EXHIBIT 4.3
Execution Copy
THIS CO-SALE, VOTING AND PREEMPTIVE RIGHTS AGREEMENT dated as of July
25, 2000, among ALLOU HEALTH & BEAUTY CARE, INC., a Delaware corporation
(together with its successors and assigns, the "Company"), and the Stockholders
(as defined herein) parties hereto.
WHEREAS, the Company, all of its subsidiaries and the Mezzanine Lenders
are party to the Purchase Agreement (as defined below);
WHEREAS, in consideration of, and as a condition to, the consummation
of the transactions contemplated by the Purchase Agreement, the Company and the
Stockholders desire to enter into this Agreement for the purposes, among others,
of (i) limiting the manner and terms by which the Stockholder Shares held by the
Xxxxxx Family Holders (as defined below) may be transferred and (ii) granting
certain preemptive rights to the Mezzanine Lenders (as defined below); and
WHEREAS, as a condition to the willingness of RFE to enter into the
Purchase Agreement, RFE has required that each Xxxxxx Family Holder agree, and
in order to induce RFE to enter into the Purchase Agreement, each Xxxxxx Family
Holder has agreed, to enter into this Agreement with respect to all the shares
of Common Stock now owned and which may hereafter be acquired by any Xxxxxx
Family Holder and any other securities, if any, which any Xxxxxx Family Holder
is entitled to vote at any meeting of the stockholders of the Company.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:
SECTION 1. DEFINITIONS. As used in this Agreement, certain terms shall
have the meaning set forth in Annex I.
SECTION 2. RESTRICTIONS ON TRANSFER; CO-SALE RIGHT; PREEMPTIVE RIGHTS
TO MEZZANINE LENDERS ONLY.
(a) Retention of Stock. Each Xxxxxx Family Holder hereby
agrees that no such Xxxxxx Family Holder shall Transfer any Stockholder Shares
held by such Xxxxxx Family Holder without complying with the provisions hereof.
Notwithstanding the foregoing, the prohibitions of Section 2(b) shall not apply
to any Transfer of any Stockholder Shares held by a Xxxxxx Family Holder to a
member of the Xxxxxx Family Holder's Family Group in a transfer which complies
with Sections 5 and 6 hereof.
(b) Co-Sale Rights with Respect to Stockholder Shares Held by
Xxxxxx Family Holders.
(i) Prior to making any Transfer of Stockholder
Shares involving, for Xxxxxx Xxxxxx in excess of 88,200 Stockholder
Shares, for Xxxxxx Xxxxxx in excess of 44,062 Stockholder Shares, for
Xxxx Xxxxxx in excess of 44,062 Stockholder Shares, in each case as
adjusted for splits, reverse splits, stock dividends, combinations and
the like (other than a Transfer permitted under Section 2(a)), any
Xxxxxx Family Holder proposing to make such a Transfer of Stockholder
Shares (the "Selling Xxxxxx Family Holder") shall give at least 15
days'
prior written notice (a "Sale Notice") to the Mezzanine Lenders
(collectively, the "Other Stockholders"), which notice shall include
the terms and conditions of such proposed Transfer, including the
identity of each prospective transferee. Each such Other Stockholder
may within 15 days of the receipt of the Sale Notice give written
notice (each, a "Tag-Along Notice") to the Selling Xxxxxx Family Holder
that such Other Stockholder wishes to participate in such proposed
Transfer and specifying the number of shares of and the class of
Stockholder Shares such Other Stockholder desires to include in such
proposed Transfer. Any Other Stockholder desiring to participate in
such proposed Transfer may include Stockholder Shares in such Other
Stockholder's Tag-Along Notice up to the balance of the total number of
Stockholder Shares permitted to be included by such Other Stockholder
as provided in Section 2(b)(ii). Any shares included in any Tag-Along
Notice shall be transferred upon the terms and conditions set forth in
the Sale Notice; provided that if any portion of any Warrant is
included in any Transfer of Stockholder Shares under this Section 2(b),
the purchase price for the Warrant shall be equal to the full purchase
price determined hereunder for the shares of Common Stock covered by
the portion of the Warrant to be transferred, reduced by the aggregate
exercise price for such shares upon exercise of such Warrant. If none
of the Other Stockholders gives the Selling Xxxxxx Family Holder a
timely Tag-Along Notice with respect to the Transfer proposed in the
Sale Notice, the Selling Xxxxxx Family Holder may Transfer the
Stockholder Shares specified in the Sale Notice for a period of 60 days
after expiration of the time period during which the Other Stockholders
may exercise their rights under this Section 2(b), on the terms and
conditions set forth in the Sale Notice. If one or more Other
Stockholders give the Selling Xxxxxx Family Holder a timely Tag-Along
Notice, then the Selling Xxxxxx Family Holder shall use all reasonable
efforts to cause the prospective transferees to agree to acquire all of
the Stockholder Shares that are identified in the Tag-Along Notices
that have been timely given to the Selling Xxxxxx Family Holder, upon
the same terms and conditions as set forth in the Sale Notice.
