EXHIBIT 10.61
SECOND AMENDED AND RESTATED
STOCKHOLDER AGREEMENT
This Second Amended and Restated Stockholder Agreement (this "Agreement"),
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dated as of March 12, 1998 and amended and restated as of January 11, 1999, 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
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partnership ("Heritage I"); Heritage Fund II, L.P., a Delaware limited
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partnership ("Heritage II"; together with Heritage I, the "Heritage Funds");
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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
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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,
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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
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Holding named on Schedule 1 hereto (the "Klearfold Managers", and together with
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the Xxxxxx Stockholders, collectively, the "Klearfold Management Stockholders");
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each of the stockholders of Holding and other Persons named on Schedule 2 hereto
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(the "AGI Management Stockholders"); the holders of Warrants listed on Schedule
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3 hereto (the "Warrant Holders"); and each other Person who becomes a party to
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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
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by Holding (an "Instrument of Accession"). Each of the parties to this
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Agreement other than Holding is sometimes referred to herein as a
"Securityholder", and all of them, collectively, are sometimes referred to
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herein as the "Securityholders." Capitalized terms used herein and not defined
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on their first use shall have the meanings set forth in Section 8 below.
WHEREAS, certain of the Securityholders entered into a Stockholder
Agreement with the Company, dated as of March 12, 1998 (the "Original
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Stockholder Agreement"), pursuant to which certain rights and obligations were
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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
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Heritage Funds and certain other Securityholders, the parties amended and
restated the Original Stockholder Agreement pursuant to a First Amended and
Restated Stockholder Agreement, dated as of September 10, 1998 (the "First
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Amended and Restated Stockholder Agreement");
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WHEREAS, pursuant to a Securities Purchase Agreement, dated as of January
11, 1999 (the "Preferred Purchase Agreement"), the Warrant Holders have agreed
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to
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purchase shares of Holding's Redeemable Preferred Stock, par value $.001 per
share (the "Series A Preferred") and the Warrants for a total purchase price of
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$20,000,000;
WHEREAS, in connection with the Preferred Purchase Agreement the parties
desire to amend and restate the First Amended and Restated Stockholder
Agreement;
NOW, THEREFORE, the parties hereto hereby agree to amend and restate the
First Amended and Restated Stockholder Agreement in its entirety to read as
follows:
1. Restrictions on Transfer of Securities.
1.1. Transfer. No Securityholder 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
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"Transfer"), either voluntarily, involuntarily, by operation of law, or
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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
Securityholders who is a natural person and by each natural person whose Family
Trust is a Securityholder, as amended and in effect from time to time (each, a
"Repurchase Agreement"), relating to the repurchase of Securities by Holding or
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the purchase of Securities by any "Co-Managers", as defined in any such
Repurchase Agreement;
(b) in the case of any Securityholder who is a natural person, to (i) such
Securityholder's Family Members, provided that such Securityholder retains
exclusive voting control over the Transferred Securities, and (ii) such
Securityholder's Personal Representative, and in the case of any Securityholder
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 Securityholders
holding a majority of the Securities then outstanding, other than the Securities
held by the Securityholder proposing such Transfer and any Affiliate or Family
Member of such Securityholder, provided further that each of the Heritage Funds
and any transferee of a Heritage Fund pursuant to Section 1.1(f)(i)-(iii) 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;
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(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 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), (iv) to
Holding pursuant to and in accordance with the terms of the letter agreement
dated as of January 11, 1999 (the "Heritage Repurchase Agreement") between
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certain of the Heritage Holders and Holding in the form attached hereto as
Schedule 7, provided that the aggregate number of shares of Common Stock to be
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transferred by the Heritage Funds together pursuant to this Section 1.1(f)(iv)
shall not exceed 33,000 (as such number may be adjusted by way of stock
dividend, stock split, or combination or division of shares) and (v) to officers
and employees of Holding or any of its Subsidiaries of up to 3,300 shares of
Common Stock prior to December 31, 1999; or
(g) in the case of any Warrant Securityholder, (i) to an Affiliate of such
Warrant Securityholder; (ii) to another Warrant Securityholder; or (iii) to a
holder of Series A Preferred, provided that no Warrant Securityholder may
transfer Securities pursuant to this clause (iii) to any Person other than a
financial investor (as compared to an industry investor);
(h) from and after June 7, 2002, to any Person, provided that the
Transferring Securityholder 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(h) 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.
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1.2. First Refusal Rights.
(a) At least 30 days prior to any Transfer proposed to be made pursuant to
Section 1.1(h) hereof, the Transferring Securityholder (the "Transferring
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Securityholder") shall deliver a written notice (the "Transfer Offer Notice") to
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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 Securityholders holding Securities of the Type to be
Transferred (collectively, the "Non-Transferring Same-Type Securityholders") in
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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 Securityholders 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 Securityholder
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 Securityholder and Holding within 30 days after the delivery of
such Transfer Offer Notice (the "Initial Securityholder Election Period"). If
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one or more of such Non-Transferring Same-Type Securityholders 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
Securityholder Election Period, or such earlier date as agreed upon by the Non-
Transferring Same-Type Securityholders 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 Securityholder, Holding and each of the other Non-
Transferring Same-Type Securityholders electing to purchase any of such
Securities pursuant to this Section 1.2(a). If the Non-Transferring Same-Type
Securityholders oversubscribe for the Securities of any such Type being offered,
each Non-Transferring Same-Type Securityholder electing to purchase such
Securities shall be entitled to purchase from the Transferring Securityholder 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
Securityholders (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 Securityholders do not duly elect
to purchase all of such Securities within the Initial Securityholder Election
Period in accordance with Section 1.2(a) hereof then within fifteen (15) days of
the expiration of the Initial Securityholder Election Period, or (ii) the
Securities proposed to be transferred are Other Securityholder Securities, then
within thirty (30) days after the delivery of the Transfer Offer Notice (such
period of fifteen or thirty days
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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
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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 Securityholders 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 Securityholder within the applicable Holding Election Period. If
Holding, alone or in combination with the Non-Transferring Same-Type
Securityholders, 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 Securityholders, if any, which elected to purchase any of
the Securities proposed to be Transferred pursuant to Section 1.2(a) hereof.
(c) If Holding and/or, to the extent applicable, the Non-Transferring Same-
Type Securityholders do not duly elect to purchase all of the Securities being
offered within the applicable Holding Election Period, and/or the Initial
Securityholder Election Period, respectively, the Transferring Securityholder
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
Securityholder, Section 1.2(b) hereof, above, to each of the Securityholders
other than the Non-Transferring Same-Type Securityholders (if any) entitled to
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receive such first Transfer Offer Notice (collectively, such other
Securityholders being referred to herein as the "Other Non-Transferring
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Securityholders") in accordance with the provisions of Section 9(b) hereof
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specifying, in addition, the number of Securities which the Non-Transferring
Same-Type Securityholders 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-
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Transferring Securityholders 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 Securityholder 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 Securityholder within 15 days after the
delivery of such Transfer Offer Notice (the "Second Securityholder Election
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Period"). If one or more of such Other Non-Transferring Securityholders duly
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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
Securityholder Election Period, or such earlier date as agreed upon by the Other
Non-Transferring Securityholders 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
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provided not later than ten (10) days prior thereto to the Transferring
Securityholder, Holding, and each of the other Securityholders who or which
shall have elected to purchase Securities pursuant to this Section 1.2. If the
Other Non-Transferring Securityholders oversubscribe for the Securities being
offered, each Other Non-Transferring Securityholder electing to purchase such
Securities shall be entitled to purchase from the Transferring Securityholder a
pro rata portion (based upon the respective numbers of Securities then held by
each of the participating Other Non-Transferring Securityholders (calculated on
a Fully Diluted Basis)) of the Securities being offered.
(d) In the event that, collectively, Holding, the Non-Transferring Same-
Type Securityholders and the Other Non-Transferring Securityholders 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 Securityholder may, within 90 days after the expiration of the
Second Securityholder 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
Securityholders and the Other Non-Transferring Securityholders 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 Transferees shall have executed and delivered to
Holding an Instrument of Accession as a condition precedent to such Transfer.
If the Transferring Securityholder fails to consummate such Transfer within the
90-day period after the expiration of the Second Securityholder 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 Securityholder, the Initial
Securityholder Election Period (or, if the Transferring Securityholder is an
Other Securityholder, 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 connection with any proposed Transfer
pursuant to Section 1.1(h), in the event that, collectively, Holding, the Non-
Transferring Same-Type Securityholders and the Other Non-Transferring
Securityholders fail to purchase all of the Securities specified in any Transfer
Offer Notice delivered by a Transferring Securityholder 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
Securityholders and the Other Non-Transferring Securityholders (collectively,
the Non-Transferring Securityholders") may elect to participate in the
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contemplated Transfer of Securities by delivering written notice to the
Transferring Securityholder before the lapse of 15 days after expiration of the
Second Securityholder Election Period. If any of such Non-Transferring
Securityholders elects to participate in such sale, the Transferring
Securityholder and each of such participating Non-Transferring Securityholders
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
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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 Securityholder and such
participating Non-Transferring Securityholders, multiplied by (y) the number of
Securities to be Transferred in the contemplated Transfer.
(For example: If the notice from the Transferring Securityholder
contemplated a Transfer of 100 shares of Common Stock by the Transferring
Securityholder, and the Transferring Securityholder at such time owns 300
shares of Common Stock, and if one Non-Transferring Securityholder elects
to participate in such sale pursuant to this Section 1.3 and such Non-
Transferring Securityholder owns 200 shares of Common Stock (calculated on
a Fully Diluted Basis), such Transferring Securityholder would be entitled
to sell 60 shares of Common Stock (300/500 x 100 shares) and such Non-
Transferring Securityholder would be entitled to sell 40 shares of Common
Stock (200/500 x 100 shares).)
In the event any Warrant Securityholder is a participating Non-Tranferring
Securityholder which elects to Transfer Warrants, (i) such Warrants shall be
deemed to be exercised, for purposes of the calculation set forth above, and
(ii) the purchase price to be received by such Warrant Securityholder shall be
reduced by the aggregate exercise price of the Warrants to be Transferred. The
Transferring Securityholder shall use all commercially reasonable efforts to
obtain the agreement of the prospective Transferee(s) to the participation of
the Non-Transferring Securityholders 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 Securityholders on the terms specified herein. The Transferring
Securityholder may, within 90 days after the expiration of the Second
Securityholder Election Period, complete the Transfer of such Securities (i)
with respect to which the Transferring Securityholder has duly given a Transfer
Offer Notice, (ii) with respect to which neither the Company nor any of the Non-
Transferring Securityholders 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 Securityholders 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 Securityholder than the terms offered to the Non-
Transferring Securityholders 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 Securityholder fails to consummate such Transfer within the 90-day
period after the expiration of the Second Securityholder 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 and Xxxxxxx Management
Holders. In the event that, at any time prior to June 7, 2002, the Heritage
Holders shall have elected to Transfer pursuant to Section 1.1(c) any amount of
Heritage Securities then held by the Heritage Holders other than to Holding
pursuant to Section 1.1(f)(iv) and other than
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Transfers (in one or a series of transactions), to officers and employees of
Holding or any of its Subsidiaries of less than 5% of the total amount of
Heritage Securities held by the Heritage Holders immediately after giving effect
to the repurchase contemplated by Section 1.1(f)(iv), and such Transfer has been
approved in writing by Securityholders 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
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Notice") from the Xxxxxx Stockholders to Holding, the Heritage Holders, the
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AGI Management Stockholders, the Warrant Securityholders and the Xxxxxxx
Management Stockholders within 15 days after the date of such approval, (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
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the Xxxxxxx Management Stockholders to Holding, the Heritage Holders, the AGI
Management Stockholders, the Warrant Securityholders and the Klearfold
Management Stockholders, also within 15 days after the date of such approval
and/or (c) has not been approved by the Majority Warrant Holders, then the
Warrant Securityholders may elect to participate in the contemplated Transfer of
Heritage Securities and Transfer a proportionate percentage of their Warrant
Securities, by delivery of a written notice (a "Warrant Co-Sale Notice") from
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the Warrant Securityholders to Holding, the Heritage Holders, the AGI Management
Stockholders, the Klearfold Management Stockholders and the Xxxxxxx Management
Stockholders within 15 days after the date of such approval. Upon delivery of a
Klearfold Co-Sale Notice, Xxxxxxx Co-Sale Notice, or a Warrant Co-Sale Notice
(each, a "Co-Sale Notice") the provisions of Section 1.3 shall apply, mutatis
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mutandis, to the participation by the Warrant Securityholders, 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 Warrant Securityholders, Xxxxxx Stockholders and Xxxxxxx Management
Stockholders participating in a contemplated Transfer under this Section 1.4,
the "Co-Selling Securityholders"), as participating Non-Transferring
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Securityholders, in the proposed Transfer by the Heritage Holders, as
Transferring Securityholders. Notwithstanding the foregoing, simultaneously
with, and as a condition to, any participation by any Co-Selling Securityholders
in any proposed Transfer by the Heritage Holders, such Co-Selling
Securityholders and the Heritage Holders, pro rata in accordance with the
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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 Klearfold Holder Securities, Tinsley Holder Securities,
Heritage Securities and Warrant Securities to be Transferred (collectively, the
"Co-Sale Securities") equal to the greater of (a) the aggregate number of Co-
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Sale Securities proposed to be Transferred by the Co-Selling Securityholders,
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
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outstanding shares of Common Stock (for the purposes of such calculation, any
Warrants proposed to be Transferred by any Co-Selling Securityholders shall be
deemed to be exercised). Any such purchase of Co-Sale Securities
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shall be at the same price and on the same terms specified for the proposed
Transfer by the Heritage Holders (provided, that (i) 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 and (ii) the purchase price to
be received in exchange for any Warrant shall be reduced by the aggregate
exercise price of such Warrant). 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, in the event of a delivery of a Xxxxxxx Co-Sale Notice, the
Xxxxxxx Management Stockholders, and/or, in the event of a delivery of a Warrant
Co-Sale Notice, the Warrant Securityholders, 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,
Xxxxxxx Management Stockholders and Warrant Securityholders 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
Securityholders of their first-refusal rights under Section 1.2 hereof, the
Transferring Securityholder shall Transfer to each such Non-Transferring
Securityholder the Securities to be purchased by such Non-Transferring
Securityholder 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
Securityholder shall deliver to each such Non-Transferring Securityholder the
certificate(s) representing the Securities to be purchased by such Non-
Transferring Securityholder (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 Securityholder, or by wire transfer to an account designated by the
Transferring Securityholder.
(b) In the event of any exercise by any of the Non-Transferring
Securityholders 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
Securityholders pursuant to such rights shall take place at the same date, time,
and place at which the Transferring Securityholder is to consummate his, her or
its Transfer of Securities to the prospective Transferee. At such closing, the
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Transferring Securityholder and each of the Non-Transferring Securityholders
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, Heritage Holders, Xxxxxxx Management Stockholders and Warrant
Securityholders, as the case may be, 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, Heritage Holders, Xxxxxxx
Management Stockholders and Warrant Securityholders, as the case may be, 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, Xxxxxxx Management Stockholders, Warrant
Securityholders or Heritage Holder, as the case may be, or by wire transfer to
an account designated by such Securityholder.
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 Securityholder 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 Securityholder 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 Securityholders 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 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 Securityholders under Section 1.3 hereof.
-11-
1.8. Additional Covenants.
(a) The Heritage Holders agree that they will not Transfer any shares of
Common Stock if, as a result of such Transfer, under the terms of Section 5.2 of
the Fourth Amended and Restated Certificate of Incorporation Holding would be
required to pay dividends on the Series A Preferred at the "Increased Dividend
Rate" (as defined therein) as a result of the occurrence of a "Heritage
Transfer".
(b) The Heritage Holders and the Block Stockholders agree that they will
not Transfer any shares of Common Stock if, as a result of such Transfer, under
the terms of Section 5.2 of the Fourth Amended and Restated Certificate of
Incorporation Holding would be required to pay dividends on the Series A
Preferred at the Increased Dividend Rate as a result of the occurrence of a "50%
Ownership Event".
(c) The Heritage Holders agree that without the prior written consent of
the Warrant Securityholders they will not Transfer any shares of Common Stock to
Holding pursuant to Section 1.1(c) or Section 1.1(h) unless they either (i)
procure for the Warrant Securityholders the right to sell to Holding on the same
terms a pro rata share of the Securities to be sold to Holding, based on the
total Securities held by the Heritage Holders intending to sell to Holding as
compared to the total Securities held by the Warranty Securityholders electing
to participate in such sale (in each case calculated on a Fully Diluted Basis
and assuming that the Warrants have been exercised) or (ii) offer to purchase
from the Warrant Securityholders that portion of the Warrant Securityholders'
Securities that they would have sold to Holding had the Warrant Securityholders
participated pursuant to clause (i) above. Any such offer shall be at the same
price paid to the Heritage Holders by Holding.
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 Securityholders 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 Securityholder (A) shall vote or cause to be voted all
Securities having voting rights that are owned by such Securityholder or
over which such
-12-
Securityholder 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 Securityholder'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 Securityholder (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.
Notwithstanding the foregoing, the Warrant Securityholders shall not be
obligated under subparagraphs (i)-(iii) above with respect to any particular
Approved Sale if (i) such Approved Sale is to any Securityholder or any
Affiliate of any Securityholder, other than an Approved Sale to the AGI
Prospective Purchasers pursuant to Section 2.2 or as may otherwise be approved
by the Majority Heritage Holders, and (ii) such Approved Sale has not been
approved by the Majority Warrant Holders.
2.2. Right of First Refusal.
(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 Securityholder (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
----- ------
-00-
XXX Xxxxxxxxxxx Xxxxxxxxxx, 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 and Convertible
Securities 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 and Convertible Securities 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 shares of Series A
Preferred, with respect to which the holders of Series A Preferred will
retain all their rights and obligations under the Fourth Amended and
Restated Certificate of Incorporation) and Convertible Securities 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 and Convertible Securities (in either case 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 on its capital stock and assuming that all holders
of Convertible Securities had converted into or exercised the rights to
acquire capital stock of Holding prior to such distribution; 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,
-14-
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
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
-15-
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 Securityholders 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
Securityholders 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
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)
-16-
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, 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
-17-
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 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 Securityholders 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.
-18-
In addition, the obligation of the Warrant Securityholders with respect to any
Approved Sale are subject to the satisfaction of the condition that upon
consummation of such sale, all of the holders of Warrants shall receive the same
forms and amounts of consideration per Warrant Share issuable upon exercise of
the Warrants, less any exercise price, or if any holders are given an option as
to the form and amount of consideration to be received per share, all holders of
Warrants 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 Securityholder shall vote or cause
to be voted all Securities having voting rights that are owned by such
Securityholder or over which such Securityholder has voting control, and/or, as
relevant, shall use such Securityholder's best efforts to cause such
Securityholder's designees as directors to vote so as to fix the number of
directors of Holding at eleven, to cause such Securityholder'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% (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
-19-
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 Securityholder shall vote or
cause to be voted all Securities having voting rights that are owned by such
Securityholder or over which such Securityholder has voting control, and/or, as
relevant, shall use such Securityholder's best efforts to cause such
Securityholder'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");
-------- - ---------
(ii) Four individuals designated by the Majority Heritage II Holders
(also being referred to herein as "Heritage II Directors"); and
-------- -- ---------
-20-
(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 Securityholders 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 Securityholders shall vote or cause to be voted all Securities having voting
rights that are owned by such Securityholder or over which such Securityholder
has voting control in favor of all matters recommended for approval by the
Securityholders 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 Securityholders (other than the Heritage Holders) thereof, provided that
the failure to deliver any such notification, or any such Securityholder'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 Securityholder shall vote or cause to be voted all
Securities having voting rights that are owned by such Securityholder or over
which such Securityholder has voting control, and/or, as relevant, shall use
such Securityholder's best efforts to cause such Securityholder'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;
(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
-21-
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 Securityholders 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 Securityholders shall vote or cause to be voted all Securities having voting
rights that are owned by such Securityholder or over which such Securityholder
has voting control in favor of all matters recommended for approval by the
Securityholders by any Board of Directors elected pursuant to this Section
3.1(c). Holding shall notify each of the Securityholders (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 Securityholder'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 Person entitled to designate a director or a replacement for a
director pursuant to this Section 3 shall also be entitled to instruct the
Securityholders to remove such director with or without cause and upon such
instruction the Securityholders shall act to remove such director,
-22-
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
Securityholder hereby agrees to vote or cause to be voted all Securities having
voting rights that are owned by such Securityholder or over which such
Securityholder has voting control, and shall use such Securityholder's best
efforts to cause such Securityholder'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 Securityholders holding a
majority of the then outstanding shares of Common Stock (on a Fully Diluted
Basis) 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 Securityholder with the right
(either individually or collectively with other Securityholders) to designate
directors under this Section 3.1 as in effect immediately prior to such
amendment, or by any Affiliate of any such Securityholder.
(f) Each Securityholder agrees to use such Securityholder's best efforts to
cause such Securityholder's designees as directors pursuant to this Section 3.1
to approve the directors designated by each other Securityholder 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 Securityholders hereby irrevocably agrees that such
Securityholder will not vote or permit to be voted any Securities having voting
rights that are owned by such Securityholder or over which such Securityholder
has voting control, and shall use such Securityholder's best efforts to cause
such Securityholder's designees as directors not to vote, in favor of any action
referred to in Schedule 5 that has not been first submitted by written notice to
----------
the Majority Heritage Holders at least ten (10) days' prior to the earlier of
the taking of such action or any Board or stockholder action approving or
ratifying any such action, provided, that such prior notice shall not be
required in the event any such action shall have been approved (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. Notwithstanding the
foregoing or anything stated in Schedule 5 hereto, no such prior written notice
----------
or prior 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
-23-
with the provisions hereof, nor shall any such prior written notice or prior
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 Securityholders hereby agree with each
Securityholder 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 Securityholder of the
foregoing provisions of this Section 3.2 shall constitute grounds for
termination for "Cause" of such Securityholder's employment by Holding or any
such Subsidiary, notwithstanding anything to the contrary stated in such
Securityholder's Employment Agreement, but shall not otherwise create any
personal liability for any breach by such Securityholder 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 Securityholders hereby irrevocably agrees
that such Securityholder shall not vote or permit to be voted any Securities
having voting rights that are owned by such Securityholder or over which such
Securityholder has voting control, and shall use such Securityholder's best
efforts to cause such Securityholder'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 Securityholder hereby irrevocably appoints Holding as
such Securityholder'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 Securityholder or over which such Securityholder
has voting control to effectuate the agreements of such Securityholder set forth
in this Agreement in the event of any breach by such Securityholder of its
obligations under this Agreement. The proxies and powers granted by each
Securityholder pursuant to this Section 3.4 are coupled with an interest and are
given to secure the performance of such Securityholder'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 Securityholder who is an individual and the merger, liquidation,
dissolution, and/or winding-up of any Securityholder that is not an individual.
3.5. Action by Securityholders. Each Securityholder further agrees that
such Securityholder shall not vote or permit to be voted any Securities having
voting rights that are owned by such Securityholder or over which such
Securityholder 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 Securityholder 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.
-24-
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, Holding shall (or
shall cause such Subsidiary to) first offer to sell to each Securityholder 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 Securityholder (calculated
on a Fully Diluted Basis; for purposes of such calculation all outstanding
Warrants shall be deemed to be exercised), divided by (ii) the number of shares
of Common Stock then outstanding (calculated on a Fully Diluted Basis). Each
Securityholder 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 Securityholder 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 (a) the issuance of shares of
Common Stock pursuant to a Public Sale, (b) the issuance of shares of Common
Stock 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) the
issuance of shares of Common Stock pursuant to a management stock option plan or
employee incentive plan approved by the Board of Directors, (d) the issuance of
shares of Common Stock 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, (e) the
issuance of shares of Common Stock as a dividend in respect of the outstanding
shares of Common Stock, (f) the sale of the Series A Preferred pursuant to the
Preferred Purchase Agreement, (g) the issuance of the Warrants pursuant to the
Preferred Purchase Agreement and the issuance of Warrant Shares upon exercise of
the Warrants or any other shares of any class of capital stock of Holding issued
pursuant to the terms of the Warrants, (h) the issuance of additional shares of
Series A Preferred as "PIK Dividends" pursuant to Holding's Fourth Amended and
Restated Certificate of Incorporation and the issuance of additional shares of
Series A Preferred pursuant to Section 7.03 of the Preferred Purchase Agreement
and (i) the offering and sale prior to December 31, 1999 of up to 3,300 shares
of Common Stock for a purchase price of not less than $608 per share to officers
and employees of Holding and its Subsidiaries.
4.2. Securityholders' Exercise of Right. Each Securityholder 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
Securityholder of written notice from Holding or its Subsidiary, as the case may
be, describing in reasonable detail the stock or other securities
-25-
being offered, the purchase price thereof, the payment terms, and such
Securityholder'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 Securityholders within such 30-day period, the stock or
securities that are not so subscribed for shall be re-offered to the
Securityholders purchasing their full allotments upon the terms set forth in
this Section 4, except that (i) such Securityholders 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 Securityholders so agree,
each such Securityholder 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 Securityholder (calculated on a Fully Diluted Basis), divided by
(y) the number of shares of Common Stock (calculated on a Fully Diluted Basis)
then held by the Securityholders 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
Securityholders 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 Securityholders. 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
Securityholders 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 substantially the following form:
"The securities represented by this certificate are subject to the terms of
a certain Second Amended and Restated Stockholder Agreement, dated as of
March 12, 1998, and amended and restated as of January 11, 1999, among the
registered holder of this certificate (or such holder's predecessor-in-
interest), the issuer of this certificate, and certain others. The Second
Amended and Restated Stockholder Agreement contains certain restrictive
provisions relating to the voting and transfer of the securities
represented hereby. A copy of the Second 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 Securityholders 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 Securityholders; provided, in the cases of any
elections to be made by,
-26-
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.
"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 and the Warrant Shares, together with all shares of
Common Stock issued to Securityholders 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.
-27-
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 any 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 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.
-28-
(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 securityholders 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 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;
(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
-29-
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 such Holders and Holding have requested be
included in such registration and which is not greater than such excess; or
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(a)(i)(A) unless Holding or such securityholders (as the
case may be) agree in writing to sell such securities on 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.
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(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
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 or Convertible 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 or Convertible Securities of Holding shall enter into similar
agreements, and
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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 and provided further that the Warrant Securityholders shall not be
bound by this paragraph (a) except (i) in connection with Holding's initial
Public Offering (whether or not they are permitted to participate in such Public
Offering) and (ii) in connection with any secondary Public Offering in which
they participate.
(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 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
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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;
(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
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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;
(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
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thereof or the underwriter or underwriters, if any, to consummate the
disposition of such Registrable Securities;
(o) in connection with an underwritten offering, cause the members of its
management to participate, to the extent reasonably requested by the managing
underwriter, in customary efforts to sell the securities under the offering,
including, without limitation, participating in "road shows"; and
(p) 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 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.
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6.7. Registration Expenses.
(a) Holding shall be responsible for and shall pay all costs and expenses
incurred or sustained by any Securityholder 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.
(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,
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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 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
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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 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 with respect to its Common Stock, or (b) the date on
which Holding shall register a class of equity 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
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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 Securityholder who is 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 6 hereto.
-------- -
Holding shall have the right to obtain insurance upon the lives of other
Securityholders, 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 6 hereto. Holding may, but shall not be required to, increase or
----------
decrease the amount of insurance coverage from that described on Schedule 6
----------
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.
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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 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 Securityholder.
"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.
-40-
"Common Stock" means, collectively, the Series A Common Stock and the
------ -----
Series B Common Stock.
"Convertible Securities" means the Warrants and all other options, warrants
----------------------
or other rights to acquire shares of capital stock of Holding.
"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.
"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 then capable of being exercised 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.
------
-41-
"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 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, as amended by the First
Supplemental Indenture thereto dated as of July 21, 1998.
"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
-42-
evaluating businesses similar to those of Holding and its Subsidiaries, and
which is not an Affiliate of Holding, any of its Subsidiaries, or any
Securityholder.
"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 Holding, (ii) pursuant to a Public Sale, or (iii) to any
Heritage Holder, AGI Management Stockholder, Xxxxxxx Management Stockholder or
Other Securityholder.
"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.
-43-
"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.
"Majority Warrant Holders" means the holders, as of the relevant time of
------------------------
reference, of at least a majority of the Warrant Securities; provided, however,
that for the purposes of such calculation, any holder of Warrants shall be
deemed to hold the Warrant shares issuable upon the exercise of such Warrants.
"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 Securityholder
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 Securityholder
Securities.
"Other Agreements" has the same meaning herein as the Investment Agreement.
----- ----------
"Other Securityholder Securities" means shares of capital stock of Holding
-------------------------------
and the Warrants originally issued and sold to any Securityholder other than an
AGI Management Stockholder, Klearfold Management Stockholder, Xxxxxxx Management
Stockholder or Heritage Holder (any such Securityholder, an "Other
-----
Securityholder"), 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 Securityholders, and any shares of
capital stock issued to any of the Other Securityholders 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
-44-
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 Securityholder 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; and provided further, that Other Securityholder
Securities shall not include any shares of Series A Preferred.
"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 Securityholder.
"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.
"Securities" means all shares of the capital stock or other securities of
----------
Holding, including without limitation the Heritage Securities and the Non-
Heritage Securities but excluding shares of Series A Preferred, and all options,
warrants (including the 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.
-45-
"Securityholders" means, collectively, all of the Persons except Holding
---------------
who are parties to this Agreement as of the relevant time of reference, and
"Securityholder" means any one of the Securityholders.
---------------
"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 Securityholder.
"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 Securityholder Securities.
-46-
"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.
"Warrants" means the warrants, issued pursuant to the Preferred Purchase
--------
Agreement, to purchase shares of Common Stock.
"Warrant Securities" means the Warrants and Warrant Shares, any shares of
------- ----------
capital stock and other securities of Holding issued or transferred to any of
the Warrant Securityholders or any permitted Transferee of any of the Warrant
Securityholders 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 Warrant Securities when transferred (i) to Holding, (ii)
pursuant to a Public Sale, or (iii) to any Holder other than a Warrant
Securityholder; and provided further that Series A Preferred shall not
constitute Warrant Securities.
"Warrant Securityholders" means, collectively, the holders, as of the
-----------------------
relevant time of reference, of any of the Warrant Securities, and "Warrant
Securityholder" means any one of the Warrant Securityholders.
"Warrant Shares" means shares of Common Stock issuable upon exercise of the
--------------
Warrants.
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.
-47-
(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).
(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
-48-
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
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
-49-
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 BT Capital Investors, L.P., to:
BT Capital Investors, L.P.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxx
Telecopier No.: (000) 000-0000
with a copy sent at the same time and by the same means to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
(F) If to Phoenix Home Life Mutual Insurance Company, to:
c/o Phoenix Investment Partners Limited
00 Xxxxxxxx Xxxxxx
P.O. Box 150480
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Private Placements Division
Telecopier: (000) 000-0000
-50-
with a copy sent at the same time and by the same means to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxxxxx-Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
(G) 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) - (F)
above.
(G) 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.
-51-
(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 and the Preferred 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 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
-52-
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, 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
Securityholders and (c) any modification, amendment or waiver of any provision
of this Agreement that grants any rights to, or restricts any rights of, any of
the Warrant Securityholders, whether individually or collectively, shall be
effective if, and only if, it is approved in writing by the Majority Warrant
Securityholders.
(m) No Rights to Employment. Nothing contained in this Agreement shall
confer on any Securityholder 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 January 11, 1999.
IMPAC GROUP, INC.
/s/ Xxxxxxx Xxxxx
By_________________________
Name: Xxxxxxx Xxxxx
Title: President
HERITAGE FUND I, L.P.
By: HF Partners I, L.P.,
its general partner
/s/ Xxxxx X. Xxxxxxx
By_________________________
Name: Xxxxx X. Xxxxxxx
Title: General Partner
HERITAGE FUND II, L.P.
By: HF Partners II, L.L.C.,
its general partner
/s/ Xxxxx X. Xxxxxxx
By_________________________
Name: Xxxxx X. Xxxxxxx
Title: General Partner
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 X. Xxxxxx
___________________________
Xxxx X. Xxxxxx
___________________________
Xxxx Xxxxxxx
Signature Page to the Stockholder Agreement
/s/ Xxxx Xxxxxxx
___________________________
Xxxx Xxxxxxx
/s/ Xxxxx Xxxxxx
___________________________
Xxxxx Xxxxxx
/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:
_________________________
_________________________
WARRANT HOLDERS:
BT CAPITAL INVESTORS, L.P.
/s/ Xxxxxx Xxxx
By_______________________
Name:Xxxxxx Xxxx
Title:Senior Managing Director
PHOENIX HOME LIFE MUTUAL INSURANCE
COMPANY
/s/ Xxxxxxxxxxx Xxxxxx
By_______________________
Name:Xxxxxxxxxxx Xxxxxx
Title:Vice President
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] Securityholder party to that certain
Second Amended and Restated Stockholder Agreement, dated as of March 12, 1998,
and amended and restated as of January 11, 1999 (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
Warrant Stockholders
BT Capital Investors L.P.
Phoenix Home Life Mutual Insurance Company
Schedule 4
[Intentionally Omitted]
Schedule 5
Certain Actions Requiring Consent
---------------------------------
(a) the sale or other disposition of all or substantially all of the assets
or properties of Holding, any of its Subsidiaries, or any business or division
of any of Holding or its Subsidiaries;
(b) the issuance or sale by Holding or any of its Subsidiaries of 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), other than (i) pursuant to any options,
warrants or other rights to acquire any such stock or other securities, the
grant of which was previously approved in accordance with the then-applicable
provisions of this Stockholder Agreement and including without limitation any
such grants pursuant to the Company's 1998 Stock Option Plan, the Company's
Second 1998 Stock Option Plan, or the notice dated December 14, 1998 from IMPAC
Europe Limited and Xxxxxxx Robor Limited to the holders of options to purchase
shares of Xxxxxxx Robor Limited's share capital, (ii) the issuance of shares of
Series A Preferred Stock as Dividend Shares (as defined in Holding's Fourth
Amended and Restated Certificate of Incorporation) and (iii) the issuance of
shares of Common Stock to employees of the Company and its Subsidiaries pursuant
to and in accordance with that certain Equity Recapitalization Agreement, dated
as of September 10, 1998, among the Company and the shareholders;
(c) (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 any guaranty or indemnity with respect
thereto), including without limitation the establishment of any such line of
credit at any bank or other financial institution, in violation of any provision
of Holding's Amended and Restated Multicurrency Revolving Credit Agreement with
Bank of America, N.T. & S.A., as Agent, the Indenture or the Senior Subordinated
Notes outstanding thereunder, or Holding's Fourth Amended and Restated
Certificate of Incorporation, in each case, as amended and in effect from time
to time (as so amended and in effect, the "Material Documents");
------------------
(d) any action to effect the voluntary, or which would precipitate an
involuntary, dissolution, liquidation, or winding-up of Holding or any of its
Subsidiaries;
(e) 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);
(f) unless otherwise permitted or required pursuant to an agreement of
Holding or any such Subsidiary previously approved in accordance with the then-
applicable provisions of this Stockholder Agreement, the acquisition by Holding
or any of its Subsidiaries of any stock or indebtedness of, or 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, capital
contributions, or investments in or to, any Person (other than any such
transaction among Holding and/or any of its Subsidiaries) which in any such case
is prohibited by any Material Document, or the entry by Holding or any of its
Subsidiaries into any partnership or joint venture;
(g) (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;
(h) the appointment or termination of the Chairman of the Board of
Directors, President, Chief Executive Officer or Chief Financial Officer (or
Persons holding equivalent positions) of Holding; or
(i) 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 for which prior notice to the Majority
Heritage Holders would be required pursuant to paragraphs (a) - (h) of this
Schedule 5, and any amendment or modification to any such agreement.
-------- -
Schedule 6
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
X. Xxxxx Xxxxxx
Xxxxxxxxxx Xxxxx
Xxxx Xxxxxxx Xxxxxxx
Xxxxxx XxXxxx
Xxxx XxXxxxxxx
Xxxxxx Xxxxxxx
Xxxxx Xxxxxx
Xxxxxx Xxxxxx
Xxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
Schedule 7
Form of Heritage Repurchase Agreement
See Attached.
Form of Heritage Share Repurchase Letter
IMPAC GROUP INC.
0000 Xxxxx Xxxx Xxxxxx
Xxxxxxx Xxxx, Xxxxxxxx 00000-0000
January 11, 1999
To Heritage Fund II Investment
Corporation
c/o Heritage Partners, Inc.
00 Xxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Ladies and Gentlemen:
Reference is hereby made to the letter agreement dated September 10, 1998
among the stockholders of IMPAC Group, Inc., a Delaware corporation (the
"Company"), and the Company (the "September 10th Letter").
-------- --------- ---- ------
Pursuant to the terms of September 10th Letter, Heritage Fund II
Investment Corporation (referred to herein as the "Stockholder") hereby agrees
-----------
to sell to the Company shares of the Company's Common Stock, par value $0.001
per share (the "Common Stock", with the shares of Common Stock to be sold
------ -----
referred to as the "Shares"), for a purchase price of $625.04 per share (the
------
"Purchase Price") and an aggregate repurchase price as set forth in Annex A. The
-------- ----- ----- -
parties acknowledge that the Purchase Price per share has been increased from
the price contemplated by the September 10th Letter to reflect that the timing
of the "Equity Recapitalization" referred to in the September 10th Letter has
been significantly delayed from the parties' expectations in September. The
number of Shares to be sold and the aggregate Purchase Price to be paid by the
Company for such Shares is set forth in Annex A.
----- -
Immediately after the closing under the Securities Purchase Agreement,
dated as of the date hereof (the "Securities Purchase Agreement"), between the
---------- -------- ---------
Company and the investors named therein, providing for the issuance and sale by
the Company of a new series of preferred stock and warrants for an aggregate
purchase price of $20,000,000,
- 2 -
each Stockholder shall deliver the certificate(s) representing the Shares to be
purchased by the Company (properly endorsed or accompanied by duly executed
stock powers or assignments), against payment therefor as provided herein by
wire transfer to an account designated by the Stockholder on Annex A. The
-------
Company hereby agrees that it will pay the aggregate Purchase Price out of the
net proceeds received by it pursuant to the Securities Purchase Agreement.
The Stockholder hereby represents and warrants that it has all right, title
and interest in the shares of Common Stock to be sold to the Company pursuant to
this letter agreement, and upon delivery to the Company of certificates
representing the Shares to be sold as provided in the preceding paragraph and
payment of the aggregate Purchase Price, the Company will acquire the Shares,
free from all liens, restrictions, claims and encumbrances.
This letter agreement shall to the maximum lawful extent be governed by and
interpreted and construed in accordance with the internal laws of the State of
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.
Please sign where indicated below to confirm your agreement with the
foregoing.
Very truly yours,
IMPAC GROUP, INC.
By:
-------------------------------------
Name:
-------------------------------
Title:
-------------------------------
Agreement Confirmed:
HERITAGE FUND II INVESTMENT
CORPORATION
By
-------------------------------
Name:
---------------------------
Title:
--------------------------
ANNEX A
----- -
Pursuant to this letter agreement the Stockholder will sell and the Company
will purchase shares of Common Stock as follows:
Shares of Aggregate
Common Stock Purchase Price
---------------- ----------------
Heritage Fund II Investment Corporation 30,087.37 $18,806,000
The aggregate Purchase Price should be sent by wire transfer as follows:
Bank Name: BankBoston
Bank Address: 000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Routing Number: 011 000 390
Account Name: Heritage Fund II, L.P.
Account Number: 503-27931
