EXHIBIT 10.9
EXECUTION
INVESTOR STOCKHOLDERS AGREEMENT
THIS INVESTOR STOCKHOLDERS AGREEMENT, dated as of October 5, 2000
(this "Agreement") is made by and among Xxxxxxx Holdings, Inc., a Delaware
corporation (the "Company"), Onex American Holdings LLC, a Delaware limited
liability company ("Onex"), J2R Partners VII, a Minnesota general partnership
("J2R") and the stockholders listed on the signature pages hereto and such other
stockholders of the Company as may, from time to time, become parties to this
Agreement in accordance with the terms and provisions hereof.
WHEREAS, the authorized capital stock of the Company consists of
75,000 shares of Class A Common Stock, par value $.01 per share (the "Class A
Common"), 150,000 shares of Class B Common Stock, par value $0.01 per share (the
"Class B Common"), 40,000 shares of Class C Common Stock, par value $0.01 per
share (the "Class C Common"), 125,000 shares of Class D-1 Common Stock, par
value $0.01 per share (the "Class D-1 Common"), 25,000 shares of Class D-2
Non-Voting Common Stock, par value $0.01 per share (the "Class D-2 Common"), and
25,000 shares of Class E Common Stock, par value $0.01 per share (the "Class E
Common").
WHEREAS, the Company, Xxxx, X0X and certain other Stockholders are
parties to a Stock Purchase Agreement, dated as of the date hereof (the"Stock
Purchase Agreement"), pursuant to which such Stockholders have acquired their
Common Stock (as defined).
WHEREAS, the Company, Xxxx, X0X, and certain other investors are
parties to a Registration Agreement (the "Registration Agreement"), dated as of
the date hereof.
WHEREAS, in order to provide for the stability of the Company, the
parties wish to enter into this Agreement.
WHEREAS, certain terms used in this Agreement are defined in Article
I of this Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the parties agree as follows:
ARTICLE 1
Certain Definitions
1.1 Certain Definitions. when used in this Agreement the
following terms shall have the respective meanings shown:
"Affiliate" shall mean, with respect to any Person, any of (a) a
director or executive officer of such Person, (b) a spouse, parent, sibling or
descendant of such Person (or spouse, parent,
sibling or descendant of any director or executive officer of such Person), and
(c) any other Person that, directly or indirectly, controls or is controlled by
or is under common control with such Person, including, without limitation,
investment partnerships or funds that are sponsored, managed or controlled,
directly or indirectly, by such Person or its Affiliates, and portfolio
companies organized or managed by HCI or its Affiliates. For the purpose of this
definition and the definition of Independent Third Party, "control" (including
with correlative meanings, the terms "controlling," "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or agency or otherwise.
"Xxxxx Group" means BCP II Affiliates Fund Limited Partnership.
Xxxxx Capital II Limited Partnership, Xxxxx Capital Partners III Limited
Partnership, BCP III Special Affiliates Limited Partnership and BCP III
Affiliates Fund Limited Partnership and their respective Affiliates.
"Business Day" means any day which is neither a Saturday or Sunday
nor a legal holiday on which banks are authorized or required to be closed in
New York City.
"Class D Common" means collectively the Class D-1 Common and the
Class D-2 Common.
"Closing" shall mean the closing of the transactions contemplated by
the Stock Purchase Agreement.
"Closing Date" means the date on which the transactions contemplated
by the Stock Purchase Agreement shall be consummated.
"Co-Investment Agreement" means that certain Co-Investment
Agreement, dated as of March 30, 1990, between Onex TMB Investments Inc., an
Ontario corporation, and J2R Corporation, a Delaware corporation, as amended
from time to time.
"Common Stock" means (i) any Class A Common, Class B Common, Class C
Common, Class D-1 Common, Class D-2 Common and Class E Common purchased, issued
to or otherwise acquired by any Stockholder, and (ii) any equity securities
issued or issuable, directly or indirectly, with respect to the securities
referred to in clause (i) above by way of stock dividend or stock split,
exchange or conversion, or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. As to any
particular shares constituting Common Stock, such shares will continue to be
Common Stock in the hands of any holder of such Common Stock (other than
purchasers pursuant to a Public Sale).
"Company" includes any successor to the Company resulting from any
merger, consolidation or other reorganization of or including the Company.
"HCI" means Hidden Creek Industries, a New York general partnership.
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"Heavy Duty" means Heavy Duty Holdings, L.L.C., a Delaware limited
liability company.
"Independent Third Party" means any Person who, immediately prior to
the contemplated transaction, does not own in excess of 5% of the Company's
common stock on a fully-diluted basis (a "5% Owner") , who is not controlling,
controlled by or under common control with any such 5% Owner and who is not the
spouse or descendent (by birth or adoption) of any such 5% Owner or a trust for
the benefit of such 5% Owner and/or such other Persons.
"Institutional Investor" means a "qualified institutional buyer" as
defined in Rule 144A promulgated under the Securities Act (codified at 17 C.F.R.
Section 230.144A (1990)).
"NEP" means Norwest Equity Partners VII, LP, a Minnesota limited
partnership.
"Other Stockholder" means any holder of Common Stock which is bound
by and subject to this Agreement other than (i) Onex and its Affiliates and (ii)
the transferees of Onex or its Affiliates that acquire all of the Common Stock
held by Onex and its Affiliates as of the date hereof.
"Person" means an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an unincorporated
organization or a government or any department or agency thereof.
"Public Company" means a company which has effected a Public
Offering.
"Public Offering" means a public offering and sale of Common Stock
pursuant to an effective registration statement under the Securities Act.
"Public Sale" means any sale of Common Stock to the public pursuant
to an offering registered under the Securities Act or to the public through a
broker, dealer or market maker pursuant to the provisions of Rule 144 (or any
similar provision then in force) adopted under the Securities Act.
"Qualified Public Offering" means the sale in an underwritten public
offering registered under the Securities Act of shares of the Common Stock
consisting of at least 20% of the Common Stock determined on a fully diluted
basis.
"Sale of the Company" means the sale of the Company pursuant to
which such party or parties acquire (i) capital stock of the Company possessing
the voting power to elect a majority of the Company's board of directors
(whether by merger, consolidation, recapitalization, reorganization or sale of a
majority of the Company's outstanding Common Stock and Common Stock equivalents)
or (ii) all or substantially all of the Company's consolidated assets.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Stockholder" means any holder of Common Stock which is bound by and
subject to this Agreement.
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"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity of
which (i) if a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the partnership or other similar ownership interest thereof is at the time
owned or controlled, directly or indirectly, by that Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association or other business entity if
such Person or Persons shall be allocated a majority of limited liability
company, partnership, association or other business entity gains or losses or
shall be or control a majority of the managers or general partners of such
limited liability company, partnership, association or other business entity.