(ii) If the prospective transferees specified in the
Sale Notice are unwilling or unable to acquire all of the shares that
are identified in the Tag-Along Notices that have been timely given,
the Selling Xxxxxx Family Holder may then elect either to (A) cancel
the proposed Transfer or (B) allocate to itself and to each Other
Stockholder which or who has given a timely Tag-Along Notice such
Stockholder's Co-Sale Percentage of the aggregate number of shares of
each class of Common Stock that the prospective transferees are willing
to purchase.
For example, if the Sale Notice contemplated a sale
of 100 shares of Common Stock by the Selling Xxxxxx
Family Holder, and if the Selling Xxxxxx Family
Holder at such time owns 30% of the Common Stock and
if one Other Stockholder elects to participate and
owns 5% of the Common Stock, then the Selling Xxxxxx
Family Holder would be entitled to sell 86 shares
(rounded up from 85.7) ((30% /35%) x 100 shares) and
the Other Stockholder would be entitled to sell 14
shares ((5% /35%) x 100 shares).
(c) Limited Equity Preemptive Rights to the Mezzanine Lenders.
(i) If the Company authorizes the issuance and sale
of any shares of Common Stock or any shares of capital stock or any
other securities providing for options or rights to acquire any shares
of capital stock (including, without limitation, convertible debt), the
Company shall offer to sell to each Mezzanine Lender a portion of such
securities equal to the
percentage determined by dividing (1) the total number of Stockholder
Shares then held by such Mezzanine Lender, by (2) the number of shares
of Common Stock deemed outstanding (before giving effect to such
authorized issuance), each on a Fully-Diluted Basis. Each Mezzanine
Lender shall be entitled to purchase such securities at the same price
and on the same terms as such securities are to be offered, as long as,
immediately prior to such issuance, such Mezzanine Lender holds at
least 50,000 Stockholder Shares (on a Fully Diluted Basis (as adjusted
for splits, reverse splits, stock dividends, combinations and the
like)).
(ii) Each Mezzanine Lender must elect to exercise its
purchase rights hereunder within 15 days after receipt of written
notice from the Company describing in reasonable detail the stock or
securities being offered, the purchase price thereof (if known), the
total amount of the offering, the payment terms and such Mezzanine
Lender's percentage allotment.
(iii) Upon the expiration of the offering period set
forth in Section 2(c)(ii), the Company shall be free to sell any such
stock or securities which the Mezzanine Lenders have not elected to
purchase during the 90 days following such expiration on terms and
conditions no more favorable to the purchasers thereof than those
offered to the Mezzanine Lenders. Any stock or securities offered or
sold by the Company after such 90-day period must be reofferred to the
Mezzanine Lenders pursuant to the terms of this Section 2(c).
(iv) The provisions of this Section 2(c) shall not
apply to (A) capital stock issued in connection with a pro rata stock
dividend, stock split or recapitalization, (B) Common Stock or options
to acquire Common Stock of the Company (up to an aggregate maximum of
300,000 shares of Common Stock (as adjusted for splits, reverse splits,
stock dividends, combinations and the like)) issued during each fiscal
year of the Company to officers, directors or employees of the Company
or a Subsidiary pursuant to the Stock Option Plans (as defined in the
Purchase Agreement), (C) securities issued upon the conversion or
exercise of any Common Stock Equivalent specifically listed on the
schedules to the Purchase Agreement, (D) additional Warrants issued at
a subsequent closing pursuant to the terms of the Purchase Agreement or
additional Warrants issued pursuant to Section 2.12.2 of the Purchase
Agreement, (E) Common Stock or Common Stock Equivalents issued to the
Mezzanine Lenders upon exercise of the Warrants or Common Stock issued
in lieu of interest pursuant to the Notes, (F) Common Stock or Common
Stock Equivalents issued directly to Persons who were not then
stockholders of the Company in consideration for an acquisition by the
Company or any Subsidiary of another company or business (whether by
merger, stock purchase, asset purchase or otherwise) permitted pursuant
to the Purchase Agreement, (G) Common Stock issued in a Qualified
Public Offering and (H) Common Stock issued as consideration to
consummate a Permitted Acquisition (as defined in the Purchase
Agreement).
SECTION 3. VOTING OBLIGATION OF THE XXXXXX FAMILY HOLDERS.
