FORM OF SALE PARTICIPATION AGREEMENT
March __, 2000
To: The Person whose name
and address are set forth
on the signature page hereof
Dear Sir or Madam:
You have entered into a Management Stockholder's Agreement, dated as
of the date hereof between Evenflo Company, Inc., a Delaware corporation (the
"Company"), and you (the "Stockholder's Agreement") relating to your ownership
and/or purchase of shares of the Class A Common Stock, par value $1.00 per
share, of the Company (the "Common Stock"). All capitalized terms used and not
defined herein shall have the meanings ascribed to them in the Stockholder's
Agreement. The "Investors," which term includes the KKR 1996 Fund, L.P. and its
affiliates, also have purchased shares of Common Stock and hereby agree with you
as follows, effective upon such purchase of Common Stock by you:
1. In the event that at any time the Investors (each, a "Selling
Party" and collectively, the "Selling Parties"), propose to sell for cash or any
other consideration any shares of Common Stock owned by them, in any transaction
other than a Public Offering (as defined in the Stockholder's Agreement) or a
sale to an affiliate of an Investor or a partner, executive or employee of
Kohlberg Kravis Xxxxxxx & Co. L.P. or an affiliate thereof who agrees in writing
to be bound by the provisions hereof (it being understood that if Common Stock
owned by an Investor is pledged to a financial institution as collateral for a
bona fide loan and such Common Stock is transferred to such financial
institution pursuant to the terms of the definitive agreements evidencing such
loan and pledge, such transfer shall not constitute a Proposed Sale hereunder),
the Investors will notify you or your Purchaser's Estate or Purchaser's Trust
(as such terms are defined in Section 2 of the Stockholder's Agreement), as the
case may be, in writing (a "Notice") of such proposed sale (a "Proposed Sale")
and the material terms of the Proposed Sale as of the date of the Notice (the
"Material Terms") promptly, and in any event not less than 15 days prior to the
consummation of the Proposed Sale and not more than 5 days after the execution
of the definitive agreement relating to the Proposed Sale, if any (the "Sale
Agreement"). If within 10 days of your or your Purchaser's Estate's or
Purchaser's Trust's, as the case may be, receipt of such Notice, the Selling
Party receives from you or your Purchaser's Estate or Purchaser's Trust, as the
case may be, a written request (a "Request") to include Common Stock held
pursuant to the Stockholder's Agreement by you or your Purchaser's Estate or
Purchaser's Trust, as the case may be, in the Proposed Sale (which Request shall
be irrevocable unless (a) there shall be a material adverse change in the
Material Terms or (b) if otherwise mutually agreed to in writing by you or your
Purchaser's Estate or Purchaser's Trust, as the case may be, and the Selling
Party), the
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Common Stock so held by you will be so included as provided herein; provided
that only one Request, which shall be executed by you or your Purchaser's Estate
or Purchaser's Trust, as the case may be, may be delivered with respect to any
Proposed Sale for all Common Stock held by you or your Purchaser's Estate or
Purchaser's Trust. Promptly after the consummation of the transactions
contemplated thereby, the Selling Party will furnish you, your Purchaser's Trust
or your Purchaser's Estate, as the case may be, with a copy of the Sale
Agreement, if any.
2. The number of shares of Common Stock which you or your
Purchaser's Estate or Purchaser's Trust, as the case may be, will be permitted
to include in a Proposed Sale pursuant to a Request will be (i) the product of
(A) the number of shares of Common Stock then owned by you or your Purchaser's
Estate or Purchaser's Trust, as the case may be, plus all shares of Common Stock
which you are then entitled to acquire under an unexercised Option (as defined
in the Stockholder's Agreement) to purchase shares of Common Stock, to the
extent such Option is then vested or would become vested as a result of the
consummation of the Proposed Sale by the Investors and (B) the Percentage (as
defined in the Stockholder's Agreement), multiplied by (ii) the quotient
determined by dividing (1) the aggregate number of shares of Common Stock
proposed to be sold in the Proposed Sale by (2) the sum of (x) the aggregate
number of shares of Common Stock owned by all parties who have rights pursuant
to this Agreement and (y) the aggregate number of shares of Common Stock held by
the Investors. If one or more holders of shares of Common Stock who have been
granted the same rights granted to you or your Purchaser's Estate or Purchaser's
Trust, as the case may be, hereunder elect not to include the maximum number of
shares of Common Stock which such holders would have been permitted to include
in a Proposed Sale (the "Eligible Shares"), the Investors, or such remaining
holders of shares of Common Stock, or any of them, may sell in the Proposed Sale
a number of additional shares of Common Stock owned by any of them equal to
their pro rata portion of the number of Eligible Shares not included in the
Proposed Sale, based on the relative number of shares of Common Stock then held
by each such holder, and such additional shares of Common Stock which any such
holder or holders propose to sell shall not be included in any calculation made
pursuant to the first sentence of this Paragraph 2 for the purpose of
determining the number of shares of Common Stock which you or your Purchaser's
Estate or Purchaser's Trust, as the case may be, will be permitted to include in
a Proposed Sale. The Investors may sell in the Proposed Sale additional shares
of Common Stock owned by any of them equal to any remaining Eligible Shares
which will not be included in the Proposed Sale pursuant to the foregoing.
3. If the Investors receive an offer from a person to purchase in a
Proposed Sale (a) at least a majority of the shares of Common Stock then
outstanding or (b) all or substantially all of the shares of Common Stock owned
by the Investors, and such offer is accepted by the Investors, then each of you,
your Purchaser's Estate and your Purchaser's Trust hereby agrees that, if
requested by the Investors (a "KKR Request"), you, your Purchaser's Estate and
your Purchaser's Trust will sell in such Proposed Sale on the same terms and
conditions (including, without limitation, time of payment and form of
consideration) as to be paid and given to the Investors, the number of shares of
Common Stock equal to the number of shares of Common Stock
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owned by you, your Purchaser's Estate and your Purchaser's Trust multiplied by
(x) in the case of a Proposed Sale described in clause (a) above, the percentage
of the then outstanding shares of Common Stock to which the Proposed Sale is
applicable or (y) in the case of a Proposed Sale described in clause (b) above,
the percentage of the shares of Common Stock owned by the Investors to which the
Proposed Sale is applicable.
4. (a) Except as may otherwise be provided herein, shares of Common
Stock subject to a Request will be included in a Proposed Sale pursuant hereto
and in any agreements with purchasers relating thereto on the same terms and
subject to the same conditions applicable to the shares of Common Stock which
the Selling Party proposes to sell in the Proposed Sale. Such terms and
conditions shall include, without limitation: the sale price; the payment of
fees, commissions and expenses; the provision of, and representation and
warranty as to, information requested by the Selling Party; and the provision of
requisite indemnifications; provided that any indemnification provided by you,
your Purchaser's Estate or your Purchaser's Trust shall be pro rata in
proportion with the number of shares of Common Stock to be sold.
(b) In the event of a transaction (such as a merger or
consolidation) involving the Company which results in a change of control
transaction but is not a Proposed Sale (a "Proposed Transaction"), you agree on
behalf of yourself, your Purchaser's Estate and your Purchaser's Trust to bear
your pro rata share of any fees, commissions, adjustments to purchase price,
expenses or indemnities borne by the Investors.
(c) Your pro rata share of any amount pursuant to Paragraphs 4(a)
and (b) shall be based upon the number of shares of Common Stock owned by you,
your Purchaser's Estate and your Purchaser's Trust plus the number of shares of
Common Stock you would have the right to acquire under unexercised options which
are then vested or would become vested as a result of the Proposed Sale or
Proposed Transaction.
(d) The Investors shall be entitled to estimate the amount of fees,
commissions, adjustments to purchase price, expenses or indemnities in
connection with any Proposed Sale or Proposed Transaction and to withhold a pro
rata share of such amounts from payments to be made to you, your Purchaser's
Estate and your Purchaser's Trust at the time of closing of such Proposed Sale
or Proposed Transaction; provided that, (i) such estimate shall not preclude the
Investors from recovering additional amounts from you, your Purchaser's Estate
and your Purchaser's Trust in respect of such fees, commissions, adjustments to
purchase price, expenses or indemnities and (ii) the Investors shall reimburse
you, your Purchaser's Estate and your Purchaser's Trust to the extent actual
amounts are ultimately less than the estimated amounts.
5. Upon delivering a Request, you or your Purchaser's Estate or
Purchaser's Trust, as the case may be, will, if requested by the Selling Party,
execute and deliver a custody agreement and power of attorney in form and
substance satisfactory to the Selling
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Party with respect to the shares of Common Stock which are to be sold by you or
your Purchaser's Estate or Purchaser's Trust, as the case may be, pursuant
hereto (a "Custody Agreement and Power of Attorney"). The Custody Agreement and
Power of Attorney will provide, among other things, that you or your Purchaser's
Estate or Purchaser's Trust, as the case may be, will deliver to and deposit in
custody with the custodian and attorney-in-fact named therein a certificate or
certificates representing such shares of Common Stock (duly endorsed in blank by
the registered owner or owners thereof) and irrevocably appoint said custodian
and attorney-in-fact as your or your Purchaser's Estate's or Purchaser's
Trust's, as the case may be, agent and attorney-in-fact with full power and
authority to act under the Custody Agreement and Power of Attorney on your or
your Purchaser's Estate's or Purchaser's Trust's, as the case may be, behalf
with respect to the matters specified therein.
6. Your or your Purchaser's Estate's or Purchaser's Trust's, as the
case may be, right pursuant hereto to participate in a Proposed Sale shall be
contingent on your or your Purchaser's Estate's or Purchaser's Trust's, as the
case may be, strict compliance with each of the provisions hereof and your or
your Purchaser's Estate's or Purchaser's Trust's, as the case may be,
willingness to execute such documents in connection therewith as may be
reasonably requested by the Selling Party.
7. The obligations of the Investors hereunder shall extend only to
you or your Purchaser's Estate or Purchaser's Trust, as the case may be, and no
other of your or your Purchaser's Estate's or Purchaser's Trust's, as the case
may be, successors or assigns shall have any rights pursuant hereto. The
provisions of this Agreement shall apply, to the full extent set forth herein
with respect to the Common Stock, to any and all shares of capital stock which
may be issued in respect of, in exchange for, or substitution of the Common
Stock, by reason of any stock dividend, split, reverse split, combination,
recapitalization, liquidation, reclassification, merger, consolidation or
otherwise.
8. This Agreement shall terminate and be of no further force and
effect on the fifth anniversary of the first occurrence of a Public Offering (as
defined in the Stockholder's Agreement).
9. All notices and other communications provided for herein shall be
in writing and shall be deemed to have been duly given when delivered to the
party to whom it is directed:
(a) If to the Investors to it at the following address:
x/x Xxxxxxxx Xxxxxx Xxxxxxx & Co.
0 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxxxxx
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with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxx, Esq.
(b) If to you, at the address set forth on the signature page
hereof;
(c) If to your Purchaser's Estate or Purchaser's Trust, at the
address provided to such parties by such entity;
or at such other address as any of the above shall have specified by notice in
writing delivered to the others by certified mail, overnight delivery or
telecopy.
10. The laws of the State of New York shall govern the
interpretation, validity and performance of the terms of this Agreement. No
suit, action or proceeding with respect to this Agreement may be brought in any
court or before any similar authority other than in a court of competent
jurisdiction in the State of New York, as the Selling Parties may elect in their
sole discretion, and you hereby submit to the non-exclusive jurisdiction of such
courts for the purpose of such suit, proceeding or judgment. You hereby
irrevocably waive any right which you may have had to bring such an action in
any other court, domestic or foreign, or before any similar domestic or foreign
authority. You hereby irrevocably and unconditionally waive trial by jury in any
legal action or proceeding in relation to this Agreement and for any
counterclaim therein.
11. Notwithstanding any other provision of this Agreement, none of
the officers or directors of KKR or any general partner, limited partner or
member of any affiliate or future general or limited partner or member of any
affiliate of KKR, shall have any personal liability for performance of any
obligation of such entity under this Agreement.
12. If KKR 1996 Fund, L.P. or [ ] transfers its interest in the
Company to an affiliate, such affiliate shall assume the obligations hereunder
of KKR 1996 Fund, L.P. or [ ], as the case may be.
It is the understanding of the undersigned that you are aware that
no Proposed Sale presently is contemplated and that such a sale may never occur.
If the foregoing accurately sets forth our agreement, please
acknowledge your acceptance thereof in the space provided below for that
purpose.
Very truly yours,
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THE INVESTORS:
KKR 1996 FUND L.P.
By: KKR Associates 1996 L.P., its general
partner
By: KKR 1996 GP LLC, its general partner
By: _____________________________________
Name: Xxxx Xxxxxxxxxx
[ ]
By: _____________________________________
Name:
Accepted and agreed to:
By: ___________________________
___________________________
Address