ARTICLE 2
Board of Directors of the Company
2.1 Board of Directors. (a) From and after the Closing Date
and until the provisions of this Article 2 cease to be effective, each of the
Stockholders will vote all of its voting stock of the Company, and will take,
and will cause any Persons controlled by it to take, all other necessary or
desirable actions within its control (in its capacity as a stockholder of the
Company), and the Company will take all necessary or desirable action within its
control, in order to cause:
(i) the authorized number of directors on the Company's board of
directors (the "Board") to be initially established at five (5) directors,
which may be increased by affirmative vote of a majority of the directors
of the Board, provided that if the number of directors on the Board shall
be increased to more than seven (7) directors, the rights of NEP and the
Xxxxx Group to designate Board representatives hereunder shall be adjusted
to approximate such Stockholder's relative proportionate ownership of
Common Stock;
(ii) the election to the Board of:
(A) two (2) representatives designated by HCI (by written
notice to the Company, which shall furnish copies of such notice to each
other party hereto), who shall initially be X.X. Xxxxxxx and Xxxx Read
(the "HCI Directors");
(B) one (1) representatives designated by Onex (by written
notice to the Company, which shall furnish copies of such notice to each
other party hereto), who shall initially be Xxxx Xxxxx (the "Onex
Director");
(C) subject to paragraph (v) below, one (1) representative
designated by the Xxxxx Group (by written notice to the Company, which
shall furnish copies of such notice
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to each other party hereto), who shall initially be C. Xxxxxx Xxxxxxxx
(the "Xxxxx Director"); and
(D) subject to paragraph (vi) below, one (1) representative
designated by NEP (by written notice to the Company, which shall furnish
copies of such notice to each other party hereto), who shall initially be
Xxxx Xxxxxxx (the "NEP Director").
(iii) at the written request of a Stockholder with the right to
designate a Board representative, the removal from the Board (with or
without cause) of any representative designated by such Stockholder, but
only upon such written request and under no other circumstances;
(iv) in the event that any representative designated hereunder by a
Stockholder for any reason ceases to serve as a member of the Board during
his or her term of office, the resulting vacancy on the Board to be filled
by a representative designated by such Stockholder as provided hereunder;
(v) the rights of the Xxxxx Group to designate the Xxxxx Director
under this Section 2.1(a) shall terminate at such time as the Xxxxx Group
collectively hold in aggregate less than 5% of the total outstanding
Common Stock of the Company; and
(vi) the rights of NEP to designate a NEP Director under this
Section 2.1(a) shall terminate at such time as the NEP holds in aggregate
less than 5% of the total outstanding Common Stock of the Company.
(b) The Company shall pay the reasonable out-of-pocket expenses
incurred by each director in connection with attending the meetings of the Board
and any committee thereof.
(c) The provisions of this Article 2 will terminate automatically
and be of no further force and effect upon a Qualified Public Offering.
ARTICLE 3
Covenants of the Company and Other Matters
3.1 Transactions with Affiliates. Subject to Section 4.2, neither
the Company nor any of its Subsidiaries shall enter into any material
transaction with a Stockholder or any of its Affiliates, including, without
limitation, the purchase, sale or exchange of property or the rendering of any
service, but excluding any dividend or other distribution to Stockholders in
their capacity as such unless either:
(a) the terms of the transaction are no less favorable to the
Company or its Subsidiaries, as the case may be, than are obtainable by it in a
comparable arm's length transaction with a Person not such Stockholder or any of
its Affiliates, or
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(b) the Stockholders holding at least a majority of the shares of
Common Stock held by all Stockholders (excluding for purposes of determining a
majority, such Stockholder and its Affiliates) give their written consent
thereto.
The Company shall give notice to the Stockholders at least 20
business days in advance of any such transaction. The Company may, however,
without complying with this Section 3.1, pay an annual management and advisory
fee to HCI or Heavy Duty (or any successor to HCI or Heavy Duty), pursuant to
the Management Agreement, dated as of the date hereof, by and between the
Company and HCI. Moreover, the Stockholders acknowledge that the Company will
pay HCI a $1,500,000 closing fee upon the consummation of the transactions
contemplated herein.
3.2 Mergers, Consolidations, Etc. The Company shall not merge or
consolidate with another corporation, enter into a share exchange, or sell all
or substantially all of its assets to another Person, if pursuant thereto any
Stockholder shall receive securities as full or partial consideration for its
Common Stock, unless all holders of a class of Common Stock (a) shall have the
right to receive the same securities as each holder of such class of Common
Stock, in each case in proportion to their respective holdings of Common Stock
(assuming the conversion, exchange or exercise of all securities convertible
into or exchangeable, or exercisable for Common Stock) and on terms consistent
with the rights and preferences set forth in the Company's Certificate of
Incorporation as is reasonably determined by the holders of at least a majority
of the shares of Class D Common voting as a separate class, the holders of a
majority of the Class B Common voting as a separate class, and the holders of at
least a majority of the shares of Class C Common voting as a separate class, and
if such classes cannot agree, by an investment banking firm of national
recognition mutually agreeable to such parties, whose determination shall be
conclusive, and (b) who are parties to this Agreement enter into a stockholders
agreement containing substantially similar rights and preferences as set forth
in this Agreement.
3.3 By-laws. The by-laws of the Company shall at all times
provide, to the extent permitted by law, that:
(a) notice of every meeting of the Board shall be given, in the
same manner as is provided in Section 9.3, to each director not less than one
day prior to the meeting;
(b) a special meeting of the Board may be called, to be held at
the registered office of the Company, by holders of at least 20% of the
Company's Common Stock, upon at least 10 days' notice, given in the same manner
as is provided in Section 9.3;
(c) any director may require the Company, to include in the
business to be discussed at the meeting any one or more proposals submitted by
such director;
(d) directors may participate in directors' meetings by telephone;
(e) directors may take action by their unanimous written consent;
(f) notice of any meeting may be waived by any director; and
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(g) any action to be taken by the Board will require at least a
majority of the directors of the Company.
3.4 Financial Information. So long as any Stockholder owns any
Common Stock, the Company shall furnish to such Stockholder the following:
(a) as soon as available, and in any event within 90 days
after-the end of each fiscal year of the Company, duplicate copies of the
audited financial statements of the Company and its Subsidiaries reported on by
a firm of independent certified public accountants of national recognition,
including a consolidated balance sheet of the Company and its Subsidiaries as at
the end of such fiscal year, and consolidated statements of income and of cash
flow of the Company and its Subsidiaries for such fiscal year and the related
footnotes thereto, and stating in comparative form the figures as of the end of
and for the previous fiscal year, accompanied by a report thereon containing an
opinion by such independent certified public accountants that the financial
statements have been prepared in accordance with generally accepted accounting
principles consistently applied, except as may be noted otherwise; provided that
with respect to fiscal year 2000, such statements shall only cover a period
beginning on the date hereof;
(b) as promptly as practicable, and in any event within 45 days
after the end of each fiscal quarter of the Company, duplicate copies of its
quarterly, unaudited financial statements prepared by the Company, including a
consolidated balance sheet of the Company and its Subsidiaries as at the end of
such fiscal quarter, and consolidated statements of income and of cash flow of
the Company and its Subsidiaries for such fiscal quarter and year to date
period, and stating in comparative form the figures as of the end of and for the
corresponding fiscal quarter and year to date period in the previous fiscal
year, in all cases such financial statements shall have been prepared in
accordance with generally accepted accounting principles consistently applied,
except as otherwise noted;
(c) copies of all press releases issued by the Company;
(d) except as otherwise required by law or judicial order or
decree or by any governmental agency or authority, each Stockholder entitled to
receive information regarding the Company and its Subsidiaries under this
Section 3.4 shall use its best efforts to maintain the confidentiality of all
nonpublic information obtained by it hereunder which the Company has reasonably
designated as proprietary or confidential in nature; provided that each such
Stockholder may, to the extent required by law, regulatory authority or rating
agency, disclose such information in connection with the sale or transfer of
Common Stock if such Stockholder's transferee agrees in writing to be bound by
the provisions hereof; and
(e) such additional financial information as may be reasonably
requested by any Stockholder who then has a right to designate a member of the
Board pursuant to Section 2.1 hereof.