(a) Voting Agreement. Each Xxxxxx Family Holder hereby agrees,
jointly and severally, that during the period that this Agreement is in effect,
at any meeting of the stockholders of the Company, however called, and in any
action by consent of the stockholders of the Company, each Xxxxxx Family Holder
shall vote his, her or its Stockholder Shares (i) in favor of the issuance of
the Warrants at the Second RFE Closing and the Subsequent Closing, and the
issuance of Warrants referred to Section 2.12.2 of the Purchase Agreement or any
of the transactions contemplated by the Purchase Agreement;
and (ii) against any other action or agreement that would result in a breach of
any covenant, representation or warranty or any other obligation or agreement of
the Company under the Purchase Agreement or which could result in any of the
conditions to the Company's obligations under the Purchase Agreement not being
fulfilled. Each Xxxxxx Family Holder acknowledges receipt and review of a copy
of the Purchase Agreement.
(b) Irrevocable Proxy. In the event that any Xxxxxx Family
Holder shall fail to comply with the provisions of Section 3(a) hereof (as
determined by RFE in its reasonable discretion), each Xxxxxx Family Holder
hereby agrees, jointly and severally, that such failure shall result, without
any further action by any Xxxxxx Family Holder, in the irrevocable appointment
of RFE, as his, her or its attorney and proxy pursuant to the provisions of
Section 212(c) of the General Corporation Law of the State of Delaware, with
full power of substitution, to vote and otherwise act (by written consent or
otherwise with respect to the Stockholder Shares which any Xxxxxx Family Holder
is entitled to vote at any meeting of stockholders of the Company (whether
annual or special and whether or not an adjourned or postponed meeting) or
consent in lieu of any such meeting or otherwise, on the matters and in the
manner specified in Section 3(a) hereof. THIS PROXY AND POWER OF ATTORNEY IS
IRREVOCABLE AND COUPLED WITH AN INTEREST. Each Xxxxxx Family Holder hereby
revokes all other proxies and powers of attorney with respect to the Stockholder
Shares which he, she or it may have heretofore appointed or granted, and no
subsequent proxy or power of attorney shall be given or written consent executed
(and if given or executed, shall not be effective) by the Xxxxxx Family Holders
with respect thereto. All authority herein conferred or agreed to be conferred
shall survive the death or incapacity of each of the Xxxxxx Family Holders and
any obligation of any of the Xxxxxx Family Holders under this Agreement shall be
binding upon the heirs, personal representatives and successors of each of the
Xxxxxx Family Holders.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE XXXXXX FAMILY HOLDERS.
Each Xxxxxx Family Holder hereby represents and warrants,
jointly and severally, to RFE as follows:
(a) Authority Relative to this Agreement. Such Xxxxxx Family
Holder has all necessary power and authority to execute and deliver this
Agreement, to perform his or her obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by such Xxxxxx Family Holder and constitutes a legal, valid and
binding obligation of such Xxxxxx Family Holder, enforceable against such Xxxxxx
Family Holder in accordance with its terms.
(b) No Conflict.
(i) The execution and delivery of this Agreement by
such Xxxxxx Family Holder does not, and the performance of this
Agreement by such Xxxxxx Family Holder will not, (A) conflict with or
violate any laws, rules or regulations applicable to such Xxxxxx Family
Holder or by which the Stockholder Shares owned by such Xxxxxx Family
Holder are bound or affected or (B) result in any breach of or
constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or encumbrance on any of the Stockholder Shares
owned by such Xxxxxx Family Holder pursuant to any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation
to which such Xxxxxx Family Holder is a party or by which such Xxxxxx
Family Holder or the Stockholder Shares owned by such Xxxxxx Family
Holder are bound or affected.
(ii) The execution and delivery of this Agreement by
such Xxxxxx Family Holder does not, and the performance of this
Agreement by such Xxxxxx Family Holder shall not, require any
commitment, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority (as such term is defined in
the Purchase Agreement).
(c) Title to the Shares. As of the date hereof, the Xxxxxx
Family Holders are the record and beneficial owners of the Stockholder Shares
listed on Schedule 4(c) hereto. Such Stockholder Shares are all the securities
of the Company owned, either of record or beneficially, by any Xxxxxx Family
Holder. The Stockholder Shares owned by each Xxxxxx Family Holder are owned free
and clear of all security interests, liens, claims, pledges, options, rights of
first refusal, agreements, limitations on any Xxxxxx Family Holder's voting
rights, charges and other encumbrances of any nature whatsoever. Except as
provided in this Agreement, no Xxxxxx Family Holder has appointed or granted any
proxy, which appointment or grant is still effective, with respect to the
Stockholder Shares owned by such Xxxxxx Family Holder. As of the date hereof,
there is no "Event of Default" under Section 7.1(x) of the Senior Credit
Agreement (as defined in the Purchase Agreement).
