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EXHIBIT 10.4
STOCKHOLDER AGREEMENT
This STOCKHOLDER AGREEMENT (this "Agreement"), dated as of
July 23, 1996, is among (a) MICROWAVE COMPONENT ENTERPRISES, INC., a Michigan
corporation (the "Company"), (b) XXXXXX X. XXXXXX ("RDB"), (c) XXXX X. XXXXX
("KWB"), (d) XXXX X. XXXXXX ("JKC"), (e) XXXXXX XXXXXXXX ("AC"), (f) XXXXX X.
XXXXXXX ("JSC"), (g) XXXXX X. XXXXXX ("JFD"), (h) XXXXXXX X. XXXXXX ("MJE"), (i)
XXXXX XXXXXXX ("DF"), (j) XXXXXX XXXXXX ("GH"), (k) XXXXXX X. XXXXXXXXXXX
("HJH"), (l) XXXXX X. XXXXXXX ("HFJ"), (m) XXXXXXX XXXXX ("WK"), (n) XXXXX X.
XxxXXXX ("FWM"), (o) XXXXXX X. XxXXXX ("EJM"), (p) XXXXX X. XXXXX ("DRM"), (q)
XXXXXXXX X. XXXXX ("GDS"), (r) XXXX X. XXXXXXX ("JLS"), (s) XXXXXXX X. XXXXXXX
("TES"), (t) XXXXXXX X. XXXXXXX ("CMS"), (u) XXXXXX X. XXXXXXX ("GHS"), (v)
XXXXXX X. XXXXXXXX ("RLS"), (w) XXXXXX X. XXXXXX ("SJV"), (x) XXXXX X. XXXXX
("JHW"), (y) XXXXXX X. XXXXX ("RJW"), (z) XX XXXXX ("AB"), (aa) XXX XXXXXXX
("TB"), (bb) XXXXXX XXXXXXX ("RH"), (cc) XXX XXXXXXXX ("RK"), (dd) XXXX
XXXXXXXXX ("MM"), (ee) XXX XXXXXX ("JP"), (ff) XXXX XXXXXXXXXX ("JR"), (gg) XXXX
XXXXXXXXXXX ("CS"), (hh) XXXXX XXXXXXXXX ("LS"), (ii) XXXXXXX XXXXXX ("MS" and,
together with the Persons named in clauses (b) through (hh) of this preamble,
the "Investors"), (jj) XXXXXXX XXXXXX MEZZANINE FUND, L.P. ("HI"), (kk) NATIONAL
CITY CAPITAL CORPORATION ("NCCC") and (ll) each other Person who becomes a party
to this Agreement, subject to the conditions set forth herein, by executing an
Instrument of Accession ("Instrument of Accession") in the form of Schedule 1
hereto.
WHEREAS, the parties hereto wish to set forth their relative
rights with regard to the transfer and issuance of the Company's securities, the
election of the Company's Board of Directors and certain other matters
concerning the Company's capital stock;
NOW, THEREFORE, the parties to this Agreement hereby agree as
follows:
ss.1. DEFINITIONS. For all purposes of this Agreement, the
following terms shall have the meanings set forth below:
Affiliate. Affiliate shall mean, with respect to any
Stockholder, any Person directly or indirectly controlling, controlled by or
under direct or indirect common control with such Stockholder and shall include
(a) any Person who is a director or beneficial holder of at least ten percent
(10%) of the then outstanding capital stock (or partnership interests or other
shares of beneficial interest) of such Stockholder and Family Members of any
such Person, (b) any Person of which such Stockholder or an Affiliate (as
defined in clause (a) above) of such Stockholder directly or indirectly, either
beneficially owns at least ten percent (10%) of the then outstanding capital
stock (or partnership interests or other shares of beneficial interest) or
constitutes at least a ten percent (10%) equity participant, (c) any Person of
which an Affiliate (as defined in clause (a) above) of such Stockholder is a
partner, director, officer or executive employee, and (d) in the case of a
specified Person who is an individual, Family Members of such Person.
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Approved Sale. See Section 3.1.
Charter. Charter shall mean the Company's Articles of
Incorporation and all amendments thereto.
Closing. Closing shall have the meaning set forth in the
Investor Purchase Agreement.
Common Stock. Common Stock shall mean (a) the Company's Common
Stock, without par value per share (the "Common Stock") and (b) any shares of
any other class of capital stock of the Company hereafter issued which are (i)
not preferred as to dividends or assets over any class of stock of the Company,
(ii) not subject to redemption pursuant to the terms thereof or (iii) issued to
the holders of shares of Common Stock upon any reclassification thereof.
Company. See preamble.
Family Members. Family Members shall mean, with respect to any
individual, any Related Person or Family Trust of such individual.
Family Trust. Family Trust shall mean, with respect to any
individual, any trust created for the benefit of one or more of such
individual's Related Persons and controlled by such individual.
HI. See preamble.
HI Securities. HI Securities shall mean (a) the HI Warrants,
(b) the HI Warrant Shares, (c) all other shares of the Company's capital stock
purchased by or issued from time to time to HI, (d) all shares of the Company's
capital stock issued or issuable upon conversion of such shares and (e) all
shares of the Company's capital stock issued with respect to such shares by way
of stock dividend or stock split or in connection with any merger,
consolidation, recapitalization or other reorganization affecting the Company's
capital stock. HI Securities will continue to be HI Securities in the hands of
any holder and each transferee thereof will succeed to the rights and
obligations of a holder of HI Securities hereunder, provided that shares of HI
Securities will cease to be HI Securities when transferred (i) to the Company or
(ii) pursuant to a Public Sale.
HI Stockholders. HI Stockholders shall mean HI for so long as
such Person holds HI Securities and any other Person to whom HI Securities are
transferred in accordance with Section 2 for so long as such Person holds any HI
Securities.
HI Warrant Shares. HI Warrant Shares shall mean all shares of
Common Stock issued or issuable upon exercise of the HI Warrants in accordance
with their terms.
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HI Warrants. HI Warrants shall mean the warrant of the Company
for the purchase of 10,340.28 shares of Common Stock issued to HI pursuant to
the Purchase Agreement as in effect on the date hereof and any warrants issued
upon transfer, exchange or replacement thereof.
Instrument of Accession. See preamble.
Investor Purchase Agreement. Investor Purchase Agreement shall
mean the Subscription Agreement, dated as of the date hereof, among RDB, MJE,
DRM, JLS and the Company, as amended and in effect from time to time.
Majority Investor Holders. Majority Investor Holders shall
mean the holder or holders at the time of determination of fifty-one percent
(51%) or more of the number of the then issued and outstanding shares of Common
Stock included in the Other Securities.
Management Agreements. Management Agreements means the
Management Agreements dated as of the date hereof between the Company and Inmet
Corporation, Weinschel Corporation and KDI/Triangle Corporation, respectively.
Management Stockholders. Management Stockholders means,
collectively, RDB, JSC, MJE, DRM, and JLS.
NCCC. See preamble.
NCCC Securities. NCCC Securities shall mean (a) the NCCC
Warrants, (b) the NCCC Warrant Shares, (c) all other shares of the Company's
capital stock purchased by or issued from time to time to NCCC, (d) all shares
of the Company's capital stock issued or issuable upon conversion of such shares
and (e) all shares of the Company's capital stock issued with respect to such
shares by way of stock dividend or stock split or in connection with any merger,
consolidation, recapitalization or other reorganization affecting the Company's
capital stock. NCCC Securities will continue to be NCCC Securities in the hands
of any holder and each transferee thereof will succeed to the rights and
obligations of a holder of NCCC Securities hereunder, provided that shares of
NCCC Securities will cease to be NCCC Securities when transferred (i) to the
Company or (ii) pursuant to a Public Sale.
NCCC Stockholders. NCCC Stockholders shall mean NCCC for so
long as such Person holds NCCC Securities and any other Person to whom NCCC
Securities are transferred for so long as such Person holds any NCCC Securities.
NCCC Warrant Shares. NCCC Warrant Shares shall mean all shares
of Common Stock issued or issuable upon exercise of the NCCC Warrants in
accordance with their terms.
