Exhibit 4.14
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
THIS AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (this "AGREEMENT") is
made and entered into as of January 6, 2005, by and among Altra Holdings, Inc.,
a Delaware corporation formerly known as CPT Acquisition Corp. (together with
its successors and permitted assigns, the "COMPANY"), and each of the parties
named on Exhibit A hereto (each, a "STOCKHOLDER" and collectively, the
"STOCKHOLDERS").
RECITALS
WHEREAS, on November 30, 2004, Altra Industrial Motion, Inc., a
Delaware corporation and a wholly owned subsidiary of the Company ("ALTRA"),
purchased, directly and indirectly, all of the issued and outstanding limited
liability company interests of Power Transmission Holding LLC, a Delaware
limited liability company, pursuant to an LLC Purchase Agreement dated as of
October 25, 2004 (as amended, the "PURCHASE AGREEMENT"), by and among the
Company, Warner Electric Holding, Inc., a Delaware corporation, and Colfax
Corporation, a Delaware corporation;
WHEREAS, in connection with the closing of the transactions
contemplated by the Purchase Agreement, the Company, Genstar Capital Partners
III, L.P. ("GENSTAR"), Stargen III, L.P. ("STARGEN"), Caisse de depot et
placement du Quebec ("CDPQ"), and certain of the Management Stockholders (as
defined herein) entered into a Subscription Agreement dated as of November 30,
2004 (the "SUBSCRIPTION AGREEMENT"), pursuant to which Genstar, Stargen, CDPQ
and certain Management Stockholders agreed to purchase certain shares of the
Series A Preferred Stock of the Company;
WHEREAS, on or about the date hereof, certain of the Covered
Stockholders (as defined herein) are purchasing from Genstar and Stargen certain
shares of Series A Preferred Stock of the Company pursuant to a Stock Purchase
Agreement, dated as of the date hereof (the "STOCK PURCHASE AGREEMENT"), among
such Covered Stockholders, Genstar and Stargen;
WHEREAS, the Company and certain of the Stockholders had previously
entered into that certain Stockholders Agreement, dated as of November 30, 2004
(the "PRIOR AGREEMENT"); and
WHEREAS, the parties hereto desire to amend and restate the Prior
Agreement to add additional Stockholders and to provide for certain rights and
obligations with respect to the shares of the Company's capital stock held by
the Management Stockholders and Non-Management Stockholders, certain transfer
restrictions thereon, certain voting rights and certain other matters, all as
provided in this Agreement.
AGREEMENT
NOW, THEREFORE, the parties to this Agreement, intending to be legally
bound hereby, agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the
following respective meanings:
(a) "AFFILIATE" means, with respect to a specified Person, any other
Person, directly or indirectly, controlling, controlled by or under common
control with such specified Person. For purposes of this definition, the term
"control," including the terms "controlling," "controlled by" and "under common
control," means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of voting securities or otherwise.
(b) "BOARD" shall mean the board of directors of the Company.
(c) "CHANGE OF CONTROL" means, whether in a single transaction or a
series of related transactions (i) a sale of all or substantially all of the
consolidated assets of the Company and its Subsidiaries taken as a whole, (ii) a
sale of Securities by the Company or the Genstar Parties resulting in more than
50% of the total voting power of all securityholders of the Company beneficially
owned by a Person other than the Genstar Parties, or (iii) a merger or
consolidation of the Company with or into another Person, if and only if, after
such merger or consolidation, the Genstar Parties and its Affiliates do not have
the ability to elect a majority of the board of directors of the surviving or
resulting company.
(d) "COMMON STOCK" shall mean the Common Stock, par value $0.001 per
share, of the Company.
(e) "CONVERTIBLE SECURITIES" shall mean (i) any securities of the
Company that are convertible into or exchangeable for Common Stock and (ii) any
rights, warrants or options to subscribe for or purchase Common Stock.
(f) "COVERED STOCKHOLDERS" shall mean the Non-Management Stockholders
and the Management Stockholders.
(g) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(h) "GENSTAR PARTIES" shall mean Genstar, Stargen and any Person to
whom Genstar or Stargen transfers Securities and who is designated as such by
the Board, provided that such Person becomes a party to this Agreement in the
capacity of Genstar or Stargen, as the case may be.
(i) "INDEPENDENT PARTY" shall mean any Person who is a bona fide
purchaser and who, directly or indirectly, immediately prior to the proposed
transaction, (i) holds less than 5% of the outstanding Securities of the Company
(on an as-converted to Common Stock basis) and (ii) is not an Affiliate of the
Company or Genstar.
(j) "MANAGEMENT STOCK" shall mean, with respect to a Management
Stockholder and its successors and permitted transfers and assigns, as the case
may be, Securities
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held beneficially or of record, directly or indirectly, as of the date hereof
and in the future, by such Management Stockholder.
(k) "MANAGEMENT STOCKHOLDER" shall mean each of Xxxxxxx X. Xxxx,
Xxxxxxx X. Xxxx, Xxxxxx X. Xxxxxxxxxx, Xxxxxx X. Xxxxxxxxxx, Xxxxxxx X. Xxxx,
Xxxxx Xxxxxxx, Xxxxxx Xxxxxx, Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxx, Xxxx Xxxxxx
and Xxxxxxx XxXxxxx and any Person (other than the Company and the Genstar
Parties) to whom such Stockholder(s) Transfer Securities in accordance with this
Agreement or any Person that the Board shall otherwise designate as such.
(l) "NEW SECURITIES" shall mean equity securities of the Company or
Altra, or rights, options, or warrants to purchase equity securities of the
Company or Altra, or any debt or other securities that are, or may become,
convertible or exchangeable into or exercisable for equity securities of the
Company or Altra.
(m) "NON-MANAGEMENT STOCKHOLDER" shall mean each of Xxxxx Xxxxxxxxx
(including Xxxxx Xxxxxxxxx MKC Worldwide), Xxxxx XxXxxxxxx, Xxx Xxxx, Xxxxxx
Xxxx and any other Person who is hereafter designated by the Board as a
Non-Management Stockholder.
(n) "PERMITTED TRANSFER" shall mean (a) a Transfer by a Covered
Stockholder of Securities made (i) to the Company pursuant to this Agreement,
(ii) by way of gratuitous donation to any trust exclusively for the benefit of
such Covered Stockholder's spouse, direct descendants (including legally adopted
children) or direct ascendants or (iii) if such Covered Stockholder is an
individual, by way of bequest or inheritance upon the death of such Covered
Stockholder to his or her executors, administrators, testamentary trustees,
legatees or beneficiaries; or (b) a Transfer by CDPQ of Securities to its
Affiliates; provided that, in the event of any Transfer made pursuant to one of
the exemptions provided by clauses (a)(ii), (a)(iii) or (b) above, the
transferee, assignee or donee shall have become a party to this Agreement in the
capacity of a Management Stockholder, a Non-Management Stockholder or CDPQ, as
the case may be, and such Management Stockholder, Non-Management Stockholder or
CDPQ, as the case may be, shall have furnished the Company with an executed copy
of this Agreement.
(o) "PERSON" shall mean any individual, partnership, limited liability
company, corporation, trust, joint venture, unincorporated organization, other
legal entity, government or agency or political subdivision thereof.
(p) "PUBLIC OFFERING" means the issuance and sale of shares of Common
Stock to the public pursuant to a registration statement under the Securities
Act which has been declared effective by the Securities and Exchange Commission
(other than a registration statement on Form X-0, Xxxx X-0 or any other similar
form).
(q) "QUALIFIED PUBLIC OFFERING" means an underwritten Public Offering
(which may be the initial Public Offering) resulting in gross proceeds of at
least $50,000,000.
(r) "REGISTRATION RIGHTS AGREEMENT" means that certain Amended and
Restated Registration Rights Agreement among the Company and the other parties
thereto dated as of the date hereof, as amended from time to time.
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(s) "SECURITIES" shall mean, as of the time of determination, shares
of Common Stock, Preferred Stock and Convertible Securities of the Company
outstanding at such time.
(t) "SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time.
(u) "SERIES A PREFERRED STOCK" shall mean the Series A Preferred
Stock, par value $0.001 per share, of the Company.
(v) "SUBSIDIARY" shall mean any and all corporations, partnerships,
limited liability companies and other entities with respect to which another
specified corporation or other entity directly or indirectly owns more than 50%
of (i) the securities having the power to elect members of the board of
directors or similar body governing the affairs of such entity, or (ii) the
equity interests of such entity.