SECTION 5. ADDITIONAL RESTRICTIONS ON TRANSFER OF STOCKHOLDER SHARES.
(a) Legends. The certificates representing the Stockholder
Shares held by the Xxxxxx Family Holders shall bear a legend substantially in
the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER, AND CERTAIN VOTING AND OTHER
AGREEMENTS SET FORTH IN THE CO-SALE, VOTING AND PREEMPTIVE
RIGHTS AGREEMENT AMONG THE CORPORATION AND CERTAIN OF ITS
SECURITYHOLDERS. THE HOLDER HEREOF MAY OBTAIN A COPY OF SUCH
AGREEMENT WITHOUT CHARGE AT THE CORPORATION'S PRINCIPAL PLACE
OF BUSINESS.
(b) Transfers in Violation of Agreement. Any Transfer or
attempted Transfer of any Stockholder Shares in violation of any provision of
this Agreement shall be null and void, and the Company shall not record such
Transfer on its books or treat any purported transferee of such Stockholder
Shares as the owner of such stock for any purpose.
(c) Stop Transfer. In order to ensure compliance with the
terms hereof, the Company shall require its transfer agent to impose stop
transfer restrictions on Stockholder Shares held by the Xxxxxx Family Holders.
(d) Senior Credit Agreement. Each of the Xxxxxx Family Holders
covenants not to Transfer any Stockholder Shares if such Transfer(s),
individually or in the aggregate, could reasonably be expect to result in an
Event of Default under Section 7.1(x) of the Senior Credit Agreement.
(e) Options. Notwithstanding anything to the contrary
contained in the Stock Option Plans (as defined in the Purchase Agreements),
none of the Xxxxxx Family Holders shall Transfer any options thereunder.
SECTION 6. BINDING EFFECT; JOINDERS; ADDITIONAL SHARES.
(a) Delivery of Joinders.
(i) Any transferee of Stockholder Shares from a
Xxxxxx Family Holder (other than a Mezzanine Lender or a transferee in
a transaction in which the co-sale rights in Section 2 do not apply or
as to which the Mezzanine Lenders have not exercised co-sale rights)
shall, as a condition to such Transfer, be deemed a Xxxxxx Family
Holder for purposes of this Agreement and be bound by and subject to
the terms and provisions of this Agreement applicable to Xxxxxx Family
Holders, and if not already a signatory to this Agreement as a Xxxxxx
Family Holder, such Person shall execute and deliver to the Company a
Xxxxxx Family Holder Joinder. Without limiting the foregoing, prior to
the approval of the matters described in Section 3(a), any transferee
of Stockholder Shares from a Xxxxxx Family Holder shall be bound by the
provisions of Sections 3 and 4 hereof.
(ii) Any transferee of Stockholder Shares from a
Mezzanine Lender and any purchaser of additional Notes and Warrants
under the Purchase Agreement shall, as a condition to such Transfer or
purchase, be deemed a Mezzanine Lender for purposes of this Agreement
and be bound by and subject to the terms and provisions of this
Agreement, and if not already a signatory to this Agreement as a
Mezzanine Lender, such Person shall execute and deliver to the Company
a Mezzanine Lender Joinder.
(b) Issuance of Additional Common Stock. In the event that
additional shares of Common Stock are issued by the Company to a Stockholder at
any time during the term of this Agreement, either directly or upon the exercise
or exchange of Common Stock Equivalents, such additional shares of Common Stock
shall, as a condition to such issuance, be deemed subject to the terms and
provisions of this Agreement.
SECTION 7. NO CONFLICTING AGREEMENTS. Neither the Company nor any
Xxxxxx Family Holder may enter into any stockholder agreements or arrangements
of any kind with any Person on terms inconsistent with the provisions of this
Agreement (whether or not such agreements or arrangements are with other
stockholders or with Persons that are not parties to this Agreement).
SECTION 8. FURTHER ASSURANCES. Each party hereto shall do and perform
or cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments and
documents as any other party hereto reasonably may request in order to carry out
the provisions of this Agreement and the consummation of the transactions
contemplated hereby.
SECTION 9. TERMINATION.
(a) Termination of Agreement Generally. All of the provisions
of this Agreement shall terminate and, except as otherwise expressly provided
herein, shall be of no further force or effect and shall not be binding upon any
party hereto, upon the first to occur of:
(i) the dissolution, liquidation or winding-up of the
Company, and
(ii) the approval of such termination by each of the
Company, the holders of a majority of the Stockholder Shares held by
all of the Mezzanine Lenders and the holders of a majority of the
Stockholder Shares held by all of the Xxxxxx Family Holders (in each
case, on a Fully Diluted Basis).