3.5 Action by Stockholders. The Stockholders shall from time to
time vote their Common Stock and take such actions reasonably within their
control as may be required in order to cause the Company:
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(a) to comply with the provisions of this Agreement; and
(b) to take all other actions required or permitted to be taken by
the Company in order to permit the Company to purchase Common Stock pursuant to
the terms of this Agreement (which may include the revaluation of assets),
provided such action is not contrary to any applicable law and such action would
not cause a default by the Company or any of its Subsidiaries under any
agreements of the Company or any of its Subsidiaries.
3.6 Action by the Company to Purchase Stock. The Company shall
take all actions necessary to permit the purchase of Common Stock pursuant to
this Agreement (which may include the revaluation of assets), provided such
action is not contrary to any applicable law and such action would not cause a
default by the Company or any Subsidiary under any agreements with the Company
or any Subsidiary.
3.7 Consents to Stock Transfers Pursuant to this Agreement. The
Stockholders hereby consent, to the extent required by the Company's Certificate
of Incorporation, to any transfer of Common Stock made as permitted by this
Agreement and shall execute any further formal consents which counsel for the
Company may determine to be reasonably necessary for that purpose.
3.8 Stock Acquired Pursuant to Warrants and Options. The
Stockholders hereby agree that all Common Stock acquired by any of them whether
pursuant to the exercise of all warrants, rights or options granted, or
otherwise issued by the Company to the Stockholders, either prior to or
following the date of this Agreement, shall be subject to the terms of this
Agreement in all respects.
3.9 Amendments to Certificate of Incorporation. No Stockholder
shall, nor shall it permit any of its Affiliates to, vote any Common Stock owned
by it or over which it has the power to vote in favor of any amendment to or
restatement of the Company's Certificate of Incorporation, if such amendment or
restatement would alter the rights and preferences of any class of Common Stock
held by the Stockholders so as to affect them adversely, but shall not so affect
the other classes of Common Stock, without the express consent of the holders of
at least 80% of the shares of the adversely affected class of Common Stock held
by such Stockholders.
3.10 High Voting Stock upon IPO. The Stockholders hereby agree to
approve and to raise no objection to the implementation, at the election of Onex
and in connection with an initial Public Offering, of a high vote common stock
to be exchanged for the Common Stock that is held by the Stockholders. In the
event that such high vote stock is issued, the Stockholders agree to enter into
a voting agreement which provides that each Stockholder, so long as such
Stockholder holds such shares, will vote for those Board representatives that
are designated by Onex or its Affiliates and which constitute a majority of the
Board. Such voting arrangement will terminate at such time as Onex and its
Affiliates cease to own in the aggregate at least 10% of the shares of common
stock held at the time of the initial Public Offering.
ARTICLE 4
Restrictions on Transfer of Common Stock
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4.1 Transfer of Stockholder Stock. No Other Stockholder shall
sell, transfer, assign, pledge, exchange or otherwise dispose of (a "Transfer")
any interest in Common Stock except pursuant to the provisions of this Article
4, Article 5, Article 7, or pursuant to a Public Sale; provided that as between
Onex and J2R, the provisions of the Co-Investment Agreement will govern any
"transfer" (as defined for this purpose in the Co-Investment Agreement) and the
provisions of Article 4 and Article 5 of this Agreement will not apply. Each
Other Stockholder agrees not to consummate any Transfer pursuant to the
provisions of Section 4.2 until at least the minimum number of days required by
Section 4.2 after the delivery of such Other Stockholder's Offer Notice (as
hereinafter defined), unless the parties to the Transfer have been finally
determined pursuant to this Article 4 prior to the expiration of such period.
4.2 First Offer Right.
(a) In addition to Transfers pursuant to Article 5, Article 7, or
a Public Sale, any Other Stockholder may Transfer an interest in Common Stock by
complying with this Section 4.2. At least 45 days prior to making any Transfer
by any Other Stockholder of any Common Stock pursuant to a bona fide offer from
an Independent Third Party (other than Pursuant to Article 5 and Article 7 or a
Public Sale), the transferring Other Stockholder (the "Transferring
Stockholder") will deliver a written notice (the "Offer Notice") to the
Stockholders and to the Company. The Offer Notice will disclose the proposed
number of shares of Common Stock (the "Subject Shares") to be transferred,
identity of the proposed purchasers, and, in reasonable detail, the proposed
terms and conditions of the Transfer. First, the Stockholders other than the
Transferring Stockholder (collectively the "First Offer Stockholders") may elect
to purchase all (but not less than all) of the Common Stock specified in the
Offer Notice at the price in cash and on the terms specified therein on a pro
rata basis determined by the number of shares of Common Stock then held by the
First Offer Stockholders electing to make such purchase by delivering written
notice of such election to the Transferring Stockholder as soon as practical but
in any event within 20 days after the delivery of the Offer Notice; provided
that if less than all of the First Offer Stockholders elect to make such
purchase, the remaining Subject Shares shall be reoffered to those Stockholders
who have elected to make such purchase until an election to purchase all of the
Subject Shares has been made. If the First Offer Stockholders have not elected
to purchase all of the Subject Shares within such 20-day period, the Company may
elect to purchase all (but not less than all) of the Subject Shares at the price
in cash and on the terms specified therein by delivering written notice of such
election to the Transferring Stockholder as soon as practicable, but in any
event within 30 days after delivery of the Offer Notice. If the Company or the
First Offer Stockholders have elected to purchase all (but not less than all) of
the Subject Shares from the Transferring Stockholder, the transfer of such
shares will be consummated as soon as practical after the delivery of the
election notice, but in any event within 75 days after delivery of the Offer
Notice (the "Consummation Period"). If any of the Subject Shares to be purchased
by any holder of any Class D-2 Common are voting securities, at the request of
any holder of Class D-2 Common the Company will exchange for such securities
other securities which are non-voting, convertible into such securities on the
same terms as those on which the Class D-2 Common is convertible into Class D-1
Common and otherwise identical to such securities in all respects. If neither
the Company nor the First Offer Stockholders have elected to purchase all of the
Subject Shares being offered or if, the Company or the First Offer Stockholders
elect to purchase all of the Subject Shares but do not consummate the purchase
within the Consummation Period, the
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Transferring Stockholder may, within 45 days after the expiration of the
Consummation Period, transfer the Subject Shares to one or more third parties at
a price in cash and on other terms no more favorable to the transferees than
offered to the Company and the First Offer Stockholders in the Offer Notice;
provided that prior to such Transfer, such transferees shall have agreed in
writing to be bound by the provisions of this Agreement. Any Subject Shares not
transferred within such 45-day period will be subject to the provisions of this
Section 4.2(a) upon subsequent transfer and the Transferring Stockholder will
not be entitled to deliver another Offer Notice for 90 days after the
Transferring Stockholder has again become subject to this Section 4.2(a).
(b) The Stockholders may transfer any of their respective rights
to purchase the Subject Shares under Section 4.2(a) to any of their respective
Affiliates; provided that prior to such transfer, such Affiliate shall have
agreed in writing to be bound by the provisions of this Agreement.
