STOCKHOLDERS SUPPORT AGREEMENT
THIS STOCKHOLDERS SUPPORT AGREEMENT is dated as of March 3, 2002 by
and among the stockholders of IOS Brands Corporation, a Delaware corporation
("IOS"), identified on the signature pages hereto and on the attached SCHEDULE
OF INVESTORS (the "STOCKHOLDERS") and XXX.XXX Inc., a Delaware corporation (the
"COMPANY").
IOS, Florists' Transworld Delivery, Inc., a Michigan corporation
("FTDI"), Aroma Acquisition Corp., a Delaware corporation ("MERGER SUB"), and
the Company are entering into an Agreement and Plan of Merger (the "MERGER
AGREEMENT"), dated as of the date hereof, pursuant to which Merger Sub has
agreed to merge with and into the Company (the "MERGER"). At or prior to the
effective time of the Merger, IOS has agreed to amend its certificate of
incorporation to read as set forth in Exhibit C to the Merger Agreement (the
"IOS CHARTER AMENDMENTS").
The Stockholders are collectively the record and beneficial owner of
approximately 11,731,824 shares of Class A Common Stock, par value $0.01 per
share ("CLASS A COMMON STOCK"), and Class B Common Stock, par value $0.0005 per
share, of IOS, representing approximately 80.5% of the shares of common stock of
IOS outstanding as of the date hereof (such shares, together with any shares of
capital stock of IOS acquired by any such Stockholder after the date hereof and
during the term of this Agreement, being collectively referred to herein as the
"STOCKHOLDER SHARES").
As a condition to the willingness of IOS and the Company to enter into
the Merger Agreement, and as an inducement to them to do so, the Stockholders
have agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties hereby agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.1 The term "MINORITY STOCKHOLDERS" as used herein shall mean the
holders of Class A Common Stock OTHER THAN the Stockholders.
Section 1.2 The term "PERMITTED TRANSFEREE" as used herein shall mean any
transferee of any Stockholder who agrees in writing, prior to such transfer, to
become bound to all of the provisions of this Agreement.
Section 1.3 The term "PERSON" as used herein shall mean any individual,
corporation, partnership, limited liability company, joint venture, Governmental
Entity or other entity.
Section 1.4 Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Merger Agreement.
ARTICLE II
COVENANTS OF STOCKHOLDERS
Section 2.1 AGREEMENT TO VOTE FOR THE APPROVAL OF THE IOS CHARTER
AMENDMENTS. Prior to the Termination Date (as defined in SECTION 5.5 below), at
any stockholders' meeting (or at any adjournment thereof) or in any other
circumstances upon which a vote, consent or other approval with respect to the
IOS Charter Amendments is sought, each Stockholder shall vote (or cause to be
voted) all of its Stockholder Shares entitled to vote on such matter in favor of
the approval of the IOS Charter Amendments. Prior to the Termination Date, each
Stockholder hereby further agrees not to revoke or rescind its approval of the
IOS Charter Amendments and not to enter into any agreement or understanding with
any person, directly or indirectly, to vote, grant any proxy or give
instructions with respect to the voting of the Stockholder Shares in any manner
inconsistent with the preceding sentence.
Section 2.2 TRANSFER OF STOCKHOLDER SHARES BY A STOCKHOLDER. Prior to the
Termination Date, no Stockholder shall transfer, sell, exchange or otherwise
dispose of any Stockholder Shares, other than a transfer of any such shares to a
Permitted Transferee of such Stockholder, subject to the written agreement of
any such Permitted Transferee to vote such shares as required by this Agreement.
Section 2.3 REASONABLE EFFORTS. Prior to the Termination Date, each
Stockholder shall use reasonable efforts to take, or cause to be taken, all
reasonable actions, and to do, or cause to be done, and to assist and cooperate
with the Company in doing, all things reasonably necessary, proper or advisable
to consummate and make effective, in the most expeditious manner reasonably
practicable, the Merger and the other transactions contemplated by the Merger
Agreement and this Agreement.