NCCC Warrants. NCCC Warrants shall mean the warrant of the
Company for the purchase of 18,382.72 shares of Common Stock issued to NCCC
pursuant to the Purchase Agreement as in effect on the date hereof and any
warrants issued upon transfer, exchange or
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replacement thereof.
Other Securities. Other Securities shall mean (a) the shares
of Common Stock issued to RDB, MJE, DRM and JLS pursuant to the Investor
Purchase Agreement, (b) all other shares of the Company's capital stock
purchased by or issued from time to time to any of the Investors, (c) all shares
of the Company's capital stock issued or issuable upon conversion of such shares
and (d) all shares of the Company's capital stock issued with respect to such
shares by way of stock dividend or stock split or in connection with any merger,
consolidation, recapitalization or other reorganization affecting the Company's
capital stock. Other Securities will continue to be Other Securities in the
hands of any holder and each transferee thereof will succeed to the rights and
obligations of a holder of Other Securities hereunder, provided that shares of
Other Securities will cease to be Other Securities when transferred (i) to the
Company, (ii) to a HI Stockholder or an NCCC Stockholder or (iii) pursuant to a
Public Sale.
Other Stockholders. Other Stockholders shall mean the
Investors for so long as such Persons hold Other Securities and any other Person
to whom Other Securities are transferred for so long as such Person holds any
Other Securities.
Other Stockholder Agreements. Other Stockholder Agreements
shall mean (i) the Amended and Restated Shareholders' Agreement dated November
28, 1995 among the Company, Inmet Corporation ("Inmet"), RDB, JSC, MJE, DRM and
JLS, (ii) the Amended and Restated Shareholders' Agreement, dated November 28,
1995, among the Company, Inmet, AC (individually and for his XXX), DF, HFJ
(individually and for his XXX), EJM, TES, CMS and SJV, (iii) the Shareholders'
Agreement, dated November 30, 1995, among the Company, KWB, JKC, AC, JFD, GH,
HJH, HFJ, WK, FWM, EJM, GDS, TES, CMS, GHS, RLS, SJV, JHW and RJW, and (iv) the
Shareholders' Agreement, dated July 23, 1996, among the Company, AB, TB, RH, RK,
MM, JP, JR, CS, LS, MS, RDB, JKC, AC, JSC, MJE, DF, GH, HFJ, DRM, JLS, TES, CMS,
GHS, and JHW, all as in effect on the date hereof and with such amendments
thereto after the date hereof as may be approved in writing by the HI
Stockholders and the NCCC Stockholders.
Permitted Transferee. Permitted Transferee shall have the
meaning set forth in the Other Stockholder Agreements.
Person. Person shall mean an individual, partnership,
corporation, association, trust, joint venture, unincorporated organization, or
any government, governmental department or agency or political subdivision
thereof.
Personal Representative. Personal Representative shall mean
the successor or legal representative (including, without limitation, a
guardian, executor, administrator or conservator) of a dead or incompetent
Stockholder.
Preferred Stock. Preferred Stock shall mean the 4,000 shares
of the Company's Series A Preferred Stock, $1,000 liquidation value per share.
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Public Sale. Public Sale shall mean any sale of Common Stock
to the public pursuant to a Public Offering or 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.
Public Offering. Public Offering shall mean the Company's
underwritten public offering pursuant to an effective registration statement
under the Securities Act covering the offer and sale of shares of Common Stock.
Purchase Agreement. Purchase Agreement shall mean the Note,
Warrant and Preferred Stock Purchase Agreement dated as of the date hereof among
the Company, HI and NCCC, as amended and in effect from time to time.
Qualified Public Offering. Qualified Public Offering shall
mean a Public Offering resulting on the date of closing in net proceeds to the
Company and selling security holders of an amount not less than $20,000,000,
which offering is managed by an independent investment banking firm that (i) is
nationally or regionally recognized, and (ii) has a net worth, determined in
accordance with generally accepted accounting principles, of at least
$25,000,000.
Related Persons. Related Persons shall mean, with respect to
any individual, such individual's parents, spouse, children and grandchildren.
Securities. Securities shall mean the HI Securities, the NCCC
Securities and the Other Securities.
Securities Act. Securities Act shall mean the Securities Act
of 1933, as amended.
Small Business Act. Small Business Act shall mean the Small
Business Investment Act of 1958, as amended, or any successor federal statute,
and the rules and regulations of the Small Business Administration thereunder,
all as the same shall be in effect from time to time.
Subsidiary. Subsidiary shall mean, with respect to the
Company, any corporation a majority (by number of votes) of the outstanding
shares of any class or classes of which shall at the time be owned by the
Company or by a Subsidiary of the Company, if the holders of the shares of such
class or classes (a) are ordinarily, in the absence of contingencies, entitled
to vote for the election of a majority of the directors (or persons performing
similar functions) of the issuer thereof, even though the right so to vote has
been suspended by the happening of such a contingency, or (b) are at the time
entitled, as such holders, to vote for the election of a majority of the
directors (or persons performing similar functions) of the issuer thereof,
whether or not the right so to vote exists by reason of the happening of a
contingency.
Stockholders. Stockholders shall mean, collectively, the HI
Stockholders, the NCCC Stockholders and the Other Stockholders.
Third Party. Third Party shall mean any Person that is not a
party to this Agreement.
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Transfer. See Section 2.1.
Transfer Notice. See Section 2.2.
ss.2. RESTRICTIONS ON TRANSFER OF SECURITIES.
2.1. Transfer: No Stockholder may sell, assign, pledge or
otherwise transfer (a "Transfer") any interest in any Securities, either
voluntarily or involuntarily, by operation of law or otherwise, except:
(a) in the case of any NCCC Stockholder or any HI Stockholder
(i) to any Person other than an Affiliate, if that Person is a bank, an
insurance company, an investment company, a saving and loan association, a
mezzanine investment fund or other financial institution or to any other Person
(other than a competitor of the Company or any Subsidiary thereof) with the
consent of the Company, which consent will not be unreasonably withheld, to the
extent permitted by Section 2.2, or (ii) to an Affiliate thereof (other than a
Person who is an individual).
(b) in the case of any Other Stockholder, to the extent
permitted in accordance with the Other Stockholder Agreements, provided,
however, that each NCCC Stockholder and HI Stockholder shall have the right, but
not the obligation, subject to the price and other terms described in the Other
Stockholder Agreements to purchase any Offered Shares (as defined in the Other
Stockholder Agreements) as if the NCCC Stockholders and HI Stockholders were
holders of Common Stock and parties thereto, and shall be deemed to own that
number of Common Shares (i) issued to such NCCC Stockholder or HI Stockholder,
and (ii) issuable upon exercise of any NCCC Warrants or HI Warrants held by such
NCCC Stockholder or HI Stockholder, respectively; and provided, further that in
no event shall shares be Transferred to a Third Party without the prior written
consent of the NCCC Stockholders and the HI Stockholders; or
(c) pursuant to a Public Sale or an Approved Sale or to the
Company;
provided that (x) the restrictions contained in this Section 2 will continue to
be applicable to the Securities after any Transfer pursuant to clauses (a) and
(b) above, and (y) the transferee of such Securities pursuant to clause (x)
above shall either be a party hereto or shall have executed and delivered to the
Company an Instrument of Accession.
2.2. Right of First Offer. If any NCCC Stockholder or any HI
Stockholder desires to sell any interest in any Securities to any Person other
than an Affiliate (other than a Person who is an individual), then such holder
must first notify the Company of such proposed sale (the "Transfer Notice"),
offering the Company the right to purchase such Securities and stating the
aggregate purchase price for which such Securities are being offered and any
other terms of the offer. For 30 days following delivery of the Transfer Notice,
the Company shall have the right to elect to purchase such Securities, at the
price and on other terms stated in the
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Transfer Notice. If the Company desires to make such purchase, the Company shall
notify such NCCC Stockholder or such HI Stockholder, as the case may be, within
such 30-day period. Any such purchase shall occur within 60 days after delivery
of the applicable Transfer Notice. If the Company elects not to purchase such
Securities, or fails to make an affirmative election within such 30-day period,
such NCCC Stockholder or such HI Stockholder, as the case may be, shall
thereafter by free to sell such Securities to any other Person so long as (a)
the purchase price is equal to or greater than the purchase price set forth in
the Transfer Notice, (b) the terms of the sale are not materially more favorable
to the purchaser thereof than the terms set forth in the Transfer Notice, and
(c) the purchase occurs within 180 days after the delivery of the applicable
Transfer Notice.