4.3 Permitted Transfers.
(a) The restrictions contained in this Article 4 and in Article 5
shall not apply with respect to (i) any Transfer of Common Stock by any
Stockholder to or among its Affiliates or (ii) any Transfer of Common Stock by
any Stockholder to any other Stockholder; provided that the restrictions
contained in this Article 4 and in Article 5 shall continue to be applicable to
the Common Stock after any such Transfer and provided further that the
transferees of such Common Stock shall have agreed in writing to be bound by the
provisions of this Agreement affecting the Common Stock so Transferred.
(b) In the case of any Transfer pursuant to Section 4.3(a)(i)
above, a transferee may at any time, and shall forthwith in the event that such
transferee ceases to be an Affiliate of the transferor (other than a transferee
pursuant to Section 4.3(a)(ii) above), transfer back to such transferor all of
the Common Stock held by it.
ARTICLE 5
Tag-Along, First Offer and Drag-Along Rights
5.1 Tag-Along Right.
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(a) Except as provided in Section 5.4, if at any time Onex or its
Affiliate proposes to Transfer (other than a pledge) any or all of its Common
Stock to any person other than an Affiliate (a "Disposition"), Onex or its
Affiliates, as the case may be (the "Disposing Stockholder"), shall, at least 30
days prior to the consummation of the Disposition, give notice (a "Disposition
Notice") to the Other Stockholders (the "Nondisposing Stockholders") describing
the terms and conditions of the Disposition in reasonable detail, including the
proposed price per share, the method of payment, the anticipated closing date
and the identity of the proposed purchaser, and stating that each of the
Nondisposing Stockholders may elect to participate in such Disposition, at a
price per share and on other terms consistent with the rights and preferences of
the Common Stock set forth in the Company's Certificate of Incorporation (but in
any case determined without consideration of voting rights or lack thereof) as
is reasonably determined by the holders of at least a majority of the shares of
Class D Common voting as a separate class, the holders of at least a majority of
the shares of Class B Common voting as a separate class, and the holders of at
least a majority of the shares of Class C Common voting as a separate class, and
if such classes cannot agree, by an investment banking firm of national
recognition mutually agreeable to such parties, whose determination shall be
conclusive.
(b) The election pursuant to subsection (a) shall be exercised by
notice to the Disposing Stockholder given within the time period specified in
the Disposition Notice, which time period shall not be less than 10 Business
Days after such Disposition Notice is given. If any Nondisposing Stockholder
gives notice of its election to sell, it shall be obligated to sell the Common
Stock specified in its notice upon the terms and subject to the conditions
specified in subsection (a) to the proposed purchaser, conditional upon the
closing of the Disposition.
(c) If the purchaser pursuant to the Disposition has a specified
limited number of shares of Common Stock which it is willing to purchase in the
aggregate, each of the Nondisposing Stockholders shall have the right to sell to
the purchaser up to that number of shares of Common Stock owned by such
Nondisposing Stockholder which is in the same proportion to its total ownership
of Common Stock as the number of shares of the Common Stock being sold by the
Disposing Stockholder is to the Disposing Stockholder's total ownership of
Common Stock (in each case, assuming the conversion, exchange or exercise of all
securities convertible into or exchangeable or exercisable for Common Stock).
(d) If any Nondisposing Stockholder does not elect to sell the
full number of shares of Common Stock which it is entitled to sell pursuant to
this Section 5.1, or if the aggregate number of shares of the Company's Common
Stock which the Nondisposing Stockholders and any other stockholders of the
Company are entitled to sell is less than the number of shares of the Company's
Common Stock which the purchaser is willing to purchase, the remaining
Nondisposing Stockholders shall be entitled to sell additional shares of Common
Stock pro rata (as described in subparagraph (c) above) to the number of shares
of Common Stock owned by each of them to make up the aggregate number of shares
of Common Stock the purchaser is willing to purchase.
(e) Prior to transferring its Common Stock pursuant to this
Section 5.1, the Disposing Stockholder shall cause the prospective transferee to
be bound by this Agreement and such transferee shall be deemed an "Other
Stockholder" for purposes hereunder unless such transferee is acquiring all of
the Common Stock held by Onex and its affiliates as of the date hereof.
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5.2 First Offer Right. Prior to making any Disposition of any or
all of its Common Stock, the Disposing Stockholder shall deliver a written
notice (an "First Offer Notice") to the Company and the Other Stockholders. The
First Offer Notice shall disclose in reasonable detail the proposed number of
shares to be transferred, and, if known, the proposed terms and conditions of
the Transfer and, if known, the identity of the prospective transferee(s). One
or more of the Other Stockholders may elect to offer to purchase their Pro Rata
Share (as defined) of all (but not less than all) of such offered shares
specified in the First Offer Notice by delivering written notice to the
Disposing Stockholder of such election within 15 days after the delivery of the
First Offer Notice (the "Election Period"), setting forth the price per share
and the terms and conditions of such offer to purchase (the "Election Notice").
The purchase price specified in any Election Notice shall be payable solely in
cash at the closing of the transaction or in installments over time. The
Disposing Stockholder may, within 90 days after the expiration of the Election
Period (i) transfer such shares to one or more third parties, provided that if
an Election Notice has been delivered, such transfer may only be at a price
greater than the price per share specified in the Election Notice and on other
terms no more favorable to the transferees thereof than offered to the Other
Stockholder in the Election Notice, (ii) transfer such shares pursuant to the
Election Notice to those Other Stockholders who delivered such Election Notice,
or (iii) elect not to transfer such shares. Any shares of Common Stock not
transferred within such 90-day period shall be subject to the terms of this
Section 5.2 prior to any subsequent Transfer. Any such shares of Common Stock to
be transferred pursuant clause (i) above shall be subject to the tag-along
rights set forth in Section 5.1 above. If the Disposing Stockholder has elected
to accept the offer to purchase such shares set forth in the Election Notice,
the transfer of such shares shall be consummated as soon as practical after the
delivery of such acceptance notice to the Other Stockholders, but in any event
within 15 days after the delivery of such acceptance notice. Each Other
Stockholder's "Pro Rata Share" shall be based upon such Stockholder's
proportionate ownership of all shares of Common Stock held by the Other
Stockholders who have participated in the delivery of the Election Notice.
5.3 Drag-Along Right.
(a) Subject to paragraph (b) below, if the Board approves a Sale
of the Company (the "Approved Sale"), the Stockholders will consent to and raise
no objections to the Approved Sale of the Company and (i) if the Approved Sale
of the Company is structured as a sale of stock, the Stockholders will agree to
sell all of their Common Stock and rights to acquire Common Stock on the terms
and conditions approved by the Board, (ii) if the Approved Sale of the Company
is structured as a merger, consolidation or other reorganization, the
Stockholders will vote in favor thereof (to the extent they are entitled to
vote) and will not exercise any dissenters' rights of appraisal they may have
under Delaware law, and (iii) if the Approved Sale of the Company is structured
as a sale of all or substantially all of the Company's consolidated assets, the
Stockholders will vote in favor thereof (to the extent they are entitled to
vote). The Stockholders will use their best efforts to cooperate in the Approved
Sale of the Company and will take all necessary and desirable actions in
connection with the consummation of the Approved Sale of the Company as are
reasonably requested by the Board, including, but not limited to, the provision
of representations and warranties or indemnifications; provided that the
Stockholders shall not be required to incur any out-of-pocket expenses in
connection with such Approved Sale of the Company which are not reimbursed by
the Company; and provided further that no Stockholder shall be required to
provide substantively
12
different representations and warranties or indemnification than any other
Stockholder and that each Stockholder's obligations thereunder shall be several
and limited to the proceeds received by such Stockholder in connection with such
Approved Sale.
