the name of the offeree, the purchase price requested and all other
material terms of the proposed Transfer. Upon receipt of the Sale Notice, the
Company, or a designee selected by a majority of the non-employee members of the
Board of Directors of the Company, shall have the right and option to purchase
all or any portion of the Securities being offered at the price and on the terms
of the proposed Transfer set forth in the Sale Notice. Within 30 days after
receipt of the Sale Notice, the Company shall notify such Management Investor
whether or not it wishes to purchase any or all of the offered Securities.
If the Company elects to purchase any of the offered Securities, the
closing of the purchase and sale of such Securities shall be held at the place
and on the date established by the Company in its notice to the Management
Investor in response to the Sale Notice, which in no event shall be less than 10
or more than 60 days from the date of such notice. In the event that the
Company does not elect to purchase all the offered Securities, the Management
Investor may, subject to the other provisions of this Agreement, Transfer the
remaining offered Securities to the offeree specified in the Sale Notice at a
price no less than the price specified in the Sale Notice and on other terms no
more favorable to the transferee(s) thereof than specified in the Sale Notice
during the 180-day period immediately following the last date on which the
Company could have elected to purchase the offered Securities. Any such
Securities not transferred within such 180-day period will be subject to the
provisions of this Section 6.3(b) upon subsequent Transfer.
- 31 -
6.4 Involuntary Transfers. In the event that the Securities owned by any
---------------------
Management Investor shall be subject to sale or other Transfer (the date of such
sale or transfer shall hereinafter be referred to as the "Transfer Date") prior
to the fifth anniversary of the Closing Date by reason of (i) bankruptcy or
insolvency proceedings, whether voluntary or involuntary, or (ii) distraint,
levy, executive or other involuntary Transfer, then such Management Investor
shall give the Company written notice thereof promptly upon the occurrence of
such event stating the terms of such proposed Transfer, the identity of the
proposed transferee, the price or other consideration, if readily determinable,
for which the Securities are proposed to be transferred, and the number of
shares of Common Stock to be transferred. After its receipt of such notice or,
failing such receipt, after the Company otherwise obtains actual knowledge of
such a proposed Transfer, the Company, or a designee selected by a majority of
the non-employee members of the Board of Directors of the Company, shall have
the right and option to purchase all, but not less than all of such Securities
which right shall be exercised by written notice given by the Company to such
proposed transferor within 60 days following the Company's receipt of such
notice or, failing such receipt, the Company's obtaining actual knowledge of
such proposed Transfer. Any purchase pursuant to this Section 6.4 shall be at
the price and on the terms applicable to such proposed Transfer. If the nature
of the event giving rise to such involuntary Transfer is such that no readily
determinable consideration is to be paid for the Transfer of the Securities, the
price to be paid by the Company shall be the Option Purchase Price that would
have been applicable hereunder had the Management Investor incurred a
Termination Date as of the date of such proposed Transfer for the Securities.
The closing of the purchase and sale of Securities shall be held at the place
and the date to be established by the Company, which in no event shall be less
than 10 or more than 60 days from the date on which the Company gives notice of
its election to purchase the Securities. At such closing, the Management
Investor shall deliver the certificates evidencing the number of shares of
Common Stock to be purchased by the Company, accompanied by stock powers duly
endorsed in blank or duly executed instruments of transfer, and any other
documents that are necessary to transfer to the Company good title to such of
the securities to be transferred, free and clear of all pledges, security
interests, liens, charges, encumbrances, equities, claims and options of
whatever nature other than those imposed under this Agreement, and concurrently
with such delivery, the Company shall deliver to the Management Investor the
full amount of the purchase
- 32 -
price for such Securities in cash by certified or bank cashier's check.