(b) Termination as to a Stockholder. As to any particular
Stockholder, this Agreement shall no longer be binding or of further force or
effect as to such Stockholder, except as otherwise expressly provided herein, as
of the date such Stockholder has transferred all such Stockholder's interest in
the Company's securities and each transferee of such securities, if required by
this Agreement, shall have become a party hereto; provided, however, that no
such termination shall be effective if such Stockholder is in breach of this
Agreement immediately before or after giving effect to such Transfer(s).
(c) Termination of Section 3. Section 3 shall terminate and be
of no further force and effect after the Stockholders of the Company shall have
approved the matters described in Section 3(a).
SECTION 9. GENERAL PROVISIONS.
(a) Amendment, Waiver and Release. Except as otherwise
provided herein, no modification, amendment or waiver of any provision of this
Agreement shall be effective unless such modification, amendment or waiver is
approved in writing by the Company and the holders of a majority of the
Stockholder Shares then held by the Xxxxxx Family Holders (calculated on a
Fully-Diluted Basis) (other than a modification, amendment or waiver of Section
2(c), as to which the Xxxxxx Family Holders shall have no approval rights), and
the Mezzanine Lenders holding a majority of the Stockholder Shares then held by
the Mezzanine Lenders (on a Fully Diluted Basis).
(b) Severability. It is the desire and intent of the parties
hereto that the provisions of this Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any particular provision of this
Agreement shall be adjudicated by a court of competent jurisdiction to be
invalid, prohibited or unenforceable for any reason, such provision, as to such
jurisdiction, shall be ineffective, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of this
Agreement or affecting the validity or enforceability of such provision in any
other jurisdiction. Notwithstanding the foregoing, if such provision could be
more narrowly drawn so as not to be invalid, prohibited or unenforceable in such
jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
(c) Entire Agreement. Except as otherwise expressly set forth
herein, this document embodies the complete agreement and understanding among
the parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
(d) Successors and Assigns. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be enforceable
by the Company and, so long as Stockholder Shares are held by such Person, each
Person which or who is a Stockholder on the date hereof and each subsequent
Stockholder. None of the provisions hereof shall create, or be construed or
deemed to create,
any right of employment in favor of any Person by the Company or any of its
Subsidiaries. This Agreement is not intended to create any third party
beneficiaries.
(e) Counterparts. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
(f) Remedies. The Company and the Stockholders shall be
entitled to enforce their rights under this Agreement to recover damages
(including reasonable attorneys' fees and costs, whether incurred in litigation,
mediation, arbitration, bankruptcy or administrative proceedings or any appeals
therefrom) by reason of any breach of any provision of this Agreement and to
exercise all other rights existing in their favor. The Company and the
Stockholders agree and acknowledge that money damages may not be an adequate
remedy for any breach of the provisions of this Agreement and that the Company
and any Stockholder may in its or his sole discretion apply to any court of law
or equity of competent jurisdiction for specific performance and/or injunctive
relief (without posting a bond or other security) in order to enforce or prevent
any violation of the provisions of this Agreement.
(g) Notices. Any notice, report, statement, request, or other
communication provided for in this Agreement shall be in writing and shall be
either personally delivered, transmitted via telecopier and confirmed by first
class mail, mailed registered or certified first class mail (postage prepaid) or
sent by reputable overnight courier service (charges prepaid) to the Company at
its address set forth below and to any other recipient at the address indicated
on Schedule A hereto and to any subsequent holder of Stockholder Shares subject
to this Agreement at such address as indicated by the Company's records and sent
by the Company to all other persons entitled to receive notices hereunder, or at
such address or to the attention of such other person as the recipient party has
specified by prior written notice to the sending party. Notices will be deemed
to have been given hereunder and received when delivered personally, when
received if transmitted via telecopier, five days after deposit in the U.S. mail
and one day after deposit with a reputable overnight courier service. The
Company's address is:
Allou Health & Beauty Care, Inc.
00 Xxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxxx
Telephone: 000-000-0000
Telecopy: 000-000-0000
(h) Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF DELAWARE, WITHOUT
GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF
THE STATE OF DELAWARE, OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF
ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE APPLIED.
(i) Jurisdiction and Venue.
(i) Each of the parties hereto hereby irrevocably and
unconditionally submits, for himself, herself or itself and its, his or
her property, to the nonexclusive jurisdiction of any New York State
court or federal court of the United States of America sitting in New
York, New York and any appellate court from any thereof, in any action
or proceeding arising out
of or relating to this Agreement or for recognition or enforcement of
any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court
or, to the extent permitted by law, in any such federal court. Each of
the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided
by law.