2.3. Right of Co-Sale. In the event that the Management
Stockholders (together with their Affiliates) desire to Transfer, either
individually or in the aggregate and whether in a single transaction or a series
of related transactions, ten percent (10%) or more of the shares of Common Stock
which the Management Stockholders collectively own (other than to any Affiliates
or Permitted Transferee of such Management Stockholders that agree to be bound
by the terms of this Agreement) (the Management Stockholders participating in
such Transfer, the "Transferring Stockholders"), the Transferring Stockholders
shall notify each of the NCCC Stockholders and the HI Stockholders, in writing,
of such Transfer and its terms and conditions. Within fifteen (15) days of
receipt of such notice, each of the NCCC Stockholders and the HI Stockholders
shall notify the Transferring Stockholders if such Person elects to participate
in such Transfer. Each such NCCC Stockholder and HI Stockholder that so notifies
the Transferring Stockholders shall have the right to sell, at the same price
the number of shares of Common Stock the third party actually proposed to
purchase multiplied by a fraction, the numerator of which shall be the number of
shares of Common Stock issued and owned by such NCCC Stockholder or HI
Stockholder and the denominator of which shall be the aggregate number of shares
of Common Stock issued and owned by the Transferring Stockholders and each of
the NCCC Stockholders and HI Stockholders exercising his or its rights under
this Section 2.3. If an NCCC Stockholder or HI Stockholder so elects to have his
or its shares sold together with the Transferring Stockholders' shares, then it
shall be a condition to the consummation of the sale by the Transferring
Stockholders to such third party that such shares of such NCCC Stockholder or HI
Stockholder be sold simultaneously with those of the Transferring Stockholders.
The rights under this Section 2.3 shall terminate when the Management
Stockholders own five percent (5%) or less of the outstanding Common Stock.
2.4 Transfers of Securities in Breach of this Agreement In the
event of any Transfer of Securities in breach of this Agreement, commencing
immediately upon the date of such attempted Transfer (a) such Transfer shall be
void and of no effect, (b) no dividend of any kind or any distribution pursuant
to any liquidation, redemption or otherwise shall be paid by the Company to the
purported transferee in respect of such Securities (all such rights to payment
by the transferring Stockholder and/or the purported transferee being deemed
waived), (c) the voting rights of such Securities, if any, shall terminate, and
(d) neither the transferring Stockholder nor the purported transferee shall be
entitled to exercise any rights with respect to such Securities until such
Transfer in breach of this Agreement has been rescinded.
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2.5. Classes of Securities. Notwithstanding anything herein to
the contrary, for purposes of this Section 2, all classes of Common Stock shall
be treated as a single class and the Common Stock and the Preferred Stock shall
be treated as separate classes.
ss.3. SALE OF THE COMPANY.
3.1. Approved Sale. In the event the sale of the Company
(whether by merger, consolidation, sale of all or substantially all of the
Company's assets or sale of all or substantially all of the outstanding shares
of Common Stock) is approved by the Company's Board of Directors and consented
to by the HI Stockholders and the NCCC Stockholders (an "Approved Sale"), each
Stockholder hereby waives, to the extent permitted by applicable law, all rights
to object to or dissent from such Approved Sale and hereby agrees to consent to
and raise no objections against such Approved Sale; provided that such sale is
not to an Affiliate of any other Stockholder. If the NCCC Stockholders or the HI
Stockholders do not consent to any such proposed sale, the Company, at the
Company's expense, may retain the services of an independent investment banking
firm that (i) is nationally or regionally recognized, (ii) is one of three
investment banking firms approved by the HI Stockholders and the NCCC
Stockholders, (iii) is not an Affiliate of the HI Stockholders and the NCCC
Stockholders, and (iv) has a net worth, determined in accordance with generally
accepted accounting principles, of at least $25,000,000, to appraise the
fairness of such proposed sale. If that independent investment banking firm
executes and delivers to the NCCC Stockholders and the HI Stockholders a
fairness opinion, in form and substance satisfactory to the NCCC Stockholders
and the HI Stockholders, stating that the price and other terms of such proposed
sale are fair, then such proposed sale shall be deemed an Approved Sale.
3.2. Obligation of Stockholders. The Company and the
Stockholders hereby agree to cooperate fully in any Approved Sale and not to
take any action prejudicial to or inconsistent with such Approved Sale. Without
limiting the generality of the foregoing, each Stockholder hereby agrees to (i)
vote such Stockholder's Securities to approve the terms of any such Approved
Sale and such matters ancillary thereto as may be necessary in the judgment of
the Board of Directors of the Company to effect such Approved Sale, (ii) waive
any appraisal rights that such Stockholder would have with respect to such
Approved Sale, (iii) in an Approved Sale structured as a sale of stock, sell all
of such Stockholder's Securities on the terms and conditions approved by the
Board of Directors of the Company and (iv) upon request, deliver such
Stockholder's Securities (together with executed instruments of transfer) in
escrow (pending receipt of the purchase price therefor) to counsel for the
Company in such sale.
3.3. Received Consideration. The obligations of the
Stockholders with respect to any Approved Sale are subject to the satisfaction
of the condition that upon the consummation of such sale, all of the sellers of
Common Stock and Preferred Stock, respectively, will receive the same form and
amount of consideration per share of Common Stock and Preferred Stock, as
applicable, or if any such sellers are given an option as to the form and amount
of consideration to be received per share of Common Stock or Preferred Stock,
all holders of Common Stock and Preferred Stock, as applicable, will be given
the same option and all of the sellers of Securities exercisable for Common
Stock and Preferred Stock will receive the same form and amount of
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consideration and the same options as to form and amount of consideration,
referred to above, in each case per share of Common Stock and Preferred Stock,
as the case may be, less the exercise price per share of Common Stock or
Preferred Stock, as the case may be. It shall be a condition to any Approved
Sale structured as a stock sale that the purchaser with respect to such
transaction contemporaneously purchase or cause to be redeemed all of the
outstanding Preferred Stock for a price per share equal to the Liquidation Value
(as defined in the Charter), plus all accrued and unpaid dividends thereon.
3.4. Proxy. Each Stockholder hereby appoints NCCC in any
Approved Sale as such Stockholder's true and lawful proxy and attorney, with
full power of substitution, to vote all Securities owned by such Stockholder or
over which such Stockholder has voting control to effectuate the agreements set
forth in this Section 3, but only in the event of and to the extent necessary to
remedy any breach by such Stockholder of its obligations under this Section 3.
The proxies and powers granted by each Stockholder pursuant to this Section 3.4
are coupled with an interest and are given to secure the performance of such
Stockholder's duties under this Section 3. Such proxies are irrevocable for so
long as this Section 3 remains in effect and will survive the death,
incompetency or disability of any Stockholder who is an individual and the
merger, liquidation or dissolution of any Stockholder that is a corporation,
partnership or other entity.
ss.4. BOARD OF DIRECTORS.
Each of the Stockholders agrees as follows:
4.1. Boards of Directors; Voting Agreements. (a) Subject to
paragraph (b) below, in any and all elections of directors of the Company
(whether at a meeting or by written consent in lieu of a meeting), each
Stockholder shall vote, or cause to be voted, or cause such Stockholder's
designees as directors to vote, all Securities owned by such Stockholder or over
which such Stockholder has voting control so as to fix the number of directors
of the Company at any number between three and fifteen (the "Maximum Number"),
and to nominate and elect such directors of the Company as follows:
(i) A number of individuals equal to the Maximum
Number less two, designated by the Majority Investor Holders,
all of whom shall be Investors, and one of whom will serve as
the Chairman of the Board of the Company;
(ii) One individual designated by HI, so long as HI
or its Affiliates hold any Securities; and
(iii) One individual designated by NCCC, so long as
NCCC holds any Securities.
