1
EXHIBIT 4.13
GOVERNANCE AGREEMENT
This Governance Agreement (this "Agreement"), dated as of December 28, 2000
among Xxxxxxxx, Inc., a Minnesota corporation (the "Company"), and the
individuals and entities listed on the signature page of this Agreement under
the caption "Stockholders" (the "Stockholders").
WHEREAS, (i) certain of the Stockholders have acquired from the Company
pursuant to the Stock Purchase Agreement 9,783,571 shares of Common Stock and
11,303 shares of Series G Preferred Stock convertible into 8,073,571 shares of
Common Stock, (ii) certain Stockholders and Molex have acquired from the Company
pursuant to the Subordinated Notes and Warrant Purchase Agreement $6,500,000
principal amount of the Company's 12% subordinated debt due on the fifth
anniversary of the Closing Date and Warrants to purchase 1,526,814 shares of
Common Stock, and (iii) certain Stockholders have acquired from the Company
pursuant to the Merger Agreement 8,736,890 shares of Common Stock; and
WHEREAS, certain Stockholders have sought Board approval of their
acquisition of shares of Common Stock, Series G Preferred Stock and/or Warrants
(i) pursuant to the Merger Agreement, the Stock Purchase Agreement or the
Subordinated Notes and Warrant Purchase Agreement, (ii) upon conversion of
shares of Series G Preferred Stock, (iii) upon exercise of the Warrants and (iv)
as dividends on the Series G Preferred Stock, in all cases as adjusted for stock
splits, dividends, recapitalization and the like and any other events requiring
adjustment under the anti-dilution provisions of applicable governing
instruments (collectively, the "Shares") for purposes of Section 302A.673 of the
Minnesota Business Corporation Act and under the Rights Agreement dated June 16,
1996, as amended, by and between the Company and Norwest Bank Minnesota, N.A.
(the "Rights Agreement") and have requested that the Company amend the Rights
Agreement so that neither IFT nor any of the Stockholders shall become an
Acquiring Person (as such term is defined in the Rights Agreement) and so that
none of a Distribution Date, a Stock Acquisition Date or an Acquisition Event
(as such terms are defined in the Rights Agreement) shall occur as a result of
the transactions contemplated by the Merger Agreement, the Subordinated Notes
and Warrant Purchase Agreement and the Stock Purchase Agreement; and
WHEREAS, as a condition to such approval, a special committee formed by the
Board and the Board (i) have required that certain arrangements be put in place
relating to the acquisition and disposition of Securities by the Stockholders
and related provisions concerning the Stockholders' relationship with the
Company, (ii) have negotiated the terms of this Agreement, (iii) have concluded
that, subject to execution and delivery of this Agreement, giving its approval
under Section 302A.673 of the
2
Minnesota Business Corporation Act, amending the Rights Agreement as provided
above and implementing the arrangements contemplated by this Agreement are in
the best interests of the Company and its stockholders and (iv) subject to
execution and delivery of this Agreement, have given such approval and put such
amendment into effect; and
WHEREAS, in consideration of such approvals, the Stockholders desire to
establish in this Agreement certain terms and conditions concerning the
acquisition and disposition of Securities by the Stockholders and their
Affiliates and Associates, and related provisions concerning the Stockholders'
relationship with the Company; and
WHEREAS, the Stockholders required as a condition to their willingness to
enter into and consummate the transactions contemplated by the Merger Agreement,
the Stock Purchase Agreement and the Subordinated Notes and Warrant Purchase
Agreement that the Company agree to the provisions of sections 2 and 4 hereof;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, and intending to be legally bound hereby, the
Company and the Stockholders hereby agree as follows:
1. STANDSTILL AND VOTING
a. Acquisition of Securities.