(b) The obligations of the Stockholders with respect to the
Approved Sale of the Company are also subject to the satisfaction of the
following conditions: (i) upon the consummation of the Approved Sale of the
Company, all of the holders of each class of Common Stock will receive the same
form and amount of consideration for their Common Stock as all other holders of
the same class of Common Stock, or if any Stockholders are given an option as to
the form and amount of consideration to be received, all holders of the same
class of Common Stock will be given the same option; (ii) the price per share of
Common Stock will be payable in cash or publicly traded securities and will be
on terms consistent with the rights and preferences set forth in the Company's
Certificate of Incorporation as is reasonably determined by the holders of at
least a majority of the shares of Class D common voting as a separate class, the
holders of at least a majority of the Class B Common voting as a separate class,
and the holders of at least a majority of the shares of Class C Common voting as
a separate class, and if such classes cannot agree, by an investment banking
firm of national recognition mutually agreeable to such parties, whose
determination shall be conclusive; and (iii) if the Approved Sale is to a Person
that is not an Independent Third Party, the holders of a majority of the Common
Stock held by the Other Stockholders may request that an appraisal of the fair
market value of the securities to be sold and/or received by the Other
Stockholders in connection with such Approved Sale be made by an investment
banking firm of national recognition mutually agreeable to such parties, whose
determination shall be binding upon the Company and the Other Stockholders, and
it shall be a condition to the consummation of such Approved Sale to a Person
that is not an Independent Third Party that such Person pay as consideration to
the Other Stockholders the fair market value as determined pursuant to such
appraisal (if such appraisal results in a valuation greater than the valuation
of the consideration proposed to be delivered in connection with such Approved
Sale, the Company shall pay the costs of such appraisal, otherwise the
requesting Stockholders shall pay such costs).
(c) If the Company enters into any negotiation or transaction for
which Rule 506 (or any similar rule then in effect) promulgated by the
Securities and Exchange Commission may be available with respect to such
negotiation or transaction (including a merger, consolidation or other
reorganization), the Stockholders will, at the request of the Board, and to the
extent required to comply with Rule 501, appoint a purchaser representative (as
such term is defined in Rule 501) reasonably acceptable to the Board. If any
Stockholder appoints the purchaser representative designated by the Board, the
Company will pay the fees of such purchaser representative, but if any
Stockholder declines to appoint the purchaser representative designated by the
Board, such holder will appoint another purchaser representative (reasonably
acceptable to the Board), and such holder will be responsible for the fees of
the purchaser representative so appointed.
(e) The provisions of this Section 5.3 shall terminate
automatically and be of no further force and effect upon the consummation of a
Public Offering.
13
5.4 Exceptions to the Tag-Along Right.
(a) At any time when the Company is a Public Company, Onex and
Affiliates shall be entitled during any 90-day period to sell collectively up to
5% of the Common Stock held by Onex and its Affiliates collectively at the
beginning of such period through the facilities of any securities exchange on
which the Common Stock is then listed or quoted in the NASDAQ System or the
over-the-counter market, subject to compliance with applicable law and with the
by-laws and regulations of such exchange or the NASD, if applicable. Any such
sale shall not be subject to the provisions of Section 5.1 or 5.2.
(b) Section 5.1, 5.2 and Section 4.2 shall not apply to any sale
as part of a Public Offering.
(c) Section 5.1 shall not apply to any Transfer of Common Stock
pursuant to a drag-along right exercised in connection with an Approved Sale.
5.5 Purchaser Subject to this Agreement. No Stockholder nor
its Affiliates shall sell any of their Common Stock to any purchaser unless the
purchaser assumes in writing, pro rata with such Stockholder and its Affiliates,
in accordance with the purchaser's and such Stockholder's and its Affiliates'
(taken together) respective share holdings, all of such Stockholder's and its
Affiliates' obligations under, and agrees to be bound by (to the extent of such
Stockholder's and its Affiliates' obligations), this Agreement. This Section
shall not, however, apply in the case of transfers by each Stockholder and its
Affiliates (a) through the facilities of any securities exchange on which the
shares of Common Stock are then listed or quoted in the NASDAQ System or the
over-the-counter market, or (b) by way of a Public Offering.
ARTICLE 6
Limited Pre-Emptive Rights
6.1 Pre-Emptive Rights.
(a) Except for issuances of Offered Securities (as defined) (i) as
full or partial consideration in connection with the acquisition of another
business or company, (ii) to the Company's or its Subsidiaries' employees and
directors, (iii) pursuant to a Public Offering, (iv) in connection with
financing arrangements with independent third party lenders, until the Company
effects an initial Public Offering, neither the Company nor its Subsidiaries
shall issue any shares of stock that have a right to participate generally in
dividends or the distribution of assets upon liquidation, dissolution or the
winding up of the Company or its Subsidiaries ("Participating Securities"), any
shares of Common Stock or any securities possessing voting power with respect to
the election of directors of the Company or its Subsidiaries ("Voting
Securities"), or any securities containing or consisting of options or rights to
acquire any shares of Participating Securities, Common Stock or Voting
Securities or any securities exchangeable into Participating Securities, Voting
Securities or Common Stock (other than a dividend on any outstanding Common
Stock or Participating Securities) (collectively, "Offered Securities") to any
Person unless the Company shall
14
have first offered such Offered Securities pro rata to all Stockholders, on the
same price, terms and conditions, pursuant to a written offer (the "Offer"). The
Offer shall specify the number of Offered Securities proposed to be issued by
the Company, the price per Offered Security and shall limit the time within
which the Offer, if not accepted, will be deemed to be declined (which time
shall be not less than 20 days or more than 40 days after the date of the
Offer). Each Stockholder shall then have the right, exercisable by notice to the
Company within the time period specified in the Offer, to purchase its "Pro Rata
Share" of the Offered Securities at the price per Offered Security referred to
in the Offer. As used in this Section 6.1, the term "Pro Rata Share" of each
Stockholder shall mean the product of (i) the total number of Offered Securities
referred to in the Offer and (ii) a fraction, the numerator of which is the
number of shares of Common Stock held by such Stockholder on the date the Offer
is made and the denominator of which is the aggregate number of the Company's
shares of Common Stock owned by such Stockholder and such other stockholders who
are entitled to purchase a pro rata portion of the Offered Securities (in each
case, assuming the conversion, exchange or exercise of all securities
convertible into or exchangeable or exercisable for Common Stock). In the event
the Offered Securities consist of shares of Class A Common, Class B Common,
Class C Common, , Class D-1 Common, Class D-2 Common or Class E Common, then (i)
the class of shares to be offered to the holders of Class A Common pursuant to
this Section 6.1 shall be shares of Class A Common, (ii) the class of shares to
be offered to the holders of Class B Common pursuant to this Section 6.1 shall
be shares of Class B Common, (iii) the class of shares to be offered to the
holders of Class C Common pursuant to this Section 6.1 shall be shares of Class
C Common, (iv) the class of shares to be offered to holders of Class D-1 Common
pursuant to this Section 6.1 shall be shares of Class D-1 Common, (v) the class
of shares to be offered to holders of Class D-2 Common pursuant to this Section
6.1 shall be shares of Class D-2 Common, and (vi) the class of shares to be
offered to holders of Class E Common pursuant to this Section 6.1 shall be
shares of Class E Common. In the event the Offered Securities consist of any
other securities which are voting securities, then the securities offered to the
holders of Class D-2 Common pursuant to this Section 6.1 shall be non-voting,
convertible into such Offered Securities on the same terms as those on which the
Class D-2 Common is convertible into Class D-1 Common and otherwise identical to
such Offered Securities in all respects.