If the Majority Investor Holders choose not to designate a director or directors
as provided in clause (i) above, the number of directors of the Company shall be
reduced by the number of directors the Majority Investor Holders choose not to
so designate until such time as the Majority Investor Holders exercise their
rights as provided in clause (i) above at which time the number of
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directors of the Company shall be increased by the number of directors
designated as provided in clause (i) above.
(b) If any vacancy shall occur in the Board of Directors of
the Company as a result of death, disability, resignation or any other
termination of a director, the replacement for such vacating director shall be
designated by the Person or Persons who, pursuant to Sections 4.1(a)(i), (ii)
and (iii) above, originally designated such vacating director. Each Person
entitled to designate a director or a replacement for a director pursuant to
this Section 4 shall also be entitled to designate the removal of such director
with or without cause. Each Stockholder hereby agrees to vote or cause to be
voted or cause such Stockholder's designees as directors to vote all Voting
Securities owned by such Stockholder or over which such Stockholder has voting
control so as to comply with this Section 4.1(b).
4.2. PROXY. EACH STOCKHOLDER HEREBY GRANTS TO THE COMPANY AN
IRREVOCABLE PROXY, COUPLED WITH AN INTEREST, TO VOTE ALL OF THE VOTING
SECURITIES OWNED BY SUCH STOCKHOLDER OR OVER WHICH SUCH STOCKHOLDER HAS VOTING
CONTROL TO THE EXTENT NECESSARY TO CARRY OUT THE PROVISIONS OF THIS SECTION 4,
BUT ONLY IN THE EVENT OF AND TO THE EXTENT NECESSARY TO REMEDY ANY BREACH BY
SUCH STOCKHOLDER OF HIS, HER OR ITS OBLIGATIONS UNDER THE VOTING AGREEMENT
CONTAINED HEREIN.
4.3. Action by Stockholders. Each Stockholder further agrees
that such Stockholder will not vote any Securities owned by such Stockholder or
over which such Stockholder has voting control, or take any action by written
consent, or take any other action as a stockholder of the Company, to circumvent
the voting arrangements required by this Section 4. Without limiting the
generality of the foregoing, each Stockholder agrees not to (a) vote any
Securities owned by such Stockholder or over which such Stockholder has voting
control, or take any other action as a stockholder of the Company, to approve
any corporate action or transaction by the Company not previously approved by
the Board of Directors of the Company elected in accordance with this Section 4
and the By-laws of the Company or (b) commence or maintain any shareholder's
derivative suit challenging any action or transaction approved by the Company's
Board of Directors.
4.4. Expense Reimbursement. The Company hereby agrees to pay
all reasonable expenses incurred by the directors designated pursuant to this
Section 4 or any representatives designated by NCCC or HI pursuant to Section
3.2 of the Warrant, in connection with their attendance at meetings of the
Company's Board of Directors (including all travel and lodging expenses related
thereto).
4.5 Board Meetings. The Company will hold at least four
regular meetings of the Board of Directors during each calendar year at such
times and places as shall be determined from time to time by the Board of
Directors.
4.6 Confidentiality. Each Stockholder agrees to keep
confidential any information relating to the Company or any of its Subsidiaries
received by it pursuant to or in
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connection with this Agreement which is (a) trade information which the
Stockholders reasonably expect that the Company would want to keep confidential,
(b) technical information with respect to the equipment or operations of the
Company, (c) financial or environmental information, and (d) any written
information that is clearly and conspicuously identified in writing by the
Company as confidential; provided, however, that this Section 4.6 shall not be
construed to prevent any Stockholder from disclosing such information (i) to any
other Stockholder or any Stockholder's legal counsel, auditors, and accountants,
or any Affiliate that shall agree to be bound by this obligation of
confidentiality, (ii) upon the order of any court or administrative agency,
(iii) upon the request or demand or any regulatory agency or authority (whether
or not such request or demand has the force of law), (iv) that has been publicly
disclosed, other than from a breach of this provision by the Stockholder, (v)
that has been obtained from any Person that is neither a party to this Agreement
nor an Affiliate of any such party, (vi) in connection with the exercise of any
right or remedy hereunder or under any other Transaction Documents (as defined
in the purchase agreement), or (vii) to any stockholder or prospective
stockholder of the Company that agrees to be bound by the obligation of
confidentiality in this Agreement.
ss.5. ADDITIONAL LEGEND. So long as any Securities are subject
to the provisions hereof, all certificates or instruments representing
Securities will have imprinted on them the following legend:
The shares represented by this certificate are subject to the
terms of a certain Stockholder Agreement, dated as of July 23,
1996, among the issuer of this certificate and certain
stockholders. The Stockholder Agreement contains certain
restrictive provisions relating to the voting (including the
grant of an irrevocable proxy relative to voting matters) and
transfer of shares of the stock represented hereby. A copy of
the Stockholder Agreement is on file at the Company's
principal offices. Upon written request to the Company's
Secretary, a copy of the Stockholder Agreement will be
provided without charge to appropriately interested persons.
ss.6. SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid.
illegal or unenforceable provision had never been contained herein.
ss.7. ENTIRE AGREEMENT. Except as otherwise expressly set
forth herein, this document embodies the complete agreement and understanding
among the parties hereto with respect to the subject matter hereof and thereof
and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
12
ss.8. SUCCESSORS AND ASSIGNS. This Agreement will bind and
inure to the benefit of and be enforceable by the Company and the Stockholders
and their respective heirs, successors and assigns.
ss.9. COUNTERPARTS. This Agreement may be executed in separate
counterparts each of which will be an original and all of which taken together
will constitute one and the same agreement.
ss.10. REMEDIES. The Stockholders will be entitled to enforce
their rights under this Agreement specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights existing in their favor. The parties
hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and that any Stockholder may
in its sole discretion apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive relief in order to
enforce or prevent any violation of the provisions of this Agreement. In the
event of any dispute involving the terms of this Agreement, the prevailing party
shall be entitled to collect reasonable fees and expenses incurred by the
prevailing party in connection with such dispute from the other parties to such
dispute.
ss.11. NOTICES. Any notice provided for in this Agreement will
be in writing and will be deemed properly delivered if either personally
delivered or sent by telecopier, overnight courier or mailed certified or
registered mail, return receipt requested, postage prepaid to the recipient (a)
if to any Stockholder, at the address listed for such Stockholder in the stock
records of the Company and (b) if to the Company, to it at Microwave Components
Enterprises, Inc., c/o Inmet Corporation, 000 Xxxx Xxxxx, Xxx Xxxxx, Xxxxxxxx
00000 (000-000-0000; fax 000-000-0000). Any such notice shall be effective (i)
if delivered personally or by telecopier, when received, (ii) if sent by
overnight courier, when receipted for, and (iii) if mailed, three days after
being mailed first class, certified mail, return receipt requested as described
above. The Company agrees to make available to each Stockholder upon request an
address list of all Stockholders to ensure correct delivery of all notices
hereunder.
ss.12. AMENDMENT AND WAIVER. No modification, amendment or
waiver of any provision of this Agreement will be effective against the Company
or the Stockholders unless such modification, amendment or waiver is approved in
writing by the Majority Investor Holders, HI, NCCC and the holders of at least
fifty-one percent (51%) of the total number of then outstanding shares of Common
Stock constituting Securities then held by all Stockholders; provided, however,
that no amendment, modification or waiver of any provision of this Agreement
that adversely affects the rights of one particular Party (as hereinafter
defined) to this Agreement in a manner different from the rights of the other
Parties shall be effective against such adversely affected Party unless approved
in writing by the holders of at least a majority of the outstanding shares of
Common Stock constituting Securities then held by all members of such Party. As
used in this Section 12, the term "Party" means any one of the following
entities or groups: (a) the Company, (ii) the HI Stockholders, (iii) the NCCC
Stockholders and (iv) the
13
Other Stockholders. The failure of any party to enforce any of the provisions of
this Agreement will in no way be construed as a waiver of such provisions and
will not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.
ss.13. TERMINATION. This Agreement will terminate upon the
earliest to occur of (a) the completion of any voluntary or involuntary
liquidation or dissolution of the Company, (b) the completion of a Qualified
Public Offering, (c) the sale of all or substantially all of the Company's
assets or of a majority of the outstanding Common Stock to a third party
(whether pursuant to a merger, consolidation or otherwise) in accordance with
the terms hereof or (d) a DeMinimus Holding Event. As used in this Section 13, a
"DeMinimus Holding Event" means that the aggregate sum of (i) the number of
shares of any Common Stock owned by the HI Stockholders and the NCCC
Stockholders, plus (ii) the number of shares of Common Stock issuable upon the
exercise of any warrant or warrants owned by the HI Stockholders and the NCCC
Stockholders, is less than one percent (1%) of the then issued and outstanding
shares of Common Stock.
SS.14. GOVERNING LAW. ALL QUESTIONS CONCERNING THE
CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS AGREEMENT WILL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW.
ss.15. DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
ss.16. CONSTRUCTION. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction will be applied against any party.
ss. 17. WARRANT AGREEMENT. This Agreement, and HI's and NCCC's
being a party to this Agreement, shall in no way be construed as a waiver of, or
an amendment, supplement or other modification of, any provision of any of the
Financing Documents (as defined in the Purchase Agreement).
14
IN WITNESS WHEREOF, the parties hereto have executed this Stockholder
Agreement on the day and year first above written.
MICROWAVE COMPONENT ENTERPRISES, INC.
By: /s/ Xxxx X. Xxxxxxx
----------------------------------
XXXX X. XXXXXXX
Title:
-------------------------------
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------
XXXXXX X. XXXXXX
By: /s/ Xxxx X. Xxxxx
----------------------------------
XXXX X. XXXXX
By: /s/ Xxxx X. Xxxxxx
---------------------------------
XXXX X. XXXXXX
By: /s/ Xxxxxx Xxxxxxxx
---------------------------------
XXXXXX XXXXXXXX (individually and
for his XXX)
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
XXXXX X. XXXXXXX
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
XXXXX X. XXXXXX
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
XXXXXXX X. XXXXXX
By: /s/ Xxxxx Xxxxxxx
---------------------------------
XXXXX XXXXXXX
By: /s/ Xxxxxx Xxxxxx
---------------------------------
XXXXXX XXXXXX
By: /s/ Xxxxxx X. Xxxxxxxxxxx
---------------------------------
XXXXXX X. XXXXXXXXXXX
15
/s/ Xxxxx X. Xxxxxxx
-----------------------------
XXXXX X. XXXXXXX
/s/ Xxxxxxx Xxxxx
-----------------------------
XXXXXXX XXXXX
/s/ Xxxxx X. XxxXxxx
-----------------------------
XXXXX X. XXXXXXX
/s/ Xxxxxx X. XxXxxx
-----------------------------
XXXXXX X. XXXXXX
/s/ Xxxxx X. Xxxxx
-----------------------------
XXXXX X. XXXXX
/s/ Xxxxxxxx X. Xxxxx
-----------------------------
XXXXXXXX X. XXXXX
/s/ Xxxx X. Xxxxxxx
-----------------------------
XXXX X. XXXXXXX
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------
XXXXXXX X. XXXXXXX
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------
XXXXXXX X. XXXXXXX
/s/ Xxxxxx X. Xxxxxxx
-----------------------------
XXXXXX X. XXXXXXX
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------
XXXXXX X. XXXXXXXX
/s/ Xxxxxx X. Xxxxxx
-----------------------------
XXXXXX X. XXXXXX
/s/ Xxxxx X. Xxxxx
-----------------------------
XXXXX X. XXXXX
16
/s/ Xxxxxx X. Xxxxx
------------------------------
XXXXXX X. XXXXX
/s/ Xx Xxxxx
------------------------------
XX XXXXX
/s/ Xxx Xxxxxxx
------------------------------
XXX XXXXXXX
/s/ Xxxxxx Xxxxxxx
------------------------------
XXXXXX XXXXXXX
/s/ Xxx Xxxxxxxx
------------------------------
XXX XXXXXXXX
/s/ Xxxx Xxxxxxxxx
------------------------------
XXXX XXXXXXXXX
/s/ Xxx Xxxxxx
------------------------------
XXX XXXXXX
/s/ Xxxx Xxxxxxxxxx
------------------------------
XXXX XXXXXXXXXX
/s/ Xxxx Xxxxxxxxxxx
------------------------------
XXXX XXXXXXXXXXX
/s/ Xxxxx Xxxxxxxxx
------------------------------
XXXXX XXXXXXXXX
/s/ Xxxxxxx Xxxxxx
------------------------------
XXXXXXX XXXXXX
17
XXXXXXX XXXXXX MEZZANINE FUND, L.P.
By: XXXXXXX XXXXXX CAPITAL PARTNERS
LLP, its General Partner
By: /s/ Xxxxxx X. Xxxxx
------------------------
Title: MANAGING PARTNER
NATIONAL CITY CAPITAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Title: MANAGING DIRECTOR
18
SCHEDULE 1
TO STOCKHOLDER
AGREEMENT
Instrument of Accession
The undersigned, , in order to become
the owner or holder of shares of Common Stock, without par value per
share (the "Shares"), of Microwave Component Enterprises, Inc., a Michigan
corporation, hereby agrees to become a [HI] [NCCC] [Other] Stockholder party to
that certain Stockholder Agreement, dated as of July 23, 1996 (the "Stockholder
Agreement"), a copy of which is attached hereto. This Instrument of Accession
shall become a part of such Stockholder Agreement.
Executed as of the date set forth below under the laws of the
State of Ohio.
Signature:
------------------------------
Address:
--------------------------------
----------------------------------------
----------------------------------------
Date:
-----------------------------------
Accepted:
MICROWAVE COMPONENT ENTERPRISES, INC.
By:
-------------------------------
Date:
---------------------------
19
FIRST AMENDMENT
TO
STOCKHOLDER AGREEMENT
THIS FIRST AMENDMENT TO STOCKHOLDER AGREEMENT, dated as of June 30, 1998,
is among (i) MCE COMPANIES, INC., a Michigan corporation f/k/a Microwave
Components Enterprises, Inc. (the "Company"), (ii) XXXXXXX XXXXXX MEZZANINE
FUND, L.P. ("Xxxxxxx"), (iii) NATIONAL CITY CAPITAL CORPORATION ("NCCC";
together with Xxxxxxx, the "Purchasers", and each individually a "Purchaser"),
and (iv) the Other Stockholders listed on the signature pages hereof who, in the
aggregate, hold in excess of fifty-one percent (51%) of the total issued and
outstanding shares of Common Stock of the Company.
Recitals
A. The Company, the Other Stockholders and the Purchasers entered into a
Stockholder Agreement dated as of July 23, 1996, as amended, modified or
supplemented from time to time (collectively, the "Stockholder Agreement"); and
B. The parties desire to amend the Stockholder Agreement as set forth
herein;
Agreements
NOW, THEREFORE, in consideration of the premises and the mutual promises
and agreements hereinafter set forth, the parties hereto agree as follows:
1. Effect of Amendment; Definitions.
The Stockholder Agreement shall be and hereby is amended as provided in
Section 2 hereof. Except as expressly amended in Section 2 hereof, the
Stockholder Agreement shall continue in full force and effect in accordance with
its respective provisions on the date hereof. As used in the Stockholder
Agreement, the terms "this Agreement", "herein", "hereinafter", "hereto",
"hereof", and words of similar import shall, unless the context otherwise
requires, mean the Stockholder Agreement as amended and modified by this
Amendment. Capitalized terms that are not otherwise defined herein, have the
meanings ascribed to such terms in the Stockholder Agreement.
2. Amendments.
(a) December 1997 -- Issuances to Certain New Employees.
(i) Background. Effective December 31, 1997, the Company issued an
aggregate of 334 shares of Common Stock, at a purchase price of $307.30 per
share, to the following individuals:
20
Investor Shares
-------- ------
Xxxxxxx X. Xxxxxx * 244
Xxxxx X. Xxxxxx ** 48
Xxxxxx X. Xxxxxx *** 32
Xxxx Xxxxxxxxx *** 10
-----
Total 334
=====
----------
* Employee of the Company.
** Employee of Inmet.
*** Employee of KDI.
In connection therewith, the Company and each of the foregoing shareholders have
entered into an Instrument of Accession relative to the Stockholder Agreement,
copies of which are attached hereto as Exhibit A. In addition, the Company and
such shareholders entered into the following Shareholders' Agreements, each of
which are substantially in the form of the Other Stockholder Agreements (as
defined in the Stockholder Agreement), copies of which are attached hereto as
Exhibit B (collectively, the "December 1997 Other Stockholder Agreements"): (A)
Shareholders' Agreement, dated April 7, 1998 to be effective as of December 31,
1997, between the Company and Xx. Xxxxxx; (B) Shareholders' Agreement, dated
April 3, 1998 to be effective as of December 31, 1997, between the Company and
Xx. Xxxxxx; and (C) Shareholders' Agreement, dated April 3, 1998 to be effective
as of December 31, 1997, among the Company and Messrs. Xxxxxx and Xxxxxxxxx.
(ii) Consent and Amendment. For purposes of the Stockholder Agreement
and the HI Warrants and the NCCC Warrants (collectively, the "Warrants"), the
Purchasers, the Company and the Other Stockholders hereby consent and agree as
follows: (A) the purchase price of $307.30 per share is not less than the then
Fair Market Value (as defined in the Warrants); and (B) the December 1997 Other
Stockholder Agreements shall be deemed to be part of the "Other Stockholder
Agreements" (as defined in the Stockholder Agreement) and Messrs. Martin,
Conley, Xxxxxx and Xxxxxxxxx shall be deemed to be part of the "Other
Stockholders" (as defined in the Stockholder Agreement).
(b) Transfers by Other Stockholders.
(i) Background. Certain of the Other Stockholders have made or propose
to make certain transfers, by gift, of their shares of Common Stock in a manner
permitted by and in accordance with the Other Stockholder Agreements, as more
fully set forth below:
Completed Transfers
* Xxxxxx X. Xxxxxx transferred 1,600 shares to Xxx X. Xxxxxx, 1,600
shares to Xxxxxx X. Xxxxxx, 1,600 shares to Xxxxxx X. Xxxxxx, and 500
shares to Xxx X. Xxxxxx.
* Xxxxxx Xxxxxxxx proposes transferring 300 shares to the Xxxxxxxx
Investment Company, LLC.
21
* Xxxxxxx X. Xxxxxx transferred 10,000 shares to E 5 Limited
Partnership.
* Xxxxx X. Xxxxxxx proposes transferring 3,474 shares to the Jacques
Investment Company, LLC.
* Xxxxx X. Xxxxx transferred 33,398 shares to Timbertop Investments II,
Limited Partnership.
* Xxxx X. Xxxxxxx transferred 5,000 shares to the Xxxxxxx Family
Ventures, L.L.C.
* Xxxxxxx X. Xxxxxxx transferred 4,925 shares to the Xxxxxxx X. Xxxxxxx
Living Trust, dated October 6, 1993, as amended.
* Xxxxxx X. Xxxxxxx transferred (i) 300 shares to the Xxxx X. Xxxxx
Education Trust, dated Xxxxx 0, 0000, (xx) 1,400 shares to the Xxxxxx
X. and Xxxxxxx X. Xxxxxxx Family, L.L.C., and (iii) 2,350 shares to
the Xxxxxx X. Xxxxxxx Living Trust, dated January 28, 1988, as
amended.
Proposed Transfers
* Xxxxxxx X. Xxxxxxx proposes transferring all or a portion of his 5,525
shares to the Solomon Investment Company, LLC.
In connection therewith, the Company and each of the foregoing transferees have
entered or will enter into an Instrument of Accession relative to the
Stockholder Agreement in substantially the form of Exhibit C attached hereto. In
addition, the Company and such transferees have entered or will enter into an
Instrument of Accession relative to the Other Stockholder Agreements which
previously governed the shares held by the transferor in substantially the form
of Exhibit D attached hereto.
(ii) Consent and Amendment. For purposes of clarifying Section 2.1(b)
of the Stockholder Agreement, the Purchasers, the Company and the Other
Stockholders hereby consent and agree that any transfers, by gift, effected by
the Other Stockholders of their shares of Common Stock in a manner permitted by
and in accordance with the Other Stockholder Agreements, whether effected prior
to or after the date hereof (including, without limitation, those transfers
described above in subsection (i)), shall not provide the Purchasers with the
right to purchase any of such shares so transferred under the Stockholder
Agreement.
(c) Issuances pursuant to Metelics Merger.
(i) Background. The Company entered into an Agreement and Plan of
Merger, dated March 16, 1998, with Metelics Corporation, a California
corporation ("Metelics"), and MCE Acquisition No. 1, Inc., a Michigan
corporation and a wholly-owned subsidiary of the Company ("Newco"), pursuant to
which, effective March 16, 1998, Newco merged with and into Metelics with
Metelics becoming the surviving corporation and a wholly-owned subsidiary of the
Company (the "Metelics Merger") and all of the outstanding shares of capital
stock of
22
Metelics held by the then shareholders of Metelics (the "Metelics Shareholders")
was converted into the right to receive aggregate merger consideration equal to
(A) an aggregate of $20,900,000 in cash, subject to certain working capital
adjustments (the Company and the Metelics Shareholders have agreed that the
final working capital adjustment totaled $311,688, which amount has been paid to
the Metelics Shareholders), and (B) an aggregate of 16,364 shares of the Common
Stock, subject to certain upward adjustments (although, as of the date hereof,
the Company and the Metelics Shareholders have agreed that there will not be any
upward adjustments). In connection therewith, the Company and each of the
Metelics Shareholders have entered into an Instrument of Accession relative to
Stockholder Agreement, copies of which are attached hereto as Exhibit E. In
addition, the Company and each of the Metelics Shareholders entered into a
Shareholders' Agreements, substantially in the form of the Other Stockholder
Agreements (as defined in the Stockholder Agreement), a copy of which is
attached hereto as Exhibit F (collectively, the "Metelics Other Stockholder
Agreement").
(ii) Consent and Amendment. For purposes of the Stockholder Agreement,
the Warrants and the Stockholder Agreement, the Purchasers, the Company and the
Other Stockholders hereby consent and agree as follows: (A) the issuance of the
shares of Common Stock pursuant to the Merger, which is estimated as of the date
hereof to be valued at $416.27 per share, was effected at a price per share that
is not less than the then Fair Market Value (as defined in the Warrants); and
(B) the Metelics Other Stockholder Agreement shall be deemed to be part of the
Other Stockholder Agreements (as defined in the Stockholder Agreement) and the
Metelics Shareholders shall be deemed to be part of the Other Stockholders (as
defined in the Stockholder Agreement).
3. Representations and Warranties of the Company.
(a) The Company hereby represents and warrants that all representations
and warranties set forth in the Financing Documents, as the same may be amended
hereby, to which it is a party are true and correct in all material respects,
and that this Amendment has been executed and delivered by its duly authorized
officer and constitutes a legal, valid and binding obligation of it, enforceable
against it in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and general principles of equity.
(b) The Company hereby represents and warrants that the execution,
delivery and performance by it of this Amendment and its performance of the
Financing Documents, as the same may be amended hereby, to which it is a party
(i) have been duly authorized by all necessary corporate action, (ii) do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the articles of incorporation or bylaws of the Company, or of
any judgment, injunction, order or decree or of any material agreement or other
material instrument binding upon the Company, and (iii) do not result in the
creation or imposition of any Lien (other than the Permitted Liens) on any asset
of the Company.
4. Representations and Warranties of the Purchasers.
Each of the Purchasers hereby severally, and not jointly, represents and
warrants with respect to itself that all representations and warranties set
forth in the Financing Documents, as the same may be amended hereby, to which it
is a party are true and correct in all material
23
respects, and that this Amendment has been executed and delivered by its duly
authorized officer and constitutes a legal, valid and binding obligation of it,
enforceable against it in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the rights of creditors generally and general
principles of equity.
5. Counterparts.
This Amendment may be executed in any number of counterparts, each of which
shall be treated as an original but all of which, collectively, shall constitute
a single instrument.
6. Miscellaneous.
(a) This Amendment shall be governed by and construed in accordance with
the laws of the State of Ohio, without reference to principles of conflict of
laws.
(b) This Amendment shall become effective upon the execution and delivery
hereof by NCCC, Xxxxxxx, the Company and that number of the Other Stockholders
holding, in the aggregate, at least fifty-one percent (51%) of the total number
of issued and outstanding shares of Common Stock.
(c) Except as expressly set forth in this Amendment, (i) the execution,
delivery and performance by NCCC and Xxxxxxx of this Amendment shall not
constitute or be deemed to be or construed as a waiver of any right, power or
remedy, or a waiver of any provision of the Stockholder Agreement or any other
Financing Document, or a waiver of any Default or any Event of Default, and (ii)
nothing herein shall be deemed to entitle the Company to a future consent to, or
a future waiver, amendment, modification or other change of, any of the terms,
conditions, obligations, covenants or agreements contained in the Stockholder
Agreement or any other Financing Document in similar or different circumstances.
This Amendment is subject to the provisions of Section 13.05 of the Purchase
Agreement.
(d) Pursuant to Section 13.13 of the Purchase Agreement, the Company
agrees to pay on demand all reasonable expenses of the Purchasers (including
reasonable fees, charges and disbursements of counsel) in connection with the
preparation, negotiation, execution and delivery of this Amendment.
24
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as
of the day and year first above written.
MCE COMPANIES, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------
Xxxx X. Xxxxxxx, President
NATIONAL CITY CAPITAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Its: Managing Director
XXXXXXX XXXXXX MEZZANINE FUND, L.P.
By: Xxxxxxx Xxxxxx Capital Partners LLP
Its: General Partner
By: /s/ Xxxxxx X. Xxxxx
-------------------
Its: Managing Partner
----------------
OTHER STOCKHOLDERS:
/s/ Xxxxxx X. Xxxxxx
--------------------
XXXXXX X. XXXXXX, 28,298 shares
/s/ Xxxxx X. Xxxxxxx
--------------------
XXXXX X. XXXXXXX, 14,388 shares
25
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------------------
XXXXXXX X. XXXXXX, individually (23,398 shares)
and on behalf of E5 Limited Partnership
(10,000 shares)
/s/ Xxxxxxx X. Xxxx
--------------------------------------------------
XXXXXXX X. XXXX, 3,051.2 shares
/s/ Xxxxx X. Xxxxx
--------------------------------------------------
XXXXX X. XXXXX, individually and on behalf of
Timbertop Investment II, Limited Partnership
(33,398 shares)
/s/ Xxxx X. Xxxxxxx
--------------------------------------------------
XXXX X. XXXXXXX, individually (28,398 shares)
and on behalf of Xxxxxxx Family Ventures, LLC
(5,000 shares)
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------------------
XXXXXXX X. XXXXXX, 254 shares
/s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------------
XXXXXXX X. XXXXXXX, individually ( shares)
and on behalf of Solomon Investment Company, LLC
( shares)
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------------------------
XXXXXX X. XXXXXXXX, 2,000 shares
26
SECOND AMENDMENT
TO
STOCKHOLDER AGREEMENT
THIS SECOND AMENDMENT TO STOCKHOLDER AGREEMENT, dated as of July 28,
1999, is among (i) MCE COMPANIES, INC., a Michigan corporation f/k/a Microwave
Components Enterprises, Inc. (the "Company"), (ii) XXXXXXX XXXXXX MEZZANINE
FUND, L.P. ("Hanifen"), (iii) NATIONAL CITY CAPITAL CORPORATION ("NCCC"), (iv)
GREAT LAKES CAPITAL INVESTMENTS I, LLC ("GLCI"), (v) ROCKY MOUNTAIN MEZZANINE
FUND II, L.P. ("Rocky Mountain"; together with Hanifen, NCCC and GLCI, the
"Purchasers", and each individually a "Purchaser"), and (iv) the Other
Stockholders listed on the signature pages hereof who, in the aggregate, hold in
excess of fifty-one percent (51%) of the total issued and outstanding shares of
Common Stock of the Company.
Recitals
A. The Company, the Other Stockholders, Hanifen and NCCC entered into a
Stockholder Agreement dated as of July 23, 1996, as amended, modified or
supplemented from time to time (collectively, the "Stockholder Agreement"); and
B. The parties desire to amend the Stockholder Agreement as set forth
herein;
Agreements
NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements hereinafter set forth, the parties hereto agree as
follows:
1. Effect of Amendment; Definitions.
The Stockholder Agreement shall be and hereby is amended as provided in
Section 2 hereof. Except as expressly amended in Section 2 hereof, the
Stockholder Agreement shall continue in full force and effect in accordance with
its respective provisions on the date hereof. As used in the Stockholder
Agreement, the terms "this Agreement", "herein", "hereinafter", "hereto",
"hereof", and words of similar import shall, unless the context otherwise
requires, mean the Stockholder Agreement as amended and modified by this
Amendment. Capitalized terms that are not otherwise defined herein, have the
meanings ascribed to such terms in the Stockholder Agreement.
2. Amendments.
(a) Section 1 of the Stockholder Agreement is hereby amended by:
(i) inserting in alphabetical order the following
definitions:
27
1996 Purchase Agreement. 1996 Purchase Agreement shall mean
the Note, Warrant and Preferred Stock Purchase Agreement dated as of July 23,
1996 among the Company, HI and NCCC, as amended and in effect from time to time.
1999 Purchase Agreement. 1999 Purchase Agreement shall mean
the Senior Subordinated Note and Warrant Purchase Agreement dated as of the date
hereof among the Company, RMMF, NCCC and GLCI, as amended and in effect from
time to time.
RMMF. RMMF shall mean Rocky Mountain Mezzanine Fund II, L.P.,
a Colorado limited partnership.
GLCI. GLCI shall mean Great Lakes Capital Investments I, LLC,
a Delaware limited liability company.
(ii) deleting the existing definitions of the following terms
and inserting in lieu thereof the following definitions.
HI Securities. HI Securities shall mean (a) the HI Warrants,
(b) the HI Warrant Shares, (c) all other shares of the Company's capital stock
purchased by or issued from time to time to HI or RMMF, (d) all shares of the
Company's capital stock issued or issuable upon conversion of such shares and
(e) all shares of the Company's capital stock issued with respect to such shares
by way of stock dividend or stock split or in connection with any merger,
consolidation, recapitalization or other reorganization affecting the Company's
capital stock. HI Securities will continue to be HI Securities in the hands of
any holder and each transferee thereof will succeed to the rights and
obligations of a holder of HI Securities hereunder, provided that shares of HI
Securities will cease to be HI Securities when transferred (i) to the Company or
(ii) pursuant to a Public Sale.
HI Stockholders. HI Stockholders shall mean HI and RMMF for so
long as such Person holds HI Securities and any other Person to whom HI
Securities are transferred in accordance with Section 2 for so long as such
Person holds any HI Securities.
HI Warrants. HI Warrants shall mean, collectively, (a) the
warrant of the Company for the purchase of 10,340.28 shares of Common Stock,
subject to adjustment as provided therein, issued to HI pursuant to the 1996
Purchase Agreement, and any warrants issued upon transfer, exchange or
replacement thereof and (b) the warrant of the Company for the purchase of
4,726.80 shares of Common Stock, subject to adjustment as provided therein,
issued to RMMF pursuant to the 1999 Purchase Agreement, and any warrants issued
upon transfer, exchange or replacement thereof.
NCCC Securities. NCCC Securities shall mean (a) the NCCC
Warrants, (b) the NCCC Warrant Shares, (c) all other shares of the Company's
capital stock purchased by or issued from time to time to NCCC or GLCI, (d) all
shares of the Company's capital stock issued or issuable upon conversion of such
shares and (e) all shares of the Company's capital stock issued with respect to
such shares by way of stock dividend or stock split or in connection with
2
28
any merger, consolidation, recapitalization or other reorganization affecting
the Company's capital stock. NCCC Securities will continue to be NCCC Securities
in the hands of any holder and each transferee thereof will succeed to the
rights and obligations of a holder of NCCC Securities hereunder, provided that
shares of NCCC Securities will cease to be NCCC Securities when transferred (i)
to the Company or (ii) pursuant to a Public Sale.
NCCC Stockholders. NCCC Stockholders shall mean NCCC and GLCI
for so long as such Person holds NCCC Securities and any other Person to whom
NCCC Securities are transferred for so long as such Person holds any NCCC
Securities.
NCCC Warrants. NCCC Warrants shall mean, collectively, (a) the
warrant of the Company for the purchase of 18,382.72 shares of Common Stock,
subject to adjustment as provided therein, issued to NCCC pursuant to the 1996
Purchase Agreement as in effect on the date hereof and any warrants issued upon
transfer, exchange or replacement thereof and (b) the warrants of the Company
for the purchase of 7,142.72 shares and 1,260.48 shares of Common Stock, subject
to adjustment as provided therein, issued to NCCC and GLCI, respectively,
pursuant to the 1999 Purchase Agreement as in effect on the date hereof and any
warrants issued upon transfer, exchange or replacement thereof.
Purchase Agreement. Purchase Agreement shall mean,
collectively, the 1996 Purchase Agreement and the 1999 Purchase Agreement.
(b) Section 4.1(a)(iii) of the Stockholder Agreement is hereby amended
by deleting that clause in its entirety and substituting in lieu thereof the
following:
(iii) One individual designated by NCCC, so long as NCCC or
its Affiliates holds any Securities.
(c) Section 5 of the Stockholder Agreement is hereby amended by
deleting that section in its entirety and substituting in lieu thereof the
following:
ss.5. ADDITIONAL LEGEND. So long as any Securities are subject
to the provisions hereof, all certificates or instruments representing
Securities issued after the date hereof will have imprinted on them the
following legend:
The shares represented by this certificate are subject to the
terms of a certain Stockholder Agreement, dated as of July 23,
1996, among the issuer of this certificate and certain
stockholders, as amended, modified or supplemented from time
to time. The Stockholder Agreement contains certain
restrictive provisions relating to the voting (including the
grant of an irrevocable proxy relative to voting matters) and
transfer of shares of the stock represented hereby. A copy of
the Stockholder Agreement is on file at the Company's
principal offices. Upon written request to the Company's
Secretary, a copy of the Stockholder Agreement will
3
29
be provided without charge to appropriately interested
persons.
(d) Section 11(b) of the Stockholder Agreement is hereby amended by
deleting that clause in its entirety and substituting in lieu thereof "(b) if to
the Company, to it at MCE Companies, Inc., 000 Xxxxx Xxxxxx, Xxx Xxxxx, Xxxxxxxx
00000; Telecopier No.: (000) 000-0000."
3. Representations and Warranties of the Company.
(a) The Company hereby represents and warrants that all representations
and warranties set forth in the Purchase Agreement to which it is a party are
true and correct in all material respects, and that this Amendment has been
executed and delivered by its duly authorized officer and constitutes a legal,
valid and binding obligation of it, enforceable against it in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights of
creditors generally and general principles of equity.
(b) The Company hereby represents and warrants that the execution,
delivery and performance by it of this Amendment and its performance of the
Purchase Agreement, as the same may be amended hereby, to which it is a party
(i) have been duly authorized by all necessary corporate action, (ii) do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the articles of incorporation or bylaws of the Company, or of
any judgment, injunction, order or decree or of any material agreement or other
material instrument binding upon the Company, and (iii) do not result in the
creation or imposition of any Lien on any asset of the Company.
4. Representations and Warranties of the Purchasers.
Each of the Purchasers hereby severally, and not jointly, represents
and warrants with respect to itself that all representations and warranties set
forth in the Purchase Agreement, as the same may be amended hereby, to which it
is a party are true and correct in all material respects, and that this
Amendment has been executed and delivered by its duly authorized officer and
constitutes a legal, valid and binding obligation of it, enforceable against it
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally and general principles of equity.
5. Counterparts.
This Amendment may be executed in any number of counterparts, each of
which shall be treated as an original but all of which, collectively, shall
constitute a single instrument.
6. Miscellaneous.
4
30
(a) This Amendment shall be governed by and construed in accordance
with the laws of the State of Ohio, without reference to principles of conflict
of laws.
(b) This Amendment shall become effective upon the execution and
delivery hereof by NCCC, Hanifen, RMMF, GLCI, the Company and that number of the
Other Stockholders holding, in the aggregate, at least fifty-one percent (51%)
of the total number of issued and outstanding shares of Common Stock.
(c) Except as expressly set forth in this Amendment, (i) the execution,
delivery and performance by NCCC, GLCI, RMMF and Hanifen of this Amendment shall
not constitute or be deemed to be or construed as a waiver of any right, power
or remedy, or a waiver of any provision of the Stockholder Agreement or the
Purchase Agreement, or a waiver of any Potential Default or any Event of
Default, and (ii) nothing herein shall be deemed to entitle the Company to a
future consent to, or a future waiver, amendment, modification or other change
of, any of the terms, conditions, obligations, covenants or agreements contained
in the Stockholder Agreement or either Purchase Agreement in similar or
different circumstances. This Amendment is subject to the provisions of Section
13.05 of the Purchase Agreement.
(d) Pursuant to Section 13.13 of the Purchase Agreement, the Company
agrees to pay on demand all reasonable expenses of the Purchasers (including
reasonable fees, charges and disbursements of counsel) in connection with the
preparation, negotiation, execution and delivery of this Amendment.
[SIGNATURES ON NEXT PAGE]
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of
the day and year first above written.
MCE COMPANIES, INC.
By: /s/ Xxxx X. Xxxxxxx
---------------------------------
Xxxx X. Xxxxxxx, President
NATIONAL CITY CAPITAL CORPORATION
By: /s/ Xxxx X. XxXxxxx
----------------------------------
Xxxx X. XxXxxxx, Managing Director
XXXXXXX XXXXXX MEZZANINE FUND, L.P.
31
By: Xxxxxxx Xxxxxx Capital Partners LLP
Its: General Partner
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Xxxxxx X. Xxxxx, General Partner
GREAT LAKES CAPITAL
INVESTMENTS I, LLC
By:/s/ Xxxx X. XxXxxxx
-------------------------------------
Xxxx X. XxXxxxx, Member
ROCKY MOUNTAIN MEZZANINE
FUND II, L.P.
By: Rocky Mountain Capital Partners
LLP, its General Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxxx, General Partner
32
OTHER STOCKHOLDERS:
/s/ Xxxxxx X. Xxxxxx
--------------------------------------------------
XXXXXX X. XXXXXX, 28,298 shares
/s/ Xxxxx X. Xxxxxxx
--------------------------------------------------
XXXXX X. XXXXXXX, 14,388 shares
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------------------
XXXXXXX X. XXXXXX, individually (23,398 shares)
and on behalf of E5 Limited Partnership
(10,000 shares)
/s/ Xxxxxxx X. Xxxx
--------------------------------------------------
XXXXXXX X. XXXX, 3,051.2 shares
/s/ Xxxxx X. Xxxxx
--------------------------------------------------
XXXXX X. XXXXX, individually and on behalf of
Timbertop Investments II, Limited Partnership
(33,398 shares)
/s/ Xxxx X. Xxxxxxx
--------------------------------------------------
XXXX X. XXXXXXX, individually (28,398 shares)
and on behalf of Xxxxxxx Family Ventures, LLC
(5,000 shares)
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------------------
XXXXXXX X. XXXXXX, 254 shares
/s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------------
XXXXXXX X. XXXXXXX, individually (___ shares)
and on behalf of Solomon Investment Company,
LLC (_____ shares)
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------------------------
XXXXXX X. XXXXXXXX, 2,000 shares