Section 2.4 SHORT-FORM MERGER. Until the earlier of (a) the one-year
anniversary of the Effective Time or (b) the Termination Date, each Stockholder
covenants and agrees not to participate, individually or as part of a "group"
(as such term is used in Section 13(d)(3) of the Exchange Act), in a transaction
(or series of related transactions) pursuant to which IOS would be a constituent
corporation to a merger effected in accordance with Section 253 of the Delaware
General Corporation Law (a "SHORT- FORM MERGER") if pursuant to the terms and
conditions of such Short-Form Merger, the consideration to be received by any
Minority Stockholder would differ in any material respect from the consideration
to be received by the Stockholders (it being agreed that, solely for purposes of
this SECTION 2.4, if pursuant to the terms of such Short-Form Merger the Class A
Common Stock held by the Minority Stockholders are converted into or exchanged
for cash, equity or other consideration and the Stockholder Shares remain
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outstanding, then the Stockholders and Minority Stockholders shall be deemed to
have received consideration that differed in material respects).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER
Each Stockholder hereby represents and warrants to the Company, with
respect to itself, that:
Section 3.1 OWNERSHIP. Each Stockholder is, as of the date hereof, the
record or beneficial owner of approximately the number of Stockholder Shares set
forth next to such Stockholder's name on the attached SCHEDULE OF INVESTORS and
such Stockholder has the right to vote its Stockholder Shares on the matters
described in Section 2.1 above. The Stockholder Shares of such Stockholder are
not subject to any voting trust or other agreement, arrangement or restriction
with respect to the voting of such Stockholder Shares on the matters described
in Section 2.1 above.
Section 3.2 AUTHORITY AND NON-CONTRAVENTION. Each Stockholder has the
right, power and authority to enter into this Agreement and to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by such Stockholder and the consummation of the transactions
contemplated by this Agreement have been duly authorized by all necessary action
on the part of such Stockholder. This Agreement has been duly executed and
delivered by such Stockholder and constitutes a valid and binding obligation of
such Stockholder, enforceable against such Stockholder in accordance with its
terms, subject to general principles of equity and as may be limited by
bankruptcy, insolvency, moratorium, or similar laws affecting creditors' rights
generally. Such actions by such Stockholder (a) require no action by or in
respect of, or filing with, any Governmental Entity with respect to such
Stockholder, other than any required filings under Section 13 of the Exchange
Act, and (b) do not conflict with and will not result in any violation of
judgement, decree, statute, law, ordinance, rule or regulation applicable to
such Stockholder.
Section 3.3 TOTAL SHARES. The Stockholder Shares listed next to such
Stockholder's name on the Schedule of Investors are the only shares of capital
stock of IOS owned of record or beneficially as of the date hereof by such
Stockholder, and, except as set forth in the Stockholders' Agreement dated as of
December 19, 1994, such Stockholder does not have any option to purchase or
right to subscribe for or otherwise acquire any securities of IOS and has no
other interest in or voting rights with respect to any other securities of IOS.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE COMPANY
The Company represents and warrants to each Stockholder that:
Section 4.1 POWER AND AUTHORITY. The Company has the right, power and
authority to enter into this Agreement and to consummate the transactions
contemplated by this Agreement. The execution and delivery of this Agreement by
the Company and the consummation of the transactions contemplated by this
Agreement have been duly authorized by all necessary action on the part of the
Company. This Agreement has been duly executed and delivered by the Company and
constitutes a valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, subject to general principles of
equity and as may be limited by bankruptcy, insolvency, moratorium or similar
laws affecting creditors' rights generally.
ARTICLE V
MISCELLANEOUS
Section 5.1 EXPENSES. All costs and expenses incurred in connection with
this Agreement shall be paid by the party incurring such cost or expense;
provided, however, that the fees and expenses of the Stockholders may be paid by
IOS.
Section 5.2 FURTHER ASSURANCES. From time to time, at the request of the
Company, each Stockholder shall execute and deliver or cause to be executed and
delivered such additional documents and instruments and take all such further
action as may be reasonably necessary or desirable to consummate the
transactions contemplated by this Agreement.
Section 5.3 SPECIFIC PERFORMANCE. Each Stockholder agrees that the Company
would be irreparably damaged if for any reason such Stockholder fails to perform
any of such Stockholder's obligations under this Agreement, and that the Company
would not have an adequate remedy at law for money damages in such event.
