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EXHIBIT 7
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "AGREEMENT") dated as of January 12, 2001 between
Heartland Industrial Partners, L.P (the "NEW INVESTOR") and each of Blackstone
Capital Company II, L.L.C., Blackstone Capital Partners, L.P., Blackstone
Advisory Directors Partnership, L.P., Blackstone Family Investment Partnership I
L.P. (collectively "BLACKSTONE") and Xxxxxxxxxxx/C&A Holdings, L.L.C.
("XXXXXXXXXXX", and together with Blackstone, "SELLERS").
RECITALS
WHEREAS, the New Investor desires to purchase from Sellers, and Sellers desire
to sell to the New Investor, 27,000,000 shares ("SHARES") of Common Stock, par
value $.01 per share (the "COMMON STOCK") of Xxxxxxx & Xxxxxx Corporation (the
"COMPANY").
WHEREAS, in connection with the transactions contemplated by this Agreement, the
New Investor, Sellers and the Company will enter into a Stockholders' Agreement
(the "STOCKHOLDERS' AGREEMENT") and a Registration Rights Agreement (the
"REGISTRATION RIGHTS AGREEMENT") to provide for certain matters relating to the
respective holdings by the New Investor and Sellers of the Common Stock.
WHEREAS, simultaneously with the execution of this Agreement, the New Investor
and the Company are entering into a purchase agreement (the "Primary Share
Purchase Agreement") pursuant to which the New Investor will purchase shares of
capital stock of the Company.
NOW, THEREFORE, in consideration of the foregoing and the representations and
warranties contained in this Agreement, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE
SECTION 1.1. PURCHASE AND SALE OF THE SHARES. On the terms and subject
to the conditions of this Agreement, Sellers shall sell, transfer and deliver to
the New Investor, and the New Investor shall purchase from Sellers, the Shares
free and clear of all Liens (as defined) in exchange for (a) immediately
available funds in an amount equal to $135,000,000 (the "INITIAL PURCHASE
PRICE"), allocated among Sellers, as set forth in Annex A to be provided prior
to Closing and (b) a participating interest in profits realized on each of the
Shares by the New Investor on the terms and conditions set forth in the Profit
Participation Agreement (the "CONTINGENT PAYMENT", and together with the Initial
Purchase Price, the "PURCHASE PRICE").
SECTION 1.2. CLOSING. The closing (the "CLOSING") of the purchase and
sale of the Shares shall be held at the offices of Xxxxxxx Xxxxxxx & Xxxxxxxx
within 3 business days of satisfaction of the conditions set forth in Article 4
or at a date and time to be mutually agreed upon by the parties (the "CLOSING
DATE"). At the Closing, (i) the New Investor shall deliver to Sellers, by wire
transfer to a bank account designated in writing by Sellers, immediately
available funds in an amount equal to the Initial Purchase Price in such amounts
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that correspond to the allocation among Sellers as set forth in Annex A and (ii)
Sellers shall deliver to the New Investor certificates representing the Shares
duly endorsed in blank or accompanied by stock powers duly endorsed in blank in
proper form for transfer, with appropriate transfer stamps, if any, affixed.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller, severally and not jointly, hereby represents and warrants to the
New Investor as follows:
SECTION 2.1. AUTHORITY. Each Seller is a limited liability company duly
organized and validly existing under the jurisdiction of its organization. Each
Seller has all requisite corporate power and authority to execute, deliver and
perform this Agreement and to consummate the transactions contemplated hereby.
All limited liability company acts and other proceedings required to be taken by
each Seller to authorize the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and properly taken. This Agreement has been duly executed and delivered by
each Seller and constitutes a legal, valid and binding obligation of each
Seller, enforceable against each Seller in accordance with its terms.
SECTION 2.2. THE SHARES. Each Seller has good and valid title to the
Shares that it is transferring hereunder, free and clear of any liens, claims,
encumbrances, security interests, options, pre-emptive, drag-along or tag-along
rights, rights of first refusal or first offer, charges or restrictions of any
kind (collectively, "LIENS"), except for such restrictions set forth in a
stockholders' agreement dated June 29, 1994 to which the Sellers, the Company
and their affiliates are a party, certain restrictions imposed by the Sellers'
financing of the purchase of the Common Stock and restrictions imposed by United
States Securities laws. Assuming the New Investor has the requisite power and
authority to be the lawful owner of the Shares, upon delivery to the New
Investor at the Closing of certificates representing the Shares, duly endorsed
by Sellers to the New Investor for transfer pursuant to Section 1.1 and upon
Sellers' receipt of the Purchase Price, good and valid title to the Shares will
pass to the New Investor, free and clear of any Liens, except for Liens arising
from acts of the New Investor.
SECTION 2.3. GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by Sellers of this Agreement requires no order, license, consent,
authorization or approval of, or exemption by, or action by or in respect of, or
notice to, or filing or registration with, any governmental body, agency or
official except such as have been obtained or except where the failure to obtain
any such order, license, consent, authorization, approval or exemption or give
any such notice or make any filing or registration would not reasonably be
expected to adversely affect the ability of Sellers to perform their obligations
hereunder.
SECTION 2.4. NONCONTRAVENTION. The execution, delivery and performance
by Sellers of this Agreement do not and will not (i) violate the governing
documents of either Seller, (ii) violate any law, rule, regulation, judgment,
injunction, order or decree applicable to or binding upon a Seller, (iii)
require any consent or other action by any person under, constitute a default
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under (with due notice or lapse of time or both), or give rise to any right of
termination, cancellation or acceleration of any right or obligation of a Seller
or to a loss of any benefit to which a Seller is entitled under any provision of
any agreement or other instrument binding upon a Seller or any of its assets or
properties or (iv) result in the creation or imposition of any material Lien on
any property or asset of a Seller.
SECTION 2.5. LITIGATION. There is no action, suit, investigation or
proceeding pending against or, to the knowledge of Sellers, threatened against
or affecting either Seller before any court or arbitrator or any governmental
body, agency or official which in any manner challenges or seeks to prevent,
enjoin, alter or materially delay the transactions contemplated by this
Agreement.
SECTION 2.6. NO BROKERS. No Seller has entered into any agreement or
understanding with any person or firm or the Company which may result in the
obligation of the Company to pay any finder's fee, commission or other like
payment in connection with this Agreement and the transactions contemplated
hereby.
SECTION 2.7. NO OTHER REPRESENTATIONS. Except for the representations
and warranties set forth above, no Seller is making any representation or
warranty, including any representation or warranty as to the Company or its
prospects.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE NEW INVESTOR
The New Investor hereby represents and warrants to Sellers as follows:
SECTION 3.1. AUTHORITY. The New Investor is a limited partnership duly
organized and validly existing under the jurisdiction of its formation. The New
Investor has all requisite power and authority to execute, deliver and perform
this Agreement and the other Secondary Transaction Documents (as defined below),
and to consummate the transactions contemplated hereby. All acts and other
proceedings required to be taken by the New Investor to authorize the execution,
delivery and performance of this Agreement and the other Secondary Transaction
Documents, and the consummation of the transactions contemplated hereby have
been duly and properly taken. This Agreement and the other Secondary Transaction
Documents have been duly executed and delivered by the New Investor and
constitute a legal, valid and binding obligation of the New Investor,
enforceable against the New Investor in accordance with its terms. For purposes
of this Agreement, "Secondary Transaction Documents" means each of the
Stockholders' Agreement, the Registration Rights Agreement and the Primary Share
Purchase Agreement.
SECTION 3.2. GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by the New Investor of this Agreement requires no order, license,
consent, authorization or approval of, or exemption by, or action by or in
respect of, or notice to, or filing or registration with, any governmental body,
agency or official except (i) such as have been obtained, (ii) compliance with
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any applicable requirements of the HSR Act and any other applicable antitrust
laws, and (iii) where the failure to obtain any such order, license, consent,
authorization, approval or exemption or give any such notice or make any filing
or registration would not reasonably be expected to adversely affect the ability
of the New Investor to perform its obligations hereunder.
SECTION 3.3. NONCONTRAVENTION. The execution, delivery and performance
by the New Investor of this Agreement does not and will not (i) violate the
partnership agreement or other similar corporate documentation of the New
Investor, (ii) violate any law, rule, regulation, judgment, injunction, order or
decree applicable to or binding upon the New Investor, (iii) require any consent
or other action by any person under, constitute a default under (with due notice
or lapse of time or both), or give rise to any right of termination,
cancellation or acceleration of any right or obligation of the New Investor or
to a loss of any benefit to which the New Investor is entitled under any
provision of any agreement or other instrument binding upon the New Investor or
any of its assets or properties or (iv) result in the creation or imposition of
any material Lien on any property or asset of the New Investor.
SECTION 3.4. SECURITIES ACT. (a) The Shares purchased by the New
Investor pursuant to this Agreement are being acquired for investment only and
not with a view to any public distribution thereof, and the New Investor will
not offer to sell or otherwise dispose of the Shares so acquired by it in
violation of any registration requirements of the Securities Act of 1933, as
amended (the "SECURITIES ACT"), and the rules and regulations promulgated
thereunder.
(b) The New Investor understands that the Shares have not been
registered under the Securities Act. The New Investor also understands that the
Shares are being sold pursuant to an exemption from registration contained in
the Securities Act based in part upon representations of the New Investor
contained in this Agreement.
(c) The New Investor understands that it must bear the economic risk of
the investment in the Shares indefinitely unless the Shares are registered
pursuant to the Securities Act, or an exemption from registration is available.
(d) The New Investor is an "accredited investor" within the meaning of
Regulation D under the Securities Act.
(e) The New Investor acknowledges that the Shares will be legended to
reflect the foregoing.
SECTION 3.5. LITIGATION. There is no action, suit, investigation or
proceeding pending against, or to the knowledge of the New Investor, threatened
against or affecting the New Investor before any court or arbitrator or any
governmental body, agency or official which in any manner challenges or seeks to
prevent, enjoin, alter or materially delay the transactions contemplated by this
Agreement.
SECTION 3.6. FINANCIAL CAPABILITY. The New Investor has the funds
available to consummate the purchase of the Shares.
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SECTION 3.7. NO OTHER REPRESENTATIONS. Except for the representations
and warranties set forth above, the New Investor is not making any other
representation or warranty.
ARTICLE IV
CONDITIONS TO CLOSING
SECTION 4.1. CONDITIONS TO OBLIGATIONS OF THE NEW INVESTOR AND SELLERS.
The obligations of the New Investor and Sellers to consummate the transactions
contemplated hereby are subject to the satisfaction of the following conditions:
(a) No provision of any applicable law, rule or regulation and no
judgment, injunction, order or decree by any governmental entity of competent
jurisdiction shall prohibit the consummation of the transactions contemplated
hereby;
(b) All material actions by or in respect of, or filings with, any
governmental body, agency, official or authority required to permit the
consummation of the Closing (including HSR clearance) shall have been taken,
made or obtained;
(c) Each of the material certificates and instruments and other
material third party consents (other than consents from the Company's financing
sources), in form and substance reasonably satisfactory to the New Investor,
required for the consummation of the purchase by the New Investor shall have
been received;
(d) The Stockholders' Agreement and the Registration Rights Agreement ,
substantially in the forms attached hereto as Exhibits A and B shall have been
executed by each of the parties thereto with such changes as may be reasonably
required by co- investors with the New Investor that are not adverse to the
Sellers in any respect;
(e) Each of the Indenture Parties shall have entered into a second
supplemental indenture to the Indenture providing for the Indenture Amendments.
By the terms of such second supplemental indenture, the Indenture Amendments
shall become effective without any further action by any person upon the Closing
Date. The Indenture Amendments shall have been irrevocably consented to by the
requisite Holders (as defined under the Indenture) of Notes for the second
supplemental indenture containing the Indenture Amendments to be entered into by
the Indenture Parties and to become effective in accordance with their terms
under Article IX of the Indenture. The form and substance of the second
supplemental indenture, insofar as the Indenture Amendments and any other
changes required by the Holders are concerned, shall be in a form and substance
reasonably satisfactory to the New Investor. The Consent Costs incurred in
connection with obtaining the Indenture Amendments, shall be reasonably
acceptable to the New Investor based upon the estimates of the likely Consent
Costs provided to the New Investor prior to the date hereof by the financial
advisors to the New Investor and the financial advisors to the Sellers and the
Company; and
(f) Each of the Credit Agreement Parties shall have entered into an
amendment and waiver to the Credit Agreement, in form in substance reasonably
satisfactory to the New Investor, providing for the Bank Amendments. By the
terms of such amendment and waiver, the Bank Amendments shall become effective
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without any further action by any person upon the Closing Date. The amendment
and waiver shall have been irrevocably consented to by the requisite lenders
under the Credit Agreement for it to become effective in accordance with its
terms and the provisions of the Credit Agreement. The Consent Costs incurred in
connection with obtaining the Bank Amendments, shall be reasonably acceptable to
the New Investor based upon the estimates of the likely Consent Costs provided
prior to the date hereof by the financial advisors to the New Investor and the
financial advisors to the Sellers and the Company. In addition, the New Investor
shall be satisfied that the effect of the Bank Amendments will be to modify the
documentation relating to the Master Equipment Lease Agreement, dated as of
September 30, 1994 and the receivables financing initially entered into in
December 1999, including, without limitation, the Receivables Agreement and
related documentation, to ensure that no default or no "Termination Event" or
"Potential Termination Event" will arise as a result of the transactions
contemplated hereby and by the Primary Share Purchase Agreement.
For purposes of Sections 4.1(e) and (f):
"Bank Amendments" means (1) the waiver of any event of default
caused by or resulting from the transactions contemplated hereby or by
the Primary Share Purchase Agreement, including, without limitation,
any event of default arising from a change of control, (2) the
amendment of the definitions of "Change in Control" and "Designated
Person" in the Credit Agreement, the Receivables Agreement (as defined
in the Primary Share Purchase Agreement) and the Master Lease Agreement
(as defined in the Primary Share Purchase Agreement) to provide for the
control and beneficial ownership of capital stock by the New Investor
and its affiliates contemplated to occur as a result of the
transactions contemplated hereby and by the Primary Share Purchase
Agreement without any breach or default thereunder and (3) such other
changes as may be requested by the New Investor that are reasonably
acceptable to the Credit Agreement Parties (excluding the Company and
its affiliates).
"Consent Costs" means the direct and indirect financial cost
(whether through the payment of consent, waiver or other fees, the
reimbursement of out-of-pocket costs and expenses of any person or any
change in financial terms of the Indenture or the Credit Agreement, as
applicable) to the New Investor or its affiliates or the Company or any
of its subsidiaries incurred or payable in connection with obtaining
requisite approval of the Indenture Amendments and the Bank Amendments,
as applicable; provided that Consent Costs shall not include (1) the
reasonable fees and expenses of any dealer manager/solicitation agent
for the consent solicitation in respect of the Indenture Amendments,
(2) reimbursements of the reasonable out-of-pocket expenses of the
Credit Agreement Parties (other than the Company and its affiliates)
payable pursuant to the terms of the Credit Agreement, as in effect on
the date hereof, (3) the reimbursement of the reasonable out-of-pocket
expenses of the Trustee incurred in connection with the Indenture
Amendments, (4) the payment of reasonable fees and expenses of the New
Investor in connection with the transactions contemplated hereby or by
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the Primary Share Purchase Agreement and (5) the payment of reasonable
fees and expenses for counsel to the Company, the Special Committee of
the Company and Sellers in connection with the transactions
contemplated hereby or by the Primary Share Purchase Agreement.
"Credit Agreement" means the Credit Agreement dated as of May
28, 1998 among the Credit Agreement Parties, as amended and modified by
the waivers and amendments thereto dated as of October 27, 1998,
December 22, 1998, March 8, 1999 and May 12, 1999.
"Credit Agreement Parties" means collectively (1) Xxxxxxx &
Xxxxxx Products Co., Xxxxxxx & Xxxxxx Canada Inc., Xxxxxxx & Xxxxxx
Plastics, Ltd., as Borrowers, (2) the Company as Guarantor, (3) Bank of
America National Trust and Savings Association, as Documentation Agent,
(4) The Chase Manhattan Bank, as Administrative Agent, and The Chase
Manhattan Bank, as Canadian Administrative Agent, and (5) the Lenders
(as defined under the Credit Agreement) necessary for the Bank
Amendments to be approved and effective under the terms of the Credit
Agreement.
"Indenture" means the Indenture dated as of June 1, 1996, as
amended by the first supplemental indenture thereto dated as of June 1,
1996 (the "FIRST SUPPLEMENTAL INDENTURE"), among the Indenture Parties.
"Indenture Amendments" means an amendment to change the
definition of "Permitted Holder" in Section 5.14 of the First
Supplemental Indenture to add the New Investor and its affiliates and
such related changes so that the transactions contemplated hereby and
by the Primary Share Purchase Agreement do not cause a "change in
control" under such First Supplemental Indenture.
"Indenture Parties" means collectively Xxxxxxx & Xxxxxx
Products Co., as Issuer, the Company, as Guarantor, and First Union
National Bank of North Carolina, as Trustees.
SECTION 4.2. CONDITIONS TO OBLIGATIONS OF THE NEW INVESTOR. The
obligation of the New Investor to consummate the transactions contemplated
hereby is subject to the satisfaction of the following further conditions:
(a) Sellers shall have performed in all material respects all of their
obligations hereunder required to be performed by it on or prior to the Closing
Date;
(b) The representations and warranties of Sellers contained in this
Agreement shall be true in all material respects when made and at and as of the
Closing Date, as if made at and as of such date;
(c) The sale of shares contemplated by the Primary Share Purchase
Agreement, in the form attached hereto as Exhibit C, shall be consummated
simultaneous with the Closing of the sale of the Shares;
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(d) The Company's Board of Directors shall have approved the purchase
of the shares of Common Stock by the New Investor such that Section 203 of the
Delaware General Corporation Law shall not apply to the acquisition of shares by
the New Investor;
(e) The proxy statement of the Company in connection with the
Shareholder Matters (as defined in the Primary Share Purchase Agreement) shall
have been prepared and filed with the Securities and Exchange Commission. Each
Seller shall have delivered to the Company an executed irrevocable proxy in
favor of the actions contemplated by the Shareholder Matters as contemplated in
Section 5.4 herein;
(f) Each of the Existing Investor Agreements (as defined below) shall
have been cancelled without payment by or obligation of the Company, and
otherwise pursuant to documentation in form and substance reasonably
satisfactory to the New Investor;
(g) The Company shall have entered into a monitoring fee agreement in
form and substance satisfactory to the New Investor providing for the payment to
the New Investor of an annual monitoring fee of $4,000,000;
(h) Four designees of the Sellers shall have resigned and the four
designees of the New Investor shall have been appointed to the Board of
Directors of the Company;
(i) The Sellers shall have entered into an agreement in the form
reasonable satisfactory to the Sellers and Purchaser providing for the
resignation of an additional director who was previously appointed by the
Sellers in the event (i) the Charter Amendment Effective Date (as defined in the
Primary Share Purchase Agreement) has not occurred within 45 days of the Closing
Date and (ii) the New Investor does not already have a majority of the Company's
Board of Directors.