6.5 Proceeds Upon Sale of the Company.
---------------------------------
Each Management Investor agrees, subject solely to the condition set
forth in the last sentence of this Section 6.5, that a portion of the proceeds
of any sale of Common Stock pursuant to Article IV equal to (x) multiplied by
(y) (such portion being the "Escrow Amount"), where (x) equals (i) the aggregate
of the after-tax total amount of such proceeds and all after-tax proceeds
received by such Management Investor upon sales of Shares pursuant to Article IV
less (ii) (A) the Adjusted Cost Price multiplied by all Shares owned by such
Management Investor and (B) the aggregate amount of the outstanding principal
and accrued but unpaid interest due on any Promissory Note of such Management
Investor to the Company for such shares of Common Stock, and (y) 100% on or
prior to the first anniversary of the Closing Date and thereafter the then
applicable Adjusted Cost Price Percentage, shall not be paid to such Management
Investor and shall instead be deposited into a trust for the exclusive benefit
of the Management Investors, unless and until there is an event of forfeiture
related to such Management Investor (as hereinafter defined), in which case the
funds subject to such forfeiture shall be paid to the Company. Such trust shall
be established in accordance with such agreements and instruments as shall be
reasonably required by the Board of Directors of the Company and shall permit
the trustee thereunder to invest the funds of such trust in such manner,
consistent with such trustee's fiduciary obligations, as such trustee shall
reasonably determine. The trust agreement shall provide that the assets of any
successor to the Company. Upon the occurrence of each date on which a subsequent
adjustment of the Adjusted Cost Price Percentage would have occurred, the
trustee shall distribute to each Management Investor the amount which thereupon
becomes distributable based on such reduced percentage; provided, however, that
-------- -------
in the event that the employment of the Management Investor is terminated by the
Company or its successor without Cause or by reason of death, disability or
retirement at age 65 or more under the Company's or DRA's normal retirement
policies, the trustee shall promptly pay all remaining funds held for the
account of such Management Investor, together with interest accrued thereon, to
such Management Investor, or to his heirs, administrators, or estate. In the
event that the Management Investor shall cease to be employed by the Company or
its successor or a subsidiary thereof (other than by reason of an approved leave
of absence) for any
- 33 -
reason other than death, disability or retirement at age 65 or more under the
Company's or DRA's normal retirement policies or termination by the Company or a
subsidiary thereof without Cause, all interest of the Management Investor in
such funds shall immediately terminate. A Management Investor shall not be bound
by the provisions of this Section 6.5 unless the purchaser or purchasers agree
in writing to continue such Management Investor's employment through the period
ending on the fifth anniversary of the Closing Date (or, if earlier, on the date
which is eighteen months after the closing of such sale) on terms and conditions
at least as favorable, in the aggregate, to the Management Investor as the terms
and conditions of his employment prior to the sale.
6.6 Purchaser Representative. If the Company or any Investor enters
------------------------
into any negotiation or transaction for which Rule 506 (or any similar rule then
in effect) promulgated by the Securities and Exchange Commission under the
Securities Act may be available with respect to such negotiation or transaction
(including a merger, consolidation or other reorganization), each Management
Investor will, at the request of the Company, appoint a purchaser representative
(as such term is defined in Rule 501 (h) promulgated by the Securities and
Exchange Commission under the Securities Act) reasonably acceptable to the
Company. If any Management Investor appoints the purchaser representative
designated by the Company, the Company will pay the fees of such purchaser
representative, but if any Management Investor declines to appoint the purchaser
representative designated by the Company such Management Investor will appoint
another purchaser representative (reasonably acceptable to the Company), and
such Management Investor will be responsible for the fees of the purchaser
representative so appointed.
6.7 Section 83 (b) Elections. Each Management Investor shall make the
------------------------
election to include in his income, in the year he purchases the Common Stock,
the excess, if any, of the fair market value of the Common Stock at that time
over $2.00 per share, pursuant to Section 83 (b) of the Internal Revenue Code of
1986, as amended, in the manner and within the time period specified by the
regulations promulgated thereunder.
- 34 -
ARTICLE VII
REGISTRATION RIGHTS
The Investors shall have registration rights with respect to the
Shares as set forth in the Registration Rights Agreement attached hereto as
Exhibit D. Each of the Investors agree not to effect any public sale or
distribution of any securities of the Company during the periods specified in
the Registration Rights Agreement, except as permitted by the Registration
Rights Agreement, and each such Investor agrees to be bound by the rights of
priority to participate in offerings as set forth therein.
ARTICLE VIII
MISCELLANEOUS
-------------
8.1 Amendment and Modification. This Agreement may be amended or
--------------------------
modified, or any provision hereof may be waived, provided that such amendment or
waiver is set forth in a writing executed by (i) the Company, (ii) CVC (so long
as CVC and its Affiliates own in the aggregate at least 25% of the outstanding
Common Stock on a fully diluted basis) and (iii) the holders of a majority of
the outstanding Common Stock on a fully diluted basis (including Shares owned by
CVC and its Affiliates); provided, however that the provisions of this Agreement
-------- -------
which are for the express benefit of Masco cannot be amended, modified or
waived, unless Masco also executes such amendment or waiver. No course of
dealing between or among any persons having any interest in this Agreement will
be deemed effective to modify, amend or discharge any part of this Agreement of
any rights or obligations of any person under or by reason of this Agreement.
8.2 Survival of Representations and Warranties. All
------------------------------------------
representations, warranties, covenants and agreements set forth in this
Agreement will survive the execution and delivery of this Agreement and the
Closing Date and the consummation of the transactions contemplated hereby,
regardless of any investigation made by an Investor or on its behalf.