(ii) Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent that he, she or it may
legally and effectively do so, any objection that he, she or it may now
or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to the Agreement in any New York
State or federal court sitting in New York, New York. Each of the
parties hereto irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.
(iii) Each of the parties further agrees that the
mailing of any process required by any such court by certified or
registered mail, return receipt requested, to the address for notice
herein provided shall constitute valid and lawful service of process
against him, her or it, without the necessity for service by any other
means provided by law.
(j) Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
(k) Construction. Where specific language is used to clarify
by example a general statement contained herein, such specific language shall
not be deemed to modify, limit or restrict in any manner the construction of the
general statement to which it relates. The language used in this Agreement shall
be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction shall be applied against any party.
(l) Nouns and Pronouns. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice-versa.
(m) Waiver of Jury Trial. NO PARTY TO THIS AGREEMENT OR ANY
ASSIGNEE, SUCCESSOR, HEIR OR PERSONAL REPRESENTATIVE OF A PARTY SHALL SEEK A
JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER LITIGATION
PROCEDURE BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER
AGREEMENTS OR THE DEALINGS OR THE RELATIONSHIP BETWEEN THE PARTIES. NO PARTY
WILL SEEK TO CONSOLIDATE ANY SUCH ACTION, IN WHICH A JURY TRIAL HAS BEEN WAIVED,
WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT OR HAS NOT BEEN WAIVED. THE
PROVISIONS OF THIS SECTION HAVE BEEN FULLY DISCUSSED BY THE PARTIES HERETO, AND
THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY
AGREED WITH OR REPRESENTED TO ANOTHER PARTY THAT THE PROVISIONS OF THIS SECTION
WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
IN WITNESS WHEREOF, the parties hereto have executed this Stockholders
Agreement on the day and year first above written.
ALLOU HEALTH & BEAUTY CARE, INC.
By:
Name: Xxxxx Xxxxxxxxxxx
Title: President and Chief Financial Officer
MEZZANINE LENDERS:
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RFE INVESTMENT PARTNERS VI, L.P.
By: RFE ASSOCIATES VI, LLC
as general partner
By: ______________________________
Name: Xxxxxx X. Xxxxxx
Title: Managing Member
XXXXXX FAMILY HOLDERS:
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Name: Xxxxxx X. Xxxxxx
STATE OF )
: ss.:
COUNTY OF )
On the ____ day of July, 2000, before me personally came Xxxxxx X.
Xxxxxx to me known, who, being by me duly sworn, did depose and say that he
resides at ____________________________; and that he is the person whose name is
subscribed to the foregoing instrument, and that he executed the same for the
purpose and in the capacity therein expressed.
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Notary Public
* * *
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Name: Xxxxxx Xxxxxx
STATE OF )
: ss.:
COUNTY OF )
On the ____ day of July, 2000, before me personally came Xxxxxx Xxxxxx
to me known, who, being by me duly sworn, did depose and say that he resides at
____________________________; and that he is the person whose name is subscribed
to the foregoing instrument, and that he executed the same for the purpose and
in the capacity therein expressed.
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Notary Public
* * *
----------------------------------
Name: Xxxx Xxxxxx
STATE OF )
: ss.:
COUNTY OF )
On the ____ day of July, 2000, before me personally came Xxxx Xxxxxx to
me known, who, being by me duly sworn, did depose and say that he resides at
____________________________; and that he is the person whose name is subscribed
to the foregoing instrument, and that he executed the same for the purpose and
in the capacity therein expressed.
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Notary Public
Schedule 4(c)
RECORD AND BENEFICIAL OWNERSHIP
OF XXXXXX FAMILY HOLDER SHARES
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Xxxxxx X. Xxxxxx 598,500
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Xxxxxx Xxxxxx 318,750
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Xxxx Xxxxxx 318,750
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Annex I
DEFINITIONS
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"Affiliate" means, with respect to any Person, any of (a) a director,
officer, manager, member, or partner of such Person, (b) a spouse, parent,
sibling or descendant of such Person or a spouse, parent, sibling or descendant
of a director, officer, or partner of such Person and (c) any other Person that,
directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, another Person. The term
"control" includes, without limitation, the possession, directly or indirectly,
of the power to direct the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
"Agreement" means this Co-Sale, Voting and Preemptive Rights Agreement.
"Common Stock" has the meaning set forth in the Purchase Agreement, as
in effect from time to time.