(w) "TRANSFER" means, with respect to any Securities, any direct or
indirect, voluntary or involuntary, offer to sell, transfer, sale, assignment,
pledge, hypothecation, short sales, loan, grant of an option to purchase or
other disposition of any of the Securities, or the entering of any contract or
agreement to do any of the foregoing.
2. Transfer Restrictions.
(a) Transfer Restrictions.
(i) Covered Stockholders. In addition to the other restrictions
contained herein, without the prior written consent of the Company, which the
Company may withhold in its sole discretion, each Covered Stockholder agrees not
to Transfer any Securities, except for (i) Permitted Transfers made in
compliance with this Agreement, (ii) Transfers pursuant to Sections 3, 4, 5 or 6
of this Agreement, and (iii) Transfers as part of a Public Offering and, after
the Company's initial Public Offering, in accordance with Rule 144 under the
Securities Act. Any attempt by a Covered Stockholder to Transfer any Securities
other than in compliance with this Agreement shall be null and void and the
Company shall not, and shall not permit, any transfer agent to give any effect
in the Company's stock records to such attempted Transfer.
(ii) CDPQ. In addition to the other restrictions contained
herein, without the prior written consent of the Company, which the Company may
withhold in its sole discretion, CDPQ agrees not to Transfer any Securities,
except for (i) Permitted Transfers made in compliance with this Agreement, (ii)
Transfers pursuant to Sections 3, 4 or 5 of this Agreement, and (iii) Transfers
as part of a Public Offering and, after the Company's initial Public Offering,
in accordance with Rule 144 under the Securities Act. Any attempt by CDPQ to
Transfer any Securities other than in compliance with this Agreement shall be
null and void and the Company shall not, and shall not permit, any transfer
agent to give any effect in the Company's stock records to such attempted
Transfer.
(b) Market Standoff Agreement. Each Covered Stockholder and CDPQ
agree, if so requested by the Board or any managing underwriter in each case in
connection with an underwritten Public Offering, not to Transfer any Securities,
including a sale pursuant to
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Rule 144 under the Securities Act (except as part of such underwritten Public
Offering), during the seven day period prior to, and during the thirty (30) day
period (or such longer period of up to 180 days, subject to research analyst
reporting "blackout" extensions, as may be required by the Board or such
underwriter) beginning on, the effective date of any registration statement with
respect to such Public Offering (except as part of such registration) or the
commencement of the public distribution of securities, to the extent timely
notified in writing by the Company or the managing underwriters; provided,
however that the foregoing restrictions shall only be applicable to CDPQ and its
Affiliates to the same extent that the Genstar and its Affiliates are subject to
such restrictions. In order to enforce the foregoing covenants, the Company may
impose stop-transfer instructions with respect to the securities of each Covered
Stockholder and CDPQ. Each of the Covered Stockholders and CDPQ hereby agree to
enter into a separate agreement providing for the foregoing, as may be requested
by the managing underwriter(s) of any such Public Offering provided that all
holders of Series A Preferred Stock (and Common Stock issuable upon conversion
of the Series A Preferred Stock) enter into similar agreements for the same
period.
(c) Securities Laws Compliance. Each of the Covered Stockholders and
CDPQ agree and acknowledge that to the extent such Covered Stockholder or CDPQ,
as the case may be, is permitted pursuant to this Agreement to Transfer
Securities, such Covered Stockholder or CDPQ, as the case may be, will not
Transfer any Securities unless (i) the Transfer is pursuant to an effective
registration statement under the Securities Act, or the rules and regulations in
effect thereunder, or pursuant to Rule 144 under the Securities Act or (ii)
counsel for the Covered Stockholder or CDPQ, as the case may be (which counsel
shall be reasonably acceptable to the Company), shall have furnished the Company
with an opinion, reasonably satisfactory in form and substance to the Company,
that no such registration is required because of the availability of an
exemption from registration under the Securities Act (provided, that the Company
may waive the requirement of such opinion in its sole discretion).
Notwithstanding the foregoing, as to Covered Stockholders, the Company
acknowledges and agrees that a Permitted Transfer shall be deemed to be in
compliance with this Section 2(c) and that no opinion of counsel is required in
connection therewith.
(d) Legend. Any certificate representing outstanding Securities held
by a Covered Stockholder, CDPQ or any of their authorized designees or assigns,
which are a party to this Agreement or otherwise subject to the terms hereof,
shall bear the following legend, in addition to any other legend required by law
or otherwise:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE GOVERNED BY THE TERMS OF
THAT CERTAIN AMENDED AND RESTATED STOCKHOLDERS AGREEMENT (THE "STOCKHOLDERS
AGREEMENT"), A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE COMPANY. ANY
ATTEMPT TO TRANSFER OR ENCUMBER ANY INTEREST IN THE SECURITIES REPRESENTED
BY THIS CERTIFICATE NOT IN ACCORDANCE WITH SUCH STOCKHOLDERS AGREEMENT
SHALL BE NULL AND VOID, AND NEITHER THE COMPANY NOR ANY TRANSFER AGENT OF
SUCH SECURITIES SHALL GIVE ANY EFFECT TO SUCH ATTEMPTED TRANSFER OR
ENCUMBRANCE IN ITS RECORDS. THE HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE
OF IT,
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AGREES TO BE BOUND BY THE TERMS OF THE STOCKHOLDERS AGREEMENT.
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). EXCEPT AS OTHERWISE
PROVIDED IN SUCH AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION, OPTION, LOAN OR OTHER DISPOSITION OF THE SHARES REPRESENTED
BY THIS CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT, OR (B) IF THE COMPANY HAS BEEN
FURNISHED WITH A REASONABLY SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER
THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT OR THE
RULES AND REGULATIONS IN EFFECT THEREUNDER, AND IN COMPLIANCE WITH
APPLICABLE PROVISIONS OF STATE SECURITIES LAWS.
3. Right of First Refusal on Sale of Securities by Covered Stockholders
and CDPQ.
(a) General. Subject to the provisions of this Section 3, each Covered
Stockholder and CDPQ (for purposes of this Section 3, each a "SELLING
STOCKHOLDER") hereby grants, first, to the Company, and second, to the Genstar
Parties, a right of first refusal (the "RIGHT OF FIRST REFUSAL") to purchase all
of the Securities held by the Selling Stockholder which such Selling Stockholder
proposes to Transfer, in compliance with the restrictions set forth in Section 2
hereof, to a Person other than the Company. Each Right of First Refusal shall be
subject to the provisions of this Section 3:
(b) Right of First Refusal. Subject to the limitations imposed by, and
only upon compliance with, Section 2 hereof, in the event that a Selling
Stockholder receives a bona fide offer (the "OFFER") to Transfer any or all of
its Securities (the "OFFER SECURITIES") from a Person other than the Company
(the "OFFEROR") which the Selling Stockholder wishes to accept, the Selling
Stockholder shall cause the Offer to be put in writing and shall give the
Company and the Genstar Parties written notice (the "OFFER NOTICE") of such
Offer. The Offer Notice shall contain an irrevocable offer to sell the Offer
Securities to the Company, the Genstar Parties or, in the case of the Genstar
Parties, their Affiliates, on the same terms and conditions as the Offer, and
such Offer Notice shall be accompanied by a true copy of the Offer (which shall
identify the Offeror). The Company shall have thirty (30) days from the delivery
date of any Offer Notice to agree to purchase all of the Offer Securities either
(i) at the same price and on the same terms and conditions as the Offer, or (ii)
if the Offer includes any consideration other than cash, then at the sole option
of the Company, on the same terms and conditions as the Offer except at the
equivalent all cash price, determined in good faith by the Board. If the Company
fails to agree to purchase all of the Offer Securities within such thirty (30)
day period, the Genstar Parties shall have fifteen (15) days from the
above-mentioned expiration of the Company's 30 day period to agree to purchase,
or arrange for an Affiliate of the Genstar Parties to purchase all of the Offer
Securities either (i) at the same price and on the same terms and conditions as
the Offer, or (ii) if the Offer includes any consideration other than cash, then
at the sole option of the Genstar
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Parties, on the same terms and conditions as the Offer except at the equivalent
all cash price, determined in good faith by the Board.
(c) Failure to Exercise Right. If the Company and the Genstar Parties
collectively fail to purchase all of the Offer Securities pursuant to Section
3(b), the Selling Stockholder shall have sixty (60) days after the last date on
which the Genstar Parties's right to purchase the Offer Securities lapsed to
Transfer the Offer Securities to the Offeror identified in the initial Offer
Notice at a price equal to or above, and upon terms not more favorable to such
Offeror than, the price and terms specified in the Offer given in connection
with such Transfer; provided, however, that the Selling Stockholder shall not be
entitled to Transfer such Offer Securities (i) if the Offeror is a competitor,
supplier or customer of the Company, or if the Offeror is not reasonably
acceptable to the Board, such determination to be made in good faith, or (ii) if
the Transfer occurs prior to the Qualified Public Offering, unless the Offeror
agrees in writing to be bound by the provisions of this Agreement as if such
Offeror were a Covered Stockholder or CDPQ, as the case may be. In the event
that the Selling Stockholder has not Transferred the Offer Securities within
such sixty (60) day period, the Selling Stockholder shall not thereafter
Transfer (except in a manner otherwise permitted under this Agreement) any of
such Offer Securities without again complying with the provisions of this
Agreement, including, if applicable, this Section 3.
(d) Exercise of Right of First Refusal. If the Company and/or the
Genstar Parties exercises its Right of First Refusal, the closing of the
purchase of the Offer Securities shall take place within 30 days after the
Company and/or the Genstar Parties gives notice of such exercise, which period
of time shall be extended in order to comply with applicable laws and
regulations, including without limitation the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended. Upon exercise of such Right of First
Refusal, the Company and/or the Genstar Parties and the Selling Stockholder
shall be legally obligated to consummate the purchase contemplated thereby and
shall use their reasonable efforts to secure any approvals required in
connection therewith.
(e) Exceptions to Right of First Refusal. The Right of First Refusal
shall not apply to (i) Permitted Transfers made in compliance with this
Agreement, (ii) Transfers pursuant to Sections 4, 5 or 6 of this Agreement, or
(iii) any registered Public Offering in which such Offer Securities are
included, or pursuant to Rule 144.
(f) Termination. The covenants and agreements set forth in this
Section 3 shall terminate upon the consummation of a Qualified Public Offering.
4. Covered Stockholders' and CDPQ Right of Co-Sale.
(a) Definition. If any or all of the Genstar Parties propose to,
directly or indirectly, Transfer for value an interest in Securities owned by
such Genstar Parties to any Person (the "TRANSFEREE"), except as set forth in
Section 4(e), each Covered Stockholder and CDPQ shall have a right of co-sale
(the "RIGHT OF CO-SALE") to sell an amount of Securities held by such Covered
Stockholder and/or CDPQ, as the case may be, equal to his, her or its applicable
Right of Co-Sale Pro Rata Share (as defined below) multiplied by the number of
Securities proposed to be transferred to the Transferee (the "TRANSFEROR
SECURITIES"), on the same terms
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(including, without limitation, price) and at the same time as the Transferor,
all as described in this Section 4.
(b) Right of Co-Sale Pro Rata Share. The "RIGHT OF CO-SALE PRO RATA
SHARE" for each Covered Stockholder and CDPQ shall be that percentage equal to
(i) the number of Securities then owned by such Covered Stockholder or CDPQ, as
the case may be, divided by (ii) the number of Securities then owned by all
Covered Stockholders, CDPQ, the Genstar Parties and other holders of Securities
entitled to the benefits of any other "co-sale" or "tag-along" rights in
connection with such sale. Each Covered Stockholder and CDPQ, as the case may
be, shall have the right to sell that number of Securities to the Transferee
(or, upon the unwillingness of any Transferee to purchase directly from such
Covered Stockholder or CDPQ, to the Genstar Parties simultaneously with the
closing of the sale by the Transferor to the Transferee) up to its respective
and applicable Right of Co-Sale Pro Rata Share of the Transferor Securities
determined as of the date the Transfer Notice (as defined below) is delivered to
the Company, upon the terms and subject to the conditions pursuant to which the
Genstar Parties sell their Transferor Securities to the Transferee.
(c) Mechanics of Sale.
(i) Exercise. If the Genstar Parties propose to Transfer any
Transferor Securities in a transaction subject to this Section 4, then they
shall notify, or cause to be notified, the Covered Stockholders and CDPQ, in
writing, of each such proposed Transfer (the "TRANSFER NOTICE"). Such Transfer
Notice shall set forth: (i) the name of the Transferee and the number of
Securities proposed to be Transferred and (ii) the proposed amount and form of
consideration and material terms and conditions of the Transfer. The Right of
Co-Sale may be exercised by any Covered Stockholder and/or CDPQ, as the case may
be, by delivering a written notice to the Genstar Parties (the "CO-SALE NOTICE")
within ten (10) business days following receipt of the Transfer Notice. The
Co-Sale Notice shall state the number of Securities that each Covered
Stockholder and/or CDPQ, as the case may be, wishes to include in such Transfer
to the Transferee, which number may not exceed its Right of Co-Sale Pro Rata
Share of the Transferor Securities. Upon the giving of a Co-Sale Notice, each
Covered Stockholder and/or CDPQ, as the case may be, shall be obligated to sell
the number of Securities set forth in its Co-Sale Notice to the Transferee on
the same (or no less favorable) terms (including, without limitation, price) and
at the same time as the Genstar Parties.
(ii) Assignment of Interest. If a Covered Stockholder and/or
CDPQ, as the case may be, exercises its respective Right of Co-Sale, then the
Genstar Parties shall assign to such Covered Stockholder and/or CDPQ, as the
case may be, as much of its interest in the agreement of sale with the
Transferee as such Covered Stockholder and/or CDPQ, as the case may be, shall be
entitled to so assign and shall accept, and such Covered Stockholder and/or
CDPQ, as the case may be, shall be obligated to provide, the same
representations, warranties, indemnification and covenants to the Transferee as
the Genstar Parties under such agreement of sale; provided, however, that CDPQ's
indemnification obligations under such agreement of sale shall (i) be on a
several (and not joint and several) basis (based on CDPQ's share of the
aggregate proceeds paid with respect to its shares) and (ii) not exceed the net
proceeds received by CDPQ in such sale. To the extent that any Transferee
prohibits such assignment or otherwise refuses to purchase Securities from a
Covered Stockholder and/or CDPQ, as the case may be, exercising its Right of
Co-Sale hereunder, then the Genstar Parties shall not sell to such Transferee
any Transferor Securities unless and until, simultaneously with such sale, the
Genstar Parties shall purchase such Securities from such Covered Stockholder
and/or CDPQ, as the case may be, for the same consideration per share and on the
same (or no less favorable) terms and subject to the same (or no less favorable)
conditions as the proposed Transfer by the Genstar Parties. Each accepting
Covered Stockholder and/or CDPQ, as the case may be,
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shall deliver to the Genstar Parties the certificate or certificates
representing the Securities to be Transferred pursuant to the Right of Co-Sale,
duly endorsed for Transfer with signatures guaranteed, together, in the case of
a Covered Stockholder, with a limited power of attorney authorizing the Genstar
Parties to Transfer such Securities pursuant to the terms of such Transfer and
to execute on behalf of such Covered Stockholder, any purchase agreement or
other documentation required to consummate such Transfer. CDPQ agrees to execute
and deliver a purchase agreement and other documentation reasonably requested by
the Genstar Parties to consummate the Transfer in compliance with this Section
4(c)(ii).
(iii) Failure to Exercise Right of Co-Sale; Additional Transfers.
If a Covered Stockholder and/or CDPQ, as the case may be, elects not to exercise
its Right of Co-Sale, then the Genstar Parties may, not later than one-hundred
eighty (180) days following delivery to the Company of the Transfer Notice,
conclude a Transfer of all or any portion of the Transferor Securities covered
by the Transfer Notice on terms and subject to conditions not more favorable to
the Transferor than those described in the Transfer Notice. Any proposed
Transfer of more securities by the Transferor shall again be subject to the
Right of Co-Sale and shall require compliance by the Transferor with the
procedures described in this Section 4.
(d) Change of Control Right of Co-Sale. Notwithstanding anything in
this Section 4 to the contrary, in the event that a Transfer of Securities by
the Genstar Parties would result in a Change of Control, then CDPQ shall have a
Right of Co-Sale to sell up to all of the Securities then held by CDPQ to the
Transferee thereof (the "CDPQ OPTION") on the same (or no less favorable) terms
(including, without limitation, price) and at the same time as the Genstar
Parties. If CDPQ exercises the CDPQ Option, CDPQ shall deliver the Co-Sale
Notice in accordance with Section 4(c) within five (5) business days following
receipt of the Transfer Notice, specifying the amount of Securities that CDPQ
elects to sell to such Transferee. If, after giving effect to the exercise of
the CDPQ Option, the total amount of Securities to be included in the proposed
Transfer exceeds the number of Securities to be purchased by the Transferee in
the proposed Transfer, then the amount of Securities to be sold by the Genstar
Parties and the Covered Stockholders shall be reduced (in relative proportions
or amounts determined by Genstar in its sole discretion) by the amount of
Securities to be sold by CDPQ in excess of its Right of Co-Sale Pro Rata Share.
(e) Exceptions to Right of Co-Sale. The Right of Co-Sale shall not
apply to (i) Transfers to Affiliates, members, advisors, employees, consultants
and partners of the Genstar Parties provided that such Transfer does not result
in a Change of Control, (ii) Transfers to other Stockholders or their Affiliates
provided that such Transfer does not result in a Change of Control, (iii)
Transfers made pursuant to a registered Public Offering or pursuant to Rule 144
under the Securities Act, (iv) Transfers in the form of dividends or
distributions (whether upon liquidation or otherwise) by a Genstar Party or a
Genstar Affiliate to its current or former partners, members of stockholders
(and any subsequent transfers by such current or former
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partners, members or stockholders) pursuant to the terms of the partnership,
limited liability company or other applicable agreement, or (v) Transfers not
for value; provided that, in the case of clauses (i), (ii) and (v) above, the
transferee agrees in writing to be bound by the provisions of this Agreement
applicable to a Genstar Party.
(f) Termination. The covenants and agreements set forth in this
Section 4 shall terminate upon the consummation of a Qualified Public Offering.
5. Drag-Along Right.
(a) Sales by the Genstar Parties. Notwithstanding Section 4, if the
Genstar Parties determine to Transfer any Securities then held by the Genstar
Parties to an Independent Party and such Transfer results in a Change of Control
(a "DRAG-ALONG SALE"), then upon the Genstar Parties' request, (a) each Covered
Stockholder shall sell to such proposed purchaser the Applicable Percentage (as
defined below) of the Securities held by such Covered Stockholder and (b) CDPQ
shall sell to such proposed purchaser up to all of the Securities held by CDPQ
but in no event less than the Applicable Percentage of the Securities held by
CDPQ. For purposes of this Section 5, the "APPLICABLE PERCENTAGE" shall be that
percentage equal to (i) the number of Securities being Transferred by the
Genstar Parties in the Drag-Along Sale divided by (ii) the aggregate number of
Securities then owned by the Genstar Parties. If CDPQ shall elect to sell more
than its Applicable Percentage of Securities in the Drag-Along Sale and the
total number of Securities exceeds the number of Securities to be Transferred in
the Drag-Along Sale, then the amount of Securities to be sold by the Covered
Stockholders and the Genstar Parties in the Drag-Along Sale shall be reduced (in
relative proportions or amounts determined by Genstar in its sole discretion) by
the number of Securities to be included by CDPQ in excess of CDPQ's Applicable
Percentage in the Drag-Along Sale. The terms and conditions of such Drag-Along
Sale shall be on the same terms and conditions (or no less favorable terms and
conditions) as such Transfer by the Genstar Parties, including without
limitation sale price with respect to the same type of securities,
representations and warranties, covenants and indemnification obligations;
provided, however, that (w) if the holders of a class of Securities are given an
option under the agreement of sale to elect the form and amount of the
consideration to be received in consideration for the Transfer of such
Securities, then each holder of such class of Securities shall be given the same
option, (x) CDPQ's indemnification obligations under the agreement of sale shall
be several (and not joint and several) based on CDPQ's share of the aggregate
proceeds paid with respect to its Securities and shall not exceed the net
proceeds received by CDPQ in such sale, (y) CDPQ shall not be subject to the
non-compete provisions or other provisions that restrict CDPQ's ability to
invest in any Person, if any, contained in the agreement for sale and (z) the
representations and warranties made by CDPQ in such agreement of sale shall be
limited to customary representations as to CDPQ and its ownership of Securities.
(b) Notice. Prior to making any Drag-Along Sale, the Genstar Parties
shall, if they determine that Covered Stockholders and CDPQ should participate
in such Transfer, provide each Covered Stockholder and CDPQ with written notice
(the "DRAG-ALONG NOTICE") not less than ten (10) business days prior to the
proposed date of the Drag-Along Sale (the "DRAG-ALONG SALE DATE"). The
Drag-Along Notice shall set forth: (i) the name of the proposed purchaser; (ii)
the proposed amount and form of consideration to be paid per Security and the
material terms and conditions of the Transfer; and (iii) the Drag-Along Sale
Date and the date
10
upon which the Covered Stockholders and CDPQ shall deliver to the Genstar
Parties the certificates or instruments representing the Securities owned by the
Covered Stockholder and CDPQ, respectively, duly endorsed, and, with respect to
the Covered Stockholders, the limited power of attorney referred to below. Each
Covered Stockholder and CDPQ shall deliver to the Genstar Parties the
certificate(s) or instrument(s) representing their Securities, duly endorsed for
transfer with signatures guaranteed, on or before the date set forth in the
Drag-Along Notice for such delivery, together, with respect to the Covered
Stockholders, with a limited power of attorney authorizing the Genstar Parties
to sell or otherwise dispose of such Securities pursuant to the term of such
Drag-Along Sale and to execute on behalf of such Covered Stockholders any
purchase agreement or other documentation required to consummate such Drag-Along
Sale.
(c) Effect of Drag-Along Sale. If a Covered Stockholder and/or CDPQ,
as the case may be, receives the applicable purchase price from a Drag-Along
Sale, but has failed to deliver certificates or instruments representing its
Securities as described in this Section 5, it shall for all purposes be deemed
no longer to be a securityholder of the Company with respect to the Securities
for which the purchase price has been received, and with respect to such
Securities it shall have no voting rights, shall not be entitled to any
dividends or other distributions with respect to the Securities held by it, and
shall have no other rights or privileges granted to securityholders, such
Securities under law or this Agreement.
(d) Sale of the Company. If a Drag-Along Sale is to be effected in the
form of a merger or other corporate reorganization which requires stockholder
approval, and if the Board approves the Drag-Along Sale (an "APPROVED SALE"),
the Covered Stockholders and CDPQ shall vote for, consent to and raise no
objections against such Approved Sale and each Covered Stockholder and CDPQ
shall waive any dissenters' rights, appraisal rights or similar rights in
connection with such Approved Sale. Each Covered Stockholder and CDPQ shall take
all necessary or desirable actions in connection with the consummation of the
Approved Sale and the distribution of the aggregate consideration from such
Approved Sale as reasonably requested by the Company.
(e) Termination. The covenants and agreements set forth in this
Section 5 shall terminate upon the consummation of a Qualified Public Offering.
6. Right to Repurchase Securities Upon Termination of Management
Stockholder's Employment.
(a) Right of Repurchase Upon Termination of Employment. If a
Management Stockholder's employment with the Company and its Subsidiaries is
terminated, voluntarily or involuntarily, for any reason, first, the Company,
and second, the Genstar Parties, shall have the exclusive and irrevocable right
(which shall not be an obligation) to repurchase (the "RIGHT OF REPURCHASE"),
for a period of ninety (90) days from the effective date of termination, all or
any portion of the Management Stock owned by such Management Stockholder, free
and clear of all liens, pledges, security interests and other encumbrances and
restrictions, at a purchase price per share equal to the purchase price as
determined in accordance with Section 6(c) below (the "REPURCHASE PRICE"). The
Company shall notify the Genstar Parties within thirty (30) days after the
termination of any Management Stockholder's employment with the Company and its
11
Subsidiaries and whether and to what extent the Company intends to exercise its
Right of Repurchase.
(b) Repurchase Procedure. If the Company and/or the Genstar Parties
elect to exercise the Right of Repurchase with respect to a Management
Stockholder's Management Stock pursuant to this Section 6, it shall deliver
written notice to such Management Stockholder within such 90-day period setting
forth the terms of the repurchase pursuant to which such repurchase is being
made. The Company and/or the Genstar Parties shall pay the Repurchase Price in
cash upon the closing of the transaction (which shall occur within such 90-day
period, which period of time shall be extended in order to comply with
applicable laws and regulations, including without limitation the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended), and the
Management Stockholder shall promptly, upon receipt of such repurchase price,
(i) endorse and deliver to the Company or the Genstar Parties, as applicable,
the certificate(s) or instrument(s) representing the Management Stock
repurchased by the Company, free and clear of all liens, pledges, security
interests and other encumbrances and restrictions, and (ii) represent and
warrant to the Company and or the Genstar Parties, as applicable, to its title
and ownership of such Management Stock, free and clear of liens or encumbrances,
and its authority to sell such Management Stock.
(c) Purchase Price.
(i) In the event that a Management Stockholder's employment with
the Company and its Subsidiaries is terminated for "Cause," the Repurchase Price
shall equal the lower of (A) the amount paid by such Management Stockholder to
acquire the shares of Management Stock subject to repurchase and (B) the then
current Fair Market Value of such shares of Management Stock (as determined in
accordance with Section 6(c)(iii)).
(ii) In the event that a Management Stockholder's employment with
the Company and its Subsidiaries is terminated for any reason other than for
"Cause," the Repurchase Price shall be the then current Fair Market Value of the
Management Stock subject to repurchase.
(iii) For purposes of this Section 6, the following terms shall
have the following meanings:
(A) "FAIR MARKET VALUE" shall mean (1) with respect to
shares of Common Stock, an amount determined in good faith by the Board of
Directors of the Company (without discount for lack of marketability or minority
interest) and (2) with respect to shares of Preferred Stock, the greater of (i)
an amount per share equal to $1.00 (as adjusted for any stock split, stock
dividends, recapitalizations and the like after issuance thereof) plus all
declared but unpaid dividends, if any, on such stock or (ii) the fair value of
the Preferred Stock as of the date of valuation as determined by Board of
Directors of the Company in good faith, on the basis of a sale to a willing,
unaffiliated buyer in an arm's length transaction; and
(B) "CAUSE" shall mean: (i) the Management Stockholder's
material breach of the terms of any agreement between the Management Stockholder
and the Company; (ii) the Management Stockholder's willful failure or refusal to
perform material
12
duties; (iii) the Management Stockholder's willful insubordination or disregard
of the legal directives of the Board which are not inconsistent with the scope,
ethics and nature of the Management Stockholder's duties and responsibilities;
(iv) the Management Stockholder's engaging in misconduct which has a material
adverse impact on the reputation, business, business relationships or financial
condition of the Company; (v) the Management Stockholder's commission of an act
of fraud or embezzlement against the Company; or (vi) any conviction of, or plea
of guilty or nolo contendere by, the Management Stockholder with respect to a
felony (other than a traffic violation), a crime involving moral turpitude,
fraud or misrepresentation; provided, however, that Cause shall not be deemed to
exist under any of clauses (i), (ii) or (iii) unless the Management Stockholder
has been given reasonably detailed written notice of the grounds for such Cause
and the Management Stockholder has not effected a cure within twenty (20) days
of the date of receipt of such notice.
(d) Rights as Stockholders. Once the Company or the Genstar Parties
has exercised its Right of Repurchase with respect to a Management Stockholder's
Management Stock, the Management Stockholder shall have no rights with respect
to such Management Stock except to receive the Repurchase Price. If the Company
has exercised its Right of Repurchase it shall not consider such Management
Stock outstanding for purposes of paying dividends, taking votes, or for any
other purposes.
(e) Termination. The covenants and agreements set forth in this
Section 6 shall terminate upon the consummation of a Qualified Public Offering.
7. Covenants.
(a) Confidential Information.
(i) "CONFIDENTIAL INFORMATION" means any proprietary information,
technical data, trade secrets or know-how belonging to the Company and/or its
direct or indirect Subsidiaries, including, but not limited to, research
information and information on product plans, products, services, customer
lists, product markets and market expectations, developments, inventions,
processes, formulas, and marketing, financial or other business information
disclosed to a Covered Stockholder or a Stockholder that holds at least
1,750,000 Securities (subject to proportional adjustment for any stock split,
stock dividend, reclassification or similar event) (a "MAJOR STOCKHOLDER"), by
the Company and/or its Subsidiaries either directly or indirectly in writing,
orally or otherwise; provided, however, that the term Confidential Information
shall not include (i) information which at the time of disclosure by the Company
and/or its Subsidiaries to a Covered Stockholder or a Major Stockholder, as the
case may be, is in the public domain; (ii) information which the Covered
Stockholder or the Major Stockholder, as the case may be, can demonstrate by
written evidence was in his or her possession prior to disclosure by the Company
and/or its Subsidiaries; (iii) information which subsequent to disclosure by the
Company and/or its Subsidiaries to a Covered Stockholder or a Major Stockholder,
as the case may be, becomes part of the public domain through no wrongful act of
such Covered Stockholder or such Major Stockholder, as the case may be; and (iv)
information which becomes known to such Covered Stockholder or Major
Stockholder, as the case may be, subsequent to disclosure by the Company and/or
its Subsidiaries through a third party who is not under any obligation of
confidentiality to the Company or its Subsidiaries.
13
(ii) Each Management Stockholder, Non-Management Stockholder and
Major Stockholder hereby agrees not to use Confidential Information for any
purpose whatsoever other than in connection with such Management Stockholder's
employment with the Company and/or its Subsidiaries or, in the case of a
Non-Management Stockholder or Major Stockholder, to monitor its investment in
the Company, or disclose Confidential Information to any third party other than
(i) as required by applicable law, (ii) in connection with the Management
Stockholder's discharge of his duties as an employee of the Company or its
Subsidiaries, (iii) in the performance of a Management Stockholder's or
Non-Management Stockholder's services as a member of the board of directors of
the Company and/or its Subsidiaries, or (iv) by a Non-Management Stockholder or
Major Stockholder to its attorneys, accountants and employees to the extent
necessary to obtain their services in connection with monitoring its investment
in the Company, as applicable. Each Management Stockholder, Non-Management
Stockholder and Major Stockholder agrees that Confidential Information shall
remain the sole property of the Company and its Subsidiaries. Each Management
Stockholder, Non-Management Stockholder and Major Stockholder further agrees to
take all reasonable precautions to prevent any unauthorized disclosure of
Confidential Information.
(iii) Each Management Stockholder hereby agrees that such
Management Stockholder will not improperly use or disclose to Company and/or its
Subsidiaries any proprietary information or trade secrets of any former or
current employer or other person or entity with which each Management
Stockholder has an agreement or duty to keep in confidence information acquired
by each Management Stockholder in confidence, and that each Management
Stockholder will not bring onto the premises of the Company and/or its
Subsidiaries any unpublished document or proprietary information belonging to
such employer, person or entity unless consented to in writing by such employer,
person or entity.
(iv) Each Management Stockholder, Non-Management Stockholder and
Major Stockholder recognizes that the Company and its Subsidiaries has received
and in the future will receive from third parties confidential or proprietary
information of such third parties subject to a duty on the part of the Company
and its Subsidiaries to maintain the confidentiality of such information and to
use it only for certain limited purposes. Each Management Stockholder,
Non-Management Stockholder and Major Stockholder agrees that, insofar as he is
informed of the confidential status of such information in writing, such
Management Stockholder, Non-Management Stockholder or Major Stockholder, as the
case may be, owes the Company and its Subsidiaries a duty to hold all such
confidential or proprietary information in confidence and not to disclose it to
any person, firm or corporation or to use it except as necessary (i) to
discharge a Management Stockholder's duties as an employee of the Company and
its Subsidiaries, (ii) in the performance of a Management Stockholder's or
Non-Management Stockholder's services as member of the board of directors of the
Company and its Subsidiaries, or (iii) by a Non-Management Stockholder or Major
Stockholder to its attorneys, accountants and employees to the extent necessary
to obtain their services in connection with monitoring its investment in the
Company, as applicable.
(b) Non-Competition. Each Management Stockholder covenants and agrees
that (i) during his employment with the Company and/or its Subsidiaries and (ii)
for a period of one (1) year thereafter, such Management Stockholder shall not
directly or indirectly own an interest in, operate, join, control, advise,
consult to, work for, serve as a director or manager of,
14
have a financial interest, or participate in any corporation, partnership,
proprietorship, firm, association, Person, or other entity that engages (or
engaged) in any business, activity or service of the Company and/or its
Subsidiaries in which the Company and/or its Subsidiaries is engaged during the
term of such Management Stockholder's employment, or with respect to such
Management Stockholder's covenants regarding the periods following termination,
in which the Company and its Subsidiaries is engaged at the time of termination
and/or was engaged during the six-month period prior thereto (a "COMPANY
ACTIVITY"). This covenant applies to Company Activities in any territory or
jurisdiction in which the Company and/or its Subsidiaries is doing business or
is making an active effort to do business during the term of such Management
Stockholder's employment with the Company and/or its Subsidiaries. This covenant
does not prohibit the mere passive ownership of less than two percent (2%) of
the outstanding stock of any public corporation, as long as such Management
Stockholder is not otherwise in violation of the covenants contained in Section
7(a).
(c) Non-Recruitment. Each Management Stockholder agrees that the
Company and its Subsidiaries have invested substantial time and effort in
assembling their present workforces. Accordingly, each Management Stockholder
covenants and agrees that during his employment and for a period of two (2)
years thereafter, such Management Stockholder shall not directly or indirectly
entice or solicit or seek to induce or influence any of the Company's and/or its
Subsidiaries' employees or contractors to leave their employment or engagement
with the Company and/or its Subsidiaries.
(d) Financial Information and Observer Rights.
(i) Basic Financial Information. The Company will use
commercially reasonable efforts to maintain accurate and complete books and
records of account in which full and correct entries will be made of all its
business transactions pursuant to a system of accounting established and
administered in accordance with generally accepted accounting principles
("GAAP") consistently applied (except as noted therein or as disclosed to the
recipients thereof), and will set aside on its books and records all such proper
accruals and reserves as shall be required under GAAP consistently applied. The
Company shall deliver to each Major Stockholder:
(A) as soon as practicable, and in any event within one
hundred twenty (120) days after the end of each fiscal year of the Company, a
consolidated balance sheet, a consolidated statement of stockholders' equity and
a consolidated statement of cash flows of the Company and its Subsidiaries for
such fiscal year, such year-end financial reports to be in reasonable detail,
prepared in accordance with GAAP, and audited and certified by independent
public accountants selected by the Board; and
(B) as soon as practicable, and in any event within
forty-five (45) days after the end of each of the first three (3) quarters of
each fiscal year of the Company, an unaudited consolidated income statement and
statement of cash flows of the Company and its Subsidiaries for such fiscal
quarter and an unaudited consolidated balance sheet of the Company and its
Subsidiaries as of the end of such fiscal quarter prepared in accordance with
GAAP, with the exception that no footnotes need be attached to such statements
and year-end audit adjustments may not have been made.
15
(C) if and to the extent available, within thirty (30) days
of the end of each month, an unaudited consolidated income statement and
statement of cash flows of Altra and its Subsidiaries and a schedule as to the
sources and application of funds and an unaudited consolidated balance sheet of
Altra and its Subsidiaries for and as of the end of such month, in reasonable
detail prepared in accordance with GAAP consistently applied (except as noted
therein), with the exception that no footnotes need be attached to such
statements and year-end audit adjustments may not have been made; and
(D) as soon as practicable, and in any event at least twenty
(20) days prior to the end of each fiscal year, a budget and operating plan for
the Company for the next fiscal year.
(ii) Inspection. The Company shall permit each Major Stockholder,
at such Stockholder's expense, to visit and inspect the Company's and each
Subsidiary's properties, to examine its books and records and to discuss the
Company's and each Subsidiary's affairs, finances and accounts with its
officers, all at times reasonably convenient to both parties; provided, however,
that the Company shall not be obligated pursuant to this Section 7(d)(iii) to
provide access to any information which it reasonably considers to be
Confidential Information.
(iii) Observer Rights. For so long as CDPQ is a Major
Stockholder, the Company shall invite one representative designated by CDPQ (the
"CDPQ REPRESENTATIVE") to attend, in a nonvoting observer capacity only, all
meetings of the Board and all meetings of the board of directors of the
Company's Subsidiaries and, in this respect, give the CDPQ Representative copies
of all notices, minutes, consents and other materials that the Company or its
Subsidiaries, as the case may be, provides to its directors as and when such
materials are provided to the directors, except that the CDPQ Representative may
be excluded from access to any material or meeting or portion thereof if the
Company or its Subsidiary, as the case may be, reasonably believes that such
exclusion is reasonably necessary to protect confidential proprietary
information, to preserve the attorney-client privilege or for other similar
reasons. The Company shall reimburse the CDPQ Representative for all
out-of-pocket expenses incurred by the CDPQ Representative in connection with
attending Board meetings.
(iv) Reporting Requirements of the Exchange Act. From the date on
which Altra becomes subject to the reporting requirements of the Exchange Act,
(which shall include any successor federal statute), and for only as long as
Altra is subject to such reporting requirements, and in lieu of the financial
information required pursuant to Section 7(d)(i) and 7(d)(ii), as the case may
be, the Company shall promptly provide Stockholders with (or make available to
Stockholders through XXXXX or its website) copies of Altra's annual reports on
Form 10-K and its quarterly reports on Form 10-Q, respectively.
(e) Termination. The covenants and agreement set forth in Section 7(a)
shall survive for a period of five (5) years after the date hereof. As to each
Management Stockholder, the covenants and agreement set forth in Section 7(b)
shall survive for a period of one year and one day after such Management
Stockholder ceases to be an employee of the Company, and the covenants and
agreements set forth in Section 7(c) shall survive for a period of two (2) years
plus one day after such Management Stockholder ceases to be an employee of the
Company. The covenants and agreement set forth in Section 7(d) (other than
Section 7(d)(iii)) (i) shall terminate
16
and be of no further force or effect immediately upon consummation of Altra's or
the Company's initial Public Offering, and (ii) shall not be in effect during
such time as Altra or the Company is filing such information pursuant to the
periodic reporting requirements of Sections 12(g) or 15(d) of the Exchange Act.
8. Right of First Offer. Subject to the terms and conditions specified in
this Section 8, and applicable securities laws, in the event the Company or
Altra, as the case may be, proposes to sell any New Securities, the Company or
Altra, as the case may be, shall first make an offering of such New Securities
to each Major Stockholder in accordance with the following provisions of this
Section 8. A Major Stockholder shall be entitled to apportion the right of first
offer hereby granted it among its Affiliates in such proportions as it deems
appropriate.
(a) The Company shall deliver a notice, in accordance with the
provisions of Section 14 hereof (the "OFFER NOTICE") to each of the Major
Stockholder stating (i) its bona fide intention to offer such New Securities,
(ii) a description of the New Securities and the number of such New Securities
to be offered, and (iii) the price and terms, if any, upon which it proposes to
offer such New Securities. If the New Securities are to be offered for property
other than cash, the Board shall make a good faith determination of the fair
market value of the property proposed to be received for such New Securities and
such determination shall constitute the price at which the New Securities will
be offered for purposes of this Section 8.
(b) By written notification received by the Company, within twenty
(20) calendar days after mailing of the Offer Notice, each of the Major
Stockholders may elect to purchase or obtain, at the price and on the terms
specified in the Offer Notice, up to that portion of such New Securities which
equals the proportion that the number of Securities (assuming full conversion
and exercise of all Securities) then held by such Major Stockholder bears to the
total number of shares of Common Stock of the Company then outstanding (assuming
full conversion and exercise of all Securities). The Company shall promptly, in
writing, inform each Major Stockholder that elects to purchase all the shares
available to it (each, a "FULLY EXERCISING STOCKHOLDER") of any other Major
Stockholder's failure to do likewise. During the ten (10) day period commencing
after receipt of such information, each Fully Exercising Stockholder shall be
entitled to obtain that portion of the New Securities for which Major
Stockholders were entitled to subscribe but which were not subscribed for by the
Major Stockholders which is equal to the proportion that the number of shares of
Common Stock issued and held, or issuable upon conversion of the Securities then
held, by such Fully Exercising Stockholders bears to the total number of shares
of Common Stock issued and held, or issuable upon conversion of the Securities
then held, by all Fully Exercising Stockholders who wish to purchase such
unsubscribed shares.
(c) If all New Securities referred to in the Offer Notice are not
elected to be purchased or obtained as provided in Section 8(b) hereof, the
Company may, during the ninety (90) day period following the expiration of the
period provided in Section 8(b) hereof, offer the remaining unsubscribed portion
of such New Securities (collectively, the "REFUSED SECURITIES") to any person or
persons at a price not less than, and upon terms no more favorable to the
offeree than, those specified in the Offer Notice. If the Company does not enter
into an agreement for the sale of the New Securities within such period, the
right provided hereunder shall be deemed
17
to be revived and such New Securities shall not be offered unless first
reoffered to the Major Stockholders in accordance with this Section 8.
(d) The right of first offer in this Section 8 shall not be applicable
to: (i) securities of the Company issued or deemed issued to employees, officers
or directors of, or consultants to, the Company or any of its Subsidiaries
pursuant to a plan, agreement, or arrangement approved by the Board; (ii) shares
of Common Stock issued in a Public Offering; (iii) the issuance of securities of
the Company pursuant to the conversion, exercise or exchange of outstanding
securities of the Company; (iv) securities issued in connection with any stock
split or stock dividend of the Company's Securities; (v) the issuance of
securities in connection with a bona fide business acquisition of or by the
Company, whether by merger, consolidation, sale of assets, sale or exchange of
stock or otherwise, which acquisition has been approved by the Board; or (vi)
the issuance of securities of the Company in connection with any future
borrowing, line of credit, leasing or similar arrangement approved by the Board.
(e) The right of first offer set forth in this Section 8 may not be
assigned or transferred except that such right is assignable by each Major
Stockholder to any Affiliate of such Major Stockholder.
(f) The provisions of this Section 8 shall terminate upon the earlier
of (i) the consummation of a Qualified Public Offering, and (ii) a Change of
Control.
9. Voting of Securities.
(a) Agreement to Vote. Each Stockholder hereby agrees to vote all of
the Securities now or hereafter acquired by such Stockholder in accordance with
the provisions of this Section 9.
(b) Board Size. Each of the Stockholders shall vote all of such
Stockholder's Securities to ensure that the size of the Company's Board of
Directors shall be fixed at five (5) directors (or such other number of
directors as Genstar determines in its sole discretion), consisting of the five
(5) Genstar Directors (as defined below) and/or such other directors as Genstar
may at any time or from time to time nominate for election or appointment.
(c) Election of the Genstar Directors. On all matters relating to the
election of the Genstar Directors, each Stockholder shall vote all of such
Stockholder's Securities to elect as directors of the Board, those
representatives nominated by Genstar Capital III, L.P. (the "GENSTAR
DIRECTORS"), who initially shall be Xxxx-Xxxxxx X. Xxxxx, Xxxxxx X. Gold,
Xxxxxxx X. Xxxxxxxx, Xxxxx Xxxxxxxxx and Xxxxxxx Xxxx. On all matters relating
to the removal of the Genstar Directors, each Stockholder hereto shall vote all
of such Stockholder's Securities to ensure that any Genstar Director selected by
Genstar Capital III, L.P. for removal as a Genstar Director shall be so removed
from the Board. Any such vacancy created by such removal shall be filled
pursuant to this Section 9(c).
(d) Legend. Each certificate representing Securities shall bear a
legend reading as follows:
18
"THE SECURITIES EVIDENCED HEREBY ARE SUBJECT TO THE TERMS OF THE
STOCKHOLDERS AGREEMENT WHICH PLACES CERTAIN RESTRICTIONS ON THE VOTING OF
THE SECURITIES REPRESENTED HEREBY, AND BY ACCEPTING ANY INTEREST IN SUCH
SECURITIES THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO
AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF THE STOCKHOLDERS
AGREEMENT."
The Company agrees that, during the term of this Agreement, it will not
remove, and will not permit to be removed (upon registration of transfer,
reissuance or otherwise), this legend from any such certificate and will place
or cause to be placed such legend on any new certificate issued to represent
Securities theretofore represented by a certificate carrying such legend.
(e) Specific Enforcement. Each Stockholder acknowledges and agrees
that each Stockholder hereto may be irreparably damaged in the event any of the
provisions of this Section 9 are not performed by the Stockholders in accordance
with their specific terms or are otherwise breached. Accordingly, it is agreed
that each of the Company and the Stockholders shall be entitled to seek an
injunction to prevent breaches of this Section 9 and to specific enforcement of
the provisions set forth herein in any action instituted in any court of the
United States or any state having subject matter jurisdiction, in addition to
any other remedy to which the Stockholders may be entitled at law or in equity.
(f) Manner of Voting; Grant of Proxy. The voting of Securities
pursuant to this Section 9 may be effected in person, by proxy, by written
consent or in any other manner permitted by applicable law. Each Stockholder
hereby grants to the Secretary of the Company, in the event that such
Stockholder fails to vote its Securities as required by this Section 9, a proxy
coupled with an interest in all Securities, whether held of record or
beneficially owned by such Stockholder, which proxy is irrevocable until this
Section 9 terminates pursuant to its terms or this provision is amended to
remove such grant of proxy in accordance with Section 9(h) of this Agreement.
(g) Termination. The covenants and agreements set forth in this
Section 9 shall terminate and be of no further force or effect immediately upon
consummation of a Qualified Public Offering or the consummation of a transaction
resulting in a Change of Control, whichever event shall first occur.
(h) Amendments and Waivers. This Section 9 shall not be amended or
waived without the vote or written consent of Persons holding a majority of the
Securities held by the Genstar Parties.
10. Ownership. Each Stockholder represents and warrants that such
Stockholder is the sole legal and beneficial owner of those Securities such
Stockholder currently holds subject to this Agreement and that no other Person
has any interest (other than a community property interest) in such Securities.
11. Limited Liability of Partners of the Genstar Parties. Notwithstanding
any other provision of this Agreement, no recourse under this Agreement or any
documents or instruments
19
delivered in connection with this Agreement or any of the transactions
contemplated hereby shall be had against any current, former or future director,
officer, employee, general or limited partner or member, of any of the Genstar
Parties, whether by the enforcement of any assessment or by any legal or
equitable proceeding, or by virtue of any statute, regulation or other
applicable law, it being expressly agreed and acknowledged that no personal
liability whatsoever shall attach to, be imposed on or otherwise be incurred by
any current, former or future director, officer, employee general or limited
partner or member of any of the Genstar Parties, as such for any obligation of
any of the Genstar Parties under this Agreement or any documents or instruments
delivered in connection with this Agreement or any of the transactions
contemplated hereby or for any claim based on, in respect of or by reason of
such obligations or their creation; provided, however, that nothing in this
Section 11 shall be deemed or operate as a waiver of the fiduciary duties owed
by the Company's officers and directors to the Company and its stockholders
under applicable law.
12. Recapitalizations. The provisions of this Agreement shall apply, to the
full extent set forth herein with respect to the Securities, to any and all
shares of capital stock or other securities of the Company or any of its
Subsidiary which may be issued in respect of, in exchange for, in substitution
of the Securities, and shall be appropriately adjusted for any stock dividends,
splits, reverse splits, combinations, recapitalizations and the like occurring
after the date hereof.
13. Attorneys' Fees. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
14. Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally or sent by
facsimile transmission, overnight air courier, or first class certified or
registered mail, postage prepaid, as follows:
If to the Company, Genstar or Stargen to:
Altra Holdings, Inc.
c/o Genstar Capital Partners III, L.P.
Four Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
Attention: Xxxx-Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxx Xxxxxx Xxxxxxx
Xxxxxxx Xxxxxx, XX 00000
20
Attention: Xxxxx X. Xxxx, Esq.
Fax No.: (000) 000-0000;
If to CDPQ to:
Xxxxxx xx xxxxx xx xxxxxxxxx xx Xxxxxx
0000, place Xxxx-Xxxx-Xxxxxxxx
Montreal (Quebec) H2Z 2B3
Attention: Xxx Xxxxx, Senior Vice President
Fax No.: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxx LLP
Citigroup Center
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
Fax No.: (000) 000-0000
If to a Covered Stockholder, to the address of such Covered
Stockholder set forth on the signature pages of this
Agreement; or
At such other address as a party may designate by five days'
advance written notice to the other parties hereto.
All notices and communications shall be deemed to have been received unless
otherwise set forth herein: (i) in the case of personal delivery, on the date of
such delivery; (ii) in the case of facsimile transmission, on the date on which
the sender receives electronic confirmation that such notice was received by the
addressee; (iii) in the case of overnight air courier, on the second business
day following the day sent, with receipt confirmed by the courier; and (iv) in
the case of mailing by first class certified or registered mail, postage
prepaid, return receipt requested, on the fifth business day following such
mailing.
15. Miscellaneous.
(a) Company Records. The Company shall not Transfer on its books any
Securities held by the Covered Stockholders and CDPQ without first ascertaining
compliance with all of the applicable provisions of this Agreement with respect
to such Transfer.
(b) Notice of Change to Beneficiary. Immediately prior to any Transfer
by a Covered Stockholder of any of the shares of his or her Securities to a
trust exclusively for the benefit of such Covered Stockholder's spouse, direct
descendants (including legally adopted children) or direct ascendants, such
Covered Stockholder shall provide the Company with a copy of the instruments
creating such trust and with the identity of the beneficiaries of such trust.
The Covered Stockholder shall notify the Company immediately prior to any change
in the identity of any beneficiary of such trust.
21
(c) Right to Negotiate Purchase. Nothing in this Agreement shall be
deemed to restrict or prohibit the Company from purchasing shares of Management
Stock from any Management Stockholder, at any time, upon such terms and
conditions, and for such price, as may be mutually agreed upon between the
Company or such Genstar Party, on the one hand, and such Management Stockholder,
on the other hand, whether or not at the time of such purchase circumstances
exist which specifically grant the Company the right to purchase shares of
Management Stock under the terms of this Agreement, provided that such shares of
Management Stock to be purchased by the Company are (i) subject to vesting,
rights of repurchase or similar provisions or (ii) were issued pursuant to a
compensatory plan, agreement or similar arrangement.
(d) Entire Agreement. This Agreement, the Subscription Agreement, the
Registration Rights Agreement and the Stock Purchase Agreement constitute the
entire agreement between or among the Company and the Stockholders concerning
the subject matter hereof. Any previous agreement between the Company and any of
the Stockholders concerning the subject matter hereof, including, without
limitation, the Prior Agreement, is hereby terminated and superseded in its
entirety by this Agreement.
(e) Amendments. Except as otherwise specifically set forth herein, any
provision of this Agreement may be amended, modified, supplemented, terminated
or waived only by a written instrument signed by the Company and the
Stockholders owning a majority of the Securities owned by the Stockholders at
such time; provided that no amendment, modification, supplement, termination or
waiver shall adversely, and in a manner different from any other Stockholder or
group of Stockholders, affect the rights or obligations of any Stockholder or
group of Stockholders contained in this Agreement without such Stockholder's
prior written consent; provided, however, that (i) without the prior written
consent of CDPQ, Sections 4, 8 and 15(e) of this Agreement shall not be amended,
modified or waived in a manner which would adversely affect the rights or
obligations of CDPQ, and (ii) without the prior written consent of CDPQ, no
amendment or modification of this Agreement shall (x) obligate CDPQ to provide
guarantees, financial assistance or further investment in the Company or any of
its Subsidiaries, (y) provide for the conversion of the Company into a limited
liability company and (z) amend or modify the rights or obligations specifically
granted to CDPQ but not to other Stockholders. Exhibit A may be amended by the
Company as necessary to reflect the addition of new Stockholders pursuant to the
terms hereof, or to reflect the addition of parties hereto as contemplated by
this Agreement, and shall not be deemed to be an amendment, modification or
waiver requiring the consent of any Stockholder.
(f) No Third Party Beneficiaries. This Agreement will not confer any
rights or remedies upon any Person other than the parties hereto and their
respective successors and permitted assigns.
(g) Assignments; Successors and Assigns. This Agreement may not be
assigned by the Covered Stockholders except as required by this Agreement in
connection with a Permitted Transfer of shares of Securities. Subject to the
foregoing, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, permitted assigns, heirs, executors and administrators of
the parties hereto. Any attempted transfer of this Agreement other than in
compliance with the terms hereof shall be null and void.
22
(h) Time of the Essence. Time is and shall be of the essence in this
Agreement.
(i) Waiver. The waiver by one party hereto of any breach by any other
party hereto (the "BREACHING PARTY") of any provision of this Agreement shall
not operate or be considered as a waiver of any other (prior or subsequent)
breach by the Breaching Party, and the waiver of a breach of a provision in one
instance shall not be deemed a waiver of such provision in any other
circumstance.
(j) Severability. If any term or provision of this Agreement or the
application thereof to any person, property or circumstance shall to any extent
be invalid or unenforceable, the remainder of this Agreement, or the application
of such term or provision to persons, property or circumstances other than those
as to which it is invalid or unenforceable, shall not be affected thereby, and
each term and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
(k) Specific Performance. Each party hereto acknowledges that the
remedies at law of the other parties for a breach or threatened breach of this
Agreement would be inadequate and, in recognition of this fact, any party to
this Agreement, without posting any bond, and in addition to all other remedies
which may be available, 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.
(l) Termination. Notwithstanding any other provision hereof, (i)
Sections 3, 5, 6 and 9 of this Agreement shall terminate upon the consummation
of a Qualified Public Offering, and (ii) if and to the extent approved by the
Stockholders owning a majority of the Securities owned by all Stockholders
immediately prior to the Change of Control, Section 6 of this Agreement shall
terminate upon a Change of Control.
(m) Headings; Construction. The headings of the sections of this
Agreement are for convenience and shall not by themselves determine the
interpretation of this Agreement. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent
and no rule of strict construction will be applied against any party.
(n) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to its
conflict of law principles or rules.
(o) Additional Sales of Series A Preferred Stock. Notwithstanding
anything to the contrary contained herein, if the Company shall issue additional
shares of its Series A Preferred Stock, any purchaser of such shares of Series A
Preferred Stock may become a party to this Agreement by executing and delivering
an additional counterpart signature page to this Agreement and shall be deemed a
Stockholder, and such shares shall be deemed Securities, hereunder, and such
Stockholder and such Securities shall be entitled to all the rights and subject
to all the obligations and restrictions set forth herein.
(p) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
23
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ALTRA HOLDINGS, INC.
By: ________________________
Name:
Title:
GENSTAR CAPITAL PARTNERS III, L.P.
By: Genstar Capital III, L.P.
Its: General Partner
By: Genstar III GP LLC
Its: General Partner
By: ________________________
Name:
Title:
STARGEN III, L.P.
By: Genstar Capital III, L.P.
Its: General Partner
By: Genstar III GP LLC
Its: General Partner
By: ________________________
Name:
Title:
XXXXXX XX XXXXX XX XXXXXXXXX XX XXXXXX
By: ________________________
Name:
Title:
By: ________________________
Name:
Title:
[SIGNATURE PAGE TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT]
________________________
Xxxxxxx X. Xxxx
Address: 00 Xxxxxxxxxx Xxxx
Xxxxxxxxxxxx, XX. 00000
Telephone: (000) 000-0000
________________________
Xxxxxxx X. Xxxx
Address: 0000 Xxxxxxxxx Xx.
Xxxxxxx XX 00000
Facsimile: (000) 000-0000
(non-secure facsimile line)
________________________
Xxxxxx X. Xxxxxxxxxx
Address: 000 Xxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
________________________
Xxxxxx X. Xxxxxxxxxx
Address: 0000 Xxxxx Xx.
Xxxxxxxx XX 00000
Facsimile: (000) 000-0000
(non-secure facsimile line)
[SIGNATURE PAGE TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT]
________________________
Xxxxxxx X. Xxxx
Address: 0 Xxxxxxx Xxxx Xxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
________________________
Xxxxx Xxxxxxx
Address: 00 Xxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Tel: (000) 000-0000
________________________
Xxxxxx Xxxxxx
Address:
________________________
Xxxxxxx X. Xxxxxx
Address:
________________________
Xxxxxx X. Xxxxxxx
Address:
[SIGNATURE PAGE TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT]
________________________
Xxxx Xxxxxx
Address:
________________________
Xxxxxxx XxXxxxx
Address:
________________________
Xxxxx XxXxxxxxx
Address:
________________________
Xxx Xxxx
Address:
________________________
Xxxxxx Xxxx
Address:
[SIGNATURE PAGE TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT]
XXXXX XXXXXXXXX MKC WORLDWIDE
By: ________________________
Name:
Title:
Address:
[SIGNATURE PAGE TO AMENDED AND RESTATED STOCKHOLDERS AGREEMENT]
EXHIBIT A
LIST OF STOCKHOLDERS
Genstar Capital Partners III, X.X.
Xxxxxxx III, X.X.
Xxxxxx de depot et placement du Quebec
Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
Xxxxxx X. Xxxxxxxxxx
Xxxxxx X. Xxxxxxxxxx
Xxxxxxx X. Xxxx
Xxxxx Xxxxxxx
Xxxxxx Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxxx
Xxxx Xxxxxx
Xxxxxxx XxXxxxx
Xxxxx XxXxxxxxx
Xxx Xxxx
Xxxxxx Xxxx
Xxxxx Xxxxxxxxx MKC Worldwide
