EXHIBIT 10.15
AGREEMENT
This Agreement is made and entered into as of the 15th day of April, 1997,
by and among XXXXX, INC., a Delaware corporation (formerly known as T.K.G.
Acquisition Corp.) (the "Company"), WARBURG, XXXXXX VENTURES, L.P., a Delaware
limited partnership ("Warburg"), NATIONSBANC INVESTMENT CORP., a Delaware
corporation ("NationsBanc"), and certain other individuals (the "Management
Investors," and, together with Warburg and NationsBanc, the "Investors").
W I T N E S S E T H :
WHEREAS, the Investors hold shares of the Company's common stock ("Common
Stock"), $.01 par value per share (including restricted shares of Common Stock
issued under the Company's 1996 Stock Incentive Plan), and shares of the
Company's Series A 12% Participating Convertible Preferred Stock, par value
$1.00 per share ("Preferred Stock"); and
WHEREAS, the Company and certain of the Investors have entered into that
certain T.K.G. Acquisition Corp. Stockholders Agreement (Common Stock and
Preferred Stock), dated as of February 29, 1996 (the "Purchase Stockholders
Agreement"), among the Company, Warburg, NationsBanc and certain Management
Investors (such Management Investors, together with Warburg and NationsBanc,
being the "Purchase Stockholders"); and
WHEREAS, the Company and certain of the Investors have entered into that
certain T.K.G. Acquisition Corp. Stockholders Agreement (Common Stock under
Stock Incentive Plan), dated as of February 29, 1996 (together with the Purchase
Stockholders Agreement, the "Stockholders Agreements"), among the Company,
Warburg and certain Management Investors; and
WHEREAS, the Company is contemplating an initial public offering (the
"Offering") of shares of its Common Stock pursuant to a Registration Statement
on Form S-1 (Reg. No. 333-23399) (the "Registration Statement"), including (i)
shares of Common Stock to be issued and sold by the Company and (ii) shares of
Common Stock that may be sold by the Company and NationsBanc upon the exercise
of the over-allotment options to be granted to the underwriters of the Offering
(the "NB Option Shares"); and
WHEREAS, in connection with the Offering and as more fully described on
Exhibit A hereto, the Company and the Investors desire that, upon the closing of
the Offering (the "Closing"), (i) a portion of the outstanding shares of
Preferred Stock be repurchased and canceled by the Company (the "Repurchase")
and (ii) the outstanding shares of Preferred Stock that are not repurchased and
canceled be converted into shares of Common Stock
(the "Conversion" and, together with the Offering and the Repurchase, the
"Transactions"); and
WHEREAS, in connection with the Transactions, the Investors agree to waive
certain rights that they may have under the Company's certificate of
incorporation and the Stockholder Agreements;
NOW, THEREFORE, in order to facilitate the Offering, which benefits the
Company and each Investor, and in consideration of the mutual promises,
covenants and conditions hereinafter set forth, the parties hereto hereby agree
as follows:
Section 1. The Repurchase and Conversion of the Preferred Stock.
(a) The Company agrees to purchase, and Warburg and NationsBanc agree to
sell, shares of Preferred Stock pursuant to the terms described on Exhibit A
upon the Closing of the Offering.
(b) The Company and the Investors agree to convert, upon the Closing of
the Offering and pursuant to the terms described on Exhibit A, the shares of
Preferred Stock remaining outstanding after the Repurchase into shares of Common
Stock.
(c) Each Investor agrees to deliver prior to the effectiveness of the
Registration Statement the certificate(s) representing the shares of Preferred
Stock held by him to the Company, together with a stock power duly endorsed in
blank, for repurchase or conversion in accordance with the terms of this
Agreement. Whether or not such certificates are delivered, the shares of
Preferred Stock shall cease to be outstanding as of the Closing, and the holders
thereof shall have thereafter only the right to receive cash and/or shares of
Common Stock in respect thereof, as described on Exhibit A.
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Section 2. Waiver of Certain Rights; Authorization of Actions.
(a) Each Investor hereby waives any rights such holder may have pursuant
to the Company's certificate of incorporation and Stockholders Agreements in
connection with the Transactions (i) to notice, written or otherwise, thereof
from the Company or any other Investor, including, in connection with the rights
listed below, (ii) to the repurchase or conversion of its Preferred Stock on
terms other than as described in this Agreement, (iii) to subscribe for equity
securities being sold by the Company, (iv) of first refusal upon the transfer of
Common Stock or Preferred Stock pursuant thereto, (v) to any right of co-sale in
connection therewith and (vi) to include any Registrable Securities (as defined
in each of the Stockholders Agreements, as applicable), other than the NB
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Option Shares, held by such holder in the proposed registration and underwriting
relating to the Offering. Such waiver shall not constitute a waiver of any other
rights of the Investors under the Stockholders Agreements.
(b) Each Investor hereby authorizes the Company to execute and deliver all
documents and take all other actions necessary or desirable in order to effect
the Transactions, including, without limitation, an amendment of the Company's
certificate of incorporation. Each Investor further agrees to vote in favor of
any such amendment of the Company's certificate of incorporation and to execute
such documents and other papers and take such further actions as may be
reasonably requested by the Company to carry out the provisions hereof and the
transactions contemplated hereby.
(c) The Company hereby waives its rights of first refusal under the
Purchase Stockholders Agreement with respect to the sale of the NB Option Shares
in the Offering. Such waiver shall not constitute a waiver of any other rights
of the Company under the Purchase Stockholders Agreement.
Section 3. Representations and Acknowledgments.
(a) Each Investor represents and warrants that it has, and will have at
Closing, good and marketable title to its shares of Preferred Stock to be
repurchased and/or converted pursuant to this Agreement, free and clear of any
security interest, pledge, mortgage, lien, charge, claim or other encumbrance.
(b) Each Investor represents and warrants to the Company as follows:
(i) The shares of Common Stock (other than the NB Option Shares) are
being acquired for such person's own account for investment and not with a view
towards the resale, transfer or distribution thereof, nor with any present
intention of distributing such securities. No other person has any right with
respect to or interest in the Common Stock being acquired by such person, nor
has such person agreed to give any person any such interest or right in the
future (other than the NB Option Shares).
(ii) Such person understands that the shares of Common Stock being
acquired in connection herewith (other than the NB Option Shares, which will be
registered as of the Closing) have not been registered under the Securities Act
of 1933, as amended (the "Securities Act"), nor qualified under any state
securities laws, and that they are being offered and sold pursuant to an
exemption from such registration and qualification based in part upon the
representations contained herein.
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(iii) Such person has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of the
investment(s) contemplated by this Agreement and is able to bear the economic
risk of investment in the Company (including a complete loss of investment).
(iv) Such person understands that absent registration under the
Securities Act and qualification under applicable state securities laws, the
shares of Common Stock may not be transferred without an opinion of counsel
reasonably satisfactory to the Company stating that an exemption from such
registration and qualification is available, and such person must otherwise bear
the economic risk of this investment indefinitely unless such person's
securities are registered pursuant to the Securities Act and qualified under
applicable state securities laws or an exemption from qualification is
available.
(v) The social security number or employer identification number set
forth under such person's name on the signature pages hereto is true and
correct.
(c) Each Purchase Stockholder acknowledges that the shares of Common Stock
it receives pursuant to this Agreement will be considered "Shares" under the
Purchase Stockholders Agreement.
Section 4. Termination.
This Agreement shall terminate at the close of business on May 31, 1997 if
the Closing shall not have occurred on or before such date. If this Agreement
is so terminated, all waivers, consents, rights, agreements and obligations
under this Agreement shall be of no further force and effect.
Section 5. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware without regard to choice of law principles
thereof.
(b) The headings of the sections of this Agreement are for convenience
only and shall not be deemed to constitute a part of this Agreement.
(c) This Agreement constitutes the entire understanding of the parties
hereto and supersedes all prior agreements or understandings among the parties
relating to the subject matter hereof. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with) the
written consent of the Company, Warburg, NationsBanc and the Management
Investors holding a majority of the shares of Preferred Stock held by the
Management Investors.
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(d) This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original, and such
counterparts together shall constitute only one instrument.
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first set forth above.
XXXXX, INC.
By:
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Name:
Title:
Address:
WARBURG, XXXXXX VENTURES, L.P.
By: Warburg, Xxxxxx & Co.,
General Partner
By:
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Name:
Title:
Address:
NATIONSBANC INVESTMENT CORP.
By:
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Name:
Title:
Address:
MANAGEMENT INVESTOR:
__________________________________
Name:
Address:
SSN:
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EXHIBIT A
DESCRIPTION OF THE REPURCHASE AND THE CONVERSION
1. The Company and the Investors would achieve in the Repurchase and the
Conversion a result economically equivalent to: (i) a pro rata redemption
of up to 800,000 shares of Preferred Stock for an aggregate of up to $80
million, and (ii) the conversion of the remaining shares of Preferred Stock
into Common Stock pursuant to the conversion formula set forth in the
Company's certificate of incorporation.
2. In order to facilitate the Offering, the Company and the Investors would
fix the conversion ratio for the above result determined by an equity value
of the Company based on the midpoint of the range of the initial public
offering price of the Common Stock that the underwriters of the Offering
determine (the "Midpoint Price"), as shall be set forth in the first
preliminary prospectus distributed to the public.
3. Warburg and NationsBanc would receive from the Company the cash described
in paragraph 1 above, with the balance of the consideration to which they
are entitled to receive pursuant to paragraph 1 being paid in shares of
Common Stock. Management Investors would receive in exchange for their
shares of Preferred Stock shares of Common Stock only. Any fractional
shares of Common Stock that would be issued to an Investor shall be paid in
cash based on the Midpoint Price.
4. In the Repurchase and the Conversion, Warburg and NationsBanc will receive
the cash described in paragraph 1 above and shares of Common Stock as
described above, pro rata, based on their relative holdings of shares of
Preferred Stock.
5. The Repurchase and the Conversion shall be contingent upon the Closing of
the Offering.