"Common Stock Equivalent" means a share of Common Stock or the right to
acquire, whether or not immediately exercisable, one share of Common Stock,
whether evidenced by an option, warrant, convertible security or other
instrument or agreement.
"Company" has the meaning set forth in the caption to this Agreement.
"Company Charter" means the Restated Certificate of Incorporation of
the Company, as amended, supplemented, or otherwise modified from time to time,
in each case pursuant to the General Corporation Law of the State of Delaware
and as permitted by the Purchase Agreement.
"Convertible Securities" means any stock or securities convertible into
or exchangeable for Common Stock.
"Co-Sale Percentage" means, with respect to (i) any Selling Xxxxxx
Family Holder or any Other Stockholder which or who has delivered a timely
Tag-Along Notice and (ii) the shares of Common Stock which the prospective
transferees specified in the applicable Sale Notice are willing to purchase, the
fraction, expressed as a percentage, the numerator of which is the number of
shares held by such Other Stockholder or Xxxxxx Family Holder and the
denominator of which is the aggregate number of the shares of Common Stock
outstanding on a Fully-Diluted Basis.
"Family Group" means, with respect to any natural Person, (i) such
Person, (ii) the spouse and issue of such Person, (iii) the parents of such
Person (whether natural or adoptive), (iv) the siblings of such Person (whether
natural or adopted), (v) assuming such Person were or is deceased, the
descendants of such Person (whether natural or adopted), and (vi) any one or
more trusts solely for the benefit of any one or more of the Persons described
in clause (i) through clause (v) above.
"Fully-Diluted Basis" means in the case of (i) any calculation of the
number of shares of Common Stock deemed outstanding, that effect is first given
to (A) all shares of Common Stock outstanding at the time of determination, (B)
all shares of Common Stock issuable upon the exercise of any option, warrant
(including the Warrants) or other right outstanding at the time of determination
and (C) all shares of Common Stock issuable upon the exercise of any conversion
or exchange right contained in any security outstanding at the time of
determination that is convertible into or exchangeable for shares of Common
Stock; and (ii) any calculation of value, that effect is first given to (A) the
securities referred to in clause (i) above and (B) the payment of any
consideration payable upon the exercise, conversion or exchange of any option,
warrant, security or other right referred to in clause (i) above if such option,
warrant (including the Warrants), security or other right were exercisable at
the time of determination. For purposes hereof, differences in voting rights
between Class A Common Stock and Class B Common Stock shall not be taken into
account, and all shares of Common Stock, regardless of class, shall be
considered together.
"Xxxxxx Family Holder" means each of the Xxxxxx Family Holders, any
Person who is a Xxxxxx Family Holder within the meaning of Section 4 and any
other Person who has executed a Xxxxxx Family Holder Joinder.
"Xxxxxx Family Holder Joinder" means a joinder agreement, substantially
in the form of Exhibit A hereto, by which a Person may become a Xxxxxx Family
Holder after the date hereof.
"Mezzanine Lender" means the Mezzanine Lenders, as of the date hereof,
listed on Schedule A attached hereto (both as holders of Warrants, alone, and as
holders of Stockholder Shares), and any Person which or who is a Mezzanine
Lender within the meaning of Section 4.
"Mezzanine Lender Joinder" means a joinder agreement, substantially in
the form of Exhibit B hereto, by which a Person may become a Mezzanine Lender
after the date hereof.
"Other Stockholders" has the meaning set forth in Section 2(b).
"Person" shall be construed broadly and shall include, without
limitation, an individual, a partnership, an investment fund, a limited
liability company, a corporation, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization and a governmental entity
or any department, agency or political subdivision thereof.
"Public Offering" means the sale, in an underwritten public offering
registered under the Securities Act, of shares of the Company's Common Stock.
"Public Sale" means the Sale of any Stockholder Shares as part of a
Public Offering or through a broker, dealer or market maker pursuant to Rule
144.
"Purchase Agreement" means the Senior Subordinated Note and Warrant
Purchase Agreement, dated as of the date hereof, between the Company and the
purchasers named therein, as in effect from time to time.
"Qualified Public Offering" means the first underwritten public
offering of the Company's Common Stock after the date hereof registered under
the Securities Act with (a) net proceeds to the Company of not less than $25
million and (b) such Common Stock being listed or authorized for trading on any
of the New York Stock Exchange, the American Stock Exchange, the NASDAQ National
Market
or any successors to any of the foregoing.
"RFE" means RFE Investment Partners VI, a Delaware limited partnership.
"Rule 144" means Rule 144 promulgated by the Securities and Exchange
Commission pursuant to the Securities Act, or any successor rules thereto, as
the same may be amended or supplemented from time to time.