Accordingly, the Company shall be entitled to specific performance and
injunctive and other equitable relief (without the need to post a bond or other
security) to enforce the performance of this Agreement by such Stockholder. This
provision is without prejudice to any other rights that the Company may have
against such Stockholder for any failure to perform its obligations under this
Agreement.
Section 5.4 AMENDMENTS. This Agreement may not be modified or amended
except by an instrument in writing signed by the party charged therewith.
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Section 5.5 TERMINATION. The representations, warranties, covenants and
agreements set forth in Article II, Article III and Article IV shall terminate,
except with respect to liability for prior breaches thereof, upon the earliest
to occur of (i) termination of the Merger Agreement in accordance with its
terms, (ii) the Closing Date (provided, that in connection with a termination
pursuant to this clause (ii), the covenants and agreements set forth in Section
2.4 hereof shall survive until the one-year anniversary of the Effective Time)
and (iii) the date, if any, upon which the Company's Board of Directors or
Special Committee fails to recommend to the Company's stockholders (or withdraws
its recommendation of) the transactions contemplated by the Merger Agreement or
recommends or takes no position with respect to any Alternative Proposal (the
"TERMINATION DATE").
Section 5.6 ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties. Subject to the preceding sentence, this
Agreement shall be binding upon, and inure to the benefit of, the parties hereto
and their respective successors and permitted assigns.
Section 5.7 EFFECT OF TRANSFER OF STOCKHOLDER SHARES. Each Stockholder
agrees that this Agreement and the obligations hereunder shall attach to the
Stockholder Shares and shall be binding upon any person to which legal or
beneficial ownership of such shares shall pass, whether by operation of law or
otherwise.
Section 5.8 ENTIRE AGREEMENT. This Agreement (including the documents
referred to herein) (a) constitutes the entire agreement, and supersedes all
prior agreements and understanding, both oral and written, between the parties
with respect to the subject matter of this Agreement and (b) is not intended to
confer upon any person other than the parties any rights or remedies.
Section 5.9 NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally, sent by
documented overnight delivery service or, to the extent receipt is confirmed,
appropriate telecopy address or telecopy number set forth below (or at such
other address or telecopy number for a party as shall be specified by like
notice):
If to the Company to:
The Special Committee of the Board of Directors
c/o XXX.XXX Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
with a copy to:
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Sidley Xxxxxx Xxxxx & Xxxx, as counsel to the Special Committee
Bank One Plaza
00 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx
Xxx X. Xxxxxx
If to any Stockholder, to:
The addresses set forth on the attached Schedule of Investors
with a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxx
Section 5.10 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
Section 5.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
Section 5.12 INTERPRETATION. The headings contained in this Agreement are
inserted for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
Section 5.13 SEVERABILITY. Any provision hereof which is invalid or
unenforceable shall be ineffective to the extent of such invalidity or
unenforceability, without affecting in any way the remaining provisions hereof.
Section 5.14 THIRD PARTY BENEFICIARY. Each of the parties hereto
acknowledges and agrees that IOS is an intended third-party beneficiary of this
Agreement and as such is entitled to (i) the benefit of the Stockholders'
obligations hereunder and (ii) the right to enforce the Company's rights
hereunder.
* * * * *
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IN WITNESS WHEREOF, this Agreement has been duly executed by or on behalf
of each of the parties hereto as of the date first above written.
COMPANY:
XXX.XXX INC.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Its: Chief Executive Officer
STOCKHOLDERS:
PERRY ACQUISITION PARTNERS, L. P.
By: PERRY INVESTORS, L.L.C.
Its: General Partner
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Its: Managing Member
PERRY PARTNERS, L.P.
By: PERRY CORP.
Its: Managing General Partner
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Its: Managing Director and Chief
Financial Officer
PERRY PARTNERS INTERNATIONAL, INC.
By: PERRY INVESTORS, L.L.C.,
Its: Investment Manager
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Its: Managing Member
[SIGNATURE PAGE TO STOCKHOLDERS SUPPORT AGREEMENT]
PERRY PRINCIPALS HOLDINGS, LLC
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxx
Its: Managing Member
XXXXXXXX PARTNERS II, L.P.