i. Each Stockholder covenants and agrees that, until the Standstill
Termination Date, it will not, and will not permit its Affiliates
or Associates (other than its partners or members) to,
Beneficially Own any Securities in excess of the Number of
Permitted Shares applicable to such Stockholder; provided that:
(1) this Agreement shall not restrict any acquisition of
Securities in a transaction directly with the Company and
approved in accordance with the provisions of Section 2(c)
hereof (including, without limitation, the acquisition of
Securities by any director serving at the direction or
request of a Stockholder by reason of the grant of stock
options by the Company); and
(2) if a Business Combination Proposal is made by any Person
(other than the Company, a Stockholder or an Affiliate of a
Stockholder, or any Person acting in concert with a
2
3
Stockholder or any Affiliate thereof), then any Stockholder
may make a Business Combination Proposal and this Agreement
shall not prohibit the making of such Business Combination
Proposal, the acquisition of Securities pursuant to such
Business Combination Proposal or any other action reasonably
connected therewith; provided, however, that, if a Person
who has not theretofore communicated a Business Combination
Proposal to the Company makes a Business Combination
Proposal to the to the Board, however communicated, and the
Board unconditionally rejects such Business Combination
Proposal by written notice delivered to the proposing party
(with a copy to each Stockholder) within five business days
of the date on which the Business Combination Proposal was
first communicated to the Board, the restrictions of this
section 1(a)(i) shall again apply to the Stockholders and
provided, further, that the preceding proviso will cease to
apply if such Person delivers to the Board any further
Business Combination Proposal or modification of any earlier
Business Combination Proposal. If any Business Combination
Proposal made by any Stockholder in accordance with this
section 1(a)(i)(2) is not consummated prior to nine months
after the Business Combination Proposal made by such other
Person has been effectively withdrawn, the restrictions of
this section 1(a)(i) shall again be applicable to the
Stockholders, subject to any further Business Combination
Proposal being made by any Person.
ii. Subject to the proviso in Section 1(a)(i) hereof and any waiver
or approval in accordance with the provisions of Section 2(c)
hereof, if at any time on or prior to the Standstill Termination
Date any Stockholder, alone or as part of any group acting
together, Beneficially Owns more than the Number of Permitted
Shares applicable to such Stockholder, inadvertently or
otherwise, then such Stockholder shall promptly take action not
inconsistent with applicable law to reduce the amount of
Securities Beneficially Owned by such Persons to an amount not
greater than the Number of Permitted Shares applicable to such
Stockholder.
iii. No Stockholder shall, on or prior to the Standstill Termination
Date, permit any Affiliate thereof to Beneficially Own any
Securities
3
4
unless such Affiliate becomes a Stockholder party to this
Agreement, which any such Affiliate may unilaterally do by
delivering to the Company an instrument executed by or on
behalf of such Affiliate pursuant to which such Affiliate
assumes the obligations of a Stockholder hereunder; provided
that any partner or member of a Stockholder who becomes a
Beneficial Owner of Securities after the date that is one
year from the date of this Agreement shall not be obligated
to become a party to this Agreement.
b. Restrictions on Transfer. For a period of one year from the date of
this Agreement, each Stockholder agrees not to Transfer any of the
Shares, unless such Transfer is to an Affiliate or Associate and is in
compliance with the terms of this Agreement, or is to be effected for
the Stockholder's personal estate planning purposes and is in
compliance with the terms of this Agreement. After the one-year
period, any Stockholder may distribute its Shares to its partners or
members. In addition, except as allowed under the immediately
preceding sentence, prior to the Standstill Termination Date, the
Stockholders, and each Affiliate thereof which acquires Securities in
accordance with the terms of this Agreement, will not Transfer
Beneficial Ownership of any Securities to any of their Affiliates
(other than a partner or member of such Stockholder) unless each such
Person becomes a signatory to this Agreement as a "Stockholder"
hereunder as provided in section 1(a)(iii) hereof. Each Stockholder
agrees to inclusion of the following legend on certificates
representing its Shares:
The shares represented by this certificate and any transfer
thereof are subject to a restriction on transfer as set forth in
a Governance Agreement between the holder and the Company dated
as of December , 2000, a copy of which is on file at the
principal executive office of the Company.
Such legend shall be placed on all certificates held by a Stockholder
during the continuance of this Agreement.