8.3 Successors and Assigns; Entire Agreement. This Agreement and
----------------------------------------
all of the provisions hereof shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns and
executors, administrators and heirs. This Agreement sets forth the entire
agreement and
- 35 -
understanding among the parties as to the subject matter hereof and merges and
supersedes all prior discussions and understandings of any and every nature
among them.
8.4 Separability. In the event that any provision of this Agreement
------------
or the application of any provision hereof is declared to be illegal, invalid or
otherwise unenforceable by a court of competent jurisdiction, the remainder of
this Agreement shall not be affected except to the extent necessary to delete
such illegal, invalid or unenforceable provision unless that provision held
invalid shall substantially impair the benefits of the remaining portions of
this Agreement.
8.5 Notices. All notices provided for or permitted hereunder shall
-------
be made in writing by hand-delivery, registered or certified first-class mail,
telex, telecopier or air courier guaranteeing overnight delivery to the other
party at the following addresses (or at such other address as shall be given in
writing by any party to the others):
If to the Company to:
DR International, Inc.
000 Xxx Xxxxxxxxx
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
with required copies to:
If to CVC, to:
Citicorp Venture Capital Ltd.
000 Xxxx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Xx., Vice President
- 36 -
with a required copy to:
Dechert Price & Xxxxxx
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: G. Xxxxxx X'Xxxxxxx, Esquire
If to WEP, to:
World Equity Partners, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx
with a required copy to:
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxx X. Xxxxx, Esquire
If to Masco, to:
MascoTech Automotive Systems Group, Inc.
000 Xxx Xxxxxxxxx
Xxxxxx Xxxxx, XX 00000
Attention: X. X. Xxxxxx
with a required copy to:
Masco Corporation
00000 Xxx Xxxxx Xxxx
Xxxxxx, XX 00000
Attention: General Counsel
If to Xxxxxxxx, to:
Xxxxxx X. Xxxxxxxx
0000 Xxxx Xxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
- 37 -
If to Xxxxxxx, to:
Xxxxx X. Xxxxxxx
0000 X. Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
If to the Management Investors or any of them, to their addresses as
listed in the books of the Company.
All such notices shall be deemed to have been duly given: when
delivered by hand, if personally delivered; five business days after being
deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt acknowledged, if telecopied; and on the next business day,
if timely delivered to an air courier guaranteeing overnight delivery.
8.6 Governing Law. The validity, performance, construction and
-------------
effect of this Agreement shall be governed by and construed in accordance with
the internal law of Delaware, without giving effect to principles of conflicts
of law.
8.7 Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not constitute a part of this Agreement, nor shall they
affect their meaning, construction or effect.
8.8 Counterparts. This Agreement may be executed in two or more
------------
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 instrument.
8.9 Further Assurances. Each party shall cooperate and take such
------------------
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
8.10 Termination. Unless sooner terminated in accordance with its
-----------
terms, this Agreement shall terminate on the tenth anniversary of the Closing
Date.
8.11 Remedies. In the event of a breach or a threatened breach by
--------
any party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific
- 38 -
performance of its rights under this Agreement. The parties agree that the
provisions of this Agreement shall be specifically enforceable, it being agreed
by the parties that the remedy at law, including monetary damages, for breach of
such provision will be inadequate compensation for any loss and that any defense
in any action for specific performance that a remedy at law would be adequate is
waived.
8.12 Party No Longer Owning Securities. If a party hereto ceases to
---------------------------------
own any Securities, such party will no longer be deemed to be an Investor or
Management Investor for purposes of this Agreement.
8.13 No Effect on Employment. Nothing herein contained shall confer
-----------------------
on any Management Investor the right to remain in the employ of the Company or
any of its subsidiaries or Affiliates.
8.14 Pronouns. Whenever the context may require, any pronouns used
--------
herein shall be deemed also to include the corresponding neuter, masculine and
feminine forms.
- 39 -
IN WITNESS WHEREOF, the parties hereto have executed this Securities
Purchase and Holders Agreement the day and year first above written.
DR INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Its: Executive V.P.
--------------------------------
CITICORP VENTURE CAPITAL LTD.
By:
---------------------------------
Its:
--------------------------------
WORLD EQUITY PARTNERS, L.P.
By:
---------------------------------
Its:
--------------------------------
MASCOTECH AUTOMOTIVE SYSTEMS GROUP, INC.
By:
---------------------------------
Its:
--------------------------------
------------------------------------
Xxxxxx X. Xxxxxxxx
/s/ Xxxxx X. Xxxxxxx
------------------------------------
Xxxxx X. Xxxxxxx
IN WITNESS WHEREOF, the parties hereto have executed this Securities
Purchase and Holders Agreement the day and year first above written.
DR INTERNATIONAL, INC.
By:
---------------------------------
Its:
--------------------------------
CITICORP VENTURE CAPITAL LTD.
By: /s/ [SIGNATURE APPEARS HERE]
---------------------------------
Its: MO
--------------------------------
WORLD EQUITY PARTNERS, L.P.
By:
---------------------------------
Its:
--------------------------------
MASCOTECH AUTOMOTIVE SYSTEMS GROUP, INC.
By:
---------------------------------
Its:
--------------------------------
------------------------------------
Xxxxxx X. Xxxxxxxx
/s/
------------------------------------
Xxxxx X. Xxxxxxx
IN WITNESS WHEREOF, the parties hereto have executed this Securities
Purchase and Holders Agreement the day and year first above written.
DR INTERNATIONAL, INC.
By:
---------------------------------
Its:
--------------------------------
CITICORP VENTURE CAPITAL LTD.
By:
---------------------------------
Its:
--------------------------------
WORLD EQUITY PARTNERS, L.P.
By: /s/ [SIGNATURE APPEARS HERE]
---------------------------------
Its: Sr. Vice President
--------------------------------
MASCOTECH AUTOMOTIVE SYSTEMS GROUP, INC.
By:
---------------------------------
Its:
--------------------------------
------------------------------------
Xxxxxx X. Xxxxxxxx
/s/
------------------------------------
Xxxxx X. Xxxxxxx
IN WITNESS WHEREOF, the parties hereto have executed this Securities
Purchase and Holders Agreement the day and year first above written.
DR INTERNATIONAL, INC.
By:
---------------------------------
Its:
--------------------------------
CITICORP VENTURE CAPITAL LTD.
By:
---------------------------------
Its:
--------------------------------
WORLD EQUITY PARTNERS, L.P.
By:
---------------------------------
Its:
--------------------------------
MASCOTECH AUTOMOTIVE SYSTEMS GROUP, INC.
By: /s/ [SIGNATURE APPEARS HERE]
---------------------------------
Its: Vice President
--------------------------------
------------------------------------
Xxxxxx X. Xxxxxxxx
/s/
------------------------------------
Xxxxx X. Xxxxxxx
IN WITNESS WHEREOF, the parties hereto have executed this Securities
Purchase and Holders Agreement the day and year first above written.
DR INTERNATIONAL, INC.
By:
---------------------------------
Its:
--------------------------------
CITICORP VENTURE CAPITAL LTD.
By:
---------------------------------
Its:
--------------------------------
WORLD EQUITY PARTNERS, L.P.
By:
---------------------------------
Its:
--------------------------------
MASCOTECH AUTOMOTIVE SYSTEMS GROUP, INC.
By:
---------------------------------
Its:
--------------------------------
/s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx
/s/
------------------------------------
Xxxxx X. Xxxxxxx
MANAGEMENT INVESTORS:
/s/ Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxxx X. Xxxxxx
000 Xxxxx 000 Xxxx
Xxxxxxxx, XX 00000
Social Security Number:
000 00 0000
-----------------------------------
Tel. 000 000 0000 (H)
000 000 0000 (O)
Schedule I
----------
Management Investors
--------------------
Xxxxxx X. Xxxxxx
EXHIBIT A
DR INTERNATIONAL, INC.
(ON A FULLY DILUTED BASIS AS OF JULY 31, 1994)
Total
Shares of Percentage Shares of Percentage Shares of
Common of Total Shares Class A of Class A Class B
Stock of Common Common Common Common
Name Outstanding Stock Stock Stock Stock
------------------------------------------------------------------------------------------------------------------------------------
Citicorp Venture Capital, Ltd. 550,000 55.0% 432,350 49.0% 117,650
MascoTech Automotive 150,000 15.0% 150,000 17.0% --
Systems Group, Inc.
World Equity Partners, L.P. * 100,000 10.0% 100,000 11.3% --
Xxxxxx X. Xxxxxxxx 50,000 5.0% 50,000 5.7% --
Xxxxx X. Xxxxxxx 15,000 1.5% 15,000 1.7% --
Xxxxxx X. Xxxxxx 25,000 2.5% 25,000 2.8% --
Management Investors ** 110,000 11.0% 110,000 12.5% --
----------- ----------- ----------- ----------- -----------
TOTAL 1,000,000 100.00% 882,350 100.0% 117,650
Principal
Percentage Amount of Purchase Purchase Price
of Class B 11% Junior Price of of Junior Total
Common Subordinated Common Subordinated Purchase
Name Stock Notes Stock Notes Price Paid
------------------------------------------------------------------------------------------------------------------------------------
Citicorp Venture Capital, Ltd. 100.0% $14,300,000 $1,100,000 $14,300,000 $15,400,000
MascoTech Automotive -- $ 3,900,000 300,000 3,900,000 4,200,000
Systems Group, Inc.
World Equity Partners, L.P. * -- -- -- -- --
Xxxxxx X. Xxxxxxxx -- -- 100,000 -- 100,000
Xxxxx X. Xxxxxxx -- -- 30,000 -- 30,000
Xxxxxx X. Xxxxxx -- -- 50,000 *** -- 50,000
Management Investors ** -- -- 220,000 -- 220,000
----------- ----------- ----------- ----------- -----------
TOTAL 100.0% $18,200,000 $1,800,000 $18,200,000 $20,000,000
* Warrant issued to World Equity Partners, L.P., pursuant to Warrant
Agreement dated July 29, 1994.
** Shares to be held by Management Investors will be purchased following the
Closing.
*** Purchase price paid as follows: $250 in cash and a promissory note in the
principle amount of $49,750
Exhibit B
PROMISSORY NOTE
---------------
$ July __, 1994
FOR VALUE RECEIVE, _______________________ ("Borrower"), hereby promises to
pay to the order of DR INTERNATIONAL, INC., a Delaware corporation ("Holder"),
the principal sum of _____________________ DOLLARS ($_________) (the "Principal
Amount"), on ___________________, 1999, together with interest accrued thereon
the date of payment.
The Borrower shall pay to the holder hereof interest from the date hereof
on the outstanding principal balance hereunder at the rate of nine and one
quarter percent (9.25%) per annum. Interest shall be calculated on the basis of
a 365-day year for the actual number of days elapsed and shall be payable on the
last day of each Yearly Period (as hereinafter defined) during the term hereof.
To the extent that interest for any Yearly Period or portion thereof is not paid
on the last day of such Yearly Period, such interest shall become part of the
Principal Amount effective such last day of such Yearly Period. As used herein,
the term "Yearly Period" means each successive twelve-month period, beginning on
the date hereof and ending on the first anniversary of the date hereof and
continuing to each successive anniversary thereafter, during which the Principal
Amount remains outstanding.
Payment shall be made at such place as the holder may designate. All
payments hereunder shall be made in immediately available funds in lawful money
of the United States of America.
This Note represents a full recourse obligation of the Borrower.
All or any portion of the Principal Amount evidenced by this Note may be
prepaid at any time without premium or penalty.
Except as set forth in the next sentence, the obligations of the Borrower
and the rights of the Holder under this Note shall be absolute and shall not be
subject to any counterclaim, set-off, deduction or defense. Notwithstanding
anything to the contrary contained herein, Holder shall be entitled to apply
twenty-five percent (25%) of the pre-tax amount of any and all bonus payments
awarded by the Company to the Borrower (other than any bonus payment awarded on
the Closing Date under the Asset Purchase Agreement, dated July 13, 1994, among
General Motors Corporation, the Company and DRA, Inc.) to
reduce the aggregate amount of the outstanding principal accrued and unpaid
interest thereon due under this Note.
The Borrower hereby waives presentment, notice of dishonor and
protest in respect hereof.
In the event of default under this Note, the Holder shall have all
rights and remedies provided at law and in equity. All costs and expenses of
collection, including attorneys fees shall be added to and become part of the
Principal Amount of this Note and shall be collectible as part of such Principal
Amount.
No interest or other amount shall be payable in excess of the maximum
permissible rate under applicable law and any interest or other amount which is
paid in excess of such maximum rate shall be deemed to be a payment of principal
hereunder.
This Note may not be changed, modified or terminated orally, but only
by an agreement in writing signed by the party sought to be charged.
This Note shall be governed by, and construed in accordance with, the
laws of the State of [Indiana] [Mississippi], without giving effect to the
principles of conflict of laws thereof. If any term or provision of the Note
shall be held invalid, illegal or unenforceable, the validity of all other terms
and provisions hereof shall in no way be affected thereby.
This Note shall be binding upon the successors and assigns of the
Borrower and shall inure to the benefit of the Holder and its successors and
assigns.
Capitalized terms used but not otherwise defined herein shall have
the meanings ascribed to such terms in the Securities Purchase and Holders
Agreement, dated July 29, 1994, among Holder, Citicorp Venture Capital Ltd.,
World Equity Partners, L.P., Mascotech Automotive Systems, Group, Inc. and the
other signatories thereto.
[Management Investor]
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