(b) If any Offered Securities shall not be capable of being
offered to or being divided among the Stockholders in proportion to their
holdings of Common Stock at the date of the Offer without division into
fractions, the same shall be offered to or divided among the Stockholders as
nearly as may be in proportion to the number of shares of Common Stock held by
them respectively at the date of the Offer without division into fractions, as
may be determined in good faith by the Board.
(c) The closing of a purchase and sale pursuant to this Section
6.1 shall be held at the registered office of the Company on the date specified
in the Offer, which date shall be not less than 15 or more than 30 days after
the time at which the Offer, if not accepted, will be deemed to be declined.
(d) If any Stockholder does not elect to purchase the full number
of Offered Securities which it is entitled to purchase pursuant to this Section
6.1, the balance shall be reoffered pro rata to the remaining Stockholders that
did elect to purchase their full entitlement at the same price per Offered
Security as specified in the Offer and otherwise on such terms as the Board may
in
15
good faith determine until either (i) all of such Offered Securities shall have
been elected to be purchased or (ii) all of the Stockholders have elected to not
purchase such remaining Offered Securities. In the event any Offered Securities
remain the Company may issue such Offered Securities in compliance with Section
6.1(c) above to such Person or Persons as the Board may in good faith determine,
but, in any event, at the same price per Offered Security as specified in the
Offer.
6.2 No Additional Pre-Emptive Rights. No Stockholder shall
have any preemptive right to acquire Common Stock from the Company except
pursuant to Section 6.1 and, without limiting the generality of the foregoing,
shall have no preemptive rights on a Public Offering of Common Stock by the
Company.
ARTICLE 7
Transfers of Common Stock and
Appointment of Proxy
7.1 Transfers in Accordance with this Agreement. No
Stockholder shall transfer or suffer to be transferred any or all of its Common
Stock, except as permitted or required by this Agreement. The Company may refuse
to register any transfer of Common Stock on its transfer books if such transfer
is not in accordance with this Agreement and state and federal securities laws.
7.2 Legending of Shares Certificates. All certificates
representing Common Stock held by any Person subject to this Agreement (and by
any permitted or required transferees who are bound by or subject to this
Agreement) shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND CERTAIN
RESTRICTIONS ON THE VOTING OF SUCH SECURITIES CONTAINED IN
THE INVESTOR STOCKHOLDERS AGREEMENT, DATED AS OF OCTOBER
5, 2000, AMONG THE ISSUER OF SUCH SECURITIES (THE
"COMPANY") AND CERTAIN OF THE COMPANY'S STOCKHOLDERS. A
COPY OF SUCH INVESTOR STOCKHOLDERS AGREEMENT WILL BE
FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER
HEREOF UPON WRITTEN REQUEST.
7.3 Default of Delivery.
(a) In the event that any Stockholder, the Company, or any
Stockholder's transferees or assignees (each, a "Requiring Party") have the
right to acquire Common Stock from any other Stockholder or the right to require
any such other Stockholder to sell its Common Stock to any other Person,
pursuant to the terms of this Agreement (such selling Stockholder hereinafter
referred to as the "Transferor" and such Requiring Party or any other Person to
whom the Transferor is required to transfer Common Stock, as applicable,
hereinafter referred to as the "Transferee") and
16
the Transferor is not present at the closing, or is present but for any reason
fails to produce and deliver to the Transferee the certificates or other
instruments representing any of the Common Stock being transferred, then the
cash purchase price, as and when payable, may be deposited into a special
account in the name of the Company at a branch of the Company's bankers and any
other consideration permitted or required to be delivered in satisfaction of the
purchase price shall be deposited with the Company. Such deposits shall
constitute valid and effective payment to the Transferor of the purchase price
for the Common Stock being transferred notwithstanding the fact that the
Transferor may have voluntarily attempted to encumber or dispose of any of the
Common Stock contrary to the terms hereof, or that one or more certificates or
other evidences of ownership of such Common Stock may have been delivered to any
other Person. From and after the date of such deposits (even though the share
certificates in the name of the Transferor have not been delivered to the
Transferee), the purchase and transfer of the Common Stock shall be deemed to
have been fully completed and all right, title, benefit and interest of the
Transferor in and to all such Common Stock, both at law and in equity, shall be
conclusively deemed to have been transferred and assigned to and become vested
in the Transferee and the Transferee will have the right to request that the
Company enter the transfer into the stock register and the Company shall be
entitled to so enter the transfer.
(b) Where the Transferee has made a deposit in accordance with
subsection (a), the Transferor shall be entitled to receive the cash purchase
price of the Common Stock deposited with the Company's bankers, and to receive
any other consideration deposited with the Company, upon delivery to the Company
of (i) the certificates or other instruments representing the Common Stock duly
endorsed for transfer and (ii) any other document required to be delivered by
the Transferor at closing, including, without limitation, the release or
discharge of any encumbrance relating to the Common Stock and stock transfer
stamps, if necessary.
7.4 Distributions upon Sale of the Company. In the event of
a sale or exchange by the Stockholders of all or substantially all of the Common
Stock held by the Stockholders, the Stockholders shall receive the same portion
of the aggregate consideration from such sale or exchange that such Stockholders
would have received if such aggregate consideration had been distributed by the
Company in complete liquidation.
ARTICLE 8
Representations and Warranties
of the Company.
The Company hereby represents and warrants to the Stockholders that
as of the Closing:
8.1 Organization, etc. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Company has all requisite corporate power and authority to carry
on its businesses as now conducted and presently proposed to be conducted and to
carry out the transactions contemplated by this Agreement, except where the
failure to have such power and authority would not have a material adverse
effect upon the business or financial condition of the Company.
17
8.2 Capital Stock and Related Matters.
(i) Immediately following the Closing, (a) the authorized capital
stock of the Company will consist of 75,000 shares of Class A Common, 150,000
shares of Class B Common, 40,000 shares of Class C Common, 125,000 shares of
Class D-1 Common, 25,000 shares of Class D-2 Common, and 25,000 shares of Class
E Common and (b) the Company will have issued, and there will be outstanding,
4,051 shares of Class A Common, 63,889 shares of Class B Common, 17,824 shares
of Class C Common, 50,371 shares of Class D-1 Common, no shares of Class D-2
Common, and 12,593 shares of Class E Common.
(ii) Immediately following the Closing, the Company will not have
outstanding any stock or securities convertible or exchangeable for any shares
of its capital stock, nor will it have outstanding any rights, subscriptions,
warrants, agreements, commitments or options to subscribe for or to purchase any
capital stock or any stock or securities convertible into or exchangeable for
any capital stock, except as contemplated in the Certificate of Incorporation
and a convertible promissory note, dated as of the date hereof, issued to Onex
American Holdings LLC. Immediately following the Closing, all of the outstanding
shares of the Company's capital stock will have been duly authorized, and upon
payment therefor will be validly issued and will be fully paid and
nonassessable.