c. Further Restrictions on Conduct. Unless waived or approved in advance
in accordance with Section 2(c) hereof, and except for a Business
Combination Proposal made by a Stockholder in conformity with the
requirements of Section 1(a)(i)(2) hereof and any action taken by such
4
5
Stockholder that is reasonably connected therewith, each Stockholder
covenants and agrees that, until the Standstill Termination Date,
neither the Stockholder nor any Affiliate or Associate thereof shall:
i. initiate, propose, make, or in any way participate in, directly
or indirectly, any "solicitation" of "proxies" to vote, or seek
to influence any Person with respect to the voting of, any Voting
Securities, or become a "participant" in a "solicitation" or
"election contest" (as such terms are defined or used in
Regulation 14A under the Exchange Act, as in effect on the date
hereof), in any election contest with respect to the election or
removal of any director whose name appears in Exhibit 2 hereof or
any replacement thereof, any director of the Board proposed by
the specified committee in accordance with Section 2 (other than
any individual whose name appears on exhibit 1 hereof or any
replacement thereof) or the Molex Director;
ii. solicit, offer, seek or propose to any other Person (including
without limitation the Company) any form of merger with, tender
or exchange offer for securities of, sale or liquidation of
assets of, or similar business combination transaction with or
involving the Company or its Affiliates or Associates; provided,
however, that the foregoing shall not restrict any such action
relating to a merger or similar business combination with the
purpose and effect of the Company or its Affiliates and
Associates acquiring the business, voting securities or assets of
another Person; or
iii. take any other action inconsistent with the foregoing or this
Agreement;
provided, however, that nothing in this Section 1(c) shall inhibit the
free exercise of judgment by any member of the Board in his capacity
as such.
d. Reports. Until the Standstill Termination Date, each Stockholder shall
deliver to the Company, promptly after any acquisition or Transfer of
Securities, an accurate written report specifying the amount and class
of Securities acquired or Transferred in such transaction and the
amount of each class of Securities owned by the Stockholder or any
Affiliate or Associate thereof after giving effect to such
transaction; provided, however, that no such report need be delivered
with respect to any such acquisition or Transfer of Securities by the
Stockholder that is reported in
5
6
a statement on Schedule 13D filed with the Commission and delivered to
the Company by the Stockholder or any Affiliate or Associate thereof
in accordance with Section 13(d) of the Exchange Act and the rules
thereunder. The Company shall be entitled to rely on such reports and
statements on Schedule 13D for all purposes of this Agreement.
2. BOARD OF DIRECTORS.
a. Initial Composition of Board of Directors.
i. The number of directors comprising the Board of Directors,
effective upon Closing, shall be seven.
ii. The Company shall use its best efforts to cause the by-laws of
the Company to be amended at the next meeting of stockholders of
the Company so as to set the size of the board of directors of
the Company at seven.
iii. Concurrently with the Closing, the Board shall take such action
as is required under applicable law to cause to be elected to the
Board, effective upon the Closing, the individuals whose names
are set forth on Exhibit 1 hereto.
iv. The remaining directors comprising the Board, effective upon the
Closing, shall consist of the Molex Director and the individuals
whose names are listed on Exhibit 2 hereto.
v. The Company shall use its best efforts to cause the individuals
serving as directors of the Company prior to the effective date
of the Merger whose names are not listed on Exhibit 2 hereto to
resign as of the effective date of the Merger.
b. Board Representation; Nominating Committee of the Board. Sections
2(b)(i) and (ii) shall apply until the Applicable Number is zero.
i. Board Representation. At least fifteen (15) days prior to each
meeting of the Board at which the Board intends to take action to
approve nominees for election to the Board at the next annual
meeting of shareholders of the Company, the Company shall provide
each of the Stockholders with a notice of such meeting, which
notice shall indicate that the Board will take such action at
6
7
such meeting . Prior to the date of each such Board meeting, the
Stockholders shall give the nominating committee of the Board, in
writing, the names of the Applicable Number of director
candidates. The Company will cause such individual or individuals
to be nominated for election as directors at the next annual
meeting of the shareholders of the Company, will include such
individual or individual's names as nominees in the proxy or
consent statement prepared by the Company in connection with such
annual meeting, indicating that the election as directors of such
individual or individuals has been recommended by the Board, and
will solicit proxies for the election of such individual or
individuals as members of the Board at such annual meeting of
shareholders. At the first meeting of the Board after the date of
this Agreement, three designees of the Stockholders shall be
appointed by the Board as Board members. If, at any time that the
Applicable Number is greater than zero, any individual so
designated by the Stockholders is unable to serve or ceases to
serve as a director for any reason, the Company will cause
another individual designated by the Stockholders to be appointed
to fill the resulting vacancy. Anything herein to the contrary
notwithstanding, after termination of this Agreement pursuant to
Section 4, the Company shall no longer be obligated to nominate
and solicit proxies for the election of such designees of the
Stockholders as directors of the Company and such nominees shall,
if requested by the Board, resign from the Board.
ii. Nominating Committee of the Board. Subject to the rights of Molex
and the Stockholders to designate individuals to serve as
directors, the identity of directors to stand for election to the
Board at each annual meeting of stockholders following the
Closing and until the Standstill Termination Date or to fill a
vacancy on the Board, as the case may be, shall be determined by
the actions of a nominating committee of the Board. The
nominating committee shall have three members and, for purposes
of the first annual meeting of the Company's stockholders held
after Closing, shall be initially comprised of one director whose
name appears on Exhibit 1 hereto, one director whose name appears
on Exhibit 2 hereto and the Molex Director.
c. Voting. Until the Applicable Number is zero:
7
8
i. the Company shall not enter into any Stockholder Interested
Transaction unless such Stockholder Interested Transaction has
been approved by the affirmative vote of a majority of the
members of the Board other than any director or directors who is
or are employed by or a partner or a member of the Stockholder or
Affiliate or Associate of the Stockholder who is a party to such
Stockholder Interested Transaction, in addition to any other
approvals required by applicable law or the Company's articles of
incorporation or by-laws.
ii. each Stockholder agrees that such Stockholder shall not, and
shall not take any action which would cause the Company or its
Board to, enter into or participate in any Stockholder Interested
Transaction which has not been so approved.
3. REPRESENTATIONS AND WARRANTIES.
a. Representations and Warranties of the Company. The Company represents
and warrants to the Stockholders that:
i. the Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the state of Minnesota and
has the corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder;
ii. the execution and delivery of this Agreement by the Company and
the consummation by the Company of the transactions contemplated
hereby have been duly authorized by all necessary corporate
action on the part of the Company and no other corporate
proceedings on the part of the Company are necessary to authorize
this Agreement or any of the transactions contemplated hereby;
and
iii. this Agreement has been duly executed and delivered by the
Company and constitutes a valid and binding obligation of the
Company, and, assuming this Agreement constitutes a valid and
binding obligation of the Stockholders, is enforceable against
the Company in accordance with its terms.
b. Representations and Warranties of the Stockholders. Each of the
Stockholders represents and warrants to the Company that:
8
9
i. it is an individual and has the power and authority to enter into
this Agreement and to carry out its obligations hereunder, or it
is an entity and is duly organized, validly existing and in good
standing under the laws of the state of its organization and
incorporation, and has the corporate power and authority to enter
into this Agreement and to carry out its obligations hereunder;
ii. the execution and delivery of this Agreement by such Stockholder
and the consummation by such Stockholder of the transactions
contemplated hereby have been duly authorized by all necessary
action on the part of such Stockholder and no other proceedings
on the part of such Stockholder are necessary to authorize this
Agreement or any of the transactions contemplated hereby; and
iii. this Agreement has been duly executed and delivered by such
Stockholder and constitutes a valid and binding obligation of
such Stockholder, and, assuming this Agreement constitutes a
valid and binding obligation of the Company, is enforceable
against such Stockholder in accordance with its terms.
4. NEGATIVE COVENANTS. So long as Xxxxxxxxxxxx, Ampersand, Ampersand Companion
and Sound Beach and all Affiliates, Associates, partners and members thereof
hold, in aggregate, at least 15% of the Common Stock Equivalents acquired on the
Closing Date by Xxxxxxxxxxxx, Ampersand, Ampersand Companion and Sound Beach
pursuant to the Merger Agreement, the Stock Purchase Agreement and the
Subordinated Notes and Warrant Purchase Agreement, the Company shall not and
shall cause its Subsidiaries not to, without the consent of whichever of
Xxxxxxxxxxxx, Ampersand and Ampersand Companion (the two Ampersand entities
being considered for this purpose as a single entity), and any Affiliates,
Associates, partners or members thereof, respectively, holds more than 15% of
the number of Common Stock Equivalents acquired by it, on the Closing Date,
pursuant to the Merger Agreement, Stock Purchase Agreement and Subordinated
Notes and Warrant Purchase Agreement:
a. authorize any reclassification of the Common Stock, any merger,
consolidation, recapitalization or reorganization of the Company or
approve or effect any plan of liquidation or dissolution whether
statutory or otherwise;
9
10
b. authorize, agree to or consummate any sale, lease, exchange or
disposition of all or substantially all of the property or assets of
the Company or the effectuation by the Company of a transaction or
series of related transactions in which more that 50% of the voting
power of the Company is disposed of;
c. increase the number of directors constituting the Board or, after such
time as the Company's shareholders take such action as is required to
reduce the size of the Board from nine to seven, set the number of
directors constituting the Board at a number other than seven;
d. repurchase or redeem any equity securities or retire any other equity
capital of the Company or of any of its direct of indirect
Subsidiaries (except for the repurchases of Common Stock under
restricted stock agreements between employees and the Company
previously approved by the Board); or
e. enter into any agreement with respect to the foregoing.
5. DEFINITIONS. For purposes of this Agreement, the following terms shall have
the following meanings:
a. "Affiliate" or "Associate" shall mean an affiliate or associate of a
person, as such terms are defined in Section 302A.011, subdivisions 43
and 45, respectively, of the Minnesota Business Corporation Act.
b. "Agreement" shall have the meaning set forth in the preamble to this
Agreement.
c. "Ampersand" shall mean Ampersand IV Limited Partnership, a Delaware
limited partnership.
d. "Ampersand Companion" shall mean Ampersand IV Companion Fund Limited
Partnership, a Delaware limited partnership.
e. "Applicable Number" shall mean the following:
i. three, so long as Xxxxxxxxxxxx, Ampersand, Ampersand Companion
and Sound Beach and any Affiliate, Associate, partner or member
thereof own, in aggregate, at least 69% of the Common Stock
Equivalents acquired by them on the Closing Date pursuant
10
11
to the Merger Agreement, Stock Purchase Agreement and
Subordinated Notes and Warrant Purchase Agreement.
ii. two, so long as Xxxxxxxxxxxx, Ampersand, Ampersand Companion and
Sound Beach and any Affiliate, Associate, partner or member
thereof own, in aggregate, at least 50% but less than 69% of the
Common Stock Equivalents acquired by them on the Closing Date
pursuant to the Merger Agreement, Stock Purchase Agreement and
Subordinated Notes and Warrant Purchase Agreement.
iii. one, so long as Xxxxxxxxxxxx, Ampersand, Ampersand Companion and
Sound Beach and any Affiliate, Associate, partner or member
thereof own, in aggregate, at least 15% but less than 50% of the
Common Stock Equivalents acquired by them on the Closing Date
pursuant to the Merger Agreement, Stock Purchase Agreement and
Subordinated Notes and Warrant Purchase Agreement.
iv. zero, so long as Xxxxxxxxxxxx, Ampersand, Ampersand Companion and
Sound Beach and any Affiliate, Associate, partner or member
thereof own, in aggregate, less than 15% of the Common Stock
Equivalents acquired by them on the Closing Date pursuant to the
Merger Agreement, Stock Purchase Agreement and Subordinated Notes
and Warrant Purchase Agreement.
f. "Beneficially Own" or "Beneficial Ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities
(as determined pursuant to Rule 13d-3 under the Exchange Act),
including pursuant to any agreement, arrangement or understanding,
whether or not in writing; but shall not include any securities that
would otherwise be Beneficially Owned pursuant to this definition
solely by virtue of the existence of this Agreement and/or any voting
agreement solely among the Stockholders with respect to the election
of directors of the Company.
g. "Board" shall mean the board of directors of the Company.
h. "Business Combination Proposal" shall mean:
i. any bona fide business combination proposal however communicated,
including without limitation a "bear hug" letter or other similar
communication directed to the Board or any member of the Board,
any merger proposal involving the Company or any
11
12
Subsidiary, any purchase of all or a material portion of the
assets of the Company or any Subsidiary, or any tender or
exchange offer directed to security holders of the Company, and
ii. any proposal to purchase more than 25% of the Total Voting Power;
but shall not include any proposal that intentionally has been
induced, in whole or in part and directly or indirectly, by one or
more Stockholders in order to cause the termination of the
restrictions set forth in section 1(a)(i) hereof.
i. "Closing" shall mean the closing of the transactions contemplated by
the Merger Agreement.
j. "Closing Date" shall mean the Closing Date as defined in the Merger
Agreement.
k. "Commission" shall mean the Securities and Exchange Commission.
l. "Common Stock" shall mean the Common Stock, par value $0.25 per share,
of the Company.
m. "Common Stock Equivalent" shall mean the following:
i. with respect to shares of Common Stock, each share of Common
Stock shall be one Common Stock Equivalent.
ii. with respect to Series G Preferred Stock, each share of Series G
Preferred Stock shall be a number of Common Stock Equivalents
equal to the number of shares of Common Stock issuable on
conversion of such share of Series G Preferred Stock as of the
date of determination.
iii. with respect to Warrants, each Warrant shall be a number of
Common Stock Equivalents equal to the number of shares of Common
Stock issuable on exercise of such Warrant as of the date of
determination.
n. "Company" shall have the meaning set forth in the preamble of this
Agreement.
12
13
o. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
p. "IFH" shall mean International Flex Holdings, Inc., a Delaware
corporation.
q. "Merger Agreement" shall mean the agreement and plan of merger, dated
as of November 10, 2000, as amended, supplemented or modified from
time to time, among the Company, IFT West Acquisition Company, a
wholly owned Subsidiary of the Company, IFH and all of the
stockholders of IFH.
r. "Merger" shall mean the merger effected pursuant to the Merger
Agreement.
s. "Molex" shall mean Molex Incorporated, a Delaware corporation.
t. "Molex Director" shall mean the individual nominated by Molex under
the terms of the Agreement Relating to Xxxxxxxx, dated as of November
18, 1998, between the Company and Molex, as amended as of November 10,
2000.
u. "Xxxxxxxxxxxx" shall mean Xxxxxxxxxxxx Venture Partners V, L.P., a
Delaware limited partnership.
v. "Number of Permitted Shares" applicable to any Stockholder shall mean
the number of shares of Common Stock, shares of Series G Preferred
Stock and/or Warrants (i) received by such Stockholder pursuant to the
Merger Agreement, the Stock Purchase Agreement or the Subordinated
Notes and Warrant Purchase Agreement, (ii) issuable upon conversion of
the shares of Series G Preferred Stock acquired by such Stockholder on
the Closing Date, (iii) issuable on exercise of the Warrants acquired
by such Stockholder on the Closing Date and (iv) received as dividends
on the Series G Preferred Stock held by such Stockholder, in all cases
as adjusted for stock splits, dividends, recapitalization and the like
and any other events requiring adjustment under the anti-dilution
provisions of applicable governing instruments.
w. "Person" shall mean any individual, partnership, joint venture,
corporation, trust, unincorporated organization, government or
department or agency of a government.
13
14
x. "Rights Agreement" shall have the meaning set forth in the recitals of
this Agreement.
y. "Securities" shall mean at any time shares of any class of capital
stock of the Company, including, without limitation, securities
convertible into such shares.
z. "Series G Preferred Stock" shall mean the shares of Series G Preferred
Stock, par value $1.00 per share, of the Company.
aa. "Shares" shall have the meaning set forth in the recitals of this
Agreement.
bb. "Sound Beach" shall mean Sound Beach Technology Partners, LLC, a
Delaware limited liability company.
cc. "Standstill Termination Date" shall mean the third anniversary of the
Closing.
dd. "Stockholders" shall have the meaning set forth in the preamble of
this Agreement.
ee. "Stockholder Interested Transaction" shall mean:
i. any transaction between the Company or any of its Subsidiaries
and any Stockholder or any Affiliates or Associates of a
Stockholder, or
ii. any amendment, modification, consent or waiver to, of or under,
or the enforcement of the terms of this Agreement, the Stock
Purchase Agreement, the Subordinated Notes and Warrant Purchase
Agreement or the Merger Agreement, other than any amendment or
modification to the Merger Agreement to affect adjustments to the
conversion ratios set forth therein.
ff. "Stock Purchase Agreement" shall mean the stock purchase agreement,
dated as of November 10, 2000, as amended, supplemented or modified
from time to time, among the Company and certain Stockholders.
gg. "Subordinated Notes and Warrant Purchase Agreement" shall mean the
Subordinated Notes and Warrant Purchase Agreement, dated as of
14
15
November 10, 2000, as amended, supplemented or modified from time to
time, among the Company, certain Stockholders and Molex.
hh. "Subsidiary" shall mean, as to any Person, any corporation at least a
majority of the shares of stock of which having general voting power
under ordinary circumstances to elect a majority of the Board of such
corporation (irrespective of whether or not at the time stock of any
other class or classes shall have or might have voting power by reason
of the happening of any contingency) is, at the time as of which the
determination is being made, owned by such Person, or one or more of
its Subsidiaries or by such Person and one or more of its
Subsidiaries.
ii. "Total Voting Power" at any time shall mean the total combined voting
power in the general election of directors of all the Voting
Securities then outstanding.
jj. "Transfer" shall mean any sale, transfer, pledge, encumbrance or other
disposition, and to "Transfer" shall mean to sell, transfer, pledge,
encumber or otherwise dispose of.
kk. "Voting Securities" shall mean at any time any Securities (other than
the shares of Series G Preferred Stock) which are entitled to vote
generally in the election of directors of the Company.
ll. "Warrants" shall mean the warrants issued to certain Stockholders
under the Subordinated Notes and Warrant Purchase Agreement.