By: SILVERADO II, L.P.
Its: General Partner
By: SILVERADO II CORP.
Its: General Partner
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Its: President
FLEET EQUITY PARTNERS VII, L.P.
By: SILVERADO V CORP.
Its: General Partner
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Its: President
FLEET GROWTH RESOURCES III, INC.
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Its: Attorney in Fact (Granted 0/0/00)
XXXXXXXX XXXXXX PARTNERS
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Name:
Its:
[SIGNATURE PAGE TO STOCKHOLDERS SUPPORT AGREEMENT]
XXXX CAPITAL FUND IV, X.X.
XXXX CAPITAL FUND IV-B, L.P.
By: XXXX CAPITAL PARTNERS IV, L.P.
Their:General Partner
By: XXXX CAPITAL INVESTORS, L.L.C.
Its: General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: Managing Director
INFORMATION PARTNERS CAPITAL FUND, L.P.
By: INFORMATION PARTNERS
Its: General Partner
By: XXXX CAPITAL PARTNERS IV, L.P.
Its: General Partner
By: XXXX CAPITAL INVESTORS, L.L.C.
Its: General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: Managing Director
BCIP ASSOCIATES
BCIP TRUST ASSOCIATES, L.P.
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Their:Authorized Partner
[SIGNATURE PAGE TO STOCKHOLDERS SUPPORT AGREEMENT]
SCHEDULE OF INVESTORS
STOCK OWNERSHIP
Section 3.1
================================================================================================
NUMBER OF CLASS A NUMBER OF CLASS B
INVESTORS STOCKHOLDER SHARES STOCKHOLDER SHARES
================================================================================================
Perry Acquisition Partners, L.P. 7,344,107 0
------------------------------------------------------------------------------------------------
Perry Partners, L.P. 3,886 122,479
------------------------------------------------------------------------------------------------
Perry Partners International, Inc. 7,216 247,874
------------------------------------------------------------------------------------------------
Perry Principals Holdings, LLC 0 50,000
------------------------------------------------------------------------------------------------
Xxxx Capital Fund IV, L.P. 718,896 0
------------------------------------------------------------------------------------------------
Xxxx Capital Fund IV-B, L.P. 822,708 0
------------------------------------------------------------------------------------------------
Information Partners Capital Fund, L.P. 885,226 0
------------------------------------------------------------------------------------------------
BCIP Associates 160,836 0
------------------------------------------------------------------------------------------------
BCIP Trust Associates, L.P. 91,950 0
------------------------------------------------------------------------------------------------
Xxxxxxxx Partners II, L.P. 173,506 215,222
------------------------------------------------------------------------------------------------
Fleet Equity Partners VII, L.P. 116,948 145,058
------------------------------------------------------------------------------------------------
Fleet Growth Resources III, Inc. 272,878 338,470
------------------------------------------------------------------------------------------------
Xxxxxxxx Street Partners 14,564 0
------------------------------------------------------------------------------------------------
TOTAL: 10,612,721 1,119,103
------------------------------------------------------------------------------------------------
SCHEDULE OF INVESTORS (ADDRESSES)
NOTICE TO PERRY ACQUISITION PARTNERS, L.P., PERRY PARTNERS, L.P., PERRY PARTNERS
INTERNATIONAL, INC. OR PERRY PRINCIPALS HOLDINGS, LLC
c/o Perry Capital Corp.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Fax: 000-000-0000
NOTICE TO XXXX CAPITAL FUND IV, L.P., XXXX CAPITAL FUND IV-B, L.P., INFORMATION
PARTNERS CAPITAL FUND, L.P., BCIP ASSOCIATES, OR BCIP TRUST ASSOCIATES, L.P.
c/o Bain Capital LLC
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Fax: 000-000-0000
NOTICE TO XXXXXXXX PARTNERS II L.P., FLEET EQUITY PARTNERS VII, L.P. OR FLEET
GROWTH RESOURCES III, INC.
c/o Navis Partners LLC
00 Xxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxx
Fax: 000-000-0000
NOTICE TO XXXXXXXX STREET PARTNERS
c/o Kirkland & Xxxxx
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, P.C.
Fax: 000-000-0000