8.3 Authorization; No Breach. The execution, delivery and
performance of this Agreement, and all other agreements and transactions
contemplated hereby and thereby have been duly authorized by the Company. This
Agreement constitutes a valid and binding obligation of the Company enforceable
in accordance with its terms, subject to the availability of equitable remedies
and to the laws of bankruptcy and other similar laws affecting creditors' rights
generally. The execution and delivery by the Company of this Agreement and all
other agreements and instruments contemplated hereby and thereby to be executed
by the Company do not and will not (i) conflict with or result in a breach of
the terms, conditions or provisions of, (ii) constitute a default under, (iii)
result in the creation of any lien, security interest, charge or encumbrance
upon the Company's capital stock or assets pursuant to, (iv) give any third
party the right to accelerate any obligation under, (v) result in a violation
of, or (vi) require any authorization, consent, approval, exemption or other
action by or notice to or filing with any court or administrative or
governmental body (other than in connection with certain state and federal
securities laws) or any other third party pursuant to, the Certificate of
Incorporation or the Bylaws, or any law, statute, rule, regulation, instrument,
order, judgment or decree to which the Company is subject or any agreement or
instrument to which the Company is a party, or by which its assets are bound,
except where the existence of any such conflict, breach, default, right to
accelerate or violation, or the creation of any such lien, security interest,
charge or encumbrance, or the failure to obtain, take or make any such
authorization, consent, approval, exemption, other action, notice or filing,
could not reasonably be expected to, individually or in the aggregate, have a
material adverse effect on the financial condition, operating results, assets,
operations or business prospects of the Company and its Subsidiaries taken as a
whole.
18
ARTICLE 9
Miscellaneous
9.1 Voting Agreement.
(a) The Stockholders shall at all times vote their Common Stock
(to the extent they are entitled to vote the same) as specifically provided
herein or, if not so provided, as directed by J2R in accordance with this
Agreement, or in the same manner as the Common Stock held by J2R is voted in
accordance with this Agreement, on the designation of director representatives,
on the election of directors and on all other matters which are submitted to a
vote (or consent in lieu of voting) of the Company's stockholders and on which
such Common Stock is entitled to vote, and for this purpose, each Stockholder,
by execution of this Agreement, hereby irrevocably constitutes and appoints the
Person who is at any time the managing general partner of J2R, its proxy with
full power of substitution to make such designations and to vote such Common
Stock in the same manner as directed by J2R or as the Common Stock held by J2R
is voted. To the extent permitted by law and for all purposes of this Agreement,
each Stockholder, by its execution of this Agreement, irrevocably constitutes
and appoints the Person who is at any time the managing general partner of J2R,
its proxy with full power of substitution to vote all of its Common Stock at any
meeting of stockholders of the Company, or to give consent in lieu of voting on
the designation of directors, representatives, or the election of directors and
on any matter which is submitted for a vote or consent to the stockholders and
on which such Common Stock is entitled to vote (except to the extent such vote
or consent would violate any applicable law and except with respect to
stockholder voting on the merger or consolidation of the Company with another
corporation or the sale of all or substantially all of the Company's assets),
provided that such Common Stock is voted or consent is given with respect to it
as specifically provided herein, or if not so provided, in the same manner as
the Common Stock held by J2R. The proxies and powers granted by such Stockholder
pursuant to this Article 9 are coupled with an interest. Notwithstanding
anything contained in this paragraph, (i) J2R shall not have the right to direct
the vote with respect to any matter upon which a class vote is required or
permitted hereunder and (ii) such Stockholder's Common Stock shall not, except
with the express consent of such Stockholder, be voted in favor of any
resolution the effect of which will be to change such Stockholder's Common Stock
or J2R's Common Stock, or convert or exchange such Stockholder's Common Stock or
J2R's Common Stock into or for different securities, unless in every such case
such Stockholder's Common Stock and J2R's Common Stock are thereby changed
identically or converted into or exchanged for the same type of securities pro
rata (except in no event shall the Class D-2 Common or any other nonvoting
securities issued as contemplated by this Agreement to holders of Class D-2
Common be amended to become voting securities and in no event shall the terms on
which Class D-2 Common or any such securities are convertible into voting
securities be amended, except with the consent of the holders of a majority of
the outstanding shares of Class D-2 Common).
(b) Each Stockholder represents that he has not granted and is not
a party to any proxy, voting trust or other agreement which is inconsistent with
or conflicts with the provisions of this Agreement, and no such holder of Common
Stock shall grant any proxy or become party to any voting trust or other
agreement which is inconsistent with or conflicts with the provisions of this
Agreement.
19
(c) The voting agreement set forth in this Section 9.1 shall
terminate upon the occurrence of a Qualified Public Offering.
9.2 Acknowledgment. The parties hereto acknowledge that,
pursuant to the Company's Certificate of Incorporation, and except as expressly
set forth in this Agreement, the Class A Common, Class B Common, Class C Common,
Class D-1 Common and Class E Common will vote together as a single class, the
Class D-2 Common shall not vote, and none of the classes of Common Stock will be
entitled to a separate class vote, except as required by law.
9.3 Notices. All notices, consents and other communications
required or permitted to be given under or by reason of this Agreement shall be
in writing, shall be delivered personally or by telex or telecopy as described
below or by reputable overnight courier, and shall be deemed given on the date
on which such delivery is made. If delivered by telex or telecopy, such notices
or communications shall be confirmed by a registered or certified letter (return
receipt requested), postage prepaid. Any such delivery shall be addressed to the
intended recipient at the following addresses (or at such other address for a
party as shall be specified by such party by like notice to the other parties):
(a) if to J2R or the Company:
c/o Hidden Creek Industries
0000 XXX Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxx
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxxx & Xxxxx
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, P.C.
Xxxx X. Xxxxxxxxxx, Esq.
Telecopy: (000) 000-0000
(b) if to Onex:
Onex American Holdings, L.L.C.
c/o Onex Investment Corporation
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx
Telecopy: (000) 000-0000
20
with a copy to:
Xxxxxxxx & Xxxxx
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, P.C.
Xxxx X. Xxxxxxxxxx, Esq.
Telecopy: (000) 000-0000
(c) if to the Baird Group:
Xxxxx Capital Partners
000 Xxxx Xxxxxx Xxxxxx, #0000
Xxxxxxx, Xxxxxxxx 00000
Attention: C. Xxxxxx Xxxxxxxx
Telecopy: (000) 000-0000
(d) if to Norwest Equity Partners VII, LP
Norwest Equity Partners
3600 IDS Center
00 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Telecopy: (000) 000-0000
(c) if to any other person which becomes a party to this Agreement
in accordance with the terms hereof, at the address for delivery of notices or
communications given to all other parties by such party at such time.
Notices to any director of the Company shall be given:
(i) by telephone or delivery in person to such director at the
address (or telephone number) designated by him from time to time by notice to
Onex and the Company (in the case of directors designated by any Other
Stockholder) or to the Other Stockholders and the Company (in the case of
directors designated by Onex), confirmed by letter to such address; or
(ii) by registered mail with postage prepaid. If a director has not
designated an address, notice to such director may be given to his address last
known to the Company.
9.4 Extended Meanings. In this Agreement, words importing
the singular number include the plural and vice versa and words importing gender
include all genders.
9.5 Captions. The captions in this Agreement are for
convenience of reference only and shall not be given any effect in the
interpretation of this Agreement.