6. MISCELLANEOUS.
a. Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including telecopy) and shall be given, if to the
Company, to:
15
16
If to the Company: Sheldahl, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxxxxx, President
Fax: (000) 000-0000 or
(000) 000-0000
With copies to: Xxxxxxxxx & Xxxxxx P.L.L.P.
0000 XXX Xxxxxx
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx XX 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
or such address or telecopy number as such party may hereafter
specify for the purpose by notice to the other parties hereto.
Each such notice, request or other communication shall be
effective when delivered personally, telegraphed or telecopied,
or, if mailed, five business days after the date of the mailing.
b. Amendments; No Waivers.
i. Any provision of this Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by the Stockholders and the Company, or
in the case of a waiver, by the party against whom the waiver is
to be effective.
ii. 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.
c. 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 permitted assigns; provided, however, that
no party may assign this Agreement without the other party's prior
written
16
17
consent; and provided further that the rights of the Stockholders
under sections 2 and 4 hereof shall not be assignable other than to
Affiliates and Associates of the assigning Person.
d. Governing Law. This Agreement shall he construed in accordance with
and governed by the internal laws of the State of Minnesota.
e. Counterparts; Effectiveness. 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 counterparts thereof signed by the other
party hereto.
f. Specific Performance. The Company and the Stockholders each
acknowledge and agree that the parties' respective remedies at law for
a breach or threatened breach of any of the provisions of this
Agreement would be inadequate and, in recognition of that fact, agrees
that, in the event of a breach or threatened breach by the Company or
the Stockholders of the provisions of this Agreement, in addition to
any remedies at law, the Stockholders and the Company, respectively,
without posting any bond shall be entitled to obtain equitable relief
in the form of specific performance, a temporary restraining order, a
temporary or permanent injunction or any other equitable remedy which
may then be available.
g. Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated, provided that the parties hereto shall negotiate in good
faith to attempt to place the parties in the same position as they
would have been in had such provision not been held to be invalid,
void or unenforceable.
h. Termination. This Agreement shall terminate on the later of:
i. the first date as of which the Applicable Number is zero, and
ii. the Standstill Termination Date.
17
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first referred to above.
XXXXXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President
STOCKHOLDERS:
XXXXXXXXXXXX VENTURE PARTNERS V, L.P.
By: /s/ Xxxx X. Xxxxx
---------------------------------
Name: Xxxx X. Xxxxx
Title: General Partner
AMPERSAND IV LIMITED PARTNERSHIP
By: AMP-IV MANAGEMENT COMPANY
LIMITED LIABILITY COMPANY,
its General Partner
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Principal Managing Member
AMPERSAND IV COMPANION FUND LIMITED
PARTNERSHIP
By: AMP-IV MANAGEMENT COMPANY
LIMITED LIABILITY COMPANY, its
General Partner
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Principal Managing Member
18
19
SOUND BEACH TECHNOLOGY PARTNERS, LLC
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: General Partner
19
20
EXHIBIT 1
NAMES OF INDIVIDUALS DESIGNATED BY THE HOLDERS OF THE SERIES G
PREFERRED STOCK TO BE ELECTED TO THE COMPANY'S BOARD OF DIRECTORS
Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx
Xxxx X. Xxxxx
20
21
EXHIBIT 2
NAMES OF INDIVIDUALS WHO HAVE SERVED ON THE COMPANY'S BOARD OF DIRECTORS PRIOR
TO THE EFFECTIVE DATE OF THE MERGER AND WHO ARE TO CONTINUE TO SERVE ON THE
COMPANY'S BOARD OF DIRECTORS FOLLOWING THE EFFECTIVE DATE OF THE MERGER
Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxx
Xxxx X. Xxxxxxxxx
21