For purposes of Section 4.2(f), "Existing Investor Agreements" means
(i) the Amended and Restated Stockholders' Agreement dated as of June 29, 1994,
among Blackstone Capital Partners L.P., Xxxxxxxxxxx Xxxxxxx Partners, L.P., the
Company and Xxxxxxx & Xxxxxx Group, Inc., (ii) the Voting Agreement, dated as of
June 29, 1994 among Blackstone Capital Partners L.P. and Xxxxxxxxxxx Xxxxxxx
Partners, L.P., and (iii) the Monitoring Fee Agreements entered into among the
Sellers and the Company.
SECTION 4.3. CONDITIONS TO OBLIGATION OF SELLER. The obligation of
Sellers to consummate the transactions contemplated hereby is subject to the
satisfaction of the following further conditions:
(a) The New Investor shall have performed in all material respects all
of its obligations hereunder required to be performed by it at or prior to the
Closing Date; and
(b) The representations and warranties of the New Investor contained in
this Agreement shall be true in all material respects when made and at and as of
the Closing Date, as if made at and as of such date.
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ARTICLE V
COVENANTS OF SELLERS AND THE NEW INVESTOR
SECTION 5.1. FURTHER ASSURANCES. Sellers and the New Investor agree
that, from time to time, whether on or after the Closing Date, each of them will
execute and deliver such further instruments of conveyance and transfer and take
such other actions as may be necessary to carry out the purposes and intents of
this Agreement.
SECTION 5.2. NO INCONSISTENT ACTION; CERTAIN ACTIONS. Subject to
Sections 7.1 and 7.2, Sellers and the New Investor shall not take any action
inconsistent with their obligations under this Agreement or which could
materially hinder or delay the consummation of the transactions contemplated by
this Agreement and agree to use its best efforts to consummate the transactions
contemplated by this Agreement and the transactions contemplated by the Primary
Share Purchase Agreement. The New Investor agrees that it will not consummate
the transactions contemplated by the Primary Share Purchase Agreement unless the
sale of Shares contemplated by this Agreement is consummated concurrently.
SECTION 5.3. REGULATORY FILINGS. The New Investor agrees to promptly,
but in no event later than 10 days from the date of this Agreement, to make any
required regulatory filings, including any required Xxxx-Xxxxx-Xxxxxx filings
and to use its best efforts to obtain any required clearance as promptly as
practicable.
SECTION 5.4. STOCKHOLDER ACTION. Upon the written request of the New
Investor, at any time after the date of this Agreement and for so long as this
Agreement is in effect, Sellers shall execute an irrevocable proxy such that the
Shares will be voted in favor of the Shareholder Matters (as defined in the
Primary Share Purchase Agreement).
SECTION 5.5. BOARD REPRESENTATION. Each of Blackstone and Xxxxxxxxxxx
shall cause two of its representatives on the Company board of directors to
resign immediately prior to the Closing.
SECTION 5.6. NO SOLICITATION. (a) Each Seller agrees that it will not,
directly or indirectly through any officer, subsidiary, affiliate, director,
employee, stockholder, representative, agent or other person (other than the
Company or a director of the Company whose actions shall be governed by the
Primary Share Purchase Agreement), (i) seek, initiate, solicit or encourage any
Person to make an Acquisition Proposal, (ii) engage in negotiations or
discussions concerning any Acquisition Proposal with any person or group, (iii)
disclose any non-public information relating to the Company or give access to
the properties, employees, books or records of the Company or any of its
subsidiaries to any person or group in connection with any Acquisition Proposal
or (iv) approve or recommend or agree to approve or recommend any Acquisition
Proposal.
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(b) Each Seller shall notify the New Investor in writing no later than
the end of the next business day after receipt thereof of the receipt by it of
any Acquisition Proposal (including a copy thereof if in writing), the terms and
conditions of such Acquisition Proposal and the identity of the person making
it. Each Seller also shall promptly notify the New Investor no later than the
end of the next business Day of any change to or modification of such
Acquisition Proposal.
(c) Each Seller shall, and shall cause its Affiliates and the advisors,
employees and other agents of such Seller and any of its Affiliates to, cease
immediately and cause to be terminated any and all existing activities,
discussions or negotiations, if any, with any Third Party conducted prior to the
date hereof with respect to any Acquisition Proposal and shall use reasonable
best efforts to cause any such party (or its agents or advisors) in possession
of confidential information about the Company that was furnished by or on behalf
of the Sellers to return or destroy all such information.
"ACQUISITION PROPOSAL" means any offer or proposal for, or any
indication of interest in, (i) any acquisition or purchase of 10% or more of the
consolidated assets of the Company and its Subsidiaries, (ii) any acquisition or
purchase of an equity interest in the Company representing in excess of 10% of
the power to vote for the election of a majority of the directors of the
Company, or any tender offer or exchange offer for equity securities of the
Company as a result of which the offeror would hold such an equity interest in
the Company, (iii) any merger, consolidation, business combination, sale of
substantially all assets, recapitalization, liquidation, dissolution or similar
transaction involving the Company, or any of its Subsidiaries, whose assets,
individually or in the aggregate, constitute more than 10% of the consolidated
assets of the Company and its Subsidiaries, or (iv) any acquisition or purchase
of the Shares in each case other than the transactions contemplated by this
Agreement.
"THIRD PARTY" means any Person as defined in Section 13(d) of the 1934
Act, other than the New Investor or any of its Affiliates.
SECTION 5.7. DEBT CONSENTS. Sellers shall cooperate and shall cause the
Company to cooperate in seeking such modifications to the "change of control"
provisions of the Credit Agreement and the Indenture so that the sale of Shares
contemplated by this Agreement and the Primary Share Purchase Agreement may be
consummated without violating the terms of the governing documents for such debt
facilities.
ARTICLE VI
NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES
SECTION 6.1. SURVIVAL. The representations, warranties and covenants in
this Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Closing for the statute of limitations period relating to such
representations, warranties or covenants.
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ARTICLE VII
TERMINATION
SECTION 7.1. GROUNDS FOR TERMINATION. This Agreement may be terminated
at any time prior to the Closing:
(a) by mutual written agreement of Sellers and the New Investor;
(b) by Sellers, on the one hand, or the New Investor, on the other
hand, if the Closing shall not have been consummated as of the close of business
on May 31, 2001;
(c) by Sellers, on the one hand, or the New Investor, on the other
hand, if consummation of the transactions contemplated hereby would violate any
non-appealable final order, decree or judgment of any court or governmental body
having competent jurisdiction; or
(d) by the New Investor or the Sellers, if the Primary Share Purchase
Agreement is terminated pursuant to its terms.
The party desiring to terminate this Agreement pursuant to clauses 7.1(b), (c)
or (d) shall promptly give notice of such termination to the other party.
SECTION 7.2. EFFECT OF TERMINATION. If this Agreement is terminated as
permitted by Section 7.1, such termination shall be without liability of any
party (or any stockholder, general partner, limited partner, member, director,
officer, employee, agent, consultant or representative of such party) to the
other party to this Agreement except as provided below, and this Agreement shall
become void and of no further force or effect; provided that such termination
shall not affect a party's ability to bring an action for breach of this
Agreement. Notwithstanding the foregoing, the provisions of Sections 8.2, 8.5,
8.6 and 8.7 shall survive any termination hereof pursuant to Section 7.1.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. NOTICES. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent by prepaid telex, cable or telecopy or sent, postage prepaid, by
registered, certified or express mail or reputable overnight courier service and
shall be deemed given when so delivered by hand, telexed, cabled or telecopied,
or if mailed, three business days after mailing (one business day in the case of
express mail or overnight courier service), as follows:
if to the New Investor,
Heartland Industrial Partners, L.P.
00 Xxxxxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx
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With a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: W. Xxxxxx Xxxxx, Esq.
Xxxxxxxx X. Xxxxxxxxx, Esq.
Fax: (000) 000-0000
If to Sellers,
Blackstone Capital Partners L.P.
000 Xxxx Xxxxxx--00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxxx
Fax: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000; and
Xxxxxxxxxxx Xxxxxxx Management Partners
1301 Avenue of the Xxxxxxxx--00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X' Xxxxxxx
Fax: (000) 000-0000
With a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxx
Fax: (000) 000-0000
SECTION 8.2. EXPENSES. Whether or not the transactions contemplated
hereby are consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs or expenses.
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SECTION 8.3. AMENDMENTS AND WAIVERS. (a) Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed, in the case of an amendment, by each party to this
Agreement, or in the case of a waiver, by the party against whom the waiver is
to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 8.4. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto; except that the New Investor may
assign its rights under this Agreement without the consent of any other party so
long as (i) the New Investor is not relieved of its obligations hereunder and
(ii) upon the purchase of the Shares under this Agreement and the Primary Share
Purchase Agreement, Heartland and its affiliates will beneficially own a
majority of the shares of Common Stock of the Company (assuming conversion of
the convertible preferred shares).
SECTION 8.5. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the law of the State of New York.
SECTION 8.6. JURISDICTION. The parties hereto agree that any suit,
action or proceeding seeking to enforce any provision of, or based on any matter
arising out of or in connection with, this Agreement or the transactions
contemplated hereby may only be brought in the United States District Court for
the Southern District of New York or any New York State court sitting in New
York City, and each of the parties hereby consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding in any such court or that any such suit,
action or proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 8.1 shall be deemed
effective service of process on such party.
SECTION 8.7. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 8.8. COUNTERPARTS; THIRD PARTY BENEFICIARIES. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other party hereto. No
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provision of this Agreement shall confer upon any person other than the parties
hereto any rights or remedies hereunder, except that the Company shall have the
right to enforce the provisions of Section 5.2 with respect to each party's duty
to use its "best efforts" to consummate the transactions contemplated hereby and
in the Primary Share Purchase Agreement.
SECTION 8.9. ENTIRE AGREEMENT. This Agreement, together with the
Stockholders' Agreement, constitutes the entire agreement between the parties
with respect to the subject matter of this Agreement and supersedes all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter of this Agreement.
SECTION 8.10. CAPTIONS. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
SECTION 8.11. SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
deemed to be excluded from this Agreement and the balance of this Agreement
shall be interpreted as if such provision were so excluded and shall be enforced
in accordance with its terms to the maximum extent permitted by law.
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IN WITNESS WHEREOF, each of the parties has duly executed this
Agreement or caused it to be duly executed as of the date first written above.
BLACKSTONE CAPITAL PARTNERS L.P.
By: Blackstone Management Associates L.P.,
its General Partner
By:
--------------------------------------
Xxxx X. Xxxxxxxx
Authorized Signatory
BLACKSTONE ADVISORY DIRECTORS PARTNERSHIP
L.P.
By: Blackstone Management Associates L.P.,
its General Partner
By:
--------------------------------------
Xxxx X. Xxxxxxxx
Authorized Signatory
BLACKSTONE FAMILY INVESTMENT PARTNERSHIP I
L.P.
By: Blackstone Management Associates I
L.L.C., its General Partner
By:
--------------------------------------
Xxxx X. Xxxxxxxx
Authorized Signatory
BLACKSTONE CAPITAL COMPANY II, L.L.C.
By:
--------------------------------------
Xxxx X. Xxxxxxxx
Authorized Signatory
XXXXXXXXXXX/C&A HOLDINGS, L.L.C.
By: , Member
--------------------------------
HEARTLAND INDUSTRIAL PARTNERS, L.P.
By: Heartland Industrial Associates L.L.C.,
its General Partner
By:
--------------------------------------
15
16
Exhibit A
STOCKHOLDERS AGREEMENT
by and among
BLACKSTONE CAPITAL COMPANY II, L.L.C.,
HEARTLAND INDUSTRIAL PARTNERS, L.P.,
XXXXXXXXXXX/C&A HOLDINGS, L.L.C.,
and
XXXXXXX & XXXXXX CORPORATION
------------------------------
Dated: ____________, 2001
------------------------------
17
TABLE OF CONTENTS
PAGE #
------
ARTICLE I DEFINITIONS; TERMINATION............................................................. 2
1.1 Definitions.......................................................................... 2
1.2 Termination.......................................................................... 7
ARTICLE II TRANSFER............................................................................. 8
2.1 Limitation on Transfer............................................................... 8
2.2 Permitted Transfers.................................................................. 8
2.3 Permitted Transfer Procedures........................................................ 8
2.4 Transfers in Compliance with Law; Substitution of Transferee......................... 8
ARTICLE III RIGHT OF FIRST REFUSAL; TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS;
AFFILIATE TRANSACTIONS; ENCUMBRANCE ................................................. 9
3.1 Proposed Voluntary Transfers......................................................... 9
3.2 Involuntary Transfers................................................................ 14
3.3 Certain Transactions................................................................. 15
3.4 Prohibition on Encumbrance........................................................... 18
ARTICLE IV [Intentionally Omitted.]............................................................. 18
ARTICLE V AFTER-ACQUIRED SECURITIES; AGREEMENT TO BE BOUND..................................... 18
5.1 After-Acquired Securities............................................................ 18
5.2 Beneficial Ownership................................................................. 18
ARTICLE VI CORPORATE GOVERNANCE................................................................. 18
6.1 General.............................................................................. 18
6.2 Stockholder Actions.................................................................. 19
6.3 Election of Directors; Number and Composition........................................ 19
6.4 Removal and Replacement of Director.................................................. 20
6.5 Reimbursement of Expenses; D&O Insurance............................................. 20
6.6 Quorum............................................................................... 21
6.7 Observer Rights...................................................................... 21
ARTICLE VII COVENANTS............................................................................ 21
7.1 Financial Statements and Other Information........................................... 21
7.2 Inspection........................................................................... 22
ARTICLE VIII STOCK CERTIFICATE LEGEND............................................................. 22
ARTICLE IX MISCELLANEOUS........................................................................ 23
9.1 Notices.............................................................................. 23
9.2 Successors and Assigns; Third Party Beneficiaries.................................... 25
9.3 Amendment and Waiver................................................................. 25
9.4 Counterparts......................................................................... 25
18
9.5 Specific Performance................................................................. 25
9.6 Headings............................................................................. 25
9.7 GOVERNING LAW........................................................................ 25
9.8 Severability......................................................................... 26
9.9 Rules of Construction................................................................ 26
9.10 Entire Agreement..................................................................... 26
9.11 Further Assurances................................................................... 26
EXHIBITS
A Form of Transfer Agreement (Previously issued shares)
ii
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STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT dated _____________, 2001, by and among Xxxxxxx
& Xxxxxx Corporation, a Delaware corporation (the "Company"), Heartland
Industrial Partners, L.P. ("Heartland") and the other investor stockholders
listed on Schedule 1 hereto (together with Heartland, the "Investors"), and
Blackstone Capital Company II, L.L.C. ("Blackstone Capital II"), Blackstone
Family Investment Partnership I L.P. ("Blackstone Family"), Blackstone Advisory
Directors Partnership L.P. ("Blackstone Advisory") and Blackstone Capital
Partners, L.P. ("Blackstone Capital") (together with Blackstone Capital II,
Blackstone Family and Blackstone Advisory, "Blackstone") and Xxxxxxxxxxx/C&A
Holdings, L.L.C. ("Xxxxxxxxxxx," together with Blackstone, the "Original
Stockholders").
WHEREAS, pursuant to the Stock Purchase Agreement, dated January [ ],
2001, (the "Company Stock Purchase Agreement"), by and among the Company and
Heartland, the Company has agreed to issue and sell to the Investors (x) an
aggregate of 1,000,000 shares of Non-Voting Convertible Preferred Stock, par
value $0.01 per share (the "Convertible Preferred Shares"), which are
convertible into 16,400,000 shares of Common Stock, par value $0.01 per share,
of the Company (the "Common Stock") and (y) 8,600,000 shares (the "Treasury
Shares") of Common Stock.
WHEREAS, pursuant to the Stock Purchase Agreement, dated January __,
2001, (the "Original Stockholders Stock Purchase Agreement," and, together with
the Company Stock Purchase Agreement, the "Stock Purchase Agreements"), by and
among the Original Stockholders and Heartland, the Original Stockholders have
agreed to sell to the Investors an aggregate of 27,000,000 shares of Common
Stock;
WHEREAS, the Company, Xxxxxxx & Xxxxxx Group, Inc. ("C&A Group"),
Blackstone Capital and Xxxxxxxxxxx Xxxxxxx Partners, L.P. entered into an
Amended and Restated Stockholders Agreement dated as of June 29, 1994 (the
"Original Stockholders Agreement");
WHEREAS, the parties hereto wish to restrict the transfer of the Shares
(as hereinafter defined) and to provide for, among other things, first offer,
tag-along and preemptive rights, corporate governance rights and obligations and
certain other rights under certain conditions;
WHEREAS, in order to induce each of the Investors to purchase its
shares of Common Stock and the Original Stockholders to enter into this
agreement, the Company has agreed to grant registration rights with respect to
the Common Stock owned by the Investors and the Original Stockholders in a
Registration Rights Agreement (the "Registration Rights Agreement"); and
WHEREAS, the Company, C&A Group, Blackstone Capital and Xxxxxxxxxxx
Xxxxxxx Partners, L.P. wish to terminate the Original Stockholders Agreement
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and the Original Stockholders wish to enter into a new stockholders agreement
with the Investors.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; TERMINATION.
1.1 Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"Affiliate" shall mean, when used with respect to any Person, any other
person which directly or indirectly beneficially owns or controls 25% or more of
the total voting power of shares of capital stock of such Person having the
right to vote for directors under ordinary circumstances, any Person
controlling, controlled by or under common control with any such Person (within
the meaning of Rule 405 of the Securities Act), and any director or executive
officer of any such person. Affiliate shall in any event include, when used with
respect to Xxxxxxxxxxx, Xxxxxxxxxxx Xxxxxxx Co., Inc., Xxxxxxxxxxx Xxxxxxx
Group, Inc. and Xxxxxxxxxxx Xxxxxxx Management Partners, Inc. and, when used
with respect to Blackstone, The Blackstone Group L.P. and Blackstone Group
Holdings L.P. and the successors of any of the above.
"Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"Big Five Accounting Firm" means Xxxxxx Xxxxxxxx, Deloitte & Touche
LLP, Ernst & Young LLP, KPMG Peat Marwick, LLP or PricewaterhouseCoopers, and
any of their successors.
"Blackstone" has the meaning set forth in the preamble to this
Agreement.
"Blackstone Director" has the meaning set forth in Section 6.3.
"Board of Directors" means the Board of Directors of the Company.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in the State of New York are authorized or required by
law or executive order to close.
"Charter Documents" means the Restated Certificate of Incorporation and
the By-laws of the Company each as in effect on the date hereof.
"Commission" means the Securities and Exchange Commission or any
similar agency then having jurisdiction to enforce the Securities Act.
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"Common Stock" has the meaning set forth in the recitals to this
Agreement and any other capital stock of the Company into which such stock is
reclassified or reconstituted and any other common stock of the Company.
"Common Stock Equivalents" means any security or obligation which is by
its terms convertible, exchangeable or exercisable into or for shares of Common
Stock, including any option, warrant or other subscription or purchase right
with respect to Common Stock and the Convertible Preferred Stock.
"Company" has the meaning set forth in the preamble to this Agreement.
"Company Option" has the meaning set forth in Section 3.1(c).
"Company Option Period" has the meaning set forth in Section 3.1(c).
"Contract Date" has the meaning set forth in Section 3.1(e).
"Convertible Preferred Stock" has the meaning set forth in the preamble
to this Agreement.
"Disinterested Members" has the meaning set forth in Section 3.3(a).
"Drag-Along Notice" has the meaning set forth in Section 3.1(g).
"Drag-Along Rightholders" has the meaning set forth in Section 3.1(g).
"Drag-Along Sellers" has the meaning set forth in Section 3.1(g).
"Excess Offered Securities" has the meaning set forth in Section
3.1(b).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
"Exempt Issuances" has the meaning set forth in Section 3.3(d).
"Exempt Transfer" has the meaning set forth in Section 2.1.
"Fair Value" has the meaning set forth in Section 3.2(b).
"GAAP" means United States generally accepted accounting principles in
effect from time to time.
"Governmental Authority" means the government of any nation, state,
city, locality or other political subdivision thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
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"Heartland" has the meaning set forth in the preamble.
"Heartland Entities" means Heartland Industrial Partners, L.P.,
Heartland Industrial Partners (FF), L.P., Heartland Industrial Partners (E1),
L.P., Heartland Industrial Partners (K1), L.P., Heartland Industrial Partners
(C1), L.P. and Permitted Transferees under clause (ii)(a) or (b) of the
definition of Permitted Transferees of any of the foregoing.
"Institutional Stockholder means any Stockholder that is not a natural
person (other than Sponsor).
"Investor Directors" has the meaning set forth in Section 6.3.
"Investor Selling Stockholder" has the meaning set forth in Section
3.1(f).
"Investor Stockholders" means each Investor and any Permitted
Transferee thereof to whom Shares are transferred in accordance with Section 2.2
of this Agreement, and the term "Investor Stockholder" shall mean any such
person.
"Investors" has the meaning set forth in the preamble to this
Agreement.
"Involuntary Transfer" means any transfer, proceeding or action by or
in which a Stockholder shall be deprived or divested of any right, title or
interest in or to any of the Shares, including, without limitation, (i) any
seizure under levy of attachment or execution, (ii) any transfer in connection
with bankruptcy (whether pursuant to the filing of a voluntary or an involuntary
petition under the United States Bankruptcy Code of 1978, or any modifications
or revisions thereto) or other court proceeding to a debtor in possession,
trustee in bankruptcy or receiver or other officer or agency, (iii) any transfer
to a state or to a public officer or agency pursuant to any statute pertaining
to escheat or abandoned property and (iv) any transfer pursuant to a divorce or
separation agreement or a final decree of a court in a divorce action.
"Involuntary Transferee" has the meaning set forth in Section 3.2(a).
"IT Rightholder" has the meaning set forth in Section 3.2(a).
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other) or preference, priority,
right or other security interest or preferential arrangement of any kind or
nature whatsoever (excluding preferred stock and equity related preferences).
"Major Stockholders" means the Original Stockholders and any Permitted
Transferee or Partner Transferee thereof to whom Shares are transferred in
accordance with Section 2.2 of this Agreement, and the term "Major Stockholder"
shall mean any such Person.
"New Issuance Notice" has the meaning set forth in Section 3.3(d).
23
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"New Securities" has the meaning set forth in Section 3.3.(d).
"Offer Price" has the meaning set forth in Section 3.1(a).
"Offered Securities" has the meaning set forth in Section 3.1(a).
"Offering Notice" has the meaning set forth in Section 3.1(a).
"Offering Stockholders" has the meaning set forth in the preamble.
"Original Stockholders" has the meaning set forth in the preamble.
"Partner Transferee" has the meaning set forth in Section 2.2.
"Partner Transferor" has the meaning set forth in Section 2.2.
"Permitted Transferee" means:
(i) with respect to any Stockholder who is a natural person, (1) the
spouse (or another individual designated in writing by a Stockholder who has no
spouse), parent or any lineal descendant (including by adoption and
stepchildren) of such Stockholder, (2) any trust of which such Stockholder is
the trustee and which is established solely for the benefit of any of the
foregoing individuals, (3) any charitable foundation selected by such
Stockholder, or (4) any partnership, all of the general partner(s) and limited
partner(s) (if any) of which are one or more Persons identified in this clause
(i), provided that, in the case of clause (1), (2), (3) or (4), such Person
executes a Transfer Agreement;
(ii) with respect to Sponsor, (a) any Person which is an Affiliate of
Sponsor on the date hereof, (b) any controlled Affiliate of Sponsor, (c) any
investor in Sponsor in connection with a pro rata distribution of shares of
Common Stock to all investors in Sponsor at the time of the expiration or
termination of the fund or any Affiliate of such investor, or (d)(1) any Person
to whom Sponsor transfers any of its Shares within a year of the date hereof; or
(2) any partner or member of any investment fund of Sponsor to whom the Sponsor
transfers any of its Shares after the first anniversary hereof for a price of
$5.00 or less per Share (equitably adjusted for stock splits, stock combinations
and similar events) plus an amount payable to reflect any retention by Sponsor
or its Affiliates of liability to make payments under the Profit Participation
Agreement; provided that, in the case of clauses (d)(1) and (d)(2), immediately
after such transfer, the Sponsor will own at least 50% of the Shares owned by
the Sponsor on the date hereof after giving effect to the transactions
contemplated by the Stock Purchase Agreements; provided that, in the case of
clause (a), (b), (c) or (d) any such transferee executes a Transfer Agreement;
(iii) with respect to any Institutional Stockholder, (a) any Affiliate
of such Institutional Stockholder, (b) any investor of such Institutional
Stockholder that is an investment fund in connection with a pro rata
distribution of shares of Common Stock to all investors (a "Stockholder
Investor" or collectively "Stockholder Investors") in such
24
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Institutional Stockholder at the time of the expiration or termination of the
fund, or (c) any Person acquiring all or substantially all of the investment
portfolio of such Institutional Stockholder provided, that, in the case of
clause (a), (b) or (c), all such investors execute a Transfer Agreement; and
(iv) with respect to any Stockholder, any institutional lender to which
such Stockholder pledges or grants a security interest in shares of Common Stock
in a bona fide transaction effected in good faith provided that (a) such pledgee
executes a Transfer Agreement and (b) prior to any subsequent foreclosure or
sale of such shares or any transfer resulting from such foreclosure is effected,
the provisions of Article III must be satisfied.
"Person" means any individual, firm, corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
limited liability company, Governmental Authority or other entity of any kind,
and shall include any successor (by merger or otherwise) of such entity.
"Profit Participation Agreement" means the Profit Participation
Interest Agreement, dated the date hereof, any Heartland, Blackstone,
Xxxxxxxxxxx and the Company.
"Proportionate Percentage" has the meaning set forth in Section 3.3(d).
"Proposed Price" has the meaning set forth in Section 3.3(d).
"Qualified Investor" means an Investor designated by Heartland who (x),
together with its Affiliates, at or prior to any date of determination, has made
an aggregate cash investment in Common Stock of the Company equal to at least
$25.0 million (based upon the original cost of such investment) or (y) owns,
together with its Direct Permitted Transferees, at least 10% or more of the
outstanding shares of Common Stock of the Company at the date of determination.
"Registration Rights Agreement" has the meaning set forth in the
preamble.
"Rightholder(s)" has the meaning set forth in Section 3.1(b).
"Securities Act" means the United States Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Selling Stockholder" has the meaning set forth in Section 3.1(a).
"Shares" means, with respect to each Stockholder, all shares, whether
now owned or hereafter acquired, of Common Stock of the Company and the
Convertible Preferred Shares (with the amount thereof calculated on an
as-converted basis, if applicable) and any other Common Stock Equivalents owned
thereby; provided, however, for the purposes of any computation of the number of
Shares pursuant to
25
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Sections 2, 3, 7 and 10.3, all outstanding Common Stock Equivalents shall be
deemed converted, exercised or exchanged as applicable and the shares of Common
Stock issuable upon such conversion, exercise or exchange shall be deemed
outstanding, whether or not such conversion, exercise or exchange has actually
been effected.
"Sponsor" means collectively the Heartland Entities or Heartland
Industrial Partners, L.P. acting on behalf of the other Heartland Entities.
"Stock Issuance Rightholder" has the meaning set forth in Section
3.3(d).
"Stock Purchase Agreements" has the meaning set forth in the recitals
to this Agreement.
"Stockholders" means the Investor Stockholders, the Major Stockholders
and any transferee thereof who has agreed to be bound by the terms and
conditions of this Agreement in accordance with Section 2.4.
"Stockholders Meeting" has the meaning set forth in Section 6.1.
"Stockholder Option Period" has the meaning set forth in Section
3.1(b).
"Tag-Along Rightholder" has the meaning set forth in Section 3.1(f).
"Third Party Purchaser" has the meaning set forth in Section 3.1(a).
"transfer" has the meaning set forth in Section 2.1.
"Transferred Shares" has the meaning set forth in Section 3.2(a).
"Xxxxxxxxxxx" has the meaning set forth in the preamble.
"Xxxxxxxxxxx Director" has the meaning set forth in Section 6.3.
"Written Consent" has the meaning set forth in Section 6.1.
1.2 Termination. The Company, C&A Group, Blackstone Capital
Partners, L.P. and Xxxxxxxxxxx Xxxxxxx Partners, L.P. hereby terminate the
Original Stockholders Agreement and all the rights and obligations of each of
the parties thereto. Blackstone Capital Partners, L.P. and Xxxxxxxxxxx Xxxxxxx
Partners, L.P. hereby terminate the Voting Agreement, dated June 29, 1994,
between them and each hereby represents that the existing monitoring agreements
between their respective Affiliates and the Company have been terminated as of
the date hereof and that it and its Affiliates are not party to any other
agreement with the Company or any of its subsidiaries other than this Agreement,
the Original Stockholders Purchase Agreement, the Profit Participation
Agreement, and the Registration Rights Agreement.
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ARTICLE II
TRANSFER.
2.1 Limitation on Transfer. No Stockholder shall directly or
indirectly sell, give, assign, hypothecate, pledge, encumber, grant a security
interest in, subject to a Lien or otherwise dispose of (whether by operation of
law or otherwise) (each a "transfer") any Shares or any right, title or interest
therein or thereto, except (1) pursuant to (a) Sections 2.2, 2.3, 2.4, 3.1, 3.2
or 3.4 of this Agreement, (b) market sales in compliance with Rule 144 under the
Securities Act, (c) a registration statement filed under the Securities Act or
(d) a transaction in which all stockholders of the Company have a right to
transfer their shares on a pro rata basis and (2) otherwise in compliance with
this Agreement. Transfers referred to in clauses (1)(b), (c) and (d) are "Exempt
Transfers." Any attempt to transfer any Shares or any rights thereunder in
violation of the preceding sentence shall be null and void ab initio.
2.2 Permitted Transfers. Notwithstanding anything to the contrary
contained in this Agreement, but subject to Sections 2.3 and 2.4, at any time,
(a) each Stockholder may transfer all or a portion of its Shares to any of its
Permitted Transferees, and (b) each Major Stockholder (each in such capacity, a
"Partner Transferor") may Transfer any Common Stock held by it, in whole or in
part, to its or its successor's members, limited partners or general partners (a
"Partner Transferee").
2.3 Permitted Transfer Procedures. If any Stockholder wishes to
transfer Shares to a Permitted Transferee or Partner Transferee under Section
2.2, such Stockholder shall give notice to the Company of its intention to make
such a transfer not less than five (5) days prior to effecting such transfer,
which notice shall state the name and address of each Permitted Transferee or
Partner Transferee to whom such transfer is proposed, the relationship of such
Permitted Transferee or Partner Transferee to such Stockholder, and the number
of Shares proposed to be transferred to such Permitted Transferee or Partner
Transferee.
2.4 Transfers in Compliance with Law; Substitution of Transferee.
(a) Notwithstanding any other provision of this
Agreement, no transfer may be made pursuant to this Section 2 or Section 3
(except in an Exempt Transfer in the case of the following clauses (a) and (b))
unless (a) if (1) to a Permitted Transferee or Partner Transferee or (2) in a
transfer by any person other than a Major Stockholder, the transferee executes,
prior to such transfer, a Transfer Agreement substantially in the form attached
hereto as Exhibit A, which shall cause such transferee to be bound by the
obligations of this Agreement, (b) the transfer complies in all respects with
the applicable provisions of this Agreement and (c) the transfer complies in all
respects with applicable federal and state securities laws, including, without
limitation, the Securities Act. If requested by the Company, an opinion of
counsel to such transferring Stockholder shall be supplied to the Company, at
such transferring Stockholder's expense, to the effect that such transfer
complies with the applicable federal and state securities laws. Upon becoming a
party to this Agreement, (i) the
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Permitted Transferee or Partner Transferee of a Major Stockholder shall be
substituted for and deemed to be, and shall enjoy the same rights and be subject
to the same obligations as, the transferring Major Stockholder hereunder with
respect to the Shares transferred to such Permitted Transferee or Partner
Transferee, subject to the limitations of any voting proxy granted pursuant to
Section 2.4(b) and (ii) the transferee shall be substituted for and deemed to
be, and shall enjoy the same rights and be subject to the same obligations as,
an Investor Stockholder hereunder with respect to the Shares transferred to such
transferee, subject to the limitation of any voting proxy granted pursuant to
Section 2.4(b).
(b) Each Partner Transferee shall execute prior to a
transfer by a Partner Transferor an irrevocable proxy granting to Blackstone or
Xxxxxxxxxxx or their respective Affiliates all voting rights with respect to the
Common Stock so transferred.
ARTICLE III
RIGHT OF FIRST REFUSAL; TAG-ALONG RIGHTS; DRAG-ALONG RIGHTS; AFFILIATE
TRANSACTIONS; ENCUMBRANCE.
3.1 Proposed Voluntary Transfers.
(a) Offering Notice. Subject to Sections 2.2, 2.3, 2.4
and 3.1(h), if any Stockholder other than a Heartland Entity (a "Selling
Stockholder") wishes to transfer all or any portion of its Shares to any Person
(other than to its Permitted Transferee or in the case of a Major Stockholder,
to its Partner Transferee) (a "Third Party Purchaser") and such Selling
Stockholder wants to make any offer or has received a bona fide offer to
purchase such Shares from a Third Party Purchaser, such Selling Stockholder
shall then offer to sell such Shares by sending written notice (an "Offering
Notice") to each Investor Stockholder and the Company, which shall state (i) the
number of Shares proposed to be transferred (the "Offered Securities"); (ii) the
proposed purchase price per Share proposed by the Selling Stockholder or offered
by the Third Party Purchaser for the Offered Securities (the "Offer Price"); and
(iii) the terms and conditions of such sale. Upon delivery of the Offering
Notice, such offer shall be irrevocable unless and until the rights of first
refusal provided for herein shall have been waived or shall have expired.
(b) Stockholder Option; Exercise.
(i) For a period of ten (10) Business Days after
the giving of the Offering Notice pursuant to Section 3.1(a) (the
"Stockholder Option Period"), each of the Investor Stockholders (for
the purpose of Section 3.1, each, a "Rightholder" and collectively, the
"Rightholders") shall have the right to purchase the Offered Securities
at a purchase price equal to the Offer Price and upon the terms and
conditions set forth in the Offering Notice. Each Rightholder shall
have the right to purchase that percentage of the Offered Securities
determined by dividing (A) the total number of Shares then owned by
such Rightholder by (B) the total number of Shares then owned by all
such
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Rightholders. If the consideration consists wholly or in material part
of consideration other than cash or marketable securities and the
Rightholder or the Company would be willing to exercise its rights
hereunder based upon the value ascribed to such consideration by the
Selling Stockholders, the Company, Heartland or any Selling Stockholder
may require that a determination of Fair Value be made in the same
manner as would apply to a determination of Fair Value under Section
3.2(b) (with Heartland substituted for IT Rightholders and the Selling
Stockholders requesting such an appraisal substituted for the
Involuntary Transferee), and in such event, all time periods under this
Section 3.1(a) through 3.1(e) shall be tolled pending the determination
of Fair Value. If any Rightholder does not fully subscribe for the
number or amount of Offered Securities it or he is entitled to
purchase, then each other fully participating Rightholder shall have
the right to purchase that percentage of the Offered Securities not so
subscribed for (for the purposes of this Section 3.1(b), the "Excess
Offered Securities") determined by dividing (x) the total number of
Shares then owned by such fully participating Rightholder by (y) the
total number of Shares then owned by all fully participating
Rightholders. The calculation described in the preceding sentence shall
be made in successive proration calculations until there are no
remaining Excess Offered Securities or there is no remaining
Rightholder who indicated a willingness in the notice referred to in
Section 3.1(b)(ii) to subscribe for additional shares.
(ii) The right of each Rightholder to purchase
the Offered Securities under subsection (i) above shall be exercisable
by delivering written notice of the exercise thereof, prior to the
expiration of the Stockholder Option Period, to the Selling Stockholder
with a copy to the Company. Each such notice shall state (a) the number
of Shares held by such Rightholder, (b) the number of Shares that such
Rightholder is willing to purchase pursuant to this Section 3.1(b),
including the number of Excess Offered Shares, if any, such Rightholder
shall wish to purchase. The giving of such notice shall constitute a
binding obligation to purchase the number of Shares elected in
accordance with Section 3.1(d). The failure of a Rightholder to respond
within the Stockholder Option Period to the Selling Stockholder shall
be deemed to be a waiver of such Rightholder's rights under subsection
(i) above, provided that each Rightholder may waive its rights under
subsection (i) above prior to the expiration of the Stockholder Option
Period by giving written notice to the Selling Stockholder, with a copy
to the Company.
(c) Company Option; Exercise. If the Rightholders do not
elect to purchase all of the Offered Securities, then on the Business Day next
following the earlier to occur of (A) the expiration of the Stockholder Option
Period and (B) the date upon which the Company shall have received written
notice from each of the Rightholders of its exercise of its right pursuant to
Section 3.1(b) or its waiver thereof (the "Company Option Period"), the Company
shall have the right (the "Company Option") but not the obligation to purchase
any remaining Offered Securities at a purchase price equal to the Offer Price
and upon the terms and conditions set forth in the Offering Notice. The right of
the Company to purchase any of the Offered Securities
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under this Section 3.1(c) shall be exercisable by delivering written notice of
the exercise thereof, prior to the expiration of the Company Option Period, to
the Selling Stockholder. The failure of the Company to respond within the
Company Option Period to the Selling Stockholder shall be deemed to be a waiver
of the Company Option, provided that the Company may waive its rights under this
Section 3.1(c) prior to the expiration of the Company Option Period by giving
written notice to the Selling Stockholder. If the Company and/or the
Rightholders do not purchase all of the Offered Securities pursuant to Section
3.1(b) and/or Section 3.1(c), then the Selling Stockholder may, subject to
Section 3.1(f), sell the remaining Offered Securities to a Third Party Purchaser
in accordance with Section 3.1(e).
(d) Closing. The closing of the purchases of Offered
Securities subscribed for by the Rightholders under Section 3.1(b) and/or the
Company under Section 3.1(c) shall be held at the executive office of the
Company at 11:00 a.m., local time, on the fifteenth Business Day after the
giving of the Offering Notice pursuant to Section 3.1(a) or at such other time
and place as the parties to the transaction may agree. At such closing, the
Selling Stockholder shall deliver certificates representing the Offered
Securities, duly endorsed for transfer and accompanied by all requisite transfer
taxes, if any, and such Offered Securities shall be free and clear of any Liens
(other than those arising hereunder and those attributable to actions by the
purchasers thereof) and the Selling Stockholder shall so represent and warrant,
and shall further represent and warrant that it is the sole beneficial and
record owner of such Offered Securities. The Company and/or each Rightholder, as
the case may be, purchasing Offered Securities shall deliver at the closing
payment in full for the Offered Securities purchased by it or him. At such
closing, all of the parties to the transaction shall execute such additional
documents as are otherwise necessary or appropriate.
(e) Sale to a Third Party Purchaser. Unless the Company
and/or the Rightholders elect to purchase all the Offered Securities under
Sections 3.1(b) and 3.1(c), the Selling Stockholder may, subject to Section
3.1(f), sell any remaining Offered Securities to a Third Party Purchaser at a
price not less than the price set forth in the Offering Notice and otherwise on
terms and conditions not materially more favorable to the Third Party Purchaser
than those set forth in the Offering Notice; provided, however, that such sale
is bona fide and made pursuant to a contract within thirty (30) days after the
earlier to occur of (i) the exercise or waiver by the Company and all of the
Rightholders of their options to purchase the Offered Securities and (ii) the
expiration of the Company Option Period (the "Contract Date"); and provided
further, that such sale shall not be consummated unless and until (x) such Third
Party Purchaser shall represent in writing to the Company and each Rightholder
that it is aware of the rights of the Company and the Stockholders contained in
this Agreement and (y) prior to the purchase by such Third Party Purchaser of
any of such Offered Securities such Third Party Purchaser shall become a party
to this Agreement and shall agree to be bound by the terms and conditions hereof
in accordance with Section 2.4. If such sale is not consummated within thirty
(30) days after the Contract Date for any reason, then the restrictions provided
for herein shall again become effective, and no transfer of such Offered
Securities may be made thereafter by the Selling Stockholder without again
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offering the same to the Company and the Rightholders in accordance with this
Section 3.1.
(f) Tag-Along Rights.
(i) If an Investor (an "Investor Selling
Stockholder") wishes to transfer Shares to a Third Party Purchaser, the
Company or any of its subsidiaries other than in an Exempt Transfer,
then each other Stockholder (each, a "Tag-Along Rightholder") shall
have the right to sell to such Third Party Purchaser, the Company, or
any of its subsidiaries, upon the terms set forth in the Offering
Notice, that number of Shares held by such Tag-Along Rightholder equal
to that percentage of the Offered Securities determined by dividing (A)
the total number of Shares then owned by such Tag-Along Rightholder by
(B) the sum of (x) the total number of Shares then owned by all such
Tag-Along Rightholders with respect to which Tag-Along Rightholders are
exercising their rights pursuant to this Section 3.1(f) and (y) the
total number of Shares then owned by the Investor Selling Stockholder.
The Investor Selling Stockholder and the Tag-Along Rightholder(s)
exercising their rights pursuant to this Section 3.1(f) shall effect
the sale of the Offered Securities and such Tag-Along Rightholder(s)
shall sell the number of Offered Securities required to be sold by such
Tag-Along Rightholder(s) pursuant to this Section 3.1(f)(i), and the
number of Offered Securities to be sold to such Third Party Purchaser,
the Company or any of its subsidiaries by the Investor Selling
Stockholder shall be reduced accordingly.
(ii) The Investor Selling Stockholder shall give
notice to each Tag-Along Rightholder of each proposed sale by it of
Offered Securities which gives rise to the rights of the Tag-Along
Rightholders set forth in this Section 3.1(f) at least ten (10)
Business Days prior to the proposed consummation of such sale, setting
forth the name of such Investor Selling Stockholder, the number of
Offered Securities, the name and address of the proposed Third Party
Purchaser, the Company or its subsidiaries, as applicable, the proposed
amount and form of consideration and terms and conditions of payment
offered by or to such Third Party Purchaser, the Company or its
subsidiary, as applicable, the percentage of Shares that such Tag-Along
Rightholder may sell to such Third Party Purchaser, the Company or its
subsidiary, as applicable, (determined in accordance with Section
3.1(f)(i)), and a representation that such Third Party Purchaser, the
Company or its subsidiary has been informed of the "tag-along" rights
provided for in this Section 3.1(f) and has agreed to purchase Shares
in accordance with the terms hereof. The tag-along rights provided by
this Section 3.1(f) must be exercised by any Tag-Along Rightholder
wishing to sell its Shares within ten (10) days following receipt of
the notice required by the preceding sentence by delivery of a written
notice to the Investor Selling Stockholder indicating such Tag-Along
Rightholder's wish to exercise its rights and specifying the number of
Shares (up to the maximum number of Shares owned by such Tag-Along
Rightholder required to be purchased by such Third Party Purchaser)it
wishes to sell, provided that any Tag-Along Rightholder may waive its
rights
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under this Section 3.1(f) prior to the expiration of such 10-day period
by giving written notice to the Investor Selling Stockholder, with a
copy to the Company. The failure of a Tag-Along Rightholder to respond
within such 10-day period shall be deemed to be a waiver of such
Tag-Along Rightholder's rights under this Section 3.1(f). If a Third
Party Purchaser, the Company or its subsidiary, as applicable, fails to
purchase Shares from any Tag-Along Rightholder that has properly
exercised its tag-along rights pursuant to this Section 3.1(f)(ii),
then the Investor Selling Stockholder shall not be permitted to
consummate the proposed sale of the Offered Securities, and any such
attempted sale shall be null and void ab initio.
(g) Drag-Along Rights. For so long as Heartland is
entitled to the right to designate directors as set forth in Section 6.3, in the
event that one or more of the Heartland Entities (the "Drag-Along Rightholders")
receive a bona fide offer from a Third Party Purchaser to purchase (including a
purchase by merger) all of the Shares held by the Investor Stockholders or all
or a substantial portion of the consolidated assets of the Company, the
Drag-Along Rightholders may send written notice (the "Drag-Along Notice") to the
Company and the other Stockholders (the "Drag-Along Sellers") notifying them
they will be required to sell all (but not less than all) of their Shares in
such sale (or, in the case of a merger or asset sale, vote in favor of such
sale). Upon receipt of a Drag-Along Notice, each Drag-Along Seller receiving
such notice shall be obligated to (i) sell all of its Shares in the transaction
(including a sale by merger or asset sale) contemplated by the Drag-Along Notice
for the same consideration per share and otherwise on the same terms and
conditions as the Drag-Along Rightholders (including payment of its pro rata
share of all costs associated with such transaction); if, but only if, the
Drag-Along Seller shall receive cash and/or other freely tradable consideration
having a fair market value of at least $11 per Share, adjusted for stock splits,
stock dividends, reclassifications and other recapitalizations and (ii)
otherwise take all necessary action in its capacity as a stockholder to cause
the consummation of such transaction, including voting its Shares in favor of
such transaction and not exercising any appraisal rights in connection
therewith. The obligations of the Drag-Along Sellers in respect of a Transaction
under this Section 3.1(g) are subject to the satisfaction of the following
conditions: (i) upon the consummation of the Transaction, each Drag-Along Seller
shall have the right to receive cash and/or other consideration having a fair
market value of at least $11 per Share (adjusted for stock splits, stock
dividends, reclassifications and recapitalizations) in the same form and amount
per share of consideration paid to Drag-Along Rightholders in such transaction
or any other transaction related thereto (such as a payment for consulting or
management services or non-compete payments); (ii) if any Drag-Along Seller is
given an option as to the form and amount of consideration to be received, each
other Drag-Along Seller will be given the same option with respect to its
applicable Pro Rata Share; and (iii) no Drag-Along Seller shall be obligated
under the terms of any agreement respecting any transaction subject to this
Section 3.1(g) to indemnify any person in an amount greater than the proceeds to
be received by such Drag-Along Seller in such transaction.
(h) Notwithstanding anything to the contrary contained in
this Agreement, the following transfers will not be subject to the provisions of
Section 2.4 or
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Sections 3.1(a) through (e): a transfer of any Shares pursuant to Rule 144 or a
transfer pursuant to a registration statement filed under the Securities Act.
3.2 Involuntary Transfers.
(a) Rights of First Offer upon Involuntary Transfer. If
an Involuntary Transfer of any Shares (the "Transferred Shares") owned by any
Stockholder shall occur, then the Company and the Investor Stockholders (unless
such Stockholder is the Stockholder transferring the Transferred Shares) (for
the purpose of Section 3.2, each, a "IT Rightholder" and collectively, the "IT
Rightholders") shall have the same rights as specified in Sections 3.1(a),
3.1(b) and 3.1(c), respectively, with respect to such Transferred Shares as if
the Involuntary Transfer had been a proposed voluntary transfer by a Selling
Stockholder and shall be governed by Section 3.1 except that (i) the time
periods shall run from the date of agreement as to the purchase price applicable
to such Involuntary Transfer with written determination of Fair Value in
accordance with Section 3.2(b), (ii) such rights shall be exercised by notice to
the transferee of such Transferred Shares (the "Involuntary Transferee") rather
than to the Stockholder who suffered or will suffer the Involuntary Transfer and
(iii) the purchase price per Transferred Share shall be agreed upon by the
Involuntary Transferee and the Company and/or the purchasing IT Rightholders
purchasing a majority of the Transferred Shares, as the case may be; provided,
however, that if such parties fail to agree as to such purchase price, the
purchase price shall be the Fair Value thereof as determined in accordance with
Section 3.2(b).
(b) Fair Value. If the parties fail to agree upon the
purchase price of the Transferred Shares in accordance with Section 3.2(a)
hereof, then the Company or the IT Rightholders, as the case may be, shall
purchase the Transferred Shares at a purchase price equal to the Fair Value
thereof. The Fair Value of the Transferred Shares shall be determined by a
nationally recognized investment banking firm or nationally recognized expert
experienced in the valuation of corporations engaged in the business conducted
by the Company. Within five (5) Business Days after the date the applicable
parties determine that they cannot agree as to the purchase price, the
Involuntary Transferee and the Board of Directors (in the case of a purchase by
the Company), or the purchasing IT Rightholders purchasing a majority of the
Transferred Shares being purchased by the purchasing IT Rightholders (if the
Company is not purchasing any Transferred Shares), or the Board of Directors and
such purchasing IT Rightholders jointly (in the case of a purchase by the
Company and IT Rightholders), as the case may be, shall designate one such
appraiser that is willing and able to conduct such determination. If either the
Involuntary Transferee or the Board of Directors or the purchasing IT
Rightholders or both, or all, as the case may be, fails to make such designation
within such period, then any other party may apply to the American Arbitration
Association or a court of appropriate jurisdiction for the appointment of such
an appraiser. The appraiser shall conduct its determination as promptly as
practicable, and the Fair Value of the Transferred Shares shall be determined by
such appraiser. Such determination shall be final and binding on the Involuntary
Transferee, the Company and the Rightholders. The Involuntary Transferee shall
be responsible for one-half the fees and expenses of the appraiser designated by
or on behalf of it, and the Company and/or
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the purchasing IT Rightholders in proportion to the ratio in which they are
purchasing Transferred Shares shall be responsible for one-half of the fees and
expenses of the appraiser. For purposes of this Section 3.2(b), the "Fair Value"
of the Transferred Shares means the fair market value of such Transferred Shares
determined in accordance with this Section 3.2(b) based upon all considerations
that the appraiser determine to be relevant.
(c) Closing. The closing of any purchase under this
Section 3.2 shall be held at the executive office of the Company at 11:00 a.m.,
local time, on the earlier to occur of (a) the fifth Business Day after the
purchase price per Transferred Share shall have been agreed upon by the
Involuntary Transferee and the Company or the purchasing IT Rightholders, as the
case may be, in accordance with Section 3.2(a)(iii), or (b) the fifth Business
Day after the determination of the Fair Value of the Transferred Shares in
accordance with Section 3.2(b), or at such other time and place as the parties
to the transaction may agree. At such closing, the Involuntary Transferee shall
deliver certificates, if applicable, or other instruments or documents
representing the Transferred Shares being purchased under this Section 3.2, duly
endorsed with a signature guarantee for transfer and accompanied by all
requisite transfer taxes, if any, and such Transferred Shares shall be free and
clear of any Liens (other than those arising hereunder) arising through the
action or inaction of the Involuntary Transferee and the Involuntary Transferee
shall so represent and warrant, and further represent and warrant that it is the
beneficial owner of such Transferred Shares. The Company or each Rightholder, as
the case may be, purchasing such Transferred Shares shall deliver at closing
payment in full in immediately available funds for such Transferred Shares. At
such closing, all parties to the transaction shall execute such additional
documents as are otherwise necessary or appropriate.
(d) General. In the event that the provisions of this
Section 3.2 shall be held to be unenforceable with respect to any particular
Involuntary Transfer, the Company and the IT Rightholders shall have the rights
specified in Sections 3.1(b) and 3.1(c), respectively, with respect to any
transfer by an Involuntary Transferee of such Shares, and each IT Rightholder
agrees that any Involuntary Transfer shall be subject to such rights, in which
case the Involuntary Transferee shall be deemed to be the Selling Stockholder
for purposes of Section 3.1 of this Agreement and shall be bound by the
provisions of Section 3.1 and other related provisions of this Agreement.
3.3 Certain Transactions.
(a) Without the consent of (1) Blackstone and Xxxxxxxxxxx
for so long as Sponsor directly or indirectly beneficially owns fifty (50%)
percent or more of the outstanding shares of Common Stock of the Company and (2)
the members of the Board of Directors of the Company that are disinterested with
respect to the applicable matter and not designated for election by Heartland
Industrial Partners, L.P. (the "Disinterested Members"), for so long as Sponsor
directly or indirectly owns 25% or more of the Shares (equitably adjusted for
stock splits, stocks combinations and similar events) that it beneficially owns
on the date hereof after giving effect to the transactions contemplated by the
Stock Purchase Agreements, the Company and its subsidiaries will
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not enter into any transaction or series of related transactions with Sponsor or
any of its Affiliates involving payments or other consideration in excess of
$500,000; provided no such consent shall be required from Blackstone or
Xxxxxxxxxxx for any transaction that has been approved by a majority of the
directors of the Company who were not designated for election by Heartland
Industrial Partners, L.P. The foregoing restrictions will not apply to: (i) the
payments to Sponsor described in paragraph (b) below; (ii) from and after the
first anniversary hereof, the payment to Sponsor of advisory fees in connection
with acquisitions or divestiture by the Company or any of its subsidiaries in an
amount not exceeding 1% of the enterprise value thereof and out-of-pocket
expense reimbursement in connection therewith; (iii) reimbursement of
out-of-pocket fees and expenses by Sponsor in connection with the Transactions;
(iv) transactions involving the sale, purchase or lease of goods or services in
the ordinary course of business and on an arm's-length basis between or among
the Company or any of its subsidiaries and portfolio companies of Sponsor in an
amount involving not more than $1,250,000 in any transaction or series of
related transactions; (v) transactions between or among the Company or any of
its subsidiaries; (vi) issuances of securities in any rights offering made to
all stockholders of the Company; (vii) issuances of up to an aggregate of $25
million in value of Common Stock at fair market value in compliance with Section
3.3(d) if applicable; (viii) issuances of securities under the circumstances
contemplated by clauses (i), (ii)(x) and (iv) of Section 3.3(d); (ix) the
Company's entering into a Monitoring Fee Arrangement pursuant to which Heartland
will receive an annual monitoring fee of $4 million from the Company, payable
quarterly in advance; and (x) the Company's paying Heartland a transaction fee
not to exceed $12.0 million upon the closing of the Transaction. Heartland shall
not cause or permit the Company to take any action in contravention of Section
3.3(a).
(b) [Intentionally omitted]
(c) Without the prior written consent of Blackstone and
Xxxxxxxxxxx, the Investors shall not cause or permit the Company to effect any
transaction:
(i) which is a "Rule 13e-3 transaction," as
defined in Rule 13e-3(a)(3) of the Exchange Act as in effect on the
date hereof, unless such transaction is a transaction in which the
Major Stockholders and the Investor Stockholders are entitled to
receive the same form and amount per Share of consideration in such
transaction or any other transaction related thereto (such as a payment
for consulting or management services or non-compete payments but
disregarding the effect of the Profit Participation Agreement); or
(ii) which requires or permits any holder of
Common Stock to exchange or sell any of such shares for an amount in
cash and/or other consideration having a fair market value of less than
$5.00 per share (as adjusted for stock splits, stock dividends,
reclassifications and recapitalizations), except that this Section
3.3(c)(ii) shall not restrict the Company from engaging in open market
purchase programs consistent with past practice; or
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(iii) which causes the company to cease being
required to file periodic reports under Section 13(a) of the Exchange
Act, except as otherwise permitted by Section 3.3(c)(i).
(d) Except for (i) a subdivision of the
outstanding shares of Common Stock into a larger number of shares of Common
Stock, including by way of stock split or stock dividend, (ii) capital stock
issued upon exercise, conversion or exchange of any Common Stock Equivalent
either (x) previously issued or (y) issued in accordance with the terms of this
Section 3.3(d) or pursuant to the Stock Purchase Agreements, (iii) pursuant to
an effective registration statement filed under the Securities Act of 1933 , or
(iv) issuance of capital stock to all holders of Common Stock on a pro rata
basis (each, an "Exempt Issuance"), Sponsor shall not acquire from the Company
or any of its subsidiaries any capital stock or any other securities convertible
into or exchangeable for capital stock of the Company or its subsidiaries
(collectively, "New Securities") unless Sponsor shall offer each of the Investor
Stockholders and the Major Stockholders (each, a "Stock Issuance Rightholder"
and collectively, the "Stock Issuance Rightholders") an opportunity to
participate therein on a pro rata basis in the manner set forth in this Section
3.3(d) by sending a written notice (the "New Issuance Notice") to the Stock
Issuance Rightholders, which New Issuance Notice shall state (x) the number of
New Securities proposed to be issued and (y) the proposed purchase price per
security of the New Securities (the "Proposed Price"). Upon delivery of the New
Issuance Notice, such offer shall be irrevocable unless and until the rights
provided for in this Section 3.3(d) shall have been waived or shall have
expired. For a period of twenty (20) days after the giving of the New Issuance
Notice, each of the Stock Issuance Rightholders shall have the right to purchase
its Proportionate Percentage (as hereinafter defined) of the New Securities, at
a purchase price equal to the Proposed Price and upon the same terms and
conditions set forth in the New Issuance Notice. Each such Stock Issuance
Rightholder shall have the right to purchase that percentage of the New
Securities determined pro rata based on the number of Shares then owned by the
Investor Stockholders and the Major Stockholders that were acquired in purchases
directly from the Company or any subsidiary of the Company, whether pursuant to
the Stock Purchase Agreements or in issuances made in compliance with this
Section 3.3(d) or otherwise, as applicable. The right of each Stock Issuance
Rightholder to purchase the New Securities shall be exercisable by delivering
written notice of the exercise thereof prior to the expiration of the 20-day
period referred to above to the Sponsor, which notice shall state the amount of
New Securities that such Stock Issuance Rightholder elects to purchase pursuant
to this Section 3.3(d). The failure of a Stock Issuance Rightholder to respond
within such 20-day period shall be deemed to be a waiver of such Stock Issuance
Rightholder's rights under this Section 3.3(d), provided that each Stock
Issuance Rightholder may waive its rights under Section 3.3(d) prior to the
expiration of such 20-day period by giving written notice to the Company. Where
reasonably possible, the Sponsor shall give the New Issuance Notice at least 20
days prior to the issuance of capital stock to the Sponsor, but in any event,
such notice shall be given not later than five (5) days following any such
issuance.
(e) Notwithstanding anything to the contrary in this
Agreement, each of Blackstone (together with its Permitted Transferees and
Partner
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Transferees) and Xxxxxxxxxxx (together with its Permitted Transferees
and Partner Transferees) shall cease having the rights granted under Section 3.3
if Blackstone or Xxxxxxxxxxx, as applicable, together with its Permitted
Transferees and Partner Transferees, no longer holds at least 25% of the Shares
(equitably adjusted for stock splits, stock combinations and similar events)
held by Blackstone or Xxxxxxxxxxx, as applicable, on the date hereof after
giving effect to the transactions effected pursuant to the Original Stockholders
Stock Purchase Agreement.
3.4 Prohibition on Encumbrance. No Stockholder shall pledge,
hypothecate, grant a security interest in or subject to a Lien any of the shares
of Common Stock held by it; provided, however, that a Stockholder may pledge,
hypothecate, grant a security interest in or subject to a Lien such shares to a
lender if such lender agrees in writing to be bound by the terms of this
Agreement (and acknowledges that it shall not receive any of the rights granted
to Stockholders under this Agreement) and such lender is not granted any voting
rights with respect to Common Stock prior to foreclosure.
ARTICLE IV
[Intentionally Omitted.]
ARTICLE V
AFTER-ACQUIRED SECURITIES; AGREEMENT TO BE BOUND.
5.1 After-Acquired Securities. Except as otherwise provided
herein, all of the provisions of this Agreement shall apply to all of the Shares
and Common Stock Equivalents now owned or which may be issued or transferred
hereafter to a Stockholder in consequence of any additional issuance, purchase,
exchange or reclassification of any of such Shares or Common Stock Equivalents,
corporate reorganization, or any other form of recapitalization, consolidation,
merger, share split or share dividend, or which are acquired by a Stockholder in
any other manner.
5.2 Beneficial Ownership. In making calculations under this
Agreement, no Shares or Common Stock Equivalents owned by any Stockholder shall
be deemed to be beneficially owned by any other Stockholder solely because of
this Agreement and the transactions contemplated hereby.
ARTICLE VI
CORPORATE GOVERNANCE.
6.1 General. From and after the execution of this Agreement, each
Stockholder shall vote its Shares at any regular or special meeting of
stockholders of the Company (a "Stockholders Meeting") or in any written consent
executed in lieu of such a meeting of stockholders (a "Written Consent"), and
shall take all other actions necessary, to give effect to the provisions of this
Agreement (including, without limitation,
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Section 6.3 hereof) and to ensure that the Charter Documents do not, at any time
hereafter, conflict in any respect with the provisions of this Agreement. In
addition, each Stockholder shall vote his, her or its Shares at any Stockholders
Meeting or act by Written Consent with respect to such Shares, upon any matter
submitted for action by the Company's stockholders or with respect to which such
Stockholder may vote or act by Written Consent, in conformity with the specific
terms and provisions of this Agreement and the Charter Documents.
6.2 Stockholder Actions. In order to effectuate the provisions of
this Section 6, each Stockholder (a) hereby agrees that when any action or vote
is required to be taken by such Stockholder pursuant to this Agreement, such
Stockholder shall use his, her or its reasonable best efforts to call, or cause
the appropriate officers and directors of the Company to call, a Stockholders
Meeting, or to execute or cause to be executed a Written Consent to effectuate
such stockholder action, (b) shall use his, her or its reasonable best efforts
to cause the Board of Directors to adopt, either at a meeting of the Board of
Directors or by unanimous written consent of the Board of Directors, all the
resolutions necessary to effectuate the provisions of this Agreement, and (c)
shall use his, her or its reasonable best efforts to cause the Board of
Directors to cause the Secretary of the Company, or if there be no secretary,
such other officer of the Company as the Board of Directors may appoint to
fulfill the duties of Secretary, not to record any vote or consent contrary to
the terms of this Section 6.
6.3 Election of Directors; Number and Composition.
(a) Each Stockholder shall vote its Shares at any
Stockholders Meeting, or act by Written Consent with respect to such Shares, and
take all other actions necessary to ensure that the number of directors
constituting the entire Board of Directors shall be nine (9) prior to conversion
of the Convertible Preferred Stock and thirteen after such conversion. Each
Stockholder shall vote its Shares at any Stockholders Meeting called for the
purpose of filling the positions on the Board of Directors, or in any Written
Consent executed for such purpose, and take all other actions necessary to
ensure the election to the Board of Directors of the following: four (4)
individuals prior to conversion of the Convertible Preferred Stock and seven (7)
individuals after such conversion designated by Heartland Industrial Partners,
L.P. (collectively, the "Investor Directors" and each an "Investor Director"),
so long as in each case the Heartland Entities continue to hold at least 25% of
the Shares (subject to equitable adjustments for stock splits, stock
combinations and similar events) which the Heartland Entities hold on the date
hereof after giving effect to the transactions contemplated by the Stock
Purchase Agreements; one (1) individual designated by Blackstone (the
"Blackstone Director") as long as Blackstone and its direct or indirect
Permitted Transferees continue to hold at least 25% of the Shares (subject to
equitable adjustments for stock splits, stock combinations and similar events)
which Blackstone holds on the date hereof after the transactions effected
pursuant to the Stock Purchase Agreements; one (1) individual designated by
Xxxxxxxxxxx (the "Xxxxxxxxxxx Director") as long as Xxxxxxxxxxx and its direct
or indirect Permitted Transferees continue to hold at least 25% of the Shares
(subject to equitable adjustments for stock splits, stock combinations and
similar events) which Xxxxxxxxxxx holds on the date hereof after the
transactions effected pursuant to the
38
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Stock Purchase Agreements; two outside directors prior to conversion of the
Convertible Preferred Stock and three outside directors within 60 days of the
dates hereof but in any event after such conversion, in each case that satisfy
the independent director requirements of any securities exchange upon which the
Common Stock is then listed as in effect from time to time; and the person from
time to time serving as the Company's chief executive officer.
(b) Each of Blackstone and Xxxxxxxxxxx agrees that if the
Charter Amendment Effective Date (as defined in the Company Stock Purchase
Agreement) has not occurred on or prior to the date that is 45 days after the
date of this Agreement, it shall cause one of the two members of the Board of
Directors designated by them (the "B/W Director") to resign and shall thereafter
at all times prior to the Charter Amendment Effective Date vote its Shares at
any Stockholders Meeting called for the purpose of filling the positions on the
Board of Directors, or in any Written Consent executed for such purpose, and
take all other actions necessary to ensure the election to the Board of
Directors of five (5) individuals designated by Heartland Industrial Partners,
L.P. After the Charter Amendment Effective Date, Blackstone and Xxxxxxxxxxx'x
rights under Section 6.3(a) shall be fully restored. At such time as this clause
(b) shall be in effect Blackstone and Xxxxxxxxxxx shall have the right to
designate one Observer to the board who shall have the rights, and be subject to
the restrictions, set forth in Section 6.7.
6.4 Removal and Replacement of Director.
(a) Removal of Directors. If at any time the Investor
Stockholders, Blackstone or Xxxxxxxxxxx notifies the other Stockholders of their
or its wish to remove at any time and for any reason (or no reason) a director
designated by them or it, then each Stockholder shall vote, or execute a Written
Consent for, all of its Shares so as to remove such director.
(b) Replacement of Directors.
(i) If at any time, a vacancy is created on the
Board of Directors by reason of the incapacity, death, removal or
resignation of any of the director designated pursuant to Section 6.3
hereof, then the Stockholder(s) who designated such director shall
designate an individual who shall be elected to fill the vacancy until
the next Stockholders Meeting.
(ii) Upon receipt of notice of the designation of
a nominee pursuant to Section 6.4(b)(i), each Stockholder shall, as
soon as practicable after the date of such notice, take all reasonable
actions, including the voting of its Shares or executing a Written
Consent, to elect the director so designated to fill the vacancy.
6.5 Reimbursement of Expenses; D&O Insurance. The Company shall
reimburse the Investor Stockholders, Blackstone and Xxxxxxxxxxx or their
respective designees, for all reasonable travel and accommodation expenses
incurred by the Investor
39
21
Directors, the Blackstone Director and the Xxxxxxxxxxx Director in connection
with attendance at meetings of the Board of Directors and committees thereof
upon presentation of appropriate documentation therefor. The Company shall, and
each Stockholder shall use reasonable commercial efforts to cause the Board of
Directors to cause the Company to, maintain a directors' liability insurance
policy that is reasonably acceptable to the Investor Directors, the Blackstone
Director and the Xxxxxxxxxxx Director.
6.6 Quorum. A quorum of the Board of Directors shall consist of
six (6) directors. All actions of the Board shall require approval by a majority
of the Board of Directors present at a meeting of the Board of Directors at
which a quorum is present.
6.7 Observer Rights. In the case of a Qualified Investor, for so
long as such Qualified Investor retains a number of shares of Common Stock equal
to at least a majority of the shares of Common Stock owned by such Person
immediately following the date hereof (subject to equitable adjustments for
stock splits, stock combinations and similar events), such Person will have
right to send one Representative on its behalf (the "Observer") to attend all
meetings of the Board of Directors, including all committees thereof (other than
meetings at which confidential matters related to the Qualified Investor or its
Observer are discussed and other than confidential audit and compensation
committee meetings), solely in a non-voting observer capacity. The Company will
furnish to the Observer copies of all notices, minutes, consents and other
materials that it generally makes available to its directors. The Observer may
participate in discussions of matters under consideration by the Board of
Directors and any matters brought before any committee thereof but will not be
entitled to vote on any matter presented to the Board of Directors. Any
Qualified Investor will have the right to remove and replace its Observer in its
sole discretion and to designate a substitute representative if its Observer is
unable or unwilling to attend any of the Board's meetings, including any
committees thereof. In no event shall there be at any time more than three
Observers (in addition to any Observer under Section 6.3(b) without the approval
of a majority of the directors not designated by Heartland Industrial Partners,
L.P. Notwithstanding the foregoing, if the Company is advised by counsel that
the rules of the Securities and Exchange Commission or other applicable
securities laws require that the Observer and/or the Qualified Investor
appointing the same be subject to a confidentiality agreement, then such
Observer and/or the Qualified Investor shall enter into such reasonable form of
confidentiality agreement that the Company shall request.
ARTICLE VII
COVENANTS.
7.1 Financial Statements and Other Information. The Company shall
deliver to each Investor Stockholder, Blackstone and Xxxxxxxxxxx such financial
statements (including monthly financial statements), reports and information as
may be reasonably requested by any of the Investor Stockholders, Blackstone or
Xxxxxxxxxxx including a copy of any filings by the Company with the Commission.
40
22
7.2 Inspection. The Company shall permit representatives of the
Investor Stockholders, Blackstone and Xxxxxxxxxxx to visit and inspect any of
its properties, to examine its corporate, financial and operating records and
make copies thereof or abstracts therefrom, and to discuss its affairs, finances
and accounts with their respective directors, officers and independent public
accountants, all at such reasonable times during normal business hours and as
often as may be reasonably requested upon reasonable advance notice to the
Company. No Stockholder beneficially owning less than 5% of the outstanding
Common Stock shall be entitled to any of the rights under this Section 7.2.
ARTICLE VIII
STOCK CERTIFICATE LEGEND
8.1 A copy of this Agreement shall be filed with the Secretary of
the Company and kept with the records of the Company. Each certificate
representing Shares now held or hereafter acquired by any Stockholder shall for
as long as this Agreement is effective (until a transfer pursuant to Rule 144 or
an effective registration statement filed under the Securities Act) bear legends
substantially in the following forms:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
THE SALE, ASSIGNMENT, HYPOTHECATION, PLEDGE, ENCUMBRANCE OR OTHER
DISPOSITION (EACH A "TRANSFER") AND VOTING OF ANY OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE TERMS OF THE
STOCKHOLDERS AGREEMENT, DATED __, 2001, AMONG THE COMPANY AND THE
STOCKHOLDERS NAMED THEREIN, A COPY OF WHICH MAY BE INSPECTED AT THE
COMPANY'S PRINCIPAL OFFICE. THE COMPANY WILL NOT REGISTER THE TRANSFER
OF SUCH SECURITIES ON THE BOOKS OF THE COMPANY UNLESS AND UNTIL THE
TRANSFER HAS BEEN MADE IN COMPLIANCE WITH THE TERMS OF THE STOCKHOLDERS
AGREEMENT.
41
23
ARTICLE IX
MISCELLANEOUS
9.1 Notices. All notices, demands or other communications provided
for or permitted hereunder shall be made in writing and shall be by telecopier,
courier service, or personal delivery:
(a) Xxxxxxx & Xxxxxx Corporation
0000 Xxx Xxxx Xxxxx
Xxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxx, CEO
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx, General Counsel
with copies to:
Morris, Nichols, Arsht & Xxxxxxx
0000 X. Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxx
Xxxxxx Xxxxxxx & Xxxx LLP
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxxx
(b) if to the New Investor:
Heartland Industrial Partners, L.P.
00 Xxxxxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx
42
24
with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: W. Xxxxxx Xxxxx, Esq.
Xxxxxxxx X. Xxxxxxxxx, Esq.
(c) if to Sellers:
Blackstone Capital Partners L.P.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxxxxxx
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxxxxxx, Esq.
and
Wasserstein, Perella Management Partners
1301 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X'Xxxxxxx
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
(d) if to any other Stockholder, at its address
as it appears on the record books of the
Company.
43
25
All such notices, demands and other communications shall be deemed to have been
duly given when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial courier service; and when receipt is
mechanically acknowledged, if telecopied. Any party may by notice given in
accordance with this Section 9.1 designate another address or Person for
receipt of notices hereunder.
9.2 SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES. This
Agreement shall inure to the benefit of and be binding upon successors and
permitted assigns of the parties hereto. This Agreement is not assignable
except in connection with a transfer of Shares in accordance with this
Agreement. No Person other than the parties hereto and their successors and
permitted assigns is intended to be a beneficiary of this Agreement.
9.3 AMENDMENT AND WAIVER.
(a) No failure or delay on the part of any party hereto
in exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies provided for herein are cumulative
and are not exclusive of any remedies that may be available to the parties
hereto at law, in equity or otherwise.
(b) Any amendment, supplement or modification of or to
any provision of this Agreement, any waiver of any provision of this Agreement,
and any consent to any departure by any party from the terms of any provision
of this Agreement, shall be effective only if it is made or given in writing
and signed by (i) the Company, and (ii) each Stockholder who is adversely
affected by such amendment, supplement, modification, waiver, consent or
departure. Any such amendment, supplement, modification, waiver or consent
shall be binding upon the Company and all of the Stockholders.
9.4 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and by the parties hereto in separate counterparts each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
9.5 SPECIFIC PERFORMANCE. The parties hereto intend that each of
the parties have the right to seek damages or specific performance in the event
that any other party hereto fails to perform such party's obligations
hereunder. Therefore, if any party shall institute any action or proceeding to
enforce the provisions hereof, any party against whom such action or proceeding
is brought hereby waives any claim or defense therein that the plaintiff party
has an adequate remedy at law.
9.6 HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
9.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF
44
26
THE STATE OF DELAWARE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREOF.
9.8 SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall materially impair the
benefits of the remaining provisions hereof.
9.9 RULES OF CONSTRUCTION. Unless the context otherwise requires,
references to sections or subsections refer to sections or subsections of this
Agreement.
9.10 ENTIRE AGREEMENT. This Agreement, together with the exhibits
hereto, is intended by the parties as a final expression of their agreement and
intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein and therein. There are no restrictions, promises, representations,
warranties or undertakings, other than those set forth or referred to herein or
therein. This Agreement, together with the exhibits hereto, supersede all prior
agreements and understandings among the parties with respect to such subject
matter.
9.11 FURTHER ASSURANCES. Each of the parties shall, and shall
cause their respective Affiliates to, execute such documents and perform such
further acts as may be reasonably required or desirable to carry out or to
perform the provisions of this agreement.
[Remainder of page intentionally left blank]
45
27
IN WITNESS WHEREOF, the undersigned have executed, or have
caused to be executed, this Agreement on the date first written above.
Xxxxxxx & Xxxxxx Corporation
By:
--------------------------------------------------
Name:
Title:
Heartland Industrial Partner, L.P.
By: Heartland Industrial Associates L.L.C.,
its general partner
By:
--------------------------------------------------
Name:
Title:
Blackstone Capital Partners L.P.
By: Blackstone Management Associates L.P., its
general partner
By:
--------------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Signatory
Blackstone Advisory Directors Partnership L.P.
By: Blackstone Management Associates L.P., its
general partner
By:
--------------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Signatory
Blackstone Family Investment Partnership I L.P.
By: Blackstone Management Associates I L.L.C., its
general partner
By:
--------------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Signatory
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28
Blackstone Capital Company II, L.L.C.
By:
--------------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Signatory
Xxxxxxxxxxx/C & A Holdings, L.L.C.
By:
--------------------------------------------------
Name:
Title:
The undersigned hereby execute this Agreement on the date
first written above for purposes of Section 1.2 only.
Xxxxxxx & Xxxxxx Group, Inc.
By:
--------------------------------------------------
Name:
Title:
Xxxxxxxxxxx Xxxxxxx Partners, L.P.
By: Xxxxxxxxxxx Xxxxxxx Management Partners, Inc.,
its general partner
By:
--------------------------------------------------
Name:
Title:
47
EXHIBIT A
ACKNOWLEDGMENT AND AGREEMENT
The undersigned wishes to receive from [NAME] ("Transferor")
certain shares or certain options, warrants or other rights to purchase
[NUMBER] shares, par value $[NUMBER] per share, of Common Stock (the "Shares")
of Xxxxxxx & Xxxxxx Corporation, a Delaware corporation (the "Company");
The Shares are subject to the Stockholders Agreement, dated
[ ], 2001 (the "Agreement"), among the Company and the other parties listed on
the signature pages thereto;
The undersigned has been given a copy of the Agreement and
afforded ample opportunity to read and to have counsel review it, and the
undersigned is thoroughly familiar with its terms;
Pursuant to the terms of the Agreement, the Transferor is
prohibited from transferring such Shares and the Company is prohibited from
registering the transfer of the Shares unless and until a transfer is made in
accordance with the terms and conditions of the Agreement and the recipient of
such Shares acknowledges the terms and conditions of the Agreement and agrees
to be bound thereby; and
The undersigned wishes to receive such Shares and have the
Company register the transfer of such Shares.
In consideration of the mutual promises contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and to induce the Transferor to transfer such Shares
to the undersigned and the Company to register such transfer, the undersigned
does hereby acknowledge and agree that (i) he[/she] has been given a copy of
the Agreement and afforded ample opportunity to read and to have counsel review
it, and the undersigned is thoroughly familiar with its terms, (ii) the Shares
are subject to the terms and conditions set forth in the Agreement, and (iii)
the undersigned does hereby agree fully to be bound thereby as [an " Investor"]
[a "Major Stockholder"] (as therein defined).
This ________ day of ________, 20__.
48
SCHEDULE I
INVESTORS
[To be completed prior to closing and to include only Permitted Transferees of
Heartland and other investors, subject to approval of Original Stockholders,
not to be unreasonably withheld.]
49
Exhibit B
================================================================================
REGISTRATION RIGHTS AGREEMENT
by and among
BLACKSTONE CAPITAL COMPANY II, L.L.C.,
HEARTLAND INDUSTRIAL PARTNERS, L.P.,
XXXXXXXXXXX/C&A HOLDINGS, L.L.C.,
and
XXXXXXX & XXXXXX CORPORATION
--------------------------
Dated: ______ __, 2001
--------------------------
================================================================================
50
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS............................................................ 2
1.1 Definitions.................................................... 2
ARTICLE II GENERAL; SECURITIES SUBJECT TO THIS AGREEMENT......................... 4
2.1 Grant of Rights................................................ 4
2.2 Registrable Securities......................................... 4
2.3 Holders of Registrable Securities.............................. 5
ARTICLE III DEMAND REGISTRATION.................................................. 5
3.1 Request for Demand Registration................................ 5
3.2 Incidental or "Piggy-Back" Rights with Respect to a Demand
Registration................................................... 6
3.3 Effective Demand Registration.................................. 7
3.4 Expenses....................................................... 7
3.5 Underwriting Procedures........................................ 7
3.6 Selection of Underwriters...................................... 8
ARTICLE IV INCIDENTAL OR "PIGGY-BACK" REGISTRATION............................... 8
4.1 Request for Incidental Registration............................ 8
4.2 Expenses....................................................... 9
ARTICLE V HOLDBACK AGREEMENTS.................................................... 9
5.1 Restrictions on Public Sale by Designated Holders.............. 9
5.2 Restrictions on Public Sale by the Company..................... 9
ARTICLE VI REGISTRATION PROCEDURES............................................... 10
6.1 Obligations of the Company..................................... 10
6.2 Seller Information(a).......................................... 13
6.3 Notice to Discontinue.......................................... 13
6.4 Registration Expenses.......................................... 14
ARTICLE VII INDEMNIFICATION; CONTRIBUTION........................................ 14
7.1 Indemnification by the Company................................. 14
7.2 Indemnification by Designated Holders.......................... 15
7.3 Conduct of Indemnification Proceedings......................... 15
7.4 Contribution................................................... 16
ARTICLE VIII COVENANTS........................................................... 17
8.1 Rule 144....................................................... 17
8.2 Xxxxxxxxxxx and Blackstone Priority of Sale.................... 17
ARTICLE IX MISCELLANEOUS......................................................... 17
9.1 Recapitalizations, Exchanges, etc.............................. 17
9.2 No Inconsistent Agreements..................................... 18
51
9.3 Remedies....................................................... 18
9.4 Notices........................................................ 18
9.5 Successors and Assigns; Third Party Beneficiaries.............. 20
9.6 Amendments and Waivers......................................... 20
9.7 Counterparts................................................... 20
9.8 Headings....................................................... 20
9.9 GOVERNING LAW.................................................. 20
9.10 Severability................................................... 20
9.11 Rules of Construction.......................................... 21
9.12 Entire Agreement............................................... 21
9.13 Further Assurances............................................. 21
9.14 Other Agreements............................................... 21
52
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated , 2001, by and among
Xxxxxxx & Xxxxxx Corporation, a Delaware corporation (the "COMPANY"), Heartland
Industrial Partners, L.P. ("Heartland") and the other investor stockholders
listed on Schedule 1 hereto (together with Heartland, the "INVESTORS"),
Blackstone Capital Company II, L.L.C. ("BLACKSTONE CAPITAL II"), Blackstone
Family Investment Partnership I L.P. ("BLACKSTONE FAMILY"), Blackstone Advisory
Directors Partnership L.P. ("BLACKSTONE ADVISORY") and Blackstone Capital
Partners, L.P. ("BLACKSTONE CAPITAL") (together with Blackstone Capital II,
Blackstone Family and Blackstone Advisory, "BLACKSTONE") and Xxxxxxxxxxx/C&A
Holdings, L.L.C. ("XXXXXXXXXXX," together with Blackstone, the "ORIGINAL
STOCKHOLDERS").
WHEREAS, pursuant o the Share Purchase Agreement, dated
January , 2001 (the "COMPANY STOCK PURCHASE AGREEMENT"), by and between the
Company and Heartland, the Company is selling to the Investors (x) an aggregate
of 1,000,000 shares of Non-Voting Convertible Preferred Stock, par value $.01
per share (the "CONVERTIBLE PREFERRED SHARES"), which is convertible into
16,400,000 shares of Common Stock, par value $ 0.01 per share, of the Company
(the "COMMON STOCK") and (y) 8,600,000 shares (the "Treasury Shares") of Common
Stock.
WHEREAS, pursuant to the Stock Purchase Agreement, dated
January , 2001 (the "SECONDARY STOCK PURCHASE AGREEMENT" and, together with the
Company Stock Purchase Agreement, the "STOCK PURCHASE AGREEMENTS"), the Original
Stockholders are selling to the Investors an aggregate of 27,000,000 shares of
Common Stock;
WHEREAS, concurrently herewith, the Company, the Investors and
the Original Stockholders are entering into the Stockholders Agreement (as
hereinafter defined), pursuant to which the parties thereto have agreed to,
among other things, certain first offer and tag-along rights, preemptive rights
and certain corporate governance rights and obligations; and
WHEREAS, in order to induce each of the Investors to purchase
its shares of Common Stock as provided in the Stock Purchase Agreements, and to
induce the parties hereto to enter into the Stockholders Agreement, the Company
has agreed to grant registration rights with respect to the Registrable
Securities (as hereinafter defined) as set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
53
2
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"AFFILIATE" has the meaning specified in the Stockholders
Agreement.
"AGREEMENT" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"APPROVED UNDERWRITER" has the meaning set forth in Section
3.6.
"BLACKSTONE HOLDERS OR STOCKHOLDERS" means Blackstone and its
Permitted Transferees and Partner Transferees to whom Registrable Securities are
transferred in accordance with Section 2.2 of the Stockholders Agreement and
Section 9.5 of this Agreement.
"BOARD OF DIRECTORS" means the Board of Directors of the
Company.
"BUSINESS DAY" means any day other than a Saturday, Sunday or
other day on which commercial banks in the State of New York are authorized or
required by law or executive order to close.
"COMMISSION" means the Securities and Exchange Commission or
any similar agency then having jurisdiction to enforce the Securities Act.
"COMMON STOCK" has the meaning set forth in the preamble to
this Agreement or any other capital stock of the Company into which such stock
is reclassified or reconstituted and any other common stock of the Company and
shall include the Convertible Preferred Shares for all purposes of this
Agreement, whether or not converted.
"COMPANY" has the meaning set forth in the preamble to this
Agreement.
"COMPANY UNDERWRITER" has the meaning set forth in Section
4.1.
"CONVERTIBLE PREFERRED SHARES" has the meaning set forth in
the preamble to this Agreement.
"DEMAND REGISTRATION" has the meaning set forth in Section
3.1.
"DESIGNATED HOLDER" means each of the Investors, the Major
Stockholders and any transferee of any of them to whom Registrable Securities
have been transferred in accordance with Section 9.5, other than a transferee to
whom Registrable Securities have been transferred pursuant to a Registration
Statement under the Securities Act or Rule 144 or Regulation S under the
Securities Act (or any successor rule thereto).
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3
"EXCHANGE ACT" means the United States Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Commission thereunder.
"HEARTLAND" has the meaning set forth in the preamble to this
Agreement.
"HEARTLAND ENTITIES" has the meaning ascribed thereto in the
Stockholders Agreement.
"HOLDER'S COUNSEL" has the meaning set forth in Section
6.1(a).
"INCIDENTAL REGISTRATION" has the meaning set forth in Section
4.1.
"INDEMNIFIED PARTY" has the meaning set forth in Section 7.3.
"INDEMNIFYING PARTY" has the meaning set forth in Section 7.3.
"INITIATING HOLDERS" has the meaning set forth in Section 3.1.
"INSPECTOR" has the meaning set forth in Section 6.1(g).
"INVESTORS" has the meaning set forth in the preamble to this
Agreement.
"INVESTOR STOCKHOLDERS" means each Investor and any Permitted
Transferee thereof to whom Registrable Securities are transferred in accordance
with Section 2.2 of the Stockholders Agreement and Section 9.5 of this
Agreement.
"LIABILITY" has the meaning set forth in Section 7.1.
"MAJOR STOCKHOLDERS" means each Original Stockholder and any
Permitted Transferee or Partner Transferee thereof to whom Registrable
Securities are transferred in accordance with Section 2.2 of the Stockholders
Agreement and Section 9.5 of this Agreement.
"MAJORITY OF THE INVESTOR STOCKHOLDERS" means the Investor
Stockholders holding a majority of the Registrable Securities held by all
Investor Stockholders.
"MAJORITY OF BLACKSTONE STOCKHOLDERS" means the Blackstone
Stockholders holding a majority of the Registrable Securities held by all
Blackstone Stockholders.
"MAJORITY OF XXXXXXXXXXX STOCKHOLDERS" means the Xxxxxxxxxxx
Stockholders holding a majority of the Registrable Securities held by all
Xxxxxxxxxxx Stockholders.
"NASD" means the National Association of Securities Dealers,
Inc.
"PARTNER TRANSFEREE" has the meaning ascribed to such term in
the Stockholders Agreement.
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"PERMITTED TRANSFEREE" has the meaning ascribed to such term
in the Stockholders Agreement.
"PERSON" means any individual, firm, corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company, government (or an agency or political
subdivision thereof) or other entity of any kind, and shall include any
successor (by merger or otherwise) of such entity.
"RECORDS" has the meaning set forth in Section 6.1(g).
"REGISTRABLE SECURITIES" means, subject to Section 2.2, each
of the following: (a) any and all shares of Common Stock owned by the Designated
Holders and (b) any shares of Common Stock issued or issuable to any of the
Designated Holders with respect to the Registrable Securities by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization or otherwise and
any shares of Common Stock or voting common stock issuable upon conversion,
exercise or exchange thereof.
"REGISTRATION EXPENSES" has the meaning set forth in Section
6.4.
"REGISTRATION STATEMENT" means a registration statement filed
pursuant to the Securities Act.
"SECURITIES ACT" means the United States Securities Act of
1933, as amended, and the rules and regulations of the Commission promulgated
thereunder.
"VALID BUSINESS REASON" has the meaning set forth in Section
3.1.
"XXXXXXXXXXX HOLDERS OR STOCKHOLDERS" means Xxxxxxxxxxx and
its Permitted Transferees and Partner Transferees to whom Registrable Securities
are transferred in accordance with Section 2.2 of the Stockholders Agreement and
Section 9.5 of this Agreement.
Any terms not defined herein shall have the meanings ascribed
thereto in the Stockholders Agreement.
ARTICLE II
GENERAL; SECURITIES SUBJECT TO THIS AGREEMENT
2.1 GRANT OF RIGHTS. The Company hereby grants registration rights
to the Designated Holders upon the terms and conditions set forth in this
Agreement.
2.2 REGISTRABLE SECURITIES. For the purposes of this Agreement,
Registrable Securities will cease to be Registrable Securities, when (i) a
Registration Statement covering such securities has been declared effective
under the Securities Act
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by the Commission and such securities have been disposed of pursuant to such
effective Registration Statement or (ii) (x) with respect to a Designated
Holder, the entire amount of such Designated Holder's Registrable Securities may
be sold in a single sale, in the opinion of counsel satisfactory to the Company
and the Designated Holder, each in their reasonable judgment, without any
limitation as to volume pursuant to Rule 144 (or any successor provision then in
effect) under the Securities Act and (y) the Designated Holder owning such
Registrable Securities owns less than one percent (1%) of the outstanding shares
of Common Stock on a fully diluted basis.
2.3 HOLDERS OF REGISTRABLE SECURITIES. A Person is deemed to be a
holder of Registrable Securities whenever such Person owns of record Registrable
Securities, or holds an option to purchase, or a security convertible into or
exercisable or exchangeable for, Registrable Securities whether or not such
acquisition or conversion has actually been effected. If the Company receives
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities, the Company may act upon the basis
of the instructions, notice or election received from the registered owner of
such Registrable Securities. Registrable Securities issuable upon exercise of an
option or upon conversion of another security shall be deemed outstanding for
the purposes of this Agreement.
ARTICLE III
DEMAND REGISTRATION
3.1 REQUEST FOR DEMAND REGISTRATION. Blackstone or Blackstone
Holders designated by Blackstone (the "Initiating Blackstone Holders"),
Xxxxxxxxxxx or Xxxxxxxxxxx Holders designated by Xxxxxxxxxxx (the "INITIATING
XXXXXXXXXXX HOLDERS"), and Heartland or an Investor Stockholder designated by
the Heartland Entities (the "INITIATING INVESTOR HOLDERS," each of the
Initiating Blackstone Holders, the Initiating Xxxxxxxxxxx Holders and the
Initiating Investor Holders shall be known as the "INITIATING HOLDERS," as
appropriate), may each make a written request to the Company to register, and
the Company shall register, under the Securities Act (other than pursuant to a
Registration Statement on Form S-4 or S-8 or any successor thereto) a "DEMAND
REGISTRATION", the number of Registrable Securities stated in such request;
PROVIDED, HOWEVER, that the Company shall not be obligated to effect (x) more
than four (4) such Demand Registrations at the request of Initiating Investor
Holders, and (y) in the aggregate not more than four (4) such Demand
Registrations at the request of Initiating Blackstone and Initiating Xxxxxxxxxxx
Holders: two of which shall be at the request of Initiating Blackstone Holders
and two of which shall be at the request of Initiating Xxxxxxxxxxx Holders. For
purposes of the preceding sentence, two or more Registration Statements filed in
response to one demand shall be counted as one Demand Registration; provided,
however, that any such Registration Statement filed at the request of an
Initiating Holder and subsequently withdrawn at the request of that Initiating
Holder shall be counted as a Demand Registration unless the withdrawing
Initiating Holder pays the expenses associated with such Registration Statement
in which case such Registration shall not be so counted. Notwithstanding
anything to the contrary contained herein, no Demand Registration need be
effected by the Company within six (6) months after the
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effectiveness of any registration statement pursuant to a Demand Registration.
The Company shall not be obliged to include more than 10 million Shares (as
equitably adjusted for stock splits, stock combinations and similar events) in
any Registration Statement pursuant to a Demand Registration, inclusive of any
Shares to be included pursuant to any incidental or piggy-back rights under this
Agreement. If the Board of Directors, in its good faith judgment, determines
that any registration of Registrable Securities should not be made or continued
because it would materially interfere with any material financing, acquisition,
corporate reorganization or merger or other material transaction involving the
Company (a "VALID BUSINESS REASON"), the Company may (x) postpone filing a
registration statement relating to a Demand Registration until such Valid
Business Reason no longer exists, but in no event for more than ninety (90)
days, and (y) in case a registration statement has been filed relating to a
Demand Registration, if the Valid Business Reason has not resulted from actions
taken by the Company, the Company, upon the approval of a majority of the Board
of Directors, such majority to include at least one Investor Director and the
Blackstone Director, if applicable, and the Xxxxxxxxxxx Director, if applicable,
may cause such registration statement to be withdrawn and its effectiveness
terminated or may postpone amending or supplementing such registration
statement. The Company shall give written notice of its determination to
postpone or withdraw a registration statement and of the fact that the Valid
Business Reason for such postponement or withdrawal no longer exists, in each
case, promptly after the occurrence thereof. Notwithstanding anything to the
contrary contained herein, the Company may not postpone or withdraw a filing
under this Section 3.1 more than once in any twelve (12) month period. Each
request for a Demand Registration by the Initiating Holders shall state the
amount of the Registrable Securities proposed to be sold and the intended method
of disposition thereof.
3.2 INCIDENTAL OR "PIGGY-BACK" RIGHTS WITH RESPECT TO A DEMAND
REGISTRATION. Each of the Designated Holders (other than Initiating Holders
which have requested a registration under Section 3.1) may offer its or his
Registrable Securities under any Demand Registration pursuant to this Section
3.2. Within five (5) Business Days after the receipt of a request for a Demand
Registration from an Initiating Holder, the Company shall (i) give written
notice thereof to all of the Designated Holders (other than Initiating Holders
which have requested a registration under Section 3.1) and (ii) subject to
Section 3.5, include in such registration all of the Registrable Securities held
by such Designated Holders from whom the Company has received a written request
for inclusion therein within ten (10) days of the receipt by such Designated
Holders of such written notice referred to in clause (i) above. Each such
request by such Designated Holders shall specify the number of Registrable
Securities proposed to be registered. The failure of any Designated Holder to
respond within such 10-day period referred to in clause (ii) above shall be
deemed to be a waiver of such Designated Holder's rights under this Article III
with respect to such Demand Registration. Any Designated Holder may waive its
rights under this Article III prior to the expiration of such 10-day period by
giving written notice to the Company, with a copy to the Initiating Holders. If
a Designated Holder sends the Company a written request for inclusion of part or
all of such Designated Holder's Registrable Securities in a registration, such
Designated Holder shall not be entitled to withdraw or revoke such request
without the prior written consent of the Company in its sole discretion unless,
as a result of facts or circumstances arising
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after the date on which such request was made relating to the Company or to
market conditions, such Designated Holder reasonably determines that
participation in such registration would have a material adverse effect on such
Designated Holder.
3.3 EFFECTIVE DEMAND REGISTRATION. The Company shall use its
reasonable best efforts to cause any such Demand Registration to become
effective not later than sixty (60) days after it receives a request under
Section 3.1 hereof. A registration shall not constitute a Demand Registration
until it has become effective and remains continuously effective for the shorter
of (i) 90 days and (ii) the period during which all Registrable Securities
registered in the Demand Registration are sold; PROVIDED, HOWEVER, that a
registration shall not constitute a Demand Registration if (x) after such Demand
Registration has become effective, such registration or the related offer, sale
or distribution of Registrable Securities thereunder is interfered with by any
stop order, injunction or other order or requirement of the Commission or other
governmental agency or court for any reason not attributable to the Initiating
Holders and such interference is not thereafter eliminated or (y) the conditions
specified in the underwriting agreement, if any, entered into in connection with
such Demand Registration are not satisfied or waived, other than by reason of a
failure by the Initiating Holder or (z) the Company exercises its rights of
postponement, termination or withdrawal under Section 3.1.
3.4 EXPENSES. The Company shall pay all Registration Expenses in
connection with a Demand Registration, whether or not such Demand Registration
becomes effective.
3.5 UNDERWRITING PROCEDURES. If the Company or the Initiating
Holders holding a majority of the Registrable Securities held by all of the
Initiating Holders so elect, the Company shall use its reasonable best efforts
to cause such Demand Registration to be in the form of a firm commitment
underwritten offering and the managing underwriter or underwriters selected for
such offering shall be the Approved Underwriter selected in accordance with
Section 3.6. In connection with any Demand Registration under this Article III
involving an underwritten offering, none of the Registrable Securities held by
any Designated Holder making a request for inclusion of such Registrable
Securities pursuant to Section 3.2 hereof shall be included in such underwritten
offering unless such Designated Holder accepts the terms of the offering as
agreed upon by the Company, the Initiating Holders and the Approved Underwriter
(including execution of an escrow agreement and/or a power of attorney with
respect to the disposition of the Registrable Securities), and then only in such
quantity as will not, in the opinion of the Approved Underwriter, jeopardize the
success of such offering by the Initiating Holders. If the Approved Underwriter
advises the Company that the aggregate amount of such Registrable Securities
requested to be included in such offering is sufficiently large to have a
material adverse effect on the success of such offering, then the Company shall
include in such registration only the aggregate amount of Registrable Securities
that the Approved Underwriter believes may be sold without any such material
adverse effect and shall reduce the amount of Registrable Securities to be
included in such registration, first as to the Company and any holder of capital
stock of the Company who is not a Designated Holder, second as to the Investors
as a group, pro rata based on
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the number of Registrable Securities owned by each Investor and third as to
Blackstone Holders and Xxxxxxxxxxx Holders as a group, pro rata based on the
number of Registrable Securities then owned by each.
3.6 SELECTION OF UNDERWRITERS. If any Demand Registration, as the
case may be, of Registrable Securities is in the form of an underwritten
offering, the Company shall select and obtain an investment banking firm of
national reputation to act as the managing underwriter of the offering (the
"Approved Underwriter"); provided, however, that the Approved Underwriter shall,
in any case, also be approved by the Initiating Holders such approval not to be
unreasonably withheld.
ARTICLE IV
INCIDENTAL OR "PIGGY-BACK" REGISTRATION
4.1 REQUEST FOR INCIDENTAL REGISTRATION. If the Company proposes
to file a Registration Statement under the Securities Act with respect to an
offering by the Company for its own account (other than a Registration Statement
on Form S-4 or S-8 or any successor thereto) (a "COMPANY OFFERING") or for the
account of any stockholder of the Company other than the Designated Holders
(each such Stockholder, a "NON-DESIGNATED STOCKHOLDER" and such offering a
"NON-DESIGNATED STOCKHOLDER OFFERING"), then the Company shall give written
notice of such proposed filing to each of the Designated Holders at least ten
(10) Business Days before the anticipated filing date, and such notice shall
describe the proposed registration and distribution and offer such Designated
Holders the opportunity to register the number of Registrable Securities as each
such Designated Holder may request (an "INCIDENTAL REGISTRATION"). The Company
shall use its reasonable best efforts to cause the managing underwriter or
underwriters in the case of a proposed underwritten offering (the "COMPANY
UNDERWRITER") to permit each of the Designated Holders who have requested in
writing to participate in the Incidental Registration to include its or his
Registrable Securities in such offering on the same terms and conditions as the
securities of the Company or the securities of such Non-Designated Stockholders,
as the case may be, included therein. In connection with any Incidental
Registration under this Section 4.1 involving an underwritten offering, the
Company shall not be required to include any Registrable Securities in such
underwritten offering unless the Designated Holders thereof accept the terms of
the underwritten offering as agreed upon between the Company, such
Non-Designated Stockholders, if any, and the Company Underwriter (including
execution of an escrow agreement and/or a power of attorney with respect to the
disposition of the Registrable Securities), and then only in such quantity as
the Company Underwriter believes will not jeopardize the success of the offering
by the Company. If the Company Underwriter determines that the registration of
all or part of the Registrable Securities which the Designated Holders have
requested to be included would materially adversely affect the success of such
offering, then the Company shall be required to include in such Incidental
Registration, to the extent of the amount that the Company Underwriter believes
may be sold without causing such adverse effect, (i) in the case of a Company
Offering: FIRST, all of the securities to be offered for the account of the
Company; SECOND, the Registrable Securities to be offered for the account of
Blackstone Holders and Xxxxxxxxxxx Holders, pro rata based on the
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number of Registrable Securities then owned by each; and THIRD, any other
securities requested to be included in such offering by the Investors and any
other Person pro rata based on the number of Registrable Securities then owned
by each; and (ii) in the case of a Non-Designated Stockholder Offering: FIRST,
the Registrable Securities to be offered for the account of Blackstone Holders
and Xxxxxxxxxxx Holders pro rata based on the number of Registrable Securities
owned by each; SECOND, all of the securities to be offered for the account of
the Company, such Non-Designated Stockholder and the Investors pro rata based on
the number of securities then owned by each. Nothing in this Section 4.1 shall
create any liability on the part of the Company or any other person to the
Designated Holders if the Company, for any reason, decides not to file a
Registration Statement proposed to be filed pursuant to this Section 4.1 or to
withdraw such Registration Statement subsequent to its filing, regardless of any
action whatsoever that a Designated Holder may have taken, whether as a result
of the issuance by the Company of any notice under this Section 4.1 or
otherwise.
4.2 EXPENSES. The Company shall bear all Registration Expenses in
connection with any Incidental Registration pursuant to this Article IV, whether
or not such Incidental Registration becomes effective.
ARTICLE V
HOLDBACK AGREEMENTS
5.1 RESTRICTIONS ON PUBLIC SALE BY DESIGNATED HOLDERS. To the
extent requested (A) by the Company or the Initiating Holders, as the case may
be, in the case of a non-underwritten public offering and (B) by the Approved
Underwriter or the Company Underwriter, as the case may be, in the case of an
underwritten public offering, each Designated Holder of Registrable Securities
agrees (x) not to effect any sale or distribution of any Registrable Securities
or of any securities convertible into or exchangeable or exercisable for such
Registrable Securities, including a sale pursuant to Rule 144 under the
Securities Act, or offer to sell, contract to sell (including without limitation
any short sale), grant any option to purchase or enter into any hedging or
similar transaction with the same economic effect as a sale of Registrable
Securities and (y) not to make any request for a Demand Registration under this
Agreement, during the one hundred-twenty (120) day period or such shorter
period, if any, agreed to by the requesting party beginning on the effective
date of such Registration Statement (except as part of such registration). No
Designated Holder of Registrable Securities subject to this Section 5.1 shall be
released from any obligation under any agreement, arrangement or understanding
entered into pursuant to this Section 5.1 except to the extent all other
Designated Holders of Registrable Securities subject to the same obligation are
also released.
5.2 RESTRICTIONS ON PUBLIC SALE BY THE COMPANY. The Company agrees
not to effect any sale or distribution of any of its securities, or any
securities convertible into or exchangeable or exercisable for such securities
(except pursuant to registrations on Form S-4 or S-8 or any successor thereto),
during the period beginning on the effective date of any Registration Statement
in which the Designated Holders of
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Registrable Securities are participating and ending on the earlier of (i) the
date on which all Registrable Securities registered on such Registration
Statement are sold and (ii) one hundred-twenty (120) days after the effective
date of such Registration Statement (except as part of such registration).
ARTICLE VI
REGISTRATION PROCEDURES
6.1 OBLIGATIONS OF THE COMPANY. Whenever registration of
Registrable Securities has been requested pursuant to Article III or Article IV
of this Agreement, the Company shall use its reasonable best efforts to effect
the registration and sale of such Registrable Securities in accordance with the
intended method of distribution thereof as quickly as practicable, and in
connection with any such request, the Company shall, as expeditiously as
possible:
(a) prepare and file with the Commission a Registration
Statement on any form for which the Company then qualifies or which counsel for
the Company shall deem appropriate and which form shall be available for the
sale of such Registrable Securities in accordance with the intended method of
distribution thereof, and use its reasonable best efforts to cause such
Registration Statement to become effective; PROVIDED, HOWEVER, that (x) before
filing a Registration Statement or prospectus or any amendments or supplements
thereto, the Company shall provide counsel selected by the Designated Holders
holding a majority of the Registrable Securities being registered in such
registration ("HOLDERS' COUNSEL") and any other Inspector with a reasonably
adequate and appropriate opportunity to review and comment on such Registration
Statement and each prospectus included therein (and each amendment or supplement
thereto) to be filed with the Commission, subject to such documents being under
the Company's control, and (y) the Company shall notify the Holders' Counsel and
each seller of Registrable Securities of any stop order issued or threatened by
the Commission and take all action required to prevent the entry of such stop
order or to remove it if entered;
(b) prepare and file with the Commission such amendments
and supplements to such Registration Statement and the prospectus used in
connection therewith as may be necessary to keep such Registration Statement
effective for the lesser of (x) 90 days and (y) such shorter period which will
terminate when all Registrable Securities covered by such Registration Statement
have been sold, and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration Statement;
(c) furnish to each seller of Registrable Securities,
prior to filing a Registration Statement, at least one copy of such Registration
Statement as is proposed to be filed, and thereafter such number of copies of
such Registration Statement, each amendment and supplement thereto (in each case
including all exhibits thereto), and the prospectus included in such
Registration Statement (including each
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preliminary prospectus) and any prospectus filed under Rule 424 under the
Securities Act as each such seller may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such seller;
(d) register or qualify such Registrable Securities under
such other securities or "blue sky" laws of such jurisdictions as any seller of
Registrable Securities may reasonably request, and to continue such
qualification in effect in such jurisdiction for as long as required pursuant to
the laws of such jurisdiction, or for as long as any such seller reasonably
requests or until all of such Registrable Securities are sold, whichever is
shortest, and do any and all other acts and things which may be reasonably
necessary or advisable to enable any such seller to consummate the disposition
in such jurisdictions of the Registrable Securities owned by such seller;
PROVIDED, HOWEVER, that the Company shall not be required to (x) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 6.1(d), (y) subject itself to taxation
in any such jurisdiction or (z) consent to general service of process in any
such jurisdiction;
(e) notify each seller of Registrable Securities at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any event as a
result of which, the prospectus included in such Registration Statement contains
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and the
Company shall promptly prepare a supplement or amendment to such prospectus and
furnish to each seller of Registrable Securities a reasonable number of copies
of such supplement to or an amendment of such prospectus as may be necessary so
that, after delivery to the purchasers of such Registrable Securities, such
prospectus shall not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
(f) enter into and perform customary agreements
(including an underwriting agreement in customary form with the Approved
Underwriter or Company Underwriter, if any, selected as provided in Article III
or Article IV, as the case may be) and take such other actions as are prudent
and reasonably required in order to expedite or facilitate the disposition of
such Registrable Securities;
(g) make available at reasonable times for inspection by
any seller of Registrable Securities, any managing underwriter participating in
any disposition of such Registrable Securities pursuant to a Registration
Statement, Holders' Counsel and any attorney, accountant or other agent retained
by any such seller or any managing underwriter (each, an "INSPECTOR" and
collectively, the "INSPECTORS"), all financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries
(collectively, the "RECORDS") as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company's and its
subsidiaries officers, directors and employees, and the independent public
accountants of the Company, to supply all information reasonably requested by
any such Inspector in
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connection with such Registration Statement. Records that the Company
determines, in good faith, to be confidential and which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors (and the
Inspectors shall confirm their agreement in writing in advance to the Company if
the Company shall so request) unless (x) the disclosure of such Records is
necessary, in the Company's judgment, to avoid or correct a misstatement or
omission in the Registration Statement, (y) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction after exhaustion of all appeals therefrom or (z) the information in
such Records was known to the Inspectors on a non-confidential basis prior to
its disclosure by the Company or has been made generally available to the
public. Each seller of Registrable Securities agrees that it shall, upon
learning that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at the Company's
expense, to undertake appropriate action to prevent disclosure of the Records
deemed confidential;
(h) if such sale is pursuant to an underwritten offering,
cause to be delivered "cold comfort" letters dated the effective date of the
registration statement and the date of the closing under the underwriting
agreement from the Company's independent public accountants in customary form
and covering such matters of the type customarily covered by "cold comfort"
letters as Holders' Counsel or the managing underwriter reasonably requests;
(i) if such sale is pursuant to an underwritten offering,
cause to be furnished, at the request of any seller of Registrable Securities on
the date such securities are delivered to the underwriters for sale pursuant to
such registration or, if such securities are not being sold through
underwriters, on the date the Registration Statement with respect to such
securities becomes effective, an opinion, dated such date, of counsel
representing the Company for the purposes of such registration, addressed to the
underwriters, if any, and to the seller making such request, covering such legal
matters with respect to the registration in respect of which such opinion is
being given as the underwriters, if any, and such seller may reasonably request
and are customarily included in such opinions;
(j) comply with all applicable rules and regulations of
the Commission, and make available to its security holders, as soon as
reasonably practicable but no later than fifteen (15) months after the effective
date of the Registration Statement, an earnings statement covering a period of
twelve (12) months beginning after the effective date of the Registration
Statement, in a manner which satisfies the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder;
(k) cause all such Registrable Securities to be listed on
each securities exchange on which similar securities issued by the Company are
then listed, PROVIDED that the applicable listing requirements are satisfied;
(l) keep Holders' Counsel advised in writing as to the
initiation and progress of any registration under Article III or Article IV
hereunder;
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(m) cooperate with each seller of Registrable Securities
and each underwriter participating in the disposition of such Registrable
Securities and their respective counsel in connection with any filings required
to be made with the NASD;
(n) make officers available to participate in customary
road shows and other informational meetings as reasonably requested by any
Approved Underwriter or Company Underwriter (it being understood that the
Company, in its discretion, may require that there be "road shows" and other
informational meetings in connection with a Demand Registration); and
(o) take all other steps reasonably necessary to effect
the registration of the Registrable Securities contemplated hereby.
6.2 SELLER INFORMATION. (a) It shall be a condition precedent to
the obligation of the Company to include any Registrable Securities of any
Designated Holder in a Registration Statement pursuant to this Agreement that
the Designated Holder shall furnish to the Company such information regarding
itself, the Registrable Securities held by it, any other securities of the
Company held by it, and the intended method of disposition of such Registrable
Securities as shall be required to effect the registration of the Registrable
Securities held by such Designated Holder, including, without limitation, all
information required to be disclosed in order to make the information previously
furnished to the Company by such Designated Holder not materially misleading or
necessary to cause such Registration Statement not to omit a material fact with
respect to such Designated Holder necessary in order to make the statements
therein not misleading. Any such Information shall be provided to the Company
within any reasonable time period requested by the Company.
(b) Each Designated Holder shall notify the Company, at
any time when a prospectus is required to be delivered under applicable law, of
the happening of any event as a result of which the prospectus included in the
applicable Registration Statement, as then in effect, in each case only with
respect to information provided by such Holder, includes an untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances then existing. Such Designated Holder shall immediately upon the
happening of any such event cease using such prospectus.
6.3 NOTICE TO DISCONTINUE. Each Designated Holder agrees that,
upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 6.1(e) or 6.2(b), such Designated Holder shall
forthwith discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until such
Designated Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 6.1(e) and, if so directed by the Company,
such Designated Holder shall deliver to the Company (at the Company's expense)
all copies, other than permanent file copies then in such Designated Holder's
possession, of the prospectus covering such Registrable Securities which is
current at the time of receipt of such notice. If the Company shall give any
such notice, the Company shall extend the period during which such Registration
Statement shall be
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maintained effective pursuant to this Agreement (including, without limitation,
the period referred to in Section 6.1(b)) by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 6.1(e) to and including the date when sellers of such Registrable
Securities under such Registration Statement shall have received the copies of
the supplemented or amended prospectus contemplated by and meeting the
requirements of Section 6.1(e).
6.4 REGISTRATION EXPENSES. The Company shall pay all expenses
arising from or incident to its performance of, or compliance with, this
Agreement, including, without limitation, (i) Commission, stock exchange and
NASD registration and filing fees, (ii) all fees and expenses incurred in
complying with securities or "blue sky" laws (including reasonable fees, charges
and disbursements of counsel to any underwriter incurred in connection with
"blue sky" qualifications of the Registrable Securities as may be set forth in
any underwriting agreement), (iii) all printing, messenger and delivery
expenses, (iv) the fees, charges and disbursements of counsel to the Company and
of its independent public accountants and any other accounting fees, charges and
expenses incurred by the Company (including, without limitation, any expenses
arising from any "cold comfort" letters or any special audits incident to or
required by any registration or qualification), (v) the reasonable fees, charges
and disbursements of one counsel to all Designated Holders not to exceed $35,000
and (vi) any liability insurance or other premiums for insurance obtained in
connection with any Demand Registration or piggy-back registration thereon or
Incidental Registration pursuant to the terms of this Agreement, regardless of
whether such Registration Statement is declared effective. All of the expenses
described in the preceding sentence of this Section 6.4 are referred to herein
as "REGISTRATION EXPENSES." The Designated Holders of Registrable Securities
sold pursuant to a Registration Statement shall bear the expense of any broker's
commission, underwriter's discount or commission or transfer taxes relating to
registration and sale of such Designated Holders Registrable Securities and,
subject to clause (v) above, shall bear the fees and expenses of their own
counsel.
ARTICLE VII
INDEMNIFICATION; CONTRIBUTION
7.1 INDEMNIFICATION BY THE COMPANY. The Company agrees to
indemnify and hold harmless each Designated Holder, its partners, directors,
officers, affiliates and each Person who controls (within the meaning of Section
15 of the Securities Act) such Designated Holder from and against any and all
losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation) (each, a "LIABILITY" and collectively, "LIABILITIES"), arising
out of or based upon any untrue, or allegedly untrue, statement of a material
fact contained in any Registration Statement, prospectus or preliminary
prospectus (as amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading under the
circumstances such statements were made, except insofar as such Liability (i)
arises out of or is based upon any untrue statement or alleged untrue statement
or omission or
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alleged omission contained in such Registration Statement, preliminary
prospectus or final prospectus in reliance and in conformity with information
concerning such Designated Holder furnished in writing to the Company by such
Designated Holder expressly for use therein, including, without limitation, the
information furnished to the Company pursuant to Section 6.2, or (ii) is caused
by any failure by the Designated Holder to deliver a prospectus or preliminary
prospectus (or amendment or supplement thereto) as and when required under the
Securities Act after such prospectus has been timely furnished by the Company .
The Company shall also provide customary indemnities to any underwriters of the
Registrable Securities, their officers, directors and employees and each Person
who controls such underwriters (within the meaning of Section 15 of the
Securities Act) to the same extent as provided above with respect to the
indemnification of the Designated Holders of Registrable Securities.
7.2 INDEMNIFICATION BY DESIGNATED HOLDERS. Each Designated Holder
agrees to indemnify and hold harmless the Company, any underwriter retained by
the Company, each of their respective officers, directors and affiliates and
each Person who controls the Company or such underwriter (within the meaning of
Section 15 of the Securities Act) to the same extent as the foregoing indemnity
from the Company to the Designated Holders, but only if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with information with respect to such Designated Holder furnished
in writing to the Company by such Designated Holder expressly for use in such
registration statement or prospectus, including, without limitation, the
information furnished to the Company pursuant to Section 6.2; PROVIDED, HOWEVER,
that the total amount to be indemnified by such Designated Holder pursuant to
Section 6.2 shall be limited to the net proceeds received by such Designated
Holder in the offering to which the Registration Statement or prospectus
relates.
7.3 CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person entitled to
indemnification hereunder (the "INDEMNIFIED PARTY") agrees to give prompt
written notice to the indemnifying party (the "INDEMNIFYING PARTY") after the
receipt by the Indemnified Party of any written notice of the commencement of
any action, suit, proceeding or investigation or threat thereof made in writing
for which the Indemnified Party intends to claim indemnification or contribution
pursuant to this Agreement; PROVIDED, HOWEVER, that the failure so to notify the
Indemnifying Party shall not relieve the Indemnifying Party of any Liability
that it may have to the Indemnified Party hereunder (except to the extent that
the Indemnifying Party is materially prejudiced or otherwise forfeits
substantive rights or defenses by reason of such failure). If notice of
commencement of any such action is given to the Indemnifying Party as above
provided, the Indemnifying Party shall be entitled to participate in and, to the
extent it may wish, jointly with any other Indemnifying Party similarly
notified, to assume the defense of such action at its own expense, with counsel
chosen by it and reasonably satisfactory to such Indemnified Party. The
Indemnified Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be paid by the Indemnified Party unless (i) the Indemnifying Party
agrees to pay the same, (ii) the Indemnifying Party fails to assume the defense
of such action with counsel reasonably satisfactory to the Indemnified Party or
(iii) the named parties to any such
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action (including any impleaded parties) include both the Indemnifying Party and
the Indemnified Party and such parties have been advised by such counsel that
either (x) representation of such Indemnified Party and the Indemnifying Party
by the same counsel would be inappropriate under applicable standards of
professional conduct or (y) there may be one or more legal defenses available to
the Indemnified Party which are different from or additional to those available
to the Indemnifying Party. In any of such cases, the Indemnifying Party shall
not have the right to assume the defense of such action on behalf of such
Indemnified Party, it being understood, however, that the Indemnifying Party
shall not be liable for the fees and expenses of more than one separate firm of
attorneys (in addition to any local counsel) for all Indemnified Parties. No
Indemnifying Party shall be liable for any settlement entered into without its
written consent, which consent shall not be unreasonably withheld. No
Indemnifying Party shall, without the consent of such Indemnified Party, which
consent shall not be unreasonably withheld, effect any settlement of any pending
or threatened proceeding in respect of which such Indemnified Party is a party
and indemnity has been sought hereunder by such Indemnified Party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability for claims that are the subject matter of such proceeding.
7.4 CONTRIBUTION. If the indemnification provided for in this
Article 7 from the Indemnifying Party is unavailable to an Indemnified Party
hereunder in respect of any Liabilities referred to herein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Liabilities in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions which resulted in such Liabilities, as well as any other relevant
equitable considerations. The relative faults of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such Indemnifying Party or
Indemnified Party, and the parties relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the Liabilities referred to above shall be
deemed to include, subject to the limitations set forth in Sections 7.1, 7.2 and
7.3, any legal or other fees, charges or expenses reasonably incurred by such
party in connection with any investigation or proceeding; PROVIDED that the
total amount to be contributed by such Designated Holder shall be limited to the
net proceeds received by such Designated Holder in the offering.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7.4 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
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ARTICLE VIII
COVENANTS
8.1 RULE 144. The Company covenants that it shall (a) file any
reports required to be filed by it under the Exchange Act and (b) take such
further action as each Designated Holder of Registrable Securities may
reasonably request (including providing any information necessary to comply with
Rule 144 under the Securities Act), all to the extent required from time to time
to enable such Designated Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such rule may be amended
from time to time, or Regulation S under the Securities Act or (ii) any similar
rules or regulations hereafter adopted by the Commission. The Company shall,
upon the request of any Designated Holder of Registrable Securities, deliver to
such Designated Holder a written statement as to whether it has complied with
such requirements.
8.2 XXXXXXXXXXX AND BLACKSTONE PRIORITY OF SALE. Notwithstanding
anything to the contrary set forth in this Agreement, in the event of any
offering of Common Stock, whether pursuant to a public offering, private
placement or other exempt sale in which Blackstone Holders and/or Xxxxxxxxxxx
Holders, on the one hand, and any other stockholder of the Company (including,
without limitation, any Investor), on the other hand, desire or intend to sell
Common Stock, Blackstone Holders and Xxxxxxxxxxx Holders, pro rata based on the
number of shares of Common Stock then owned by each, shall have an absolute
right to sell prior to the right of any other such holder. The foregoing rights
of priority will not preclude the grant by the Company of any demand or
piggyback rights to any other person that do not conflict with the provisions of
this Agreement.
ARTICLE IX
MISCELLANEOUS
9.1 RECAPITALIZATIONS, EXCHANGES, ETC. The provisions of this
Agreement shall apply to the full extent set forth herein with respect to (i)
the shares of Common Stock, (ii) any and all shares of common stock of the
Company into which the shares of Common Stock are converted, exchanged or
substituted in any recapitalization or other capital reorganization by the
Company and (iii) any and all equity securities of the Company or any successor
or assign of the Company (whether by merger, consolidation, sale of assets or
otherwise) which may be issued in respect of, in conversion of, in exchange for
or in substitution of, the shares of Common Stock and shall be appropriately
adjusted for any stock dividends, splits, reverse splits, combinations,
recapitalizations and the like occurring after the date hereof. The Company
shall cause any successor or assign (whether by merger, consolidation, sale of
assets or otherwise) to enter into a new registration rights agreement with the
Designated Holders on terms substantially the same as this Agreement as a
condition of any such transaction.
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9.2 NO INCONSISTENT AGREEMENTS. The Company represents and
warrants that it has not granted to any Person the right to request or require
the Company to register any securities issued by the Company, other than the
rights granted to the Designated Holders herein. The Company shall not enter
into any agreement with respect to its securities that is inconsistent with the
rights granted to the Designated Holders in this Agreement or grant any
additional registration rights to any Person or with respect to any securities
which are not Registrable Securities which are prior in right to or inconsistent
with the rights granted in this Agreement.
9.3 REMEDIES. The Designated Holders, in addition to being
entitled to exercise all rights granted by law, including recovery of damages,
shall be entitled to specific performance of their rights under this Agreement.
The Company agrees that monetary damages would not be adequate compensation for
any loss incurred by reason of a breach by it of the provisions of this
Agreement and hereby agrees to waive in any action for specific performance the
defense that a remedy at law would be adequate.
9.4 NOTICES. All notices, demands and other communications
provided for or permitted hereunder shall be made in writing and shall be made
by telecopier, courier service or personal delivery:
(a) if to the Company:
Xxxxxxx & Xxxxxx Corporation
0000 Xxx Xxxx Xxxxx
Xxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxx, CEO
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx, Esq. General Counsel
with a copy to:
Xxxxxx Xxxxxxx & Xxxx LLP
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
(b) if to Heartland:
Heartland Industrial Partners, L.P.
00 Xxxxxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx
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with a copy to:
Xxxxxx Xxxxxx & Xxxxxxx
00 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: W. Xxxxxx Xxxxx, Esq.
Xxxxxxxx X. Xxxxxxxxx, Esq.
(c) if to any Blackstone Holders:
Blackstone Capital Partners L.P.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxxxxxx
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxxxxxx, Esq.
(d) if to Xxxxxxxxxxx:
Wasserstein, Perella Management Partners
1301 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X'Xxxxxxx
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
All such notices, demands and other communications shall be deemed to
have been duly given when delivered by hand, if personally delivered; when
delivered by
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courier, if delivered by commercial courier service; five (5) Business Days
after being deposited in the mail, postage prepaid, if mailed; and when receipt
is mechanically acknowledged, if telecopied. Any party may by notice given in
accordance with this Section 9.4 designate another address or Person for receipt
of notices hereunder.
9.5 SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES. This
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of the parties hereto as hereinafter provided. The Demand
Registration rights and related rights of the Investor Stockholders and Major
Stockholders contained in Article III hereof, shall be with respect to any
Registrable Security that is transferred to a Permitted Transferee of an
Investor Stockholder or Major Stockholder, automatically transferred to such
transferee who agrees to be bound hereby. The incidental or "piggy-back"
registration rights of the Designated Holders contained in Section 3.2 and
Article IV hereof and the other rights of each of the Designated Holders with
respect thereto shall be, with respect to any Registrable Security,
automatically transferred to any Person who is the transferee of such
Registrable Security, but only if transferred in compliance with the
Stockholders Agreement. All of the obligations of the Company hereunder shall
survive any such transfer. Any assignment in violation of this Agreement shall
be null and void. Except as provided in Article VII, no Person other than the
parties hereto and their successors and permitted assigns is intended to be a
beneficiary of this Agreement.
9.6 AMENDMENTS AND WAIVERS. Except as otherwise provided herein,
the provisions of this Agreement may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless consented to in writing by (i) the Company, (ii) a Majority of the
Investor Stockholders, (iii) a Majority of Blackstone Stockholders and (iii) a
Majority of Xxxxxxxxxxx Stockholders. Any such written consent shall be binding
upon the Company and all of the Designated Holders.
9.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
9.8 HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
9.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
9.10 SEVERABILITY. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not
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be in any way impaired, unless the provisions held invalid, illegal or
unenforceable shall substantially impair the benefits of the remaining
provisions hereof.
9.11 RULES OF CONSTRUCTION. Unless the context otherwise requires,
references to sections or subsections refer to sections or subsections of this
Agreement.
9.12 ENTIRE AGREEMENT. This Agreement is intended by the parties as
a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, representations, warranties or undertakings, other than those set
forth or referred to herein. This Agreement supersedes all prior agreements and
understandings among the parties with respect to such subject matter.
9.13 FURTHER ASSURANCES. Each of the parties shall, and shall cause
their respective Affiliates to, execute such documents and perform such further
acts as may be reasonably required or desirable to carry out or to perform the
provisions of this Agreement.
9.14 OTHER AGREEMENTS. Nothing contained in this Agreement shall be
deemed to be a waiver of, or release from, any obligations any party hereto may
have under, or any restrictions on the transfer of Registrable Securities or
other securities of the Company imposed by, any other agreement including, but
not limited to, the Stock Purchase Agreements or the Stockholders Agreement.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the undersigned have executed, or have
caused to be executed, this Registration Rights Agreement on the date first
written above.
Xxxxxxx & Xxxxxx Corporation
By:
-----------------------------------------------------
Name:
Title:
Heartland Industrial Partner, L.P.
By: Heartland Industrial Associates L.L.C.,
its general partner
By:
--------------------------------------------------
Name:
Title:
Blackstone Capital Partners L.P.
By: Blackstone Management Associates L.P., its
general partner
By:
-----------------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Signatory
Blackstone Advisory Directors Partnership L.P.
By: Blackstone Management Associates L.P., its
general partner
By:
-----------------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Signatory
Blackstone Family Investment Partnership I L.P.
By: Blackstone Management Associates I L.L.C., its
general partner
By:
-----------------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Signatory
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Blackstone Capital Company II, L.L.C.
By:
-----------------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Authorized Signatory
Xxxxxxxxxxx/C & A Holdings, L.L.C.
By:
-----------------------------------------------------
Name:
Title:
75
SCHEDULE I
INVESTORS
[To be completed prior to closing and to include only Permitted Transferees of
Heartland and other investors, subject to approval of Blackstone and
Xxxxxxxxxxx, not to be unreasonably withheld.]