"Sale Notice" has the meaning set forth in Section 2(b).
"Sale of the Company" means the consummation of a Mandatory Repurchase
Event, as defined in the Purchase Agreement.
"Securities Act" means the Securities Act of 1933, as the same may be
amended or supplemented from time to time, or any successor statute, and the
rules and regulations thereunder, as the same are from time to time in effect.
"Selling Xxxxxx Family Holder" has the meaning set forth in Section
2(b)(i).
"Stockholder" means a Xxxxxx Family Holder and/or a Mezzanine Lender.
For purposes hereof, Mezzanine Lenders are treated as Stockholders both prior to
and after exercise of the Warrants and shall be subject to the provisions hereof
as to the Warrants (which will be treated as Stockholder Shares), as to the
underlying Warrant Shares and as to any shares of Common Stock issued in lieu of
interest pursuant to the Notes issued pursuant to the Purchase Agreement.
"Stockholder Shares" means (i) any Common Stock purchased or otherwise
acquired by any Stockholder (including in the case of the Xxxxxx Family Holders,
Common Stock acquired by exercising options granted pursuant to the Company's
stock option plans), (ii) any Warrant Shares, (iii) any shares of Common Stock
issued in lieu of interest pursuant to the Notes issued pursuant to the Purchase
Agreement, and (iv) any equity securities issued or issuable directly or
indirectly with respect to the Common Stock referred to in clauses (i) - (iii)
above by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization. For purposes hereof, the holder of any portion of any Warrant
shall be deemed to be a holder of any Stockholder Shares issuable upon exercise
of such Warrant and therefore shall be subject to the provisions hereof both as
to the Warrants (which will be treated as Stockholder Shares) and as to the
underlying Warrant Shares. As to any particular shares constituting Stockholder
Shares, such shares will cease to be Stockholder Shares when they have been sold
through a Public Sale.
"Subsidiary" means any corporation of which a Person owns securities
having a majority of the ordinary voting power in electing the board of
directors directly or through one or more subsidiaries.
"Tag-Along Notice" has the meaning set forth in Section 2(b)(i).
"Transfer" means the direct or indirect sale, transfer, pledge,
hypothecation, gift, assignment or other disposition (whether with or without
consideration and whether voluntarily or involuntarily or by operation of law)
of any interest in any Stockholder Share. Without limiting the foregoing, any
change in beneficial ownership of a trust described in clause (vi) of the
definition of Family Group which will result in less than all of the beneficial
or other interests in such trust being held by the Persons described in clauses
(i) - (v) of such definition shall be deemed to be a Transfer.
"Warrant" means (i) the warrants to purchase shares of Common Stock
(subject to adjustment) issued pursuant to the Purchase Agreement (including
Warrants issued at a "Second RFE Closing" or "Subsequent Closings" pursuant to
the terms of the Purchase Agreement and Warrants issued pursuant to Section
2.12.2 of the Purchase Agreement), and (ii) any equity securities issued or
issuable directly or indirectly with respect to the Warrants in connection with
a recapitalization, merger, consolidation or other reorganization.
"Warrant Shares" means any shares of capital stock of the Company
issued upon exercise of the Warrants.
SCHEDULE A
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STOCKHOLDER ADDRESSES
MEZZANINE LENDERS:
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RFE INVESTMENT PARTNERS VI, L.P.
00 Xxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxxx
Telecopy: 000-000-0000
XXXXXX FAMILY HOLDERS:
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All care of the Company at its address set forth in the Agreement, with a copy
to each such person at his or her home address as maintained in the Company's
books and records.
EXHIBIT A
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XXXXXX FAMILY HOLDER JOINDER
By execution of this Xxxxxx Family Holder Joinder, the undersigned
agrees to become a party to that certain Co-Sale, Voting and Preemptive Rights
Agreement dated as of July 25, 2000, among Allou Health & Beauty Care, Inc., a
Delaware corporation, and certain of its securityholders. The undersigned shall
have all the rights, and shall observe all the obligations, applicable to a
Xxxxxx Family Holder.
Name:
Address for Notices:
Date:
Signature:
EXHIBIT B
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MEZZANINE LENDER JOINDER
By execution of this Mezzanine Lender Joinder, the undersigned agrees
to become a party to that certain Co-Sale, Voting and Preemptive Rights
Agreement dated as of July 25, 2000, among Allou Health & Beauty Care, Inc., a
Delaware corporation, and certain of its securityholders. The undersigned shall
have all the rights, and shall observe all the obligations, applicable to a
Mezzanine Lender.
Name:
Address for Notices: with copies to:
_____________________________
_____________________________
_____________________________
_____________________________
_____________________________
Signature:
Date:
