EXHIBIT 10.60
FIRST AMENDED AND RESTATED
STOCKHOLDER AGREEMENT
This First Amended and Restated Stockholder Agreement (this "Agreement"),
dated as of March 12, 1998 and amended and restated as of September 10, 1998, is
by and among IMPAC Group, Inc., a Delaware corporation, formerly known as KFI
Holding Corporation ("Holding"); Heritage Fund I L.P., a Delaware limited
partnership ("Heritage I"); Heritage Fund II, L.P., a Delaware limited
partnership ("Heritage II"; together with Heritage I, the "Heritage Funds");
Xxxxxx X. Xxxxxx and H. Xxxxx Xxxxxx, each of whom is an individual; Xxxxxxx X.
Xxxxxx, not individually but as trustee under an Indenture of Trust of Xxxxxx X.
Xxxxxx dated June 4, 1996 (the "Xxxxxx Family Trust"); Xxxxxx X. Xxxxxx, not
individually but as trustee under an Irrevocable Deed of Trust dated August 12,
1992, f/b/o H. Xxxxx Xxxxxx (the "Xxxxx Trust") (collectively, Xxxxxx X. Xxxxxx,
H. Xxxxx Xxxxxx, the Xxxxxx Family Trust and the Xxxxx Trust are sometimes
referred to herein as the "Xxxxxx Stockholders"); each of the stockholders of
Holding named on Schedule 1 hereto (the "Klearfold Managers", and together with
the Xxxxxx Stockholders, collectively, the "Klearfold Management Stockholders");
each of the stockholders of Holding and other Persons named on Schedule 2 hereto
(the "AGI Management Stockholders"); and each other Person who becomes a party
to this Agreement by executing and delivering to Holding an Instrument of
Accession in the form of the attached Exhibit A which is subsequently accepted
in writing by Holding (an "Instrument of Accession"). Each of the parties to
this Agreement other than Holding is sometimes referred to herein as a
"Stockholder", and all of them, collectively, are sometimes referred to herein
as the "Stockholders." Capitalized terms used herein and not defined on their
first use shall have the meanings set forth in Section 8 below.
WHEREAS, certain of the Stockholders entered into a Stockholder Agreement
with the Company, dated as of March 12, 1998 (the "Original Stockholder
Agreement"), pursuant to which certain rights and obligations were established
with respect to the outstanding capital stock of Holding and with respect to the
internal affairs of Holding; and
WHEREAS, in connection with the issuance of certain additional shares of
capital stock of Holding pursuant to a Stock Purchase Agreement dated as of
September 10, 1998 (the "Stock Purchase Agreement"), among the Company, the
Heritage Funds and certain other Stockholders, the parties desire to amend and
restate the Original Stockholder Agreement;
NOW, THEREFORE, the parties hereto hereby agree to amend and restate the
Original Stockholder Agreement in its entirety to read as follows:
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1. Restrictions on Transfer of Securities.
1.1. Transfer. No Stockholder shall sell, assign, pledge, or otherwise
dispose of or transfer any Securities or any interest (legal, beneficial, or
otherwise) in any Securities (a "Transfer"; or to effect any such Transfer, to
"Transfer"), either voluntarily, involuntarily, by operation of law, or
otherwise, except any Transfer:
(a) pursuant to and in accordance with the provisions of Section 1.4
hereof, or the provisions of those certain Employment, Non-Competition and Stock
Repurchase Agreements, Agreements relating to Employment and Stock Ownership, or
Stock Purchase or Stock Repurchase Agreements entered into by each of the
Stockholders who is a natural person and by each natural person whose Family
Trust is a Stockholder, as amended and in effect from time to time (each, a
"Repurchase Agreement"), relating to the repurchase of Securities by Holding or
the purchase of Securities by any "Co-Managers", as defined in any such
Repurchase Agreement;
(b) in the case of any Stockholder who is a natural person, to (i) such
Stockholder's Family Members, provided that such Stockholder retains exclusive
voting control over the Transferred Securities, and (ii) such Stockholder's
Personal Representative, and in the case of any Stockholder which is a Family
Trust, to (A) the individual for whom, or for the benefit of whose Related
Persons, such Family Trust was created, and (B) the Family Members of such
individual, provided that, in the case of any transfer pursuant to clauses (A)
or (B) such individual retains exclusive voting control over the Transferred
Securities, and (C) such individual's Personal Representative;
(c) at any time prior to June 7, 2002, to any Person, provided that (i)
such Transfer shall have been previously approved in writing by Stockholders
holding a majority of the Securities then outstanding, other than the Securities
held by the Stockholder proposing such Transfer and any Affiliate or Family
Member of such Stockholder, provided further that each of the Heritage Funds and
any transferee of a Heritage Fund pursuant to Section 1.1(f) below shall be
deemed to be an Affiliate of each Heritage Fund for purposes of this Section
1.1(c)(i), and (ii) such Transfer, if a Transfer of Heritage Securities not
otherwise permitted under Section 1.1(f) below, shall be subject to the
provisions of Section 1.4 hereof;
(d) pursuant to a Public Offering or an Approved Sale;
(e) in the case of any Xxxxxx Stockholder, to another Xxxxxx Stockholder;
in the case of any Block Stockholder, to another Block Stockholder; and in the
case of any Xxxxxxx Management Stockholder, to another Xxxxxxx Management
Stockholder;
(f) in the case of any Heritage Securities, (i) to either of the Heritage
Funds, (ii) to a successor entity of any Heritage Holder, as a result of a
merger, consolidation, or sale of all or substantially all of the assets of such
Heritage Holder, (iii) by Heritage I, to the extent required pursuant to the
terms of the First Amended and Restated Agreement of Limited Partnership of
Heritage I dated as of December 14, 1994, as in effect on the AGI Closing
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Date, or by Heritage II, to the extent required pursuant to the terms of the
Agreement of Limited Partnership of Heritage II dated as of January 28, 1997, as
in effect on the Xxxxxxx Closing Date (it being understood and agreed that each
of such limited partnership agreements may be further amended from time to time
after such dates in accordance with their respective terms, but that
notwithstanding any such amendment, a Transfer of Heritage Securities by a
Heritage Fund will be permitted under this Section 1.1(f)(iii) only to the
extent that such Transfer would have been required pursuant to the terms of such
Heritage Fund's limited partnership agreement as in effect on the date referred
to above), and (iv) to Holding pursuant to and in accordance with the terms of
the letter agreement regarding equity recapitalization dated as of September 10,
1998 (the "Equity Recapitalization Agreement"), by and among Holding and each of
the Stockholders, provided that the aggregate number of shares of Common Stock
to be transferred by the Heritage Funds together pursuant to this Section
1.1(f)(iv) shall not exceed 49,294 (as such number may be adjusted by way of
stock dividend, stock split, or combination or division of shares); or
(g) from and after June 7, 2002, to any Person, provided that the
Transferring Stockholder shall first have complied with all of the provisions of
Sections 1.2 and 1.3 below;
provided that, if such Securities are shares of Series B Common Stock, then any
Transfer of such Securities shall be subject to the applicable provisions of
Holding's By-Laws, as in effect from time to time, and not of this Section 1.1,
and provided, further, in the case of any Transfer described in Sections 1.1(a)
1.1(g) above other than a Transfer to Holding or pursuant to a Public Offering
or an Approved Sale, that (x) the restrictions contained in this Section 1 shall
continue to be applicable to the Transferred Securities after such Transfer, and
(y) the Transferee of such Securities shall either already be a party hereto or
shall first have executed and delivered to Holding an Instrument of Accession
which, if such Transfer is otherwise in compliance with this Section 1.1, shall
be accepted in writing by Holding.
1.2. First Refusal Rights.
(a) At least 30 days prior to any Transfer proposed to be made pursuant to
Section 1.1(g) hereof, the Transferring Stockholder (the "Transferring
Stockholder") shall deliver a written notice (the "Transfer Offer Notice") to
Holding and, if the Securities proposed to be transferred are AGI Holder
Securities, Klearfold Holder Securities, Tinsley Holder Securities or Heritage
Securities, to each of the Stockholders holding Securities of the Type to be
Transferred (collectively, the "Non-Transferring Same-Type Stockholders") in
accordance with the provisions of Section 9(b) hereof. The Transfer Offer
Notice shall disclose in reasonable detail the number of Securities of each Type
that are proposed to be Transferred, the proposed terms and conditions of the
Transfer (including without limitation the consideration to be paid for such
Securities and any deferred payment terms), and the identity of the proposed
Transferee(s). If the Securities proposed to be transferred are AGI Holder
Securities, Klearfold Holder Securities, Tinsley Holder Securities or Heritage
Securities, each of the Non-Transferring Same-Type Stockholders may elect to
purchase any or all of the Securities of the Type proposed to be Transferred, as
specified in the Transfer Offer Notice, at the price and on the terms specified
therein (provided, that each such Non-Transferring Same-Type Stockholder
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shall have the option to substitute for any non-cash consideration proposed to
be received in respect of such proposed Transfer, cash in the amount of the fair
market value thereof), by delivering written notice of such election to the
Transferring Stockholder and Holding within 30 days after the delivery of such
Transfer Offer Notice (the "Initial Stockholder Election Period"). If one or
more of such Non-Transferring Same-Type Stockholders duly elect to purchase all
of the Securities of any such Type so offered, the Transfer of such Securities
shall be consummated 30 days after the expiration of the Initial Stockholder
Election Period, or such earlier date as agreed upon by the Non-Transferring
Same-Type Stockholders who will be purchasing not less than a majority of the
Securities to be Transferred, provided that written notice of such earlier date
is delivered not later than ten (10) days prior to such date to the Transferring
Stockholder, Holding and each of the other Non-Transferring Same-Type
Stockholders electing to purchase any of such Securities pursuant to this
Section 1.2(a). If the Non-Transferring Same-Type Stockholders oversubscribe for
the Securities of any such Type being offered, each Non-Transferring Same-Type
Stockholder electing to purchase such Securities shall be entitled to purchase
from the Transferring Stockholder a pro rata portion (based upon the respective
numbers of shares of such Type of Securities then held by each of the
participating Non-Transferring Same-Type Stockholders (calculated on a Fully
Diluted Basis)) of the Securities of such Type being offered.
(b) If either (i) the Securities proposed to be transferred are AGI Holder
Securities, Klearfold Holder Securities, Tinsley Holder Securities or Heritage
Securities and the Non-Transferring Same-Type Stockholders do not duly elect to
purchase all of such Securities within the Initial Stockholder Election Period
in accordance with Section 1.2(a) hereof then within fifteen (15) days of the
expiration of the Initial Stockholder Election Period, or (ii) the Securities
proposed to be transferred are Other Stockholder Securities, then within thirty
(30) days after the delivery of the Transfer Offer Notice (such period of
fifteen or thirty days pursuant to clauses (i) or (ii) above, as applicable,
being referred to herein as the "Holding Election Period"), Holding may elect to
purchase any or all of the Securities specified in the Transfer Offer Notice, at
the price and on the terms specified therein, but excluding any such Securities
which Non-Transferring Same-Type Stockholders shall have elected to purchase
pursuant to Section 1.2(a) hereof, to the extent applicable (provided, that
Holding shall have the option to substitute for any non-cash consideration
proposed to be received in respect of such proposed Transfer, cash in the amount
of the fair market value thereof), by delivering written notice of such election
to the Transferring Stockholder within the applicable Holding Election Period.
If Holding, alone or in combination with the Non-Transferring Same-Type
Stockholders, duly elects to purchase all of the Securities so offered, the
Transfer of such Securities shall be consummated not less than ten (10) nor more
than thirty (30) days after the expiration of the applicable Holding Election
Period. The date of the consummation shall be determined by a majority vote of
the Board of Directors of Holding, on the date it elects to purchase such
Securities, and Holding shall promptly, but not less than ten (10) days prior to
the proposed date of consummation, provide notice thereof to the Non-
Transferring Same-Type Stockholders, if any, which elected to purchase any of
the Securities proposed to be Transferred pursuant to Section 1.2(a) hereof.
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(c) If Holding and/or, to the extent applicable, the Non-Transferring Same-
Type Stockholders do not duly elect to purchase all of the Securities being
offered within the applicable Holding Election Period, and/or the Initial
Stockholder Election Period, respectively, the Transferring Stockholder shall
within fifteen (15) days after the end of the applicable Holding Election Period
deliver a further Transfer Offer Notice as to such Securities, in the same form
and substance as the first Transfer Offer Notice delivered pursuant to Section
1.2(a) hereof or, in the case of a proposed sale by an Other Stockholder,
Section 1.2(b) hereof, above, to each of the Stockholders other than the Non-
Transferring Same-Type Stockholders (if any) entitled to receive such first
Transfer Offer Notice (collectively, such other Stockholders being referred to
herein as the "Other Non-Transferring Stockholders") in accordance with the
provisions of Section 9(b) hereof specifying, in addition, the number of
Securities which the Non-Transferring Same-Type Stockholders and Holding have
elected to purchase in accordance with Sections 1.2(a) and 1.2(b) hereof, and
the number of Securities remaining to be purchased (the "Remaining Securities").
Each of the Other Non-Transferring Stockholders may elect to purchase all of the
Remaining Securities specified in the further Transfer Offer Notice delivered to
them (but collectively, not more nor less than all of the Remaining Securities),
at the price and on the terms specified therein (provided, that each such Other
Non-Transferring Stockholder shall have the option to substitute for any non-
cash consideration proposed to be received in respect of such proposed Transfer,
cash in the amount of the fair market value thereof), by delivering written
notice of such election to the Transferring Stockholder within 15 days after the
delivery of such Transfer Offer Notice (the "Second Stockholder Election
Period"). If one or more of such Other Non-Transferring Stockholders duly elect
to purchase all of the Securities so offered, the Transfer of such Securities
shall be consummated 30 days after the expiration of the Second Stockholder
Election Period, or such earlier date as agreed upon by the Other Non-
Transferring Stockholders who or which will, collectively, be purchasing not
less than a majority of the Securities so offered, provided that written notice
of such earlier date is provided not later than ten (10) days prior thereto to
the Transferring Stockholder, Holding, and each of the other Stockholders who or
which shall have elected to purchase Securities pursuant to this Section 1.2. If
the Other Non-Transferring Stockholders oversubscribe for the Securities being
offered, each Other Non-Transferring Stockholder electing to purchase such
Securities shall be entitled to purchase from the Transferring Stockholder a pro
rata portion (based upon the respective numbers of Securities then held by each
of the participating Other Non-Transferring Stockholders (calculated on a Fully
Diluted Basis)) of the Securities being offered.
(d) In the event that, collectively, Holding, the Non-Transferring Same-
Type Stockholders and the Other Non-Transferring Stockholders fail to purchase
all of the Securities specified in any Transfer Offer Notice in accordance with
Sections 1.2(a), (b) and (c) hereof, the elections to so purchase pursuant to
those sections shall be void and of no further effect, and the Transferring
Stockholder may, within 90 days after the expiration of the Second Stockholder
Election Period, complete the Transfer of such Securities for such consideration
and on such other terms as are no more favorable to the Transferees than the
terms offered to the Non-Transferring Same-Type Stockholders and the Other Non-
Transferring Stockholders in their respective Transfer Offer Notices, provided,
that no such Transfer may be completed except in compliance with Section 1.3, if
applicable, and further provided, that each of such
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Transferees shall have executed and delivered to Holding an Instrument of
Accession as a condition precedent to such Transfer. If the Transferring
Stockholder fails to consummate such Transfer within the 90-day period after the
expiration of the Second Stockholder Election Period, any subsequent proposed
Transfer of such Securities shall be once again subject to all of the provisions
of Section 1.1 above.
(e) In the event that non-cash consideration is proposed to be received in
respect of any proposed Transfer by a Transferring Stockholder, the Initial
Stockholder Election Period (or, if the Transferring Stockholder is an Other
Stockholder, the Holding Election Period) shall be extended by the period of
time necessary to determine the fair market value of such non-cash
consideration.
1.3. General Co-Sale Rights. In the event that, collectively, Holding, the
Non-Transferring Same-Type Stockholders and the Other Non-Transferring
Stockholders fail to purchase all of the Securities specified in any Transfer
Offer Notice delivered by a Transferring Stockholder who immediately prior to
giving effect to the Transfer described in such Transfer Offer Notice holds at
least five percent (5%) of the total number of outstanding shares of Common
Stock, on a Fully Diluted Basis, each of the Non-Transferring Same-Type
Stockholders and the Other Non-Transferring Stockholders (collectively, the Non-
Transferring Stockholders") may elect to participate in the contemplated
Transfer of Securities by delivering written notice to the Transferring
Stockholder before the lapse of 15 days after expiration of the Second
Stockholder Election Period. If any of such Non-Transferring Stockholders
elects to participate in such sale, the Transferring Stockholder and each of
such participating Non-Transferring Stockholders shall be entitled to sell in
the proposed Transfer a number of Securities equal to the product of (x) a
fraction, the numerator of which is the number of Securities (calculated on a
Fully Diluted Basis) held by such Person, and the denominator of which is the
aggregate number of Securities (calculated on a Fully Diluted Basis) owned by
the Transferring Stockholder and such participating Non-Transferring
Stockholders, multiplied by (y) the number of Securities to be Transferred in
the contemplated Transfer.
(For example: If the notice from the Transferring Stockholder contemplated
a Transfer of 100 shares of Common Stock by the Transferring Stockholder,
and the Transferring Stockholder at such time owns 300 shares of Common
Stock, and if one Non-Transferring Stockholder elects to participate in
such sale pursuant to this Section 1.3 and such Non-Transferring
Stockholder owns 200 shares of Common Stock (calculated on a Fully Diluted
Basis), such Transferring Stockholder would be entitled to sell 60 shares
of Common Stock (300/500 x 100 shares) and such Non-Transferring
Stockholder would be entitled to sell 40 shares of Common Stock (200/500 x
100 shares).)
The Transferring Stockholder shall use all commercially reasonable efforts to
obtain the agreement of the prospective Transferee(s) to the participation of
the Non-Transferring Stockholders in any proposed sale, and in any event shall
not Transfer any Securities to the prospective Transferee(s) if the prospective
Transferee(s) declines to allow the participation of the Non-Transferring
Stockholders on the terms specified herein. The Transferring
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Stockholder may, within 90 days after the expiration of the Second Stockholder
Election Period, complete the Transfer of such Securities (i) with respect to
which the Transferring Stockholder has duly given a Transfer Offer Notice, (ii)
with respect to which neither the Company nor any of the Non-Transferring
Stockholders has duly exercised its rights to acquire such Securities pursuant
to Section 1.2 hereof, and (iii) as constitute the excess of the Securities
described in the applicable Transfer Offer Notice over the aggregate amount of
Securities as to which Non-Transferring Stockholders have duly elected to sell
in such proposed sale pursuant to and in accordance with this Section 1.3, for
such consideration and on such other terms as are no more favorable to the
Transferring Stockholder than the terms offered to the Non-Transferring
Stockholders in the applicable Transfer Offer Notice; provided, that each of
such Transferees shall have executed and delivered to Holding an Instrument of
Accession as a condition precedent to such Transfer. If the Transferring
Stockholder fails to consummate such Transfer within the 90-day period after the
expiration of the Second Stockholder Election Period, any subsequent proposed
Transfer of such Securities shall be once again subject to all of the provisions
of Section 1.1 above.
1.4. Co-Sale Rights of Klearfold Management Holders. In the event that, at
any time prior to June 7, 2002, the Heritage Holders shall have elected to
Transfer more than five percent (5%) of the total amount of Heritage Securities
then held by the Heritage Holders, and such Transfer has been approved in
writing by Stockholders holding a majority of the Securities then outstanding
(other than Securities then held by the Heritage Holders and their Affiliates)
pursuant to and in accordance with Section 1.1(c) hereof, but such Transfer (a)
has not been approved by the Majority Klearfold Holders, then the Xxxxxx
Stockholders may elect to participate in the contemplated Transfer of Heritage
Securities and Transfer a proportionate percentage of their Klearfold Holder
Securities, by delivery of a written notice (a "Klearfold Co-Sale Notice") from
the Xxxxxx Stockholders to Holding, the Heritage Holders, the AGI Management
Stockholders and the Xxxxxxx Management Stockholders within 15 days after the
date of such approval, and/or (b) has not been approved by the Majority Xxxxxxx
Holders, then the Xxxxxxx Management Stockholders may elect to participate in
the contemplated Transfer of Heritage Securities and Transfer a proportionate
percentage of their Tinsley Holder Securities, by delivery of a written notice
(a "Xxxxxxx Co-Sale Notice") from the Xxxxxxx Management Stockholders to
Holding, the Heritage Holders, the AGI Management Stockholders and the Klearfold
Management Stockholders, also within 15 days after the date of such approval.
Upon delivery of a Klearfold Co-Sale Notice or Xxxxxxx Co-Sale Notice (each, a
"Co-Sale Notice") the provisions of Section 1.3 shall apply, mutatis mutandis,
to the participation by the Xxxxxx Stockholders and/or Xxxxxxx Management
Stockholders, as the case may be, who shall have elected to participate in the
contemplated Transfer (together, all such Xxxxxx Stockholders and Xxxxxxx
Management Stockholders participating in a contemplated Transfer under this
Section 1.4, the "Co-Selling Stockholders"), as participating Non-Transferring
Stockholders, in the proposed Transfer by the Heritage Holders, as Transferring
Stockholders. Notwithstanding the foregoing, simultaneously with, and as a
condition to, any participation by any Co-selling Stockholders in any proposed
Transfer by the Heritage Holders, such Co-Selling Stockholders and the Heritage
Holders, pro rata in accordance with the respective number of shares of Common
Stock then held by each of them, shall offer to the AGI Management Stockholders
the opportunity to acquire up to a maximum number of the
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Klearfold Holder Securities, Tinsley Holder Securities and Heritage Securities
to be Transferred (collectively, the "Co-Sale Securities") equal to the greater
of (a) the aggregate number of Co-Sale Securities proposed to be Transferred by
the Co-Selling Stockholders, and (b) that number of Co-Sale Securities, the
acquisition of which by the AGI Management Stockholders would ensure the
ownership by the AGI Management Stockholders, collectively, of fifty percent
(50%) plus one of the then outstanding shares of Common Stock. Any such purchase
of Co-Sale Securities shall be at the same price and on the same terms specified
for the proposed Transfer by the Heritage Holders (provided, that each AGI
Management Stockholder electing to acquire any Co-Sale Securities shall have the
option to substitute for any non-cash consideration proposed to be received in
respect of such proposed Transfer, cash in the amount of the fair market value
thereof based on an appraisal by an Independent Appraiser). If the AGI
Management Stockholders wish to exercise their right to acquire any Co-Sale
Securities, the Majority AGI Holders shall so indicate by written notice to
Holding, the Heritage Holders and, in the event of a delivery of a Klearfold Co-
Sale Notice, the Klearfold Management Stockholders, and/or, in the event of a
delivery of a Xxxxxxx Co-Sale Notice, the Xxxxxxx Management Stockholders, in
each case within 30 days of the date of such Co-Sale Notice (or such longer
period, not to exceed 60 days after the effective date of delivery of such Co-
Sale Notice, as may be required to determine the value of non-cash
consideration, if non-cash consideration is proposed to be received in respect
of such proposed Transfer). Unless such notice shall have been timely delivered,
the Klearfold Management Stockholders and Xxxxxxx Management Stockholders shall
be free to participate fully in the proposed Transfer by the Heritage Holders in
accordance with the first sentence of this Section 1.4, provided that no such
Transfer shall be completed until after the end of the period during which a Co-
Sale Notice may be delivered. If such notice is delivered within such 30-day
period, the proposed Transfer by the Heritage Holders shall be delayed for such
period, not to exceed six (6) months from the date of the first Co-Sale Notice,
as shall be reasonably necessary to permit those AGI Management Stockholders who
so wish to acquire any such Co-Sale Securities pursuant to this Section 1.4.
1.5. Closings.
(a) In the event of any exercise by any of the Non-Transferring
Stockholders of their first-refusal rights under Section 1.2 hereof, the
Transferring Stockholder shall Transfer to each such Non-Transferring
Stockholder the Securities to be purchased by such Non-Transferring Stockholder
at a closing to be held at 10:00 a.m. at Holding's principal executive offices
on the date specified in accordance with the applicable provisions of Section
1.2 hereof. At such closing, the Transferring Stockholder shall deliver to each
such Non-Transferring Stockholder the certificate(s) representing the Securities
to be purchased by such Non-Transferring Stockholder (properly endorsed or
accompanied by duly executed stock powers or assignments, with signature(s)
guaranteed or similar appropriate documentation of authority to transfer), free
and clear of Liens, against payment therefor as provided herein by certified or
bank check payable to the Transferring Stockholder, or by wire transfer to an
account designated by the Transferring Stockholder.
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(b) In the event of any exercise by any of the Non-Transferring
Stockholders of their co-sale rights under Sections 1.3 or 1.4 hereof, the
closing of the sale of the Securities to be sold by such Non-Transferring
Stockholders pursuant to such rights shall take place at the same date, time,
and place at which the Transferring Stockholder is to consummate his or its
Transfer of Securities to the prospective Transferee. At such closing, the
Transferring Stockholder and each of the Non-Transferring Stockholders shall
deliver the certificate(s) representing the respective Securities to be sold by
him or it (properly endorsed or accompanied by duly executed stock powers or
assignments, with signature(s) guaranteed or similar appropriate documentation
of authority to transfer), free and clear of Liens, against payment therefor as
provided herein by certified or bank check payable to him or it, or by wire
transfer to an account designated by him or it.
(c) In the event of any exercise by any of the AGI Management Stockholders
of their rights under Section 1.4 hereof, the Transferring Klearfold Management
Stockholders and Heritage Holders shall Transfer to each such AGI Management
Stockholder the Co-Sale Securities to be purchased by such AGI Management
Stockholder at a closing to be held at the same date, time, and place, subject
to the provisions of Section 1.4 above, as that at which the Transferring
Heritage Holders are to consummate the Transfer of their Securities to their
prospective Transferee pursuant to Section 1.1(c). At such closing, the
Transferring Klearfold Management Stockholders and Heritage Holders shall
deliver to each such AGI Management Stockholder the certificate(s) representing
the Co-Sale Securities to be purchased by such AGI Management Stockholder
(properly endorsed or accompanied by duly executed stock powers or assignments,
with signature(s) guaranteed or similar appropriate documentation of authority
to transfer), free and clear of Liens, against payment therefor as provided
herein by certified or bank check payable to the applicable Transferring
Klearfold Management Stockholder or Heritage Holder, as the case may be, or by
wire transfer to an account designated by such Stockholder.
1.6. Transfers of Securities in Breach of this Agreement. Any attempted or
purported Transfer of Securities in breach of this Agreement shall be wholly
void, and commencing immediately upon the date of such attempted or purported
Transfer (a) no dividend or distribution of any kind shall be paid by Holding in
respect of such Securities (all rights to any such payment being hereby
irrevocably waived and relinquished by the Stockholder attempting such transfer
or purporting so to Transfer Securities, for both himself or itself and any
purported Transferee), (b) the voting rights of such Securities, if any, shall
terminate, and (c) neither the Stockholder attempting such transfer or
purporting so to Transfer Securities nor the purported Transferee shall be
entitled to any rights in respect of such Securities unless and until such
attempted or purported Transfer in breach of this Agreement has been rescinded.
1.7. Other Holder Co-Sale Rights. Notwithstanding anything to the contrary
stated herein, each of the Stockholders hereby agrees to honor and comply with
any co-sale rights granted to any other holder of any Securities or options or
warrants to acquire Securities with respect to the Transfer of such other
holder's Securities or options or warrants, as the case may be, including any
such rights under employee stock incentive or option plan or any other
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agreement with Holding granting co-sale rights to any such holder, provided that
such other holder's co-sale rights are no more extensive or favorable than the
rights of Non-Transferring Stockholders under Section 1.3 hereof.
2. Sale of Holding.
2.1 Approved Sale. If at any time Holding's Board of Directors approves the
sale of Holding or its business, whether by merger, consolidation, sale of all
or substantially all of the assets or capital stock of Holding and/or one or
more of its Subsidiaries, or otherwise, and (a) if on or after March 12, 2000,
such approval was made in accordance with Section 3.2 and was permitted pursuant
to Section 2.2(a), and (b) if prior to March 12, 2000, each of the Majority AGI
Holders, the Majority Heritage Holders and the Majority Klearfold Holders have
consented to such sale pursuant to and in accordance with Section 3.3 (any such
proposed sale, or any sale to one or more AGI Prospective Purchasers (as defined
in Section 2.2(a)(vii) below) pursuant to and in accordance with Section 2.2, an
"Approved Sale"), then:
(i) Holding and each of the Stockholders shall cooperate fully in any
Approved Sale and shall not take any action that is prejudicial to or
inconsistent with such Approved Sale.
(ii) Each Stockholder (A) shall vote or cause to be voted all
Securities having voting rights that are owned by such Stockholder or over
which such Stockholder has voting control to approve the terms of any such
Approved Sale and such matters ancillary thereto as may be necessary or
appropriate, in the judgment of the Board of Directors of Holding, to
effect such Approved Sale, (B) hereby irrevocably waives and relinquishes,
to the fullest extent permitted by applicable law, all rights to object to
or dissent from such Approved Sale (including without limitation any
appraisal or similar rights), and agrees to raise no objections against,
such Approved Sale, (C) with respect to any Approved Sale structured as a
sale of stock, shall sell all of such Stockholder's Securities on the terms
and conditions approved by the Board of Directors of Holding, and (D) upon
Holding's request, shall deliver the certificates representing all
Securities owned or controlled by such Stockholder (duly endorsed, or
accompanied by duly executed instruments of transfer) in escrow (pending
receipt of the purchase price therefor) to Holding's counsel in such sale.
(iii) Holding shall cause its officers, employees, agents,
contractors, and other Persons under its control to cooperate in any
Approved Sale and not to take any action that might impede any such sale.
Without limiting the generality of the foregoing, any resignation of any
office of Holding prior to closing of any Approved Sale by a director or
executive officer of Holding shall be a breach of this Section 2.1(iii).
Pending the completion of any Approved Sale, Holding shall operate only in
the ordinary course and shall use all commercially reasonable efforts to
maintain all existing business relationships in good standing.
2.2. Right of First Refusal.
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(a) Right of First Refusal. If at any time on or after March 12, 2000,
Holding's Board of Directors wishes to approve the sale of Holding or its
business, whether by merger, consolidation, sale of all or substantially all of
the assets or capital stock of Holding and/or one or more of its Subsidiaries,
or otherwise (any such sale, "Qualified Proposed Sale"), whether pursuant to the
terms of a bona fide offer to purchase Holding or its business received by
Holding from a third party not Affiliated to any Stockholder (a "Purchase
Offer"), or, subject to the limitations set forth in Section 2.2(b) below,
pursuant to a decision by a majority of the members of the Board to offer
Holding or its business for sale (a "Sale Decision"), the Board shall not
recommend approval or approve any such Qualified Proposed Sale unless such
recommendation or approval is made in accordance with Section 3.2 and Holding
has complied in full with the terms of this Section 2.2(a).
(i) Immediately following any Sale Decision or the receipt by Holding
of any Purchase Offer, Holding shall provide written notice thereof (a
"Sale Notice") to the AGI Prospective Purchasers, setting forth in such
Sale Notice in reasonable detail the nature and the proposed terms and
conditions of the Qualified Proposed Sale, including, without limitation,
the aggregate consideration to be paid (the "Offer Price"), whether such
Sale Notice is being delivered pursuant to a Sale Decision or with respect
to a Purchase Offer and, in the case of any Purchase Offer, the identity of
the proposed purchaser, details of any deferred payment terms and other
details as to the structure of the proposed consideration, together with a
copy of the Purchase Offer if in writing.
(ii) By delivery of written notice (an "AGI Purchase Notice") to
Holding within 30 days of the effective date of delivery of the Sale Notice
(or such longer period, not to exceed 60 days after the effective date of
delivery of the Sale Notice, as may be required to determine the value of
non-cash consideration, if non-cash consideration is proposed to be
received in respect of such Qualified Proposed Sale), the AGI Prospective
Purchasers may elect to purchase the following (in any such case, the
"Items To Be Sold"): (A) all of the assets, stock or other properties
described in the Sale Notice, at the Offer Price and on the other terms
specified therein; (B) if the Qualified Proposed Sale described in the Sale
Notice is a purchase and sale of all or substantially all of the capital
stock of Holding, all of the shares of capital stock proposed to be sold
pursuant to such Qualified Proposed Sale, other than such shares then owned
by the AGI Prospective Purchasers, at a price per share equivalent to the
price per share which the holders of such capital stock would have received
in the Qualified Proposed Sale described in the applicable Sale Notice and
on the other terms specified therein; or (C) if the Qualified Proposed Sale
described in the Sale Notice is a purchase and sale of all or substantially
all the assets of Holding, at the AGI Prospective Purchasers' discretion,
all of the shares of Holding's capital stock, other than such shares then
owned by the AGI Prospective Purchasers, at a price per share equivalent to
the distribution per share which the holders of Holding's capital stock
(other than the AGI Prospective Purchasers) would have received in the
event that Holding had paid out the purchase price, net of expenses and
taxes incurred in connection with such transaction, for all or
substantially all of its assets as a distribution
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on its capital stock; provided, however, that if non-cash consideration is
proposed to be received in any such case, the AGI Prospective Purchasers
shall have the right to pay cash in the amount of the fair market value
thereof pursuant to an appraisal obtained by them from an Independent
Appraiser; and any such appraisal shall be included with the applicable AGI
Purchase Notice.
(iii) If (x) the AGI Prospective Purchasers do not timely deliver an
AGI Purchase Notice in accordance with paragraph (ii) above, or (y) the AGI
Prospective Purchasers do deliver an AGI Purchase Notice in accordance with
paragraph (ii) above, but fail to consummate an AGI Purchase (as defined
below) pursuant to and in accordance with Section 2.2(a)(vi) below, then
Holding shall be free, in the case of clause (x), for a period of five (5)
months from the last date upon which an AGI Purchase Notice might have been
timely delivered pursuant to paragraph (ii) above, and in the case of
clause (y), for a period of 12 months from the applicable AGI Purchase
Termination Date (such period, as determined under clause (x) or clause (y)
above, the "Board Sale Period") to pursue and complete the Qualified
Proposed Sale, and such sale completed in accordance herewith shall be an
"Approved Sale" hereunder, subject to the terms and conditions set forth in
Sections 2.1 and 2.3 hereof. Holding shall notify the AGI Prospective
Purchasers if at any time during a Board Sale Period the fair market value
of the aggregate consideration being offered (with any non-cash
consideration being valued on the same basis as employed in the appraisal,
if any, obtained by the AGI Prospective Purchasers pursuant to paragraph
(ii) above, and if no such appraisal shall have been obtained, as valued in
accordance with an appraisal obtained by Holding from an Independent
Appraiser reasonably acceptable to the AGI Prospective Purchasers) shall be
less than 92.5% of the Offer Price. At any such time during a Board Sale
Period, or if the Qualified Proposed Sale has not been consummated within
the applicable Board Sale Period and Holding's Board of Directors
determines at the end of such period, subject to the limitations of Section
2.2(b), that it wishes to continue to pursue a Qualified Proposed Sale,
then and in either such case Holding shall provide written notice thereof
to the AGI Prospective Purchasers (a "Second Sale Notice"), setting forth
in such Second Sale Notice the information described in paragraph (i) above
with respect to the terms and conditions of the Qualified Proposed Sale as
then proposed, together with any appraisal obtained by Holding of any non-
cash consideration offered in such Qualified Proposed Sale. If the AGI
Prospective Purchasers elect to purchase the Items To Be Sold as described
in such Second Sale Notice, then they shall so notify Holding by written
notice (also an "AGI Purchase Notice") within 30 days of the effective date
of delivery of the Second Sale Notice.
(iv) If an AGI Purchase Notice shall have been duly and timely
delivered in accordance with paragraphs (ii) or (iii), then the purchase of
the Items To Be Sold (the "AGI Purchase") shall be consummated, unless
otherwise agreed by the AGI Prospective Purchasers, on a pro rata basis
based upon the ratio which the number of shares of AGI Holder Securities
then held by each such electing AGI Prospective Purchaser bears to the
total of AGI Holder Securities held by all of the AGI Prospective
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Purchasers who have elected to participate in such purchase (in all cases
calculated on a Fully Diluted Basis). The AGI Purchase shall be consummated
on the terms, as to price and other conditions, referred to in paragraph
(ii) above and such Purchase shall be an "Approved Sale" hereunder, subject
to the terms and conditions set forth in Sections 2.1 and 2.3 hereof. A
legally-binding and enforceable agreement to complete the AGI Purchase on
such terms within a period not to exceed 30 days after the date of such
agreement and without a financing contingency (an "AGI Purchase Contract")
shall have been entered into on the later of (x) if the Qualified Proposed
Sale were pursuant to a Purchase Offer, the date which the prospective
purchaser proposed to consummate such purchase as described in such
Purchase Offer, or (y) the date five (5) months following the date of the
applicable AGI Purchase Notice, subject in each case to the AGI Prospective
Purchasers' compliance with the provisions of paragraph (v) below.
(v) From and after the delivery of an AGI Purchase Notice, the AGI
Prospective Purchasers shall use their best efforts to inform Holding's
Board of Directors as to their progress or lack thereof in procuring
financing for the completion of the AGI Purchase. Without limiting the
foregoing general obligation, (x) within 60 days of the delivery of the AGI
Purchase Notice, the AGI Prospective Purchasers shall have delivered to
Holding's Board of Directors reasonably detailed expressions of interest
from one or more financing sources regarding financing in the amounts
necessary to complete the AGI Purchase and pay the AGI Prospective
Purchasers' related expenses, and (y) within 120 days of the delivery of
the AGI Purchase Notice, the AGI Prospective Purchasers shall have
delivered to Holding's Board of Directors letter(s) of intent from one or
more reasonably reputable financing sources setting forth reasonably
detailed proposals for the provision to the AGI Prospective Purchasers of
financing in such amounts as shall then be necessary to complete the AGI
Purchase and pay the AGI Prospective Purchasers' related expenses, together
with a reasonably complete draft of an AGI Purchase Contract. In any event,
the AGI Prospective Purchasers shall deliver to Holding's Board of
Directors copies of all such expressions of interest and letters of intent
and copies of the first and last drafts of financing documentation and of
any proposed AGI Purchase Contract, as soon as such documents are received
by such AGI Prospective Purchasers. So long as the AGI Prospective
Purchasers are complying with the provisions of this Section 2.2(a)(v),
Holding and each of the Stockholders other than the AGI Prospective
Purchasers agree to act with respect to the proposed AGI Purchase in
accordance with the provisions of Section 2.1, and such AGI Purchase shall
be deemed to be an Approved Sale hereunder. Holding and each of such other
Stockholders agree to treat as confidential all information regarding the
proposed AGI Purchase pursuant to this Section 2.2(a)(v).
(vi) If (A) at any time following delivery of an AGI Purchase Notice
pursuant to paragraphs (ii) or (iii) above and prior to entering into an
AGI Purchase Contract, (x) the AGI Prospective Purchasers determine in good
faith (provided that if requested in good faith by any director of Holding,
the AGI Prospective Purchasers shall within ten (10) days after such
request send written notice to Holding's Board of Directors of their
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determination as to such matters), that the AGI Prospective Purchasers will
either (1) not be able to enter into an AGI Purchase Contract within the
period specified in paragraph (iv) above, or (2) not be able to complete an
AGI Purchase on the terms required by this Section 2.2(a), or (y) the AGI
Prospective Purchasers elect not to proceed with an AGI Purchase, or (B)
the AGI Prospective Purchasers shall have breached or been unable to comply
with the requirements of paragraphs (iv) and/or (v) above, or (C) the AGI
Prospective Purchasers have not, within ten (10) days of being requested to
do so by any director of Holding, delivered to Holding a written
determination as described in clause (A)(x) above, then, in the case of
clause (A) above, the AGI Prospective Purchasers shall immediately so
notify Holding's Board of Directors in writing, and in any such case the
rights of the AGI Prospective Purchasers to pursue an AGI Purchase pursuant
to this Section 2.2(a) shall thereupon terminate, and thereafter the AGI
Prospective Purchasers shall only be entitled to pursue an AGI Purchase
pursuant to and in accordance with Section 2.2(b) below.
(vii) The term "AGI Prospective Purchasers" means Xxxxxxx Xxxxx,
individually, together with his Family Members and Family Trusts. No AGI
Prospective Purchaser may assign any or all of his or its rights to deliver
an AGI Purchase Notice, to pursue an AGI Purchase, or to complete an AGI
Purchase under this Section 2.2(a) without the prior written consent of
Holding, provided that if the proposed assignee is an entity under the
control of ("control", for purposes of this Section 2.2(a)(vii), includes
Xxxxxxx Xxxxx holding a senior executive position with, or membership of
the board of, such entity) or majority-owned by an AGI Prospective
Purchaser, then such consent shall not be unreasonably withheld or delayed.
(b) Subsequent Purchase Rights. In the event that an AGI Purchase Notice
(other than an Exempt Purchase Notice, as defined below) shall have been
delivered in accordance with Sections 2.2(a)(ii) or 2.2(a)(iii) above, and the
period for the AGI Prospective Purchasers to pursue an AGI Purchase pursuant
thereto shall have terminated pursuant to and in accordance with Section
2.2(a)(vi) above (the date of such termination, the "AGI Purchase Termination
Date"), then the AGI Prospective Purchasers shall have the right to deliver not
more than one additional AGI Purchase Notice with respect to any Sale Notices
delivered prior to June 7, 2002, provided that this limitation shall not apply
to limit the AGI Prospective Purchasers' right to deliver AGI Purchase Notices
which are Exempt Purchase Notices under clause (B) of the definition thereof,
and provided further that any AGI Purchase Notice otherwise permitted to be
delivered hereunder and which becomes an Exempt Purchase Notice under clause (A)
of the definition thereof shall not be considered to be an additional AGI
Purchase Notice for purposes of this limitation. If, in response to any Sale
Notice delivered prior to June 7, 2002, the AGI Prospective Purchasers shall
have delivered an AGI Purchase Notice which was not an Exempt Purchase Notice,
then the AGI Prospective Purchasers shall have no right to deliver an AGI
Purchase Notice in response to a Sale Notice delivered after June 7, 2002,
unless such AGI Purchase Notice would be an Exempt Purchase Notice under clause
(B) of the definition thereof, and would be delivered in connection with a Sale
Notice originally delivered prior to June 7, 2002. If the first AGI Purchase
Notice which is not an Exempt Purchase Notice is delivered in response to a Sale
Notice delivered after June 7, 2002,
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then, except with respect to Exempt Purchase Notices described in clause (B) of
the definition thereof, no other AGI Purchase Notice may be provided under this
Agreement. Notwithstanding anything herein to the contrary, (i) to the extent
that two AGI Purchase Notices shall have been delivered in response to Sale
Notices with respect to Qualified Proposed Sales, other than Exempt Purchase
Notices under clause (B) of the definition thereof, no further AGI Purchase
Notices may be delivered, and (ii) Exempt Purchase Notices under clause (B) of
the definition thereof may be delivered at any time, including after June 7,
2002, to the extent that any such Exempt Purchase Notice relates to a Sale
Notice with respect to which the AGI Prospective Purchasers originally had the
right to deliver an AGI Purchase Notice under the other terms of this Section
2.2(b).
As used herein, the term "Exempt Purchase Notice" means (A) any AGI
Purchase Notice delivered in response to a Sale Decision, if no Qualified
Proposed Sale is consummated either pursuant to such AGI Purchase Notice or
during the applicable Board Sale Period thereafter, or (B) any AGI Purchase
Notice delivered during a Board Sale Period in response to a Second Sale Notice
disclosing an Offer Price which is less than 92.5% of the Offer Price disclosed
in the Sale Notice delivered prior to the commencement of such Board Sale
Period.
In the event that a further AGI Purchase Notice is permitted to be
delivered in accordance with the foregoing provisions of this Section 2.2(b),
the provisions of Section 2.2(a) shall apply to such AGI Purchase Notice and to
the rights and obligations of Holding and the AGI Prospective Purchasers arising
therefrom, except that the period by which an AGI Purchase Contract is to have
been entered into pursuant to Section 2.2(a)(iv)(y) shall be reduced from six
(6) months (or seven (7), as the case may be) to four (4) months (or five (5),
as the case may be), and the periods of 60 and 120 days specified in Section
2.2(a)(v) shall each be reduced by 30 days to 30 and 90 days, respectively.
Subject to the foregoing limitations, Holding shall comply with the provisions
of Section 2.2(a) with respect to any and all Qualified Proposed Sales,
including the requirement to deliver to the AGI Prospective Purchasers Sale
Notices with respect thereto, from and after March 12, 2000, provided, however,
that in the event that a Sale Notice resulting from a Sale Decision has been
delivered and no Qualified Proposed Sale has been consummated within a period of
six months (if no AGI Purchase Notice was delivered in connection therewith) or,
in all other cases, twelve (12) consecutive months following such delivery (as
such period may have been extended to permit the valuation of any proposed non-
cash consideration), then Holding may not deliver another Sale Notice resulting
from a Sale Decision for a period after the end of such 6- or 12-month period,
as the case may be (as so extended), equal to the lesser of (A) six (6) months,
or (B) the period to June 7, 2002 (provided that, for the avoidance of doubt,
this provision shall not limit Holding's obligation to deliver Sale Notices with
respect to Purchase Offers received by Holding).
(c) Delay in Completion of Purchase. If a "Change of Control", as such term
is defined in the Indenture, would occur as a result of an exercise of the AGI
Proposed Purchasers' rights under this Section 2.2, then the closing of the
transaction which would otherwise result in such Change of Control may be
delayed, at the option of the AGI Prospective Purchasers, for a period not to
exceed ninety (90) days beyond the end of the
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period(s) required for the completion thereof under the applicable sections
above, notwithstanding any provisions to the contrary in such sections.
2.3. Received Consideration. The obligations of the Stockholders with
respect to any Approved Sale are subject to the satisfaction of the condition
that upon the consummation of such sale, all of the holders of Common Stock
shall receive the same forms and amounts of consideration per share outstanding,
or if any holders are given an option as to the form and amount of consideration
to be received per share, all holders shall be given the same option.
3. Voting.
3.1. Board of Directors.
(a) Subject to the provisions of Sections 3.1(b) - (e) hereof, in any and
all elections of directors of Holding, AGI, Klearfold, and any other Domestic
Subsidiary of Holding existing from time to time (whether at a meeting or by
written consent in lieu of a meeting), each Stockholder shall vote or cause to
be voted all Securities having voting rights that are owned by such Stockholder
or over which such Stockholder has voting control, and/or, as relevant, shall
use such Stockholder's best efforts to cause such Stockholder's designees as
directors to vote so as to fix the number of directors of Holding at eleven, to
cause such Stockholder's designees as directors of Holding to so act as to
ensure that Holding, in its capacity as stockholder of AGI, Klearfold, and any
other such Domestic Subsidiary, fixes the number of directors of each of AGI,
Klearfold, and any other such Domestic Subsidiary at eleven, and, in each case,
to nominate and elect, or use its best efforts to cause to be nominated and
elected, such directors of each of Holding, AGI, Klearfold, and any other such
Domestic Subsidiary, respectively, as follows:
(i) Three individuals (the "AGI Directors") designated as follows: (A)
if Xxxxxxx Xxxxx is both chief executive officer of Holding and holds at
least 75% (on a Fully Diluted Basis) of the number of shares of Common
Stock issued to him pursuant to the Investment Agreement, as adjusted for
splits, combinations, and other recapitalizations from and after the date
thereof, then Xxxxxxx Xxxxx and two individuals designated by Xxxxxxx
Xxxxx; (B) if Xxxxxxx Xxxxx is both chief executive officer of Holding and
holds at least 50% but less than 75% (on a Fully Diluted Basis) of the
numbers of shares of Common Stock issued to him pursuant to the Investment
Agreement, as adjusted for splits, combinations and other recapitalizations
from and after the date thereof, then Xxxxxxx Xxxxx, one individual
designated by Xxxxxxx Xxxxx, and one individual designated by the holders
of a majority of the then outstanding AGI Holder Securities who are then
employed by Holding or its Subsidiaries (the "Majority AGI Employee
Holders"); (C) if Xxxxxxx Xxxxx is both chief executive officer of Holding
and holds less than 50% (on a Fully Diluted Basis) of the numbers of shares
of Common Stock issued to him pursuant to the Investment Agreement, as
adjusted for splits, combinations and other recapitalizations from and
after the date thereof, then Xxxxxxx Xxxxx and two individuals designated
by the Majority AGI Employee Holders; (D) if Xxxxxxx Xxxxx is not chief
executive officer of Holding and holds at least 50%
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(on a Fully Diluted Basis) of the numbers of shares of Common Stock issued
to him pursuant to the Investment Agreement, as adjusted for splits,
combinations and other recapitalizations from and after the date thereof,
then one individual designated by Xxxxxxx Xxxxx and two individuals
designated by the Majority AGI Employee Holders; and (E) if Xxxxxxx Xxxxx
is not chief executive officer of Holding and holds less than 50% (on a
Fully Diluted Basis) of the number of shares of Common Stock issued to him
pursuant to the Investment Agreement, as adjusted for splits, combinations
and other recapitalizations from and after the date thereof, then three
individuals designated by the Majority AGI Employee Holders;
(ii) Two individuals (the "Heritage I Directors") designated by the
Majority Heritage I Holders;
(iii) Two individuals (the "Heritage II Directors") designated by the
Majority Heritage II Holders;
(iv) Two individuals (the "Klearfold Directors") designated by the
Majority Xxxxxx Holders; and
(v) Two individuals (the "Xxxxxxx Directors") designated by the
Majority Xxxxxxx Holders or, if no Tinsley Holder Securities are then
outstanding, designated by the Xxxxxxx Management Stockholders.
and a quorum of the Board of Directors of each of Holding, AGI, Klearfold and
any other Domestic Subsidiary of Holding existing from time to time, shall
consist of ten directors, provided, however that in the event a quorum is not
present at any meeting of the Board of Directors of any such Person, such
meeting shall be adjourned and each director notified by telephone and written
telecommunication of the date and time at which such meeting is to be
reconvened, which shall be not less than 48 hours following the time of the
originally-scheduled meeting of the Board of Directors, and at such reconvened
meeting the quorum of the Board of Directors shall consist of six directors.
(b) Notwithstanding the foregoing Section 3.1(a) and Section 3.1(c) below,
upon delivery of a written notice from the Majority Heritage Holders to Holding
(a "Board Control Notice"), and thereafter until the withdrawal by the Majority
Heritage Holders of such Board Control Notice, each Stockholder shall vote or
cause to be voted all Securities having voting rights that are owned by such
Stockholder or over which such Stockholder has voting control, and/or, as
relevant, shall use such Stockholder's best efforts to cause such Stockholder's
designees as directors to vote, so as to fix the number of directors of Holding
at fifteen, and to nominate and elect such fifteen directors as follows:
(i) Four individuals designated by the Majority Heritage I Holders
(also being referred to herein as "Heritage I Directors");
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(ii) Four individuals designated by the Majority Heritage II Holders
(also being referred to herein as "Heritage II Directors"); and
(iii) Seven individuals designated as follows: three designated in
accordance with Section 3.1(a)(i), also being referred to herein as "AGI
Directors"; two designated in accordance with Section 3.1(a)(iv), also
being referred to herein as "Klearfold Directors"; and two designated in
accordance with Section 3.1(a)(v), also being referred to herein as
"Xxxxxxx Directors"; and all such individuals being referred to herein as
the "Non-Heritage Directors".
and each of the Stockholders will use its best efforts to cause Holding so to
act as to make conforming changes to the Boards of Directors of AGI, Klearfold
and each other Domestic Subsidiary of Holding existing at such time, and each of
the Stockholders shall vote or cause to be voted all Securities having voting
rights that are owned by such Stockholder or over which such Stockholder has
voting control in favor of all matters recommended for approval by the
Stockholders by any Board of Directors elected pursuant to this Section 3.1(b).
Upon its receipt of a Board Control Notice, Holding shall notify each of the
Stockholders (other than the Heritage Holders) thereof, provided that the
failure to deliver any such notification, or any such Stockholder's failure to
receive any such notification, shall not limit the effectiveness of this Section
3.1(b). While the Boards of Directors of Holding, AGI, Klearfold, and any other
Domestic Subsidiary are constituted in accordance with this Section 3.1(b) a
quorum of each of such Boards of Directors shall consist of thirteen directors,
provided, however that in the event a quorum is not present at any meeting of
the Board of Directors of any such company, such meeting shall be adjourned and
each director notified by telephone and written telecommunication of the date
and time at which such meeting is to be reconvened, which shall be not less than
48 hours following the time of the originally-scheduled meeting of the Board of
Directors, and at such reconvened meeting the quorum of the Board of Directors
shall consist of eight directors, provided, further, that in order to constitute
a quorum, the aggregate number of Heritage I Directors and Heritage II Directors
present at any such meeting (including any such reconvened meeting) shall exceed
the number of Non-Heritage Directors so present.
(c) Subject to the provisions of Sections 3.1(b) and (d) hereof, in the
event that Xxxxx Xxxxxx'x employment with Holding and its Subsidiaries is
terminated either (A) by Xxxxx Xxxxxx with Good Reason, at any time after
January 1, 1999, pursuant to clause (i) of the definition of Good Reason in his
Employment, Non-Competition and Stock Repurchase Agreement with Holding, dated
as of March 12, 1998, or (B) pursuant to Section 4(f) of such Agreement, then
and thereafter each Stockholder shall vote or cause to be voted all Securities
having voting rights that are owned by such Stockholder or over which such
Stockholder has voting control, and/or, as relevant, shall use such
Stockholder's best efforts to cause such Stockholder's designees as directors to
vote, so as to fix the number of directors of Holding at thirteen, and to
nominate and elect such thirteen directors as follows:
(i) Eleven individuals designated in accordance with Sections
3.1(a)(i) - (v) hereof;
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(ii) One individual, who shall for the purposes hereof also be
referred to herein as an "AGI Director", designated by Xxxxxxx Xxxxx, so
long as Xxxxxxx Xxxxx is chief executive officer of Holding, and otherwise
by the Majority AGI Employee Holders, and approved by the Majority Heritage
Holders in their sole discretion (such approval not to be unreasonably
withheld or delayed) but who shall not be an Affiliate or Related Party of
any AGI Stockholder or any Heritage Holder, nor an employee or officer of
Holding or any of its Subsidiaries; and
(iii) One individual, who shall for the purposes hereof also be
referred to herein as a "Heritage Director", designated by the Majority
Heritage Holders, and approved by Xxxxxxx Xxxxx, in his sole discretion, so
long as Xxxxxxx Xxxxx is chief executive officer of Holding, and otherwise
by the Majority AGI Employee Holders, in their sole discretion (such
approval, in either such case, not to be unreasonably withheld or delayed)
but who shall not be an Affiliate or Related Party of any AGI Stockholder
or any Heritage Holder, nor an employee or officer of Holding or any of its
Subsidiaries.
and each of the Stockholders will use its best efforts to cause Holding so to
act as to make conforming changes to the Boards of Directors of AGI, Klearfold
and each other Domestic Subsidiary of Holding existing at such time, and each of
the Stockholders shall vote or cause to be voted all Securities having voting
rights that are owned by such Stockholder or over which such Stockholder has
voting control in favor of all matters recommended for approval by the
Stockholders by any Board of Directors elected pursuant to this Section 3.1(c).
Holding shall notify each of the Stockholders (other than the Xxxxxx
Stockholders) of the occurrence of a termination of Xxxxx Xxxxxx'x employment
with Holding as described above in this Section 3.1(c), provided that the
failure to deliver any such notice, or any such Stockholder's failure to receive
any such notice, shall not limit the effectiveness of this Section 3.1(c). While
the Boards of Directors of Holding, AGI, Klearfold, and any other Domestic
Subsidiary of Holding are constituted in accordance with this Section 3.1(c), a
quorum of each of such Boards of Directors shall consist of twelve directors,
provided, however that in the event a quorum is not present at any meeting of
the Board of Directors of any such company, such meeting shall be adjourned and
each director notified by telephone and written telecommunication of the date
and time at which such meeting is to be reconvened, which shall be not less than
48 hours following the time of the originally-scheduled meeting of the Board of
Directors, and at such reconvened meeting the quorum of the Board of Directors
shall consist of seven directors.
(d) If any vacancy shall occur in any of the Boards of Directors of
Holding, AGI Klearfold or any other Domestic Subsidiary of Holding, whether as a
result of the death, disability, resignation, or removal of any director or
otherwise, such director's replacement shall be designated by the Person or
Persons who, pursuant to subsection (a), (b) or (c) of Section 3.1 hereof, as
the case may be, originally designated such director (unless such subsection
(a), (b) or (c) as the case may be, is not at the time of designation of such
replacement director the operative section governing the election of directors
hereunder). Each
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Person entitled to designate a director or a replacement for a director pursuant
to this Section 3 shall also be entitled to instruct the Stockholders to remove
such director with or without cause and upon such instruction the Stockholders
shall act to remove such director, whereupon the Person(s) initiating such
removal shall be entitled, subject to the approvals required by Sections
3.1(c)(ii) or 3.1(c)(iii) above, if applicable, to designate a replacement for
any director so removed. Each Stockholder hereby agrees to vote or cause to be
voted all Securities having voting rights that are owned by such Stockholder or
over which such Stockholder has voting control, and shall use such Stockholder's
best efforts to cause such Stockholder's designees as directors to vote, so as
to comply with this Section 3.1(d).
(e) If at any time Holding or any of its Subsidiaries acquires all or
substantially all of the assets or capital stock of any Person for aggregate
consideration in excess of $10,000,000, then the Stockholders holding a majority
of the then outstanding shares of Common Stock may act to amend this Section
3.1, and any corresponding provision of Holding's or any of its Subsidiaries'
by-laws, so as to permit an increase in the number of directors required hereby
(but not, in any event, to decrease such number), provided that the additional
directors elected pursuant to any such increase may not be selected by any
existing Stockholder with the right (either individually or collectively with
other Stockholders) to designate directors under this Section 3.1 as in effect
immediately prior to such amendment, or by any Affiliate of any such
Stockholder.
(f) Each Stockholder agrees to use such Stockholder's best efforts to cause
such Stockholder's designees as directors pursuant to this Section 3.1 to
approve the directors designated by each other Stockholder pursuant to this
Section 3.1, in order to ensure that each such director is and remains a
"Continuing Director" under and as defined in the Indenture.
3.2. Consent to Certain Actions.
(a) Each of the Stockholders hereby irrevocably agrees that such
Stockholders will not vote or permit to be voted any Securities having voting
right that are owned by such Stockholder or over which such Stockholder has
voting control, and shall use such Stockholder's best efforts to cause such
Stockholder's designees as directors not to vote, in favor of any action
referred to in Schedule 4 that has not been approved by the Majority Heritage
Holders, provided, that approval (by written consent or by affirmative vote at a
meeting of the Board of Directors) by one director of Holding who was designated
as such by the Majority Heritage I Holders pursuant to any of Sections 3.1(a),
(b) or (c) above, as the case may be, or by one director of Holding who was
designated as such by the Majority Heritage II Holders pursuant to any of such
subsections, shall constitute due consent of the Majority Heritage Holders for
purposes of this Section 3.2. Notwithstanding the foregoing or anything stated
in Schedule 4 hereto, no such approval shall be required for Holding or any of
its Subsidiaries to perform any of their respective obligations under this
Agreement, the Stock Purchase Agreement, any Repurchase Agreement, Holding's By-
Laws, or any employee stock incentive or option plan or any other agreement to
which the Company is a party or otherwise board approved by the Board of
Directors of Holding prior to the Xxxxxxx Closing Date, or approved by the Board
of Directors of Holding after the Xxxxxxx Closing Date in accordance
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with the provisions hereof, nor shall any such approval be required in order for
any party hereto, or to any of the above agreements (other than Holding), or any
person having rights under any of the above documents (other than Holding), to
exercise any right or benefit provided to such party therein.
(b) Holding and each of the Stockholders hereby agree with each Stockholder
who is an employee of Holding or any of its Subsidiaries, or party to an
Employment Agreement with Holding or any of its Subsidiaries, that any wanton
and willful breach by any such employee Stockholder of the foregoing provisions
of this Section 3.2 shall constitute grounds for termination for "Cause" of such
Stockholder's employment by Holding or any such Subsidiary, notwithstanding
anything to the contrary stated in such Stockholder's Employment Agreement, but
shall not otherwise create any personal liability for any breach by such
Stockholder of the foregoing provisions of this Section 3.2.
3.3 Consent to Sale. Until March 12, 2000, and subject to the provisions of
Section 2.3 hereof, each of the Stockholders hereby irrevocably agrees that such
Stockholder shall not vote or permit to be voted any Securities having voting
rights that are owned by such Stockholder or over which such Stockholder has
voting control, and shall use such Stockholder's best efforts to cause such
Stockholder's designees as directors not to vote, in favor of any sale of
Holding or its business (whether by merger, consolidation, sale of all or
substantially all of the assets or capital stock of Holding and/or one or more
of its Subsidiaries, or otherwise), if the proposed sale has not been previously
approved in writing by the Majority AGI Holders, the Majority Heritage Holders
and the Majority Klearfold Holders.
3.4. Proxy. Each Stockholder hereby irrevocably appoints Holding as such
Stockholder's true and lawful proxy and attorney-in-fact, with full power of
substitution, to vote or cause to be voted all Securities having voting rights
that are owned by such Stockholder or over which such Stockholder has voting
control to effectuate the agreements of such Stockholder set forth in this
Agreement in the event of any breach by such Stockholder of its obligations
under this Agreement. The proxies and powers granted by each Stockholder
pursuant to this Section 3.4 are coupled with an interest and are given to
secure the performance of such Stockholder's duties under this Agreement. Such
proxies shall be irrevocable for so long as this Agreement remains in effect and
shall survive the death, incompetence, and/or disability of any Stockholder who
is an individual and the merger, liquidation, dissolution, and/or winding-up of
any Stockholder that is not an individual.
3.5. Action by Stockholders. Each Stockholder further agrees that such
Stockholder shall not vote or permit to be voted any Securities having voting
rights that are owned by such Stockholder or over which such Stockholder has
voting control, or take any other action as a stockholder of Holding, to
circumvent the voting arrangements set forth in this Section 3. Without limiting
the generality of the foregoing, each Stockholder agrees not to commence,
maintain, or participate in any legal action or proceeding (including without
limitation any stockholder's derivative suit) challenging any action or
transaction duly approved by Holding's Board of Directors in accordance with the
terms of this Agreement.
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4. Preemptive Rights.
4.1. Grant of Rights. Subject to the final sentence of this Section 4.1, if
Holding or any of its Subsidiaries authorizes the issuance or sale of any shares
of any class of capital stock or other securities on or prior to June 7, 2002,
Holding shall (or shall cause such Subsidiary to) first offer to sell to each
Stockholder a portion of such securities equal to the quotient (expressed as a
percentage) of (i) the number of shares of Common Stock held by such Stockholder
(calculated on a Fully Diluted Basis), divided by (ii) the number of shares of
Common Stock then outstanding (calculated on a Fully Diluted Basis). Each
Stockholder who is an "accredited investor", as defined in Rule 501 of the
regulations promulgated by the Securities and Exchange Commission under the Act
shall be entitled to purchase all or part of such stock or securities at the
same price and on the same terms (including any deferred payment terms) as such
stock or securities are to be offered to any other Persons, provided, that each
such Stockholder shall have the option to substitute for any non-cash
consideration proposed to be received in respect of such proposed issuance or
sale, cash in the amount of the fair market value thereof. Notwithstanding the
foregoing, the provisions of this Section 4.1 shall not apply to the issuance or
sale of any shares of capital stock by any of Holding's Subsidiaries to Holding
or to any of its wholly owned Subsidiaries, or to the issuance of shares of
Common Stock (a) pursuant to a Public Sale, (b) as consideration for the
acquisition of all or any substantial portion of the assets or all or any
portion of the capital stock of any Person, provided, for the avoidance of
doubt, that the issuance or sale by Holding or any of its Subsidiaries of any
shares of any class of capital stock or other securities to generate cash
funding of the consideration for any such acquisition shall be subject to the
provisions of the first sentence of this Section 4.1, (c) pursuant to a
management stock option plan or employee incentive plan approved by the Board of
Directors, (d) to, or pursuant to warrants or options issued to, consultants to,
vendors to, or joint venture partners of Holding or its Subsidiaries, in each
case as approved by the Board of Directors, or (e) as a dividend in respect of
the outstanding shares of Common Stock.
4.2. Stockholders' Exercise of Right. Each Stockholder entitled to exercise
purchase rights under Section 4.1 above must exercise such purchase rights
within 30 days after the effective date of delivery to such Stockholder of
written notice from Holding or its Subsidiary, as the case may be, describing in
reasonable detail the stock or other securities being offered, the purchase
price thereof, the payment terms, and such Stockholder's allotted portion
thereof, as determined in accordance with Section 4.1 hereof. If all of such
stock or other securities are not fully subscribed for by the Stockholders
within such 30-day period, the stock or securities that are not so subscribed
for shall be re-offered to the Stockholders purchasing their full allotments
upon the terms set forth in this Section 4, except that (i) such Stockholders
must exercise their purchase rights with respect to such re-offered securities
within ten (10) days after receipt of such re-offer, and (ii) unless such
Stockholders so agree, each such Stockholder shall be offered and shall be
entitled to purchase pursuant to this Section 4.2 a portion of the re-offered
securities equal to the quotient (expressed as a percentage) of (x) the number
of shares of Common Stock held by such Stockholder (calculated on a Fully
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Diluted Basis), divided by (y) the number of shares of Common Stock (calculated
on a Fully Diluted Basis) then held by the Stockholders receiving such re-offer.
4.3. Holding's Exercise of Rights. Upon the expiration of the offer and re-
offer (if any) periods described above, Holding or its Subsidiary, as the case
may be, shall be free to sell any stock or other securities that the
Stockholders have not elected to purchase during the ninety (90) days following
such expiration, on terms and conditions no more favorable to the purchasers
thereof than those offered to the Stockholders. Any stock or other securities
offered or sold by Holding or such Subsidiary after such 90-day period and prior
to June 7, 2002 must be re-offered to all of the Stockholders pursuant to the
terms of this Section 4.
5. Restrictive Legend. So long as any Securities are subject to the
provisions hereof, all certificates representing such Securities shall have
imprinted on them a restrictive legend in the form required by Section 5 of the
Original Stockholder Agreement, or in substantially the following form:
"The securities represented by this certificate are subject to the terms of
a certain First Amended and Restated Stockholder Agreement, dated as of
March 12, 1998, and amended and restated as of September 10, 1998, among
the registered holder of this certificate (or such holder's predecessor-in-
interest), the issuer of this certificate, and certain others. The First
Amended and Restated Stockholder Agreement contains certain restrictive
provisions relating to the voting and transfer of the securities
represented hereby. A copy of the First Amended and Restated Stockholder
Agreement is on file and may be inspected for any proper purpose at the
issuer's principal executive office."
6. Registration Rights.
6.1. Definitions. As used in this Section 6:
"Commission" means the Securities and Exchange Commission.
"Holders" means the Stockholders and all Persons to whom any Registrable
Securities are transferred in accordance with the provisions of this Agreement,
and "Holder" means any one of the Stockholders; provided, in the cases of any
elections to be made by, and any notices or other communications to be made by
or to, any Holder pursuant to this Section 6, that such elections, notices, or
other communications shall be made by or to the Majority Heritage I Holders, in
the case of any Holder who is a Heritage I Holder, by or to the Majority
Heritage II Holders, in the case of any Holder who is a Heritage II Holder, by
or to the Majority Klearfold Holders, in the case of any Holder who is a
Klearfold Management Stockholder, by or to the Majority AGI Holders, in the case
of any Holder who is an AGI Management Stockholder, or by or to the Majority
Xxxxxxx Holders, in the case of any Holder who is a Xxxxxxx Management
Stockholder.
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"Majority Demanding Holder(s)" means the Demanding Holder or Demanding
Holders, as the case may be, as defined in Section 6.2(a)(i) below, holding a
majority of the Registrable Securities held by the Demanding Holders.
"Registered" and "registration" (regardless of whether capitalized) refer
to a registration effected by preparing and filing a registration statement in
compliance with the Securities Act and the declaration or ordering by the
Commission of effectiveness of such registration statement.
"Registrable Securities" means the shares of Common Stock issued pursuant
to the Investment Agreement, together with all shares of Common Stock issued to
Stockholders as a result of any exercise of pre-emptive rights pursuant to
Section 4 hereof, and includes any shares of capital stock and other securities
of Holding issued or issuable with respect to any of the foregoing shares of
Common Stock by way of a stock dividend, stock split, combination or division of
shares, recapitalization, merger, consolidation, reorganization, or the like,
and any shares of capital stock and other securities of Holding into which any
of the foregoing shares of capital stock and other securities of Holding are
(directly or indirectly) converted or for which any of the foregoing shares of
capital stock and other securities of Holding are (directly or indirectly)
exchanged, in each case regardless of subsequent transfers of such shares of
capital stock or other securities of Holding. Securities shall cease to be
Registrable Securities when (i) they have been sold pursuant to an effective
registration statement under the Securities Act, or distributed to the public
through a broker, dealer or market maker pursuant to Rule 144 under the
Securities Act, or any other exemption from the registration requirements of the
Securities Act under which the transferee receives securities that are not
"restricted securities" within the meaning of that term as defined in Rule
144(a)(3), or (ii) when they may be resold under Rule 144(k) (or other similar
exemption from registration) without volume limitation.
"Underwriters' Maximum Number" means, with respect to an underwritten
registration, that number of securities to which such registration should be
limited, in the reasonable written opinion of the managing underwriters of such
registration in the light of marketing factors.
6.2. Demand Registrations.
(a) Request for Demand Registration. Subject to the limitations set forth
in the following paragraphs of this Section 6.2:
(i) The Holders of either (A) not less than a majority of all of the
Heritage Securities at any time outstanding, or (B) at least twenty percent
(20%) (on a Fully Diluted Basis) of the amount of Registrable Securities
outstanding on the AGI Closing Date, as adjusted from time to time for splits,
combinations and other recapitalizations (in either such case, the "Demanding
Holders"), may at any time give to Holding a written request for the
registration (a "Demand Registration") by Holding under the Securities Act of
all or any part of the Registrable Securities held by such Demanding Holders.
Within five business days after
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the receipt by Holding of any such written request, Holding shall give written
notice of such request to all Holders of Registrable Securities.
(ii) After the receipt of a written request for a Demand Registration,
(A) Holding shall be obligated to include in such Demand Registration all of the
Registrable Securities with respect to which Holding shall receive the written
requests of the Holders thereof for inclusion in such Demand Registration,
within 20 days after the date on which Holding shall have given to all Holders a
written notice of registration request pursuant to Section 6.2(a)(i) of this
Agreement, and (B) Holding shall use its best efforts in good faith to effect
promptly the registration of all such Registrable Securities. All written
requests made by Holders of Registrable Securities pursuant to this Section
6.2(a)(ii) shall specify the number of Registrable Securities to be registered
and shall also specify the intended method of disposition thereof. Such method
of disposition shall, in any case, be an underwritten offering unless Holding,
the Majority Heritage Holders, or, if different, the Majority Demanding Holders,
mutually consent otherwise, none of which consents shall be unreasonably
withheld or delayed.
(b) Limitations on Demand Registrations.
(i) Holding shall not be obligated to effect more than three (3)
Demand Registrations pursuant to Section 6.2(a) of this Agreement.
(ii) Holding shall not be obligated to effect any Demand Registration
of any Registrable Securities pursuant to Section 6.2(a) hereof before the
earlier to occur of (A) June 7, 2002, and (B) six months following the
consummation of Holding's initial public offering of shares of Common Stock
registered in an effective registration statement under the Securities Act.
(iii) Any registration initiated as a Demand Registration pursuant to
Section 6.2(a) hereof shall not count as a Demand Registration for purposes of
the limitation set forth in Section 6.2(b)(i) of this Agreement unless such
registration has become effective and at least 75% of the Registrable Securities
of the Demanding Holders requested to be included in such registration have
actually been sold.
(iv) Holding shall not be obligated to effect any Demand Registration
during the period commencing on the date falling 90 days prior to Holding's
estimated date of filing of, and ending on the date 180 days following the
effective date of, any registration statement pertaining to any registration
initiated by Holding, for the account of Holding and/or stockholders other than
Holders (other than with respect to securities registered solely in connection
with acquisitions, employee benefit plans, and the like); provided, however,
that Holding shall use its best efforts in good faith to cause any such
registration statement to be filed and to become effective as expeditiously as
shall be reasonably possible.
(v) Holding shall not be obligated to effect any Demand Registration
for any 120-day period following receipt of any written request for
registration, if in the good faith judgment of the Board of Directors of
Holding, or of the managing underwriter of such
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offering if (A) such managing underwriter was selected pursuant to Section
6.2(d) hereof by the consent of the Majority Demanding Holders, and (B) Holding
has not withheld its approval of any managing underwriter proposed by the
Majority Demanding Holders in connection with such Demand Registration, the
filing of any registration statement during such 120-day period would adversely
affect a material proposed or pending acquisition, merger, or similar corporate
event to which Holding is or expects to be party.
(c) Priority in Demand Registrations. If the managing underwriters in any
Demand Registration advise Holding in writing that the number of securities
proposed to be included in such registration exceeds the Underwriters' Maximum
Number, then: (i) if (x) such registration would not be the first registration
of Common Stock by Holding under the Securities Act (other than with respect to
securities registered solely in connection with acquisitions, employee benefit
plans, and the like) or (y) such registration is the first such registration,
but Holding does not desire to sell shares on its own behalf pursuant thereto,
then (A) Holding shall be obligated to include in such registration that number
of Securities duly requested by the Holders thereof to be included in such
registration as does not exceed the Underwriters' Maximum Number, and such
number of Securities shall be allocated pro rata among such Holders on the basis
of the number of Securities held by each such Holder; (B) if the Underwriters'
Maximum Number exceeds the number of Securities duly requested to be included in
such registration, then Holding shall be entitled to include in such
registration that number of securities as shall have been duly requested by
Holding to be included in such registration for the account of Holding and that
is not greater than such excess; and (C) if the Underwriters' Maximum Number
exceeds the sum of the number of Registrable Securities that are to be included
in such registration pursuant to the foregoing clauses (A) and (B), then Holding
may include in such registration that number of other securities that Persons
other than Holders and Holding have requested be included in such registration
and which is not greater than such excess; and (ii) if (x) such registration
would be the first registration of Common Stock by Holding under the Securities
Act (other than with respect to securities registered solely in connection with
acquisitions, employee benefit plans, and the like) and (y) Holding desires to
sell shares on its own behalf pursuant thereto, then (A) Holding shall be
entitled to include in such registration that number of securities as shall have
been authorized to be included by its Board of Directors for its own account, up
to the Underwriter's Maximum Number; (B) if the Underwriters' Maximum Number
exceeds the number of Securities Holding proposes to offer and sell for its own
account in such registration, then Holding shall be obligated to include in such
registration that number of Securities duly requested by the Holders thereof to
be included in such registration that is not greater than such excess, and such
number of Securities shall be allocated pro rata among such Holders on the basis
of the number of Securities held by each such Holder; and (C) if the
Underwriters' Maximum Number exceeds the sum of the number of Securities that
are to be included in such registration pursuant to subclauses (A) and (B) of
this clause (ii), then Holding may include in such registration that number of
other securities that Persons other than Holders and Holding have requested be
included in such registration and which is not greater than such excess. Neither
Holding nor any of its other securityholders shall be entitled to include any
securities in any underwritten Demand Registration initiated pursuant to Section
6.2(x)(i)(A) unless Holding or such securityholders (as the case may be) agree
in writing to sell such securities on
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the same terms and conditions as apply to the Heritage Securities to be included
in such Demand Registration.
(d) Selection of Underwriters. If any Demand Registration is an
underwritten offering, the investment bankers and managing underwriters in such
registration shall be selected by Holding, subject to the approval of the
Majority Demanding Holders, which approval shall not be unreasonably withheld or
delayed. If the Majority Demanding Holders reasonably disapprove of such
investment bankers or underwriters, such Holders shall use their best efforts to
select another investment banker or underwriter reasonably acceptable to Holding
(Holding's approval thereof not to be unreasonably withheld or delayed), and
shall continue such process until such investment bankers or underwriters have
been selected.
6.3. Piggyback Registrations.
(a) Rights to Piggyback.
(i) If (and on each occasion that) Holding proposes to register any
of its securities under the Securities Act, for Holding's own account and/or for
the account of any of its security holders (each such registration not withdrawn
or abandoned prior to the effective date thereof, a "Piggyback Registration"),
Holding shall give written notice of such proposal to each of the Holders not
later than the earlier to occur of (A) the tenth day following the receipt by
Holding of notice of exercise of any registration rights by any Persons, and (B)
30 days prior to the anticipated filing date of such Piggyback Registration.
Notwithstanding the foregoing, Holding shall not be obligated to give such
notice to Holders with respect to, or to include any Registrable Securities in,
any registration statement on Form S-8 or similar limited-purpose form of
registration statement effected solely to implement an employee benefit plan, or
any registration statement on Form S-4 or similar limited-purpose form of
registration statement effected solely to implement an acquisition.
(ii) Subject to the provisions contained in paragraph (b) of this
Section 6.3 and in the last sentence of this clause (ii): (A) Holding shall be
obligated to include in each Piggyback Registration all Registrable Securities
with respect to which Holding receives, within 20 days after the date on which
Holding shall have given written notice of such Piggyback Registration to
Holders pursuant to Section 6.3(a)(i) hereof, the written requests of such
Holders for inclusion in such Piggyback Registration, and (B) Holding shall use
its best efforts in good faith to effect promptly the registration of all such
Registrable Securities. Holders shall be permitted to withdraw all or any part
of their Registrable Securities from any Piggyback Registration at any time
prior to the effective date of such Piggyback Registration.
(b) Priority in Piggyback Registrations. If a Piggyback Registration is an
underwritten registration, and the managing underwriters thereof give written
advice to Holding of an Underwriters' Maximum Number, then: (i) Holding shall be
entitled to include in such registration that number of securities which
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Holding proposes to offer and sell for its own account in such registration and
which does not exceed the Underwriters' Maximum Number; (ii) if the
Underwriters' Maximum Number exceeds the number of securities which Holding
proposes to offer and sell for its own account in such registration, then
Holding will be obligated and required to include in such registration that
number of Registrable Securities requested by the Holders thereof to be included
in such registration and which does not exceed such excess and such Registrable
Securities shall be allocated pro rata among the Holders thereof on the basis of
the number of Registrable Securities requested to be included therein by each
such Holder; and (iii) if the Underwriters' Maximum Number exceeds the sum of
the number of Registrable Securities which Holding shall be required to include
in such registration pursuant to clause (ii) and the number of securities which
Holding proposes to offer and sell for its own account in such registration,
then Holding may include in such registration that number of other securities
which Persons other than the Holders shall have requested be included in such
registration and which is not greater than such excess.
(c) Selection of Underwriters. In any Piggyback Registration, Holding
shall (unless Holding shall otherwise agree) have the right to select the
investment bankers and managing underwriters in such registration.
6.4. Lockup Agreements.
(a) Restrictions on Public Offering by Holders of Registrable Securities.
If, in connection with any Public Offering, Holding or, if such Public Offering
is pursuant to an underwritten registration, the managing underwriters thereof
so request, each Holder of Registrable Securities, whether or not any of their
Registrable Securities are included in any such Public Offering, shall not,
without the prior written consent of Holding or (if applicable) such
underwriters, effect any Public Offering or other distribution of any equity
securities of Holding, including any sale pursuant to Rule 144, during the seven
days prior to, and during the 180-day period commencing on, the date of such
Public Offering, except in each case in connection with such Public Offering;
provided that each officer, director and other Affiliate of Holding or any of
its Subsidiaries who holds any equity securities of Holding shall enter into
similar agreements, and provided, further, that to the extent that any such
officer, director, or other Affiliate is released (in whole or in part) from
such lock-up agreement prior to its scheduled termination date, each Holder
bound by a similar lock-up agreement shall have a proportionate percentage of
its securities released from such lock-up agreement.
(b) Restrictions on Public Offering by Holding. Holding shall not effect
any Public offering or other distribution of shares of its capital stock or
other equity securities, or securities exercisable or exchangeable for, or
convertible into, such capital stock or other equity securities, during the
period commencing on the seventh day prior to, and ending on the 180th day
following, the effective date of any underwritten registration, except in
connection with any such registration.
6.5. Registration Procedures. If (and on each occasion that) Holding
becomes obligated to effect any registration of any Registrable Securities
hereunder, Holding shall use its best efforts in good faith to effect promptly
the registration of such Registrable Securities under the Securities Act and to
permit the public offering and sale of such Registrable
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Securities in accordance with the Holders' intended methods of disposition
thereof, and, in connection therewith, Holding as expeditiously as possible
shall:
(a) prepare and file with the Commission as soon as is practicable, and in
any event within 120 days after a proper request therefor made in accordance
with Section 6.2(a) hereof, a registration statement with respect to such
Registrable Securities, and use its best efforts to cause such registration
statement to become and remain effective as provided in this Agreement;
(b) prepare and file with the Commission such amendments and supplements
to such registration statement and the prospectus included in such registration
statement as may be necessary or advisable to comply in all material respects
with the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement or as may be necessary to keep
such registration statement effective and current, but for no longer than nine
months subsequent to the effective date of such registration;
(c) furnish to each seller of Registrable Securities such number of copies
of such registration statement, each amendment and supplement thereto (in each
case including all exhibits thereto), the prospectus included in such
registration statement (including each preliminary prospectus), and such other
documents as any such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities held by such seller;
(d) use its best efforts (i) to list the Registrable Securities to be
registered in such registration on each securities exchange or quotation system
on which similar securities of Holding are then listed (or if none, then at a
minimum on the automated quotations system of the National Association of
Securities Dealers, Inc.), and (ii) to register and qualify the Registrable
Securities covered by such registration statement under such securities or Blue
Sky laws of such jurisdictions as any Holder may reasonably request and do any
and all such other acts and things as may be reasonably necessary or advisable
to enable such seller to consummate the disposition in such jurisdictions of the
Registrable Securities held by such seller; provided, however, that Holding
shall not be required in connection with such Blue Sky registration or
qualification to qualify generally to do business, subject itself to taxation,
or file a general consent to service of process in any such jurisdiction;
(e) furnish to each prospective seller and each underwriter a signed
counterpart, addressed to such prospective seller, of (i) an opinion of counsel
for Holding, dated the effective date of the registration statement, and (ii) a
"comfort" letter signed by the independent public accountants who have certified
Holding's financial statements included in the registration statement, covering
substantially the same matters with respect to the registration statement (and
the prospectus included therein) and (in the case of the comfort letter, with
respect to events subsequent to the date of the financial statements), as are
customarily covered (at the time of such registration) in opinions of issuer's
counsel and in comfort letters delivered to the underwriters in underwritten
public offerings of securities;
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(f) notify each prospective seller of Registrable Securities, at any time
when a prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event as a result of which such
prospectus included in such Registration Statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements therein
not misleading, and, at the request of any such seller, Holding will promptly
prepare (and, when completed, give notice to each prospective seller of
Registrable Securities) a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any fact necessary to make the statements therein not misleading; provided
that upon such notification by Holding, each prospective seller of such
Registrable Securities will not offer or sell such Registrable Securities until
Holding has notified such seller that it has prepared a supplement or amendment
to such prospectus and delivered copies of such supplement or amendment to such
prospective seller;
(g) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of such registration statement;
(h) enter into all such customary agreements (including underwriting
agreements in customary form) and take all such other actions as the holders of
a majority of the Heritage Securities to be registered (in the case of a Demand
Registration) or the Registrable Securities to be registered (in the case of a
Piggyback Registration) or the underwriters, if any, reasonably request in order
to expedite or facilitate the disposition of such Registrable Securities
(including, without limitation, effecting a stock split or a combination of
shares);
(i) make available for inspection on a confidential basis by any Holder,
any underwriter participating in any disposition pursuant to such registration
statement, or any attorney, accountant, or other agent retained by any such
Holder or underwriter (in each case after reasonable prior notice), all
financial and other records, pertinent corporate documents, and properties of
Holding, and cause Holding's and its respective Subsidiaries' officers,
directors, employees, and independent accountants to supply on a confidential
basis all information reasonably requested by any such Holder, underwriter,
attorney, accountant, or agent in connection with such registration statement;
but in each case only to the extent reasonably required in order to permit such
Holder, underwriter, attorney, accountant, or agent to conduct an investigation
sufficient to establish a "due diligence" defense in accordance with the
Securities Act and the rules, regulations, and case law thereunder;
(j) permit any Holder who, in his or its sole and exclusive judgment,
might be deemed to be an underwriter or a controlling person of Holding within
the meaning of Section 15 of the Securities Act, to participate in the
preparation of such registration statement and to permit the insertion therein
of material, furnished to Holding in writing, which in the reasonable judgment
of such Holder and his or its counsel should be included, subject to the
omission of such portions, if any, of such furnished material that Holding and
its counsel in good faith may determine was unreasonably furnished;
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(k) in the event of the issuance of any stop order suspending the
effectiveness of a Registration Statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Registrable Securities included in such Registration Statement for sale in
any jurisdiction, use its best efforts promptly to obtain the withdrawal of such
order;
(l) if requested by the managing underwriter or underwriters or any Holder
in connection with any sale pursuant to a registration statement, promptly
incorporate in a prospectus supplement or post-effective amendment such
information relating to such underwriting as the managing underwriter or
underwriters or such Holder reasonably requests to be included therein, subject
to the omission of such portions, if any, of such material that Holding and its
counsel in good faith may determine was unreasonably furnished, and make all
required filings of such prospectus supplement or post-effective amendment as
soon as practicable after being notified of the matters incorporated in such
prospectus supplement or post-effective amendment;
(m) cooperate with the holders of Registrable Securities and the managing
underwriter or underwriters, if any, to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legends) representing
Registrable Securities to be sold under such registration statement, and enable
such Registrable Securities to be in such denominations and registered in such
names as the managing underwriter or underwriters, if any, or such holders may
request;
(n) use its best efforts to cause the Registrable Securities to be
registered with or approved by such other governmental agencies or authorities
within the United States and having jurisdiction over Holding as may reasonably
be necessary to enable the seller or sellers thereof or the underwriter or
underwriters, if any, to consummate the disposition of such Registrable
Securities; and
(o) otherwise comply with all applicable rules and regulations of the
Commission, and make generally available to its securityholders (as contemplated
by Section 11(a) under the Securities Act) an earnings statement satisfying the
provisions of Rule 158 under the Securities Act no later than ninety (90) days
after the end of the twelve month period beginning with the first month of
Holding's first fiscal quarter commencing after the effective date of such
registration statement, which statement shall cover said twelve month period.
6.6. Cooperation by Prospective Sellers, Etc.
(a) Each prospective seller of Registrable Securities shall furnish to
Holding in writing such information as Holding may reasonably require from such
seller, and otherwise reasonably cooperate with Holding in connection with any
registration statement with respect to such Registrable Securities.
(b) The failure of any prospective seller of Registrable Securities to
furnish any information or documents in accordance with any provision contained
in this Section 6 shall
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not affect the obligations of Holding under this Section 6 to any remaining
sellers who furnish such information and documents unless in the reasonable
opinion of counsel to Holding or the underwriters, such failure impairs or may
impair the viability of the offering or the legality of the registration
statement or the underlying offering.
(c) Each Holder of Registrable Securities included in any registration
statement shall not (until further notice) effect sales thereof after receipt of
telegraphic or written notice from Holding to such Holder to suspend sales to
permit Holding to correct or update such registration statement or prospectus
(which Holding shall do as promptly as is practicable); but the obligations of
Holding with respect to maintaining any registration statement current and
effective shall be extended by a period of days equal to the aggregate period
any such suspensions are in effect.
(d) At the end of any period during which Holding is obligated to keep any
registration statement current and effective as provided by Section 6.5 hereof
(and any extensions thereof required by the preceding paragraph (c) of this
Section 6.6), the Holders of Registrable Securities included in such
registration statement shall discontinue sales of shares pursuant to such
registration statement upon notice from Holding to such Holders of its intention
to remove from registration the shares covered by such registration statement
which remain unsold, and such Holders shall notify Holding of the number of
shares registered that remain unsold promptly after receipt of such notice from
Holding.
6.7. Registration Expenses.
(a) Holding shall be responsible for and shall pay all costs and expenses
incurred or sustained in connection with or arising out of each registration
pursuant to this Section 6, including, without limitation, all registration and
filing fees, fees and expenses of compliance with securities or Blue Sky laws
(including reasonable fees and disbursements of counsel for the underwriters in
connection with the Blue Sky qualification of Registrable Securities), printing
expenses, messenger, telephone, and delivery expenses, fees and disbursements of
counsel for Holding, reasonable fees and disbursements of one counsel
representing the Holders of Heritage Securities and one counsel representing the
Holders of other Registrable Securities, fees and disbursements of all
independent certified public accountants (including the expenses relating to the
preparation and delivery of any special audit or comfort letters required by or
incident to such registration), and fees and disbursements of underwriters
(excluding underwriting discounts and commissions), the reasonable fees and
expenses of any special experts retained by Holding on its own initiative or at
the request of the managing underwriters in connection with such registration,
and fees and expenses of all (if any) other Persons retained by Holding (all
such costs and expenses, collectively, "Registration Expenses"). Holding shall,
in any case, pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit, and the fees and expenses
incurred in connection with the listing of the securities to be registered on
each securities exchange or quotation system on which similar securities of
Holding are then listed.
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(b) Holding shall not bear the cost of nor pay for any stock transfer
taxes imposed in respect of the transfer of any Registrable Securities to any
purchaser thereof by any Holder of Registrable Securities in connection with any
registration of Registrable Securities pursuant to this Section 6.
(c) To the extent that Registration Expenses incident to any registration
are, under the terms of this Section 6, not required to be paid by Holding, each
Holder of Registrable Securities included in such registration shall pay all
Registration Expenses that are clearly solely attributable to the registration
of such Holder's Registrable Securities so included in such registration, and
all other Registration Expenses not so attributable to one Holder shall be borne
and paid by all sellers of securities included in such registration pro rata in
proportion to the number of securities so included by each such seller.
6.8. Indemnification.
(a) Indemnification by Holding. Holding shall indemnify each Holder
joining in a registration and each underwriter of the securities so registered,
the officers, directors, and partners of each such Person and each Person who
controls (within the meaning of the Securities Act) any of the foregoing, and
their respective successors and assigns, against any and all Damages to which
such Person is or may become subject arising out of or based on any untrue
statement (or alleged untrue statement) of any material fact contained in any
prospectus, offering circular or other document incident to any registration,
qualification or compliance (or in any related registration statement,
notification or the like) or any omission (or alleged omission) to state therein
any material fact required to be stated therein or necessary to make the
statements therein not misleading, or any violation by Holding of any rule or
regulation promulgated under the Securities Act applicable to Holding and
relating to any action or inaction required of Holding in connection with any
such registration, qualification, or compliance; provided, however, that Holding
shall not be liable in any such case to the extent that any such Damages arise
out of or are based on any untrue statement or omission based upon written
information furnished to Holding in an instrument duly executed by such Holder,
underwriter, officer, director, partner, or controlling person and stated to be
specifically for use in such prospectus, offering circular, or other document.
(b) Indemnification by Each Holder. Each Holder requesting or joining in a
registration shall indemnify each underwriter of the securities so registered,
Holding and its officers and directors and each person, if any, who controls
(within the meaning of the Securities Act) any of the foregoing, and their
respective successors and assigns, against any and all Damages to which such
Person is or may become subject arising out of or based on any untrue statement
(or alleged untrue statement) of any material fact contained in any prospectus,
offering circular, or other document incident to any registration, qualification
or compliance (or in any related registration statement, notification or the
like) or any omission (or alleged omission) to state therein any material fact
required to be stated therein or necessary to make the statement therein not
misleading, but only if and to the extent that such statement or omission was
made in reliance upon written information furnished to such underwriter or
Holding in an instrument duly executed by such Holder and stated to be
specifically for use in
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such prospectus, offering circular, or other document (or related registration
statement, notification, or the like) or any amendment or supplement thereto;
and provided further that each Holder's liability with respect to any particular
registration shall be limited to an amount equal to the net cash proceeds
received by such Holder from the Registrable Securities sold by such Holder in
such registration.
(c) Indemnification Proceedings. Each party entitled to indemnification
pursuant to this Section 6.8 (the "indemnified party") shall give notice to the
party required to provide indemnification pursuant to this Section 6.8 (the
"indemnifying party") promptly after such indemnified party acquires actual
knowledge of any claim as to which indemnity may be sought, and shall permit the
indemnifying party (at its expense) to assume the defense of any claim or any
litigation resulting therefrom; provided that counsel for the indemnifying
party, who shall conduct the defense of such claim or litigation, must be
acceptable to the indemnified party, and the indemnified party may participate
in such defense at such party's expense; and provided, further, that the failure
by any indemnified party to give notice as provided in this paragraph (c) shall
not relieve any indemnifying party of its obligations under this Section 6.8
except if and to the extent that such failure results in a failure of actual
notice to the indemnifying party and such indemnifying party is actually
prejudiced solely as a result of such failure to give notice. No indemnifying
party, in the defense of any such claim or litigation, shall, except with the
consent of each indemnified party, consent to entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation. The reimbursement required
by this Section 6.8 shall be made by periodic payments during the course of the
investigation or defense, as and when bills are received or expenses incurred,
and may be conditioned upon an undertaking by the indemnified party to reimburse
the indemnifying party in the event the indemnified party is finally determined
by a court of competent jurisdiction not to be entitled to indemnification.
6.9. Contribution in Lieu of Indemnification. If the indemnification
provided for in Section 6.8 hereof is unavailable to a party that would have
been an indemnified party in respect of any Damages referred to therein, then
each party that would have been an indemnifying party thereunder shall, in lieu
of indemnifying such indemnified party, contribute to the amount paid or payable
by such indemnified party as a result of such Damages in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and such
indemnified party, respectively, in connection with the statements or omissions
which resulted in such Damages. Relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or such indemnified
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. Holding and each
Holder of Registrable Securities agree that it would not be just and equitable
if contribution pursuant to this Section 6.9 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to above in this Section 6.9. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the
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Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
6.10. Rule 144 Requirements; Form S-3 Registrations. From time to time
after the earlier to occur of (a) the ninetieth day following the date on which
there shall first become effective a registration statement filed by Holding
under the Securities Act, or (b) the date on which Holding shall register a
class of securities under Section 12 of the Exchange Act, Holding shall make
every effort in good faith to take all steps necessary to ensure that Holding
will be eligible to register securities on Form S-3 (or any comparable or
successor form adopted by the Commission) as soon thereafter as possible (it
being acknowledged that certain aspects of eligibility to use Form S-3, e.g.,
the aggregate market value of Holding's securities held by non-affiliates, are
beyond Holding's control), and to make publicly available and available to the
Holders, pursuant to Rule 144 of the Commission under the Securities Act, such
current public information as shall be necessary to enable the Holders of
Registrable Securities to make sales of Registrable Securities pursuant to that
Rule. Holding shall furnish to the Holders, upon request at any time after the
undertaking of Holding in the preceding sentence shall have first become
effective, a written statement signed by Holding, addressed to each Holder,
describing briefly the action Holding has taken or proposes to take to comply
with the current public information requirements of Rule 144. Upon receipt of a
certificate certifying (i) that such Holder has held such Purchased Securities
for a period of not less than two (2) years (or such lesser period after which
the exemption from registration pursuant to which Rule 144(k) may be available),
and (ii) that such Holder has not been an affiliate (as defined in Rule 144) of
Holding during the preceding three months, Holding shall, at the request of any
Holder of Purchased Securities, remove from the stock certificates representing
such Purchased Securities any restrictive legend (or portion thereof) relating
to the registration provisions of the Securities Act. After (and for so long as)
Holding qualifies for the use of Form S-3, then, subject to the provisions of
Sections 6.2(b)(iv) and (v) of this Agreement, any Holder or Holders of
Registrable Securities with an aggregate fair market value of $1,000,000 or
more, shall have the right to require Holding to register Registrable Securities
with not less than such aggregate fair market value on Form S-3, provided, that
Holding shall not be obligated to effect such a registration more frequently
than once in any six-month period.
6.11. Participation in Underwritten Registrations. No Person may
participate in any underwritten registration pursuant to this Section 6 unless
such Person (a) agrees to sell such Person's securities on the basis provided in
any underwriting arrangements approved by the Persons entitled, under the
provisions hereof, to approve such arrangements, and (b) completes and executes
all questionnaires, powers of attorney, custody agreements, indemnities,
underwriting agreements, and other documents reasonably required by the terms of
such underwriting arrangements. Any Holder of Registrable Securities to be
included in any underwritten registration shall be entitled at any time to
withdraw such Registrable Securities from such registration prior to its
effective date in the event that such Holder disapproves of any of the terms of
the related underwriting agreement.
7. Life Insurance. Holding shall maintain and name itself as the
beneficiary of (i) one or more insurance policies on the life of Xxxxxxx Xxxxx
and each other Stockholder who is
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also an executive employee of Holding and who has the right under a Repurchase
Agreement to require the repurchase by Holding of his shares of Common Stock
upon his death, and (ii) one or more insurance policies on the lives of Xxxxxx
X. Xxxxxx and H. Xxxxx Xxxxxx, payable upon the later of the deaths of such two
individuals. The amount of such insurance under such policies shall be as set
forth on Schedule 7 hereto. Holding shall have the right to obtain insurance
upon the lives of other Stockholders, in such amounts and upon such terms as
Holding may deem appropriate. Once obtained, any such life insurance (including
the policies referred to in clauses (i) and (ii) above) shall be maintained;
provided, however, that Holding's obligation to obtain or maintain any such
insurance shall be limited, in each instance, to Holding's attempting in good
faith to obtain and maintain such insurance at standard rates; if such insurance
is unavailable at standard rates, Holding shall have the discretion not to
obtain or maintain such insurance, or to obtain or maintain less than that
provided for on Schedule 7 hereto. Holding may, but shall not be required to,
increase or decrease the amount of insurance coverage from that described on
Schedule 7 hereto commensurate with changes in its equity valuation as
reasonably determined from time to time by its Board of Directors. Holding shall
direct each insurance company that has issued a policy pursuant to this Section
7 to send duplicate premium notices to the insured. In the event that Holding
fails to pay any premium due on any such policy it has obtained, the insured may
pay the premium and shall be reimbursed by Holding.
8. Definitions. As used in this Agreement, the following terms have the
following respective meanings:
"Affiliate" means, with respect to a specified Person, (i) any Person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the specified Person and (ii)
any Person that is an officer, director, trustee, member or general partner of,
or serves in a similar capacity with respect to, the specified Person, or of
which the specified Person is an officer, director, trustee, member or general
partner, or with respect to which the specified Person serves in a similar
capacity or (iii) any Person who is a spouse, parent, sibling or lineal
descendant of such Person or any Person described in clauses (i) or (ii). For
purposes of this definition the term "control" when used with respect to a
Person means (a) the beneficial ownership (as defined in Rule 13d-d promulgated
under the Securities and Exchange Act of 1934, as amended) of 50 percent or more
of the voting interests in such Person, or (b) the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.
"AGI" means AGI Incorporated, an Illinois corporation and the surviving
corporation of the Merger under and as defined in the Merger Agreement.
"AGI Closing Date" means March 12, 1998.
"AGI Holder Securities" means the shares of capital stock of Holding
originally issued and sold pursuant to the Investment Agreement and the Stock
Purchase Agreement to AGI Management Stockholders, any shares of capital stock
or other securities of Holding
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transferred in accordance with this Agreement or issued from time to time after
the AGI Closing Date to any of the AGI Management Stockholders, and any shares
of capital stock issued to any of the AGI Management Stockholders as a result of
any exercise of pre-emptive rights pursuant to Section 4 hereof, and includes
any shares of capital stock and other securities of Holding issued or issuable
with respect to any of the foregoing shares of capital stock or other securities
of Holding by way of a stock dividend, stock split, combination or division of
shares, recapitalization, merger, consolidation, reorganization, or the like,
and any shares of capital stock or other securities of Holding into which any of
the foregoing shares of capital stock or other securities of Holding are
(directly or indirectly) converted or for which any of the foregoing shares of
capital stock or other securities are (directly or indirectly) exchanged, in
each case regardless of subsequent transfers of such shares of capital stock or
other securities of Holding; provided, that shares of capital stock and other
securities of Holding shall cease to be AGI Holder Securities when transferred
(i) to Holding, (ii) pursuant to a Public Sale, or (iii) to any Heritage Holder,
Klearfold Management Stockholder, Xxxxxxx Management Stockholder or Other
Stockholder.
"Block Stockholders" means, collectively, (i) Xxxxxxx Xxxxx, (ii) Freya
Block, as Trustee of the Xxxxxxx X. Block Family Trust u/t/a/d 4/1/94, and (iii)
any direct or indirect transferee of Securities from either of them pursuant to
and in accordance with Section 1.1(b) hereof.
"Common Stock" means, collectively, the Series A Common Stock and the
Series B Common Stock.
"Domestic Subsidiary" means any Subsidiary of Holding or any of its
Subsidiaries organized under the laws of the United States of America, any of
its States or the District of Columbia, provided, however, that so long as KF-
Delaware carries on no business activities other than the holding of title to
certain intellectual properties, the use of which is licensed to Klearfold, KF-
Delaware shall not be deemed for the purposes of this Agreement to be a Domestic
Subsidiary.
"Employment Agreement" means any Employment, Non-Competition and Stock
Repurchase Agreement, Agreement with respect to Employment and Stock Ownership,
Employment Agreement, Service Agreement or other similar agreement with respect
to the provisions of services to Holding or any of its Subsidiaries or between
any of Holding or any of its Subsidiaries and any of their employees.
"Family Members" means, with respect to any individual, any Related Person
or Family Trust of such individual.
"Family Trust" means, with respect to any individual, any trust created for
the benefit of such individual and/or one or more of such individual's Related
Persons, and controlled by such individual.
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"Fully Diluted Basis" means, with respect to any calculation to be made at
any time pursuant to this Agreement, that such calculation shall be made by
treating as outstanding all shares of Common Stock issuable upon exercise of all
outstanding warrants, options, and/or other rights to acquire shares of Common
Stock, but excluding any such warrants, options, and/or other rights (or any
portions thereof) as are not capable of being exercised then or thereafter in
accordance with the respective terms thereof.
"Heritage Holders" means, collectively, the holders, as of the relevant
time of reference, of any of the Heritage Securities, and "Heritage Holder"
means any one of the Heritage Holders.
"Heritage I Holders" means, collectively, the holders, as of the relevant
time of reference, of any of the Heritage I Securities, and "Heritage I Holder "
means any one of the Heritage I Holders.
"Heritage II Holders" means, collectively, the holders, as of the relevant
time of reference, of any of the Heritage II Securities, and "Heritage II
Holder" means any one of the Heritage II Holders.
"Heritage Securities" means the Heritage I Securities and the Heritage II
Securities, collectively.
"Heritage I Securities" means the shares of capital stock and other
securities of Holding issued and sold to Heritage I pursuant to the Investment
Agreement and the Stock Purchase Agreement, any shares of capital stock and
other securities of Holding issued or transferred to Heritage I or any permitted
Transferee of Heritage I (other than Heritage II) pursuant to Section 1.1(f)
hereof, and any shares of capital stock issued to Heritage I or any such
permitted Transferee as a result of any exercise of pre-emptive rights pursuant
to Section 4 hereof, and includes any shares of capital stock and other
securities of Holding issued or issuable with respect to any of the foregoing
shares of capital stock or other securities of Holding by way of a stock
dividend, stock split, combination or division of shares, recapitalization,
merger, consolidation, reorganization, or the like, and any shares of capital
stock and other securities of Holding into which any of the foregoing shares of
capital stock and other securities of Holding are (directly or indirectly)
converted or for which any of the foregoing shares of capital stock and other
securities of Holding are (directly or indirectly) exchanged, in each case
regardless of subsequent transfers of such shares of capital stock or other
securities of Holding; provided, that shares of capital stock and other
securities of Holding shall cease to be Heritage I Securities when transferred
(i) to Holding, (ii) pursuant to a Public Sale, (iii) to Heritage II, or (iv) to
any of the Non-Heritage Holders.
"Heritage II Securities" means the shares of capital stock and other
securities of Holding issued and sold to Heritage II pursuant to the Stock
Purchase Agreement, any shares of capital stock and other securities of Holding
issued or transferred to Heritage II or any permitted Transferee of Heritage II
(other than Heritage I) pursuant to Section 1.1(f) hereof, and any shares of
capital stock issued to Heritage II or any such permitted Transferee as a
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result of any exercise of pre-emptive rights pursuant to Section 4 hereof, and
includes any shares of capital stock and other securities of Holding issued or
issuable with respect to any of the foregoing shares of capital stock or other
securities of Holding by way of a stock dividend, stock split, combination or
division of shares, recapitalization, merger, consolidation, reorganization, or
the like, and any shares of capital stock and other securities of Holding into
which any of the foregoing shares of capital stock and other securities of
Holding are (directly or indirectly) converted or for which any of the foregoing
shares of capital stock and other securities of Holding are (directly or
indirectly) exchanged, in each case regardless of subsequent transfers of such
shares of capital stock or other securities of Holding; provided, that shares of
capital stock and other securities of Holding shall cease to be Heritage II
Securities when transferred (i) to Holding, (ii) pursuant to a Public Sale,
(iii) to Heritage I, or (iv) to any of the Non-Heritage Holders.
"Indenture" means the Indenture dated of even date herewith between Holding
and State Street Bank and Trust Company, as trustee.
"Independent Appraiser" shall mean an investment banking or accounting firm
or independent appraiser of nationally recognized status and at least ten years
of experience in evaluating businesses similar to those of Holding and its
Subsidiaries, and which is not an Affiliate of Holding, any of its Subsidiaries,
or any Stockholder.
"Investment Agreement" means that certain Investment Agreement dated as of
February 19, 1998, by and among the AGI Management Stockholders, the Klearfold
Management Stockholders, Heritage, Holding and certain other persons named
therein.
"KF-Delaware" means KF-Delaware, Inc. a Delaware corporation.
"Klearfold" means Klearfold, Inc., a Pennsylvania corporation.
"Klearfold Holder Securities" means the shares of capital stock of Holding
originally issued and sold pursuant to the Investment Agreement and Stock
Purchase Agreement to the Klearfold Management Stockholders, any shares of
capital stock or other securities of Holding transferred in accordance with this
Agreement or issued from time to time after the AGI Closing Date to any of the
Klearfold Management Stockholders, and any shares of capital stock issued to any
of the Klearfold Management Stockholders as a result of any exercise of pre-
emptive rights pursuant to Section 4 hereof, and includes any shares of capital
stock and other securities of Holding issued or issuable with respect to any of
the foregoing shares of capital stock or other securities of Holding by way of a
stock dividend, stock split, combination or division of shares,
recapitalization, merger, consolidation, reorganization, or the like, and any
shares of capital stock or other securities of Holding into which any of the
foregoing shares of capital stock or other securities of Holding are (directly
or indirectly) converted or for which any of the foregoing shares of capital
stock or other securities are (directly or indirectly) exchanged, in each case
regardless of subsequent transfers of such shares of capital stock or other
securities of Holding; provided, that shares of capital stock and other
securities of Holding shall cease to be Klearfold Holder Securities when
transferred (i) to
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Holding, (ii) pursuant to a Public Sale, or (iii) to any Heritage Holder, AGI
Management Stockholder, Xxxxxxx Management Stockholder or Other Stockholder.
"Lien" means any lien, claim, mortgage, security interest, charge,
encumbrance, or restriction on transfer of any kind.
"Majority AGI Holders" means the holders, as of the relevant time of
reference, of at least a majority of the AGI Holder Securities.
"Majority Heritage Holder" means the holder, as of the relevant time of
reference, of at least a majority of the Heritage Securities.
"Majority Heritage I Holders" means the holders, as of the relevant time of
reference, of at least a majority of the Heritage I Securities.
"Majority Heritage II Holders" means the holders, as of the relevant time
of reference, of at least a majority of the Heritage II Securities.
"Majority Xxxxxx Holders" means the holders, as of the relevant time of
reference, of at least a majority of the Securities then held by the Xxxxxx
Stockholders.
"Majority Klearfold Holders" means the holders, as of the relevant time of
reference, of at least a majority of the Klearfold Holder Securities.
"Majority Non-Heritage Holders" means the holders, as of the relevant time
of reference, of at least a majority of the Non-Heritage Securities.
"Majority Xxxxxxx Holders" means the Holders, as of the relevant time of
reference, of at least a majority of the Tinsley Holder Securities.
"Merger Agreement" means the Agreement and Plan of Merger dated as of
February 19, 1998 by and among Holding, AGI, AGI Acquisition Corporation and
certain stockholders of AGI.
"Non-AGI Holder Securities" means the Heritage Securities, the Klearfold
Holder Securities, the Tinsley Holder Securities and the Other Stockholder
Securities.
"Non-Heritage Holders" means, collectively, the holders, as of the relevant
time of reference, of the Non-Heritage Securities, and "Non-Heritage Holder"
means any one of the Non-Heritage Holders.
"Non-Heritage Securities" means the AGI Holder Securities, the Klearfold
Holder Securities, the Tinsley Holder Securities and the Other Stockholder
Securities.
"Other Agreements" has the same meaning herein as the Investment Agreement.
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"Other Stockholder Securities" means shares of capital stock of Holding
originally issued and sold to any Stockholder other than an AGI Management
Stockholder, Klearfold Management Stockholder, Xxxxxxx Management Stockholder or
Heritage Holder (any such Stockholder, an "Other Stockholder"), any shares of
capital stock or other securities of Holding transferred in accordance with this
Agreement or issued from time to time after the AGI Closing Date to any of the
Other Stockholders, and any shares of capital stock issued to any of the Other
Stockholders as a result of any exercise of pre-emptive rights pursuant to
Section 4 hereof, and includes any shares of capital stock and other securities
of Holding issued or issuable with respect to any of the foregoing shares of
capital stock or other securities of Holding by way of a stock dividend, stock
split, combination or division of shares, recapitalization, merger,
consolidation, reorganization, or the like, and any shares of capital stock or
other securities of Holding into which any of the foregoing shares of capital
stock or other securities of Holding are (directly or indirectly) converted or
for which any of the foregoing shares of capital stock or other securities are
(directly or indirectly) exchanged, in each case regardless of subsequent
transfers of such shares of capital stock or other securities of Holding;
provided, that shares of capital stock and other securities of Holding shall
cease to be Other Stockholder Securities when transferred (i) to Holding, (ii)
pursuant to a Public Sale, or (iii) to any Heritage Holder, Klearfold Management
Stockholder, AGI Management Stockholder or Xxxxxxx Management Stockholder.
"Person" means any natural person, entity, or association, including
without limitation any corporation, partnership, limited liability company,
government (or agency or subdivision thereof), trust, joint venture or sole or
joint proprietorship.
"Personal Representative" means the successor or legal representative
(including without limitation, a guardian, executor, administrator or
conservator) of a dead or incompetent Stockholder.
"Public Offering" means any sale of shares of Common Stock to the public
pursuant to a public offering registered under the Securities Act.
"Public Sale" means any Public Offering or any sale of shares of Common
Stock to the public through a broker or market-maker pursuant to the provisions
of Rule 144 (or any successor rule) adopted under the Securities Act.
"Qualified Public Offering" means an underwritten Public Offering, pursuant
to an effective registration statement under the Securities Act, covering the
offer and sale of shares of Common Stock in which an aggregate of not less than
$25,000,000 of gross proceeds from such Public Offering are received by Holding
and/or one or more of the selling stockholders for its and/or his account, as
the case may be.
"Related Persons" means, with respect to any individual, such individual's
parents, spouse, children, and grandchildren.
-42-
"Securities" means all shares of the capital stock or other securities of
Holding, including without limitation the Heritage Securities and the Non-
Heritage Securities, and all options, warrants, and other rights to acquire
shares of the capital stock or other securities of Holding (including without
limitation upon the conversion or exchange of other securities or instruments).
"Series A Common Stock" means the Series A Common Stock, $0.001 par value
per share, of Holding.
"Series B Common Stock" means the Series B Common Stock, $0.001 par value
per share, of Holding.
"Stockholders" means, collectively, all of the Persons except Holding who
are parties to this Agreement as of the relevant time of reference, and
"Stockholder" means any one of the Stockholders.
"Subsidiary" or "Subsidiaries" means, with respect to any Person, any
corporation a majority (by number of votes) of the outstanding shares of any
class or classes of the capital stock of which shall at the time be owned by
such Person or by a Subsidiary of such Person, if the holders of the shares of
such class or classes of capital stock (a) are ordinarily, in the absence of
contingencies, entitled to vote for the election of at least a majority of the
directors (or persons performing similar functions) of the issuer thereof,
regardless of whether the right so to vote has been suspended by the happening
of such a contingency, or (b) are at the relevant time of reference entitled, as
such holders, to vote for the election of at least a majority of the directors
(or persons performing similar functions) of the issuer thereof, regardless of
whether the right so to vote exists by reason of the happening of a contingency.
"Xxxxxxx Closing Date" means September 10, 1998.
"Tinsley Holder Securities" means any shares of capital stock or other
securities of Holding transferred in accordance with this Agreement or issued
from time to time after the Xxxxxxx Closing Date to any of the Xxxxxxx
Management Stockholders, and any shares of capital stock issued to any of the
Xxxxxxx Management Stockholders as a result of any exercise of pre-emptive
rights pursuant to Section 4 hereof, and includes any shares of capital stock
and other securities of Holding issued or issuable with respect to any of the
foregoing shares of capital stock or other securities of Holding by way of a
stock dividend, stock split, combination or division of shares,
recapitalization, merger, consolidation, reorganization, or the like, and any
shares of capital stock or other securities of Holding into which any of the
foregoing shares of capital stock or other securities of Holding are (directly
or indirectly) converted or for which any of the foregoing shares of capital
stock or other securities are (directly or indirectly) exchanged, in each case
regardless of subsequent transfers of such shares of capital stock or other
securities of Holding; provided, that shares of capital stock and other
securities of Holding shall cease to be Tinsley Holder Securities when
transferred (i) to Holding, (ii) pursuant to a Public Sale, or (iii) to any
Heritage Holder, AGI Management Stockholder, Klearfold Management Stockholder or
Other Stockholder.
-43-
"Xxxxxxx Management Stockholders" means M. Xxxxx Xxxxxx, Xxx Xxxxxx, and
each other individual who may become a party hereto by the delivery of an
Instrument of Accession identifying himself or herself as a "Xxxxxxx Management
Stockholder".
"Type" means, as to any Securities, whether such Securities are AGI Holder
Securities, Klearfold Holder Securities, Tinsley Holder Securities, Heritage
Securities or Other Stockholder Securities.
"vote" as a noun, means any vote, resolution, or action by written consent,
as the case may be, and as a verb, means to adopt or cast any vote or resolution
or to take any action by written consent, as the case may be.
9. Miscellaneous.
(a) Benefits of Agreement; No Assignments; No Third-Party Beneficiaries.
(i) This Agreement shall bind and inure to the benefit of the
parties hereto and their respective heirs, successors, and permitted
assigns.
(ii) No party shall assign any rights or delegate any obligations
hereunder without the consent of the other parties, and any attempt to do
so shall be void; provided, that the rights hereunder of the several
parties other than Holding shall also inure to the benefit of any Person
other than Holding to whom Securities are transferred in accordance with
all of the provisions of this Agreement, except any such Person to whom
such securities were transferred pursuant to a Public Sale.
(iii) Nothing in this Agreement is intended to or shall confer any
rights or remedies on any Person other than the parties hereto, their
respective heirs and successors, and permitted transferees of the
securities issued pursuant to this Agreement, as referred to in Section
9(a)(ii) hereof.
(b) Notices. All notices, requests, payments, instructions, or other
documents to be given hereunder shall be in writing or by written
telecommunication, and shall be deemed to have been duly given if (i) delivered
personally (effective upon delivery), (ii) mailed by registered or certified
mail, return receipt requested, postage prepaid (effective five business days
after dispatch), (iii) sent by a reputable, established courier service that
guarantees next business day delivery (effective the next business day), or (iv)
sent by telecopier followed within 24 hours by confirmation by one of the
foregoing methods (effective upon receipt of the telecopy in complete, readable
form), addressed as follows (or to such other address as the recipient party may
have furnished to the sending party for the purpose pursuant to this section).
Any reference in this Agreement to the "effectiveness" or the "effective date"
of a notice or other communication means the date as of which such notice or
other communication is effective as determined in accordance with this Section
9(b).
-44-
(A) If to any Heritage Holder, in care of:
Heritage Partners Management Company, Inc.
00 Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx, Managing Director
Telecopier No. (000) 000-0000
with a copy sent at the same time and by the same means to:
Xxxxx X. Xxxxx, Esq.
Xxxxxxx Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopier No. (000) 000-0000
(B) If to any of the Klearfold Management Stockholders, in care of:
Klearfold, Inc.
000 Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: H. Xxxxx Xxxxxx
Telecopier No. (000) 000-0000
with a copy sent at the same time and by the same means to
Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxxx Xxxxx Xxxxxxx & Ingersoll LLP
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Telecopier No. (000) 000-0000
(C) If to any of the AGI Management Stockholders, or to the AGI
Prospective Purchasers, in care of:
AGI Incorporated
0000 Xxxxx Xxxx Xxxxxx
Xxxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxx and Xxxxx Xxxxxxxxx
Telecopier No. (000) 000-0000
-45-
with a copy sent at the same time and by the same means to:
Xxxxx Xxxxxxx Xxxxxx, Esq.
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
Suite 8000 Sears Tower
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopier No. (000) 000-0000
(D) If to any of the Xxxxxxx Management Stockholders, in care of:
Xxxxxxx Robor Limited
Xxxxxxx Xxxxx
Xxxxxxx
Xxxxxxxxxx
Xxxx Xxxxxx X000 0XX
XXXXXXX
Attention: Xxx Xxxxxx and Xxxxx Xxxxxx
Telecopier No. (011-44) (0)-124-377-4567
with a copy sent at the same time and by the same means to:
Xxxxxxx Xxxxxxx, Esq.
Laytons
Carmelite
00 Xxxxxxxx Xxxxxxxxxx
Xxxxxxxxxxx
Xxxxxx X0X OLS
ENGLAND
Telecopier No.: (011-44) (0)-171-330-9999
(E) If to Holding, to:
IMPAC Group, Inc.
0000 Xxxxx Xxxx Xxxxxx
Xxxxxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxx and Xxxxx Xxxxxxxxx
Telecopier No. (000) 000-0000
with copies sent at the same time and by the same means to each
of the Persons (including counsel) listed under clauses (A) - (D)
above.
-46-
(F) If to any other party to this Agreement, to the most recent
address of such party reflected in the register referred to in Section 7 of
the Investment Agreement, or to such address as such Person may have
furnished to the sending party for such purpose pursuant to this section.
(c) Counterparts. This Agreement may be executed by the parties in
separate counterparts, each of which when so executed and delivered shall be an
original, but all of which together shall constitute one and the same agreement.
In pleading or proving this Agreement, it shall not be necessary to produce or
account for more than one such counterpart.
(d) Captions. The captions of sections or subsections of this Agreement
are for reference only and shall not affect the interpretation or construction
of this Agreement.
(e) Equitable Relief. Each of the parties hereby acknowledges that any
breach by it of its obligations under this Agreement would cause substantial and
irreparable damage to the other parties, and that money damages would be an
inadequate remedy therefor, and accordingly, acknowledges and agrees that each
of the other parties shall be entitled to an injunction, specific performance,
and/or other equitable relief to prevent the breach of such obligations (in
addition to all other rights and remedies to which such party may be entitled in
respect of any such breach).
(f) Construction. The language used in this Agreement is the language
chosen by the parties to express their mutual intent, and no rule of strict
construction shall be applied against any party.
(g) Waivers. No waiver of any breach or default hereunder shall be valid
unless in a writing signed by the waiving party. No failure or other delay by
any party exercising any right, power, or privilege hereunder shall be or
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power, or privilege.
(h) Further Assurances. From time to time, each party hereto shall
promptly execute and deliver all such further instruments and other documents,
and shall promptly take all such further actions, as any other party hereto may
reasonably request in order more effectively to effect or confirm the
transactions hereby contemplated and to carry out the purposes of this
Agreement.
(i) Entire Agreement. This Agreement, together with the Merger Agreement,
the Other Agreements and the Stock Purchase Agreement, contains the entire
understanding and agreement among the parties, and supersedes any prior
understandings or agreements among them, or between or among any of them, with
respect to the subject matter hereof.
(j) Governing Law. This Agreement shall to the maximum lawful extent be
governed by and interpreted and construed in accordance with the internal laws
of the State of
-47-
Delaware, as applied to contracts under seal made, and entirely to be performed,
within Delaware, and without reference to principles of conflicts or choice of
law.
(k) Termination. This Agreement may be terminated by written agreement of
all of the parties, and shall automatically terminate upon and concurrently with
the sale to a third party of all or substantially all of Holding's assets or
capital stock, or of all or substantially all of the assets or capital stock of
any Subsidiary or Subsidiaries that constitute all or substantially all of the
assets of Holding (whether pursuant to a merger, consolidation, or otherwise) in
accordance with the terms hereof and the distribution of the net proceeds of
such sale (after payment of creditors of Holding has been made or provided for)
to the stockholders of Holding. Unless earlier terminated in accordance with the
provisions of the preceding sentence, all provisions of this Agreement other
than Sections 6 through 9 hereof shall automatically terminate upon and
concurrently with the closing of an Approved Sale or a Qualified Public
Offering. Any termination of this Agreement shall not affect the rights or
obligations of any party arising, or based on actions or omissions occurring,
before such termination.
(l) Amendment and Waiver. Except as expressly set forth in Section 3.1(e)
above, any modification, amendment, or waiver of any provision of this Agreement
shall be effective if, and only if, it is approved in writing by each of (i) the
Majority Heritage Holders, (ii) the Majority AGI Holders, and (iii) the Majority
Klearfold Holders, provided, however, that (A) any modification, amendment or
waiver of any provision of this Agreement that grants any rights to, or
restricts any rights of, any of the Xxxxxxx Management Holders, whether
individually or collectively, shall be effective if, and only if, it is approved
in writing by the Majority Xxxxxxx Holders (or if no Tinsley Holder Securities
are then outstanding, by the Xxxxxxx Management Stockholders) as well as by the
parties referred to in clauses (i) (iii) above, and (B) the consent of the
Majority Klearfold Holders shall not be required for any such modification or
amendment which either (x) increases or reduces the number of directors under
Section 3.1 hereof, or reallocates the right to designate such directors, so
long as the rights of the Majority Xxxxxx Holders under such Section 3.1 are not
thereby modified or amended, or (y) arises from the creation and issuance of
shares of Series B Common Stock in connection with the conversion of options for
the purchase of shares of Xxxxxxx Robor plc into options for the purchase of
shares of Series B Common Stock, and of shares of preferred stock and warrants
for the purchase of shares of Series A Common Stock pursuant to the Equity
Recapitalization Agreement, so long as any such modification or amendment does
not restrict any rights of any of the Klearfold Management Stockholders, whether
individually, collectively or in the capacity of any of them as Xxxxxx
Stockholders, or grant any additional rights to any other existing Stockholders.
(m) No Rights to Employment. Nothing contained in this Agreement shall
confer on any Stockholder a right to employment or continued employment with
Holding or any of its Subsidiaries, or to employment in the same position or on
the same terms as those currently in effect.
Signature Page to the Stockholder Agreement
IN WITNESS WHEREOF, each of the parties has executed and delivered this
Agreement to the others as an agreement under seal as of September 10, 1998.
IMPAC GROUP, INC.
By /s/ Xxxxxxx Xxxxx
----------------------------
Name:
Title:
HERITAGE FUND I, L.P.
By: HF Partners I, L.P.,
its general partner
By /s/ Signature unintelligible
----------------------------
Name:
Title:
HERITAGE FUND II, L.P.
By: HF Partners II, L.L.C.,
its general partner
By /s/ Signature unintelligible
----------------------------
Name:
Title:
KFI MANAGEMENT STOCKHOLDERS:
/s/ Xxxxxx X. Xxxxxx
-------------------------------
Xxxxxx X. Xxxxxx
Signature Page to the Stockholder Agreement
/s/ H. Xxxxx Xxxxxx
-----------------------------------
H. Xxxxx Xxxxxx
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx, not individually
but as trustee under an Indenture
of Trust of Xxxxxx X. Xxxxxx dated
June 4, 1996
/s/ Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxxx X. Xxxxxx, not individually
but as trustee under an Indenture
of Trust dated August 12, 1992
f/b/o H. Xxxxx Xxxxxx
/s/ Xxxxxx Xxxxxx
-----------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxx Xxxxxx
-----------------------------------
Xxxxx Xxxxxx
/s/ Xxxxxx Xxxxxxx
-----------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxx XxXxxxxxx
-----------------------------------
Xxxx XxXxxxxxx
/s/ Xxxxxx Xxxxxxx
-----------------------------------
Xxxxxx Xxxxxxx
Signature Page to the Stockholder Agreement
/s/ Xxxxxxx Xxxxxxx
-------------------------------
Xxxxxxx Xxxxxxx
-------------------------------
AGI MANAGEMENT STOCKHOLDERS:
/s/ Xxxxxxx Xxxxx
-------------------------------
Xxxxxxx Xxxxx
/s/ Xxxxx Xxxxxxxxxxx
-------------------------------
Xxxxx Xxxxxxxxxxx
/s/ Xxxxxxx Xxxxxxxxxxx
-------------------------------
Xxxxxxx Xxxxxxxxxxx
/s/ Xxxxx Xxxxxxxxx
-------------------------------
Xxxxx Xxxxxxxxx
/s/ Xxxx Xxxxxx
-------------------------------
Xxxx Xxxxxx
/s/ Xxxx Xxxxxxx
-------------------------------
Xxxx Xxxxxxx
Signature Page to the Stockholder Agreement
/s/ Xxxx Xxxxxxx
-------------------------------
Xxxx Xxxxxxx
-------------------------------
/s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Xxxxxx X. Xxxxxxxx, as Trustee
of the Xxxxxx Xxxxxxxx Trust
dated 5/17/92
/s/ Xxxxx Xxxxxxxx
-------------------------------
Xxxxx Xxxxxxxx
/s/ Zenas Block
-------------------------------
Zenas Block
/s/ Xxxxxx XxXxxx
-------------------------------
Xxxxxx XxXxxx
/s/ Xxxx Xxxxxxx Xxxxxxx
-------------------------------
Xxxx Xxxxxxx Xxxxxxx
/s/ Freya Block
-------------------------------
Freya Block, as Trustee of the
Xxxxxxx X. Block Family Trust
u/t/a dated 4/1/94
Signature Page to the Stockholder Agreement
XXXXXXX MANAGEMENT STOCKHOLDERS:
-------------------------------
M. Xxxxx Xxxxxx
-------------------------------
Xxx Xxxxxx
EXHIBIT A
Instrument of Accession
to
Amended and Restated
Stockholder Agreement
The undersigned, ____________________, in order to become the owner or
holder of certain securities of IMPAC Group, Inc., a Delaware corporation
("Holding"), hereby agrees to become [an] [Heritage] [AGI Management] [Klearfold
Management] [Xxxxxxx Management] [Other] Stockholder party to that certain
Amended and Restated Stockholder Agreement, dated as of March 12, 1998, and
amended and restated as of September 10, 1998 (the "Stockholder Agreement"), a
copy of which is attached. This Instrument of Accession shall be effective and
shall become a part of the Stockholder Agreement upon acceptance by Holding.
Executed under seal as of the date set forth below under the laws of the
State of Delaware.
Dated_________________ _________________________________________
(signature)
Print Name:______________________________
Address: ______________________________
______________________________
______________________________
ACCEPTED:
IMPAC Group, Inc.
By_______________________
Name:
Title:
Schedule 1
Klearfold Management Stockholders
---------------------------------
1. Xxxxxx Xxxxxx
2. Xxxxxx Xxxxxxx
3. Xxxxxxx Xxxxxxx
4. Xxxxx Xxxxxx
5. Xxxxx Xxxxxxx
6. Xxxx XxXxxxxxx
7. H. Xxxxx Xxxxxx
8. Xxxxxx Xxxxxx
Schedule 2
AGI Management Stockholders
---------------------------
1. Xxxxxxx Xxxxx
2. Xxxxx Xxxxxxxxxxx
3. Xxxxxxx Xxxxxxxxxxx
4. Xxxx Xxxxxxx
5. Xxxxxx X. Xxxxxxxx, as Trustee of the Xxxxxx
Xxxxxxxx Trust dated 5/17/92
6. Xxxx Xxxxxxx
7. Xxxxx Xxxxxxxx
8. Xxxxx Xxxxx
0. Xxxx Xxxxxx
00. Xxxxxx XxXxxx
11. Xxxx Xxxxxxx Xxxxxxx
12. Freya Block, as Trustee of the Xxxxxxx X. Block
Family Trust u/t/a dated 4/1/94
Schedule 3
Xxxxxxx Management Stockholders
-------------------------------
1. M. Xxxxx Xxxxxx
2. Xxx Xxxxxx
Schedule 4
Certain Actions Requiring Consent
---------------------------------
(a) the establishment or material modification of the annual budget of
Holding and its Subsidiaries with respect to revenues, expenses, cash flow,
acquisitions and dispositions of capital assets, and other capital expenditures;
(b) the establishment of any pension plan, employee stock incentive or
option plan, or other group benefit plan for any officers, directors, or
employees of Holding or any of its Subsidiaries, or any modification to any such
plan materially increasing the liability of Holding or any of its Subsidiaries
thereunder, or materially increasing the scope of or eligibility under such
plan;
(c) except as provided in the annual budget approved pursuant to clause (a)
above: (i) the entering into by Holding or any of its Subsidiaries in any fiscal
year of operating leases that call in the aggregate for total payments of more
than $750,000 per year, (ii) the purchasing, leasing as lessee, licensing as
licensee, or other making by Holding or any of its Subsidiaries of any capital
expenditure in excess of $250,000 in any instance, or in excess of $750,000 in
the aggregate in any fiscal year, or (iii) the sale, leasing as lessor,
licensing as licensor, or other disposition of any material portion of the
intellectual properties of Holding or any of its Subsidiaries, or (other than
sales of inventory in the ordinary course of business consistent with past
practice) of any assets or properties of Holding or any of its Subsidiaries
having a value of more than $500,000 in any instance or more than $1,000,000 in
the aggregate in any fiscal year; or the making of any commitment for any of the
foregoing;
(d) the issuance, sale by Holding, or purchase, or the redemption,
repurchase (other than a repurchase not initiated by Holding pursuant to and in
accordance with any Repurchase Agreement, Holding's By-Laws, any other agreement
by Holding to repurchase any of its Securities, or any employee stock incentive
or stock option plan, in each case as previously approved by the Board of
Directors of Holding), or determination whether to exercise elective repurchase
rights with respect to, any capital stock or other securities of Holding or any
of its Subsidiaries (including without limitation options, warrants, and other
rights to acquire any such stock or other securities) or the selection by
Holding or any of its Subsidiaries of any appraiser in connection with any
valuation of any such stock or other securities, whether in connection with any
such repurchase or otherwise;
(e) the declaration, setting aside, or payment of any dividends or other
distributions in respect of the capital stock or other securities of Holding or
its Subsidiaries, other than the payment of dividends in respect of shares of
preferred stock in kind in accordance with the terms of such preferred stock or
to Holding by any of its Subsidiaries;
(f) (i) the incurrence by Holding or any of its Subsidiaries of any
indebtedness for borrowed money, or the entry by Holding or any of its
Subsidiaries into any agreement,
instrument, obligation, commitment, or understanding relating thereto, including
without limitation the establishment of a line of credit at any bank or other
financial institution, or (ii) any amendment or modification of Holding's credit
arrangements with Bank of America, N.T. & S.A., as Agent, or the Indenture or
the Senior Subordinated Notes outstanding thereunder, or any other agreement or
arrangement previously approved hereunder pursuant to which Holding or any of
its Subsidiaries incurs indebtedness for borrowed money;
(g) the giving by Holding or any of its Subsidiaries of any guaranties or
indemnities in connection with the debt or other obligations of any Person
(other than Holding or any such Subsidiary), if as a result thereof the
aggregate liability of Holding and its Subsidiaries under all such guaranties
and indemnities would exceed $100,000 at any time;
(h) the settlement of any litigation, arbitration, lawsuit or other legal
proceeding involving a claim against Holding or any of its Subsidiaries (other
than any such claim by either of the Heritage Funds or any of their Affiliates)
for any amount in excess of $250,000;
(i) any action to effect the voluntary, or which would precipitate an
involuntary, dissolution, liquidation, or winding-up of Holding or any of its
Subsidiaries;
(j) the establishment of any material new business or any material change
to the business plan of Holding or any of its Subsidiaries;
(k) the approval of any Approved Sale pursuant to Section 2.1(a), the
approval of or recommendation to approve any Qualified Proposed Sale, or the
entering into or consummation of any merger or consolidation of Holding or any
of its Subsidiaries with or into any other Person (other than any merger into
Holding or any such Subsidiary, so long as (i) Holding or such Subsidiary is the
survivor of such merger, and (ii) in the case of a merger into Holding, at least
a majority of both the capital stock and the voting shares of Holding
outstanding immediately following such merger are held by Persons holding a
majority of such capital stock and voting shares, respectively, immediately
prior to such merger);
(l) unless otherwise permitted without the Majority Heritage Holders'
consent pursuant to paragraph (c) of this Schedule 4, the acquisition by Holding
or any of its Subsidiaries of any stock or indebtedness of, or (other than in
the ordinary course of business) any obligations or liabilities of, or the
acquisition by Holding or any of its Subsidiaries of all or a substantial
portion of the properties or assets of, or the making by Holding or any of its
Subsidiaries of any loans, advances (other than advances to employees in the
ordinary course of business), capital contributions, or investments (other than
in the ordinary course of business) in, any Person (other than any such
transaction among Holding and/or any of its Subsidiaries), or the entry by
Holding or any of its Subsidiaries into any partnership or joint venture;
(m) (i) the entering into by Holding or any of its Subsidiaries of any
transaction with any Affiliate (other than Holding or any such Subsidiary) on
terms less favorable to Holding or such Subsidiary, or more favorable to such
Affiliate, than would have been obtainable on an
arms-length basis in the ordinary course of business, or (ii) the making of any
payment (whether in cash, securities, or other property) to or for the benefit
of any Affiliate (other than Holding or any of its Subsidiaries) of Holding or
any of its Subsidiaries in respect of any indebtedness owed by, or other
obligation of, Holding or any of its Subsidiaries to such Affiliate, in each
case other than (A) the reasonable compensation and reimbursement for out-of-
pocket expenses of any member of the Board of Directors of Holding or any of its
Subsidiaries who is not an employee, officer, or stockholder of Holding or its
Subsidiaries, (B) the reasonable costs and expenses associated with any rights
of board or executive committee attendance or observation or inspection and
lodging expenses related thereto, or (C) any increases in the compensation of
any employee of Holding or any of its Subsidiaries in the ordinary course of
business or pursuant to and in accordance with such employee's employment
agreement with Holding or such Subsidiary as in effect on September 10, 1998;
(n) the appointment or termination of the Chairman of the Board of
Directors, President, Chief Executive Officer, Chief Operating Officer or Chief
Financial Officer (or Persons holding equivalent positions) of Holding, or the
establishment or modification of any bonus plan or incentive compensation
payable to any of such officers of Holding or its Subsidiaries;
(o) the appointment and retention of auditors for Holding and its
Subsidiaries;
(p) the retaining or compensating by Holding or any of its Subsidiaries of
any investment banker or similar advisor or consultant; or
(q) the entering into by Holding or any of its Subsidiaries of any
agreement obliging, committing or binding the Company or any such Subsidiary to
do any thing or to take any action referred to in paragraphs (a) (p) of this
Schedule 4, and any amendment or modification to any such agreement.
Schedule 7
Insurance Policies
------------------
Name Amount of Policy
---- ----------------
Xxxxxxx Xxxxx $10,000,000
Xxxx Xxxxxx $ 2,000,000
Xxxxx Xxxxxxxxxxx $ 2,000,000
Xxxxxxx Xxxxxxxxxxx $ 2,000,000
Xxxxx Xxxxxxxxx $ 2,000,000
The following people shall have an insurance policy, if any, in an amount
to be determined from time to time:
Xxxxxx Xxxxxx
H. Xxxxx Xxxxxx
Xxxxxx Xxxxxxx
Xxxxx Xxxxxx
Xxxxxx Xxxxxx
Xxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