21
9.6 Applicable Law. The corporate law of Delaware will
govern all issues concerning the relative rights of the Company and its
stockholders. All other questions concerning the construction, validity and
interpretation of this Agreement will be governed by the internal law, and not
the law of conflicts, of the State of New York.
9.7 Time. Time shall be of the essence of this Agreement.
9.8 Severability. The provisions of this Agreement are
intended to be and shall be deemed severable. The invalidity or unenforceability
of any particular provision of this Agreement shall not affect the other
provisions hereof, and this Agreement shall be construed in all respects as if
such invalid or unenforceable provision were omitted.
9.9 Currency. References in this Agreement to monetary
amounts shall be in United States currency unless otherwise expressly stated.
9.10 Arbitration Procedure.
(a) Except as provided in Section 9.13, the parties hereto agree
that the arbitration procedure set forth below shall be the sole and exclusive
method for resolving and remedying claims or disputes arising out of the
provisions of this Agreement (the "Disputes"). Nothing in this Section 9.10
shall prohibit a party hereto from instituting litigation to enforce any Final
Determination (as defined below) or the provisions of this Section 9.10. The
parties hereto hereby agree and acknowledge that, except as otherwise provided
in this Section 9.10 or in the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA") as in effect from time to time, the
arbitration procedures and any Final Determination hereunder shall be governed
by, and shall be enforced pursuant to the Uniform Arbitration Act.
(b) In the event that any party hereto asserts that there exists a
Dispute, such party shall deliver a written notice to each other party hereto
involved therein specifying the nature of the asserted Dispute and requesting a
meeting to attempt to resolve the same. If no such resolution is reached within
ten business days after such delivery of such notice, the party delivering such
notice of Dispute (the "Disputing Party") may, within 45 business days after
delivery of such notice, commence arbitration hereunder by delivering to each
other party hereto involved therein (collectively, the "Other Parties") a notice
of arbitration (a "Notice of Arbitration"). Such Notice of Arbitration shall
specify the matters as to which arbitration is sought, the nature of any
Dispute, the claims of each party to the arbitration and shall specify the
amount and nature of any damages, if any, sought to be recovered as a result of
any alleged claim, and any other matters required by the Commercial Arbitration
Rules of the American Arbitration Association as in effect from time to time to
be included therein, if any.
(c) The Disputing Party, on the one hand, and the Other Parties,
on the other hand, each shall select one non-neutral arbitrator expert in the
subject matter of the Dispute (the arbitrators so selected shall be referred to
herein as the "Disputing Party's Arbitrator" and the "Other Parties'
Arbitrator," respectively). In the event that either such party fails to select
an arbitrator as set forth herein within 20 days from the delivery of a Notice
of Arbitration, then the matter shall be
22
resolved by the arbitrator selected by the other party. The Disputing Party's
Arbitrator and the Other Parties' Arbitrator shall select a third independent,
neutral arbitrator expert in the subject matter of the dispute, and the three
arbitrators so selected shall resolve the matter according to the procedures set
forth in this Section 9.10. If the Disputing Party's Arbitrator and the Other
Parties' Arbitrator are unable to agree on a third arbitrator within 20 days
after their selection, the third arbitrator shall be chosen by the President of
the AAA.
(d) The arbitrator(s) selected pursuant to Section 9.10(c) above
will determine the allocation of the costs and expenses of arbitration based
upon the percentage which the portion of the contested amount not awarded to
each party to the arbitration bears to the amount actually contested by such
party. For example, if the Disputing Party submits a claim for $1,000 and if the
Other Parties contest only $500 of the amount claimed by the Disputing Party,
and if the arbitrator(s) ultimately resolves the dispute by awarding the
Disputing Party $300 of the $500 contested, then the costs and expenses of
arbitration will be allocated 60% (i.e., 300 ) 500) to the Other Parties and 40%
(i.e., 200 ) 500) to the Disputing Party.
(e) The arbitration shall be conducted under the Commercial
Arbitration Rules of the American Arbitration Association as in effect from time
to time, except as modified by the agreement of all of the parties to the
arbitration. The arbitrator(s) shall so conduct the arbitration that a final
result, determination, finding, judgment and/or award (the "Final
Determination") is made or rendered as soon as practicable, but in no event
later than 90 business days after the delivery of the Notice of Arbitration nor
later than 10 days following completion of the arbitration. The Final
Determination must be agreed upon and signed by the sole arbitrator or by at
least two of the three arbitrators (as the case may be). The Final Determination
shall be final and binding on all parties and there shall be no appeal from or
reexamination of the Final Determination, except for fraud, perjury, evident
partiality or misconduct by an arbitrator prejudicing the rights of any party to
the arbitration and to correct manifest clerical errors.
(f) The Disputing Party and the Other Parties may enforce any
Final Determination in any state or federal court having jurisdiction over the
Dispute. For the purpose of any action or proceeding instituted with respect to
any Final Determination, each party hereto hereby irrevocably submits to the
jurisdiction of such courts, irrevocably consents to the service of process by
registered mail or personal service and hereby irrevocably waives, to the
fullest extent permitted by law, any objection which it may have or hereafter
have as to personal jurisdiction, the laying of the venue of any such action or
proceeding brought in any such court and any claim that any such action or
proceeding brought in any court has been brought in an inconvenient forum.
(g) Any party hereto required to make a payment pursuant to this
Section 9.10 shall pay the party entitled to receive such payment within three
days of the delivery of the Final Determination to such responsible party. If
any party hereto shall fail to pay the amount of any damages, if any, assessed
against it within such three day period, the unpaid amount shall bear interest
from the date of such delivery at the lesser of (i) the prime rate of interest
published by the Board of Governors of the Federal Reserve System as the "Bank
Prime Loan" rate, in effect from time to time (which rate shall be adjusted on
the effective date of each change in such prime rate) plus 2.00% and (ii) the
maximum rate permitted by applicable usury laws. Interest on any such unpaid
amount shall be compounded semi-annually, computed on the basis of a 360-day
year
23
consisting of twelve 30-day months and shall be payable on demand. In addition,
such party shall promptly reimburse the other party to the arbitration for any
and all costs and expenses of any nature or kind whatsoever (including but not
limited to all attorneys' fees) incurred in seeking to collect such damages or
to enforce any Final Determination.
9.11 Assignment. This Agreement shall be binding upon the
parties hereto, all Stockholders and, to the extent expressly provided elsewhere
in this Agreement, their respective permitted transferees and assigns (other
than purchasers of Common Stock pursuant to a Public Sale), together with in
each case all successors, heirs, executors and administrators thereof, and shall
inure to the benefit of the parties hereto, all Stockholders and, to the extent
expressly provided elsewhere in this Agreement, assigns of the Stockholders,
together, in each case, with all successors, heirs, executors and administrators
thereof; provided that a Stockholder may assign its rights to purchase Common
Stock hereunder to one of its Affiliates so long as such Affiliate is, or agrees
to become, a party hereto. The parties hereto agree that the rights of each
Stockholder contained in this Agreement are personal to such Stockholder and may
not be assigned to, and will not inure to the benefit of any transferees of such
Stockholder other than its Affiliates or, as expressly provided herein, the
Company. Except as otherwise provided herein, no party may assign any of its
rights or delegate any of its duties under this Agreement.
9.12 Amendment and Waiver. Except as otherwise provided
herein, 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 Company and the
holders of at least a majority of the shares of voting Common Stock and, to the
extent that any modification, amendment or waiver adversely affects the rights
of the holders of any class, series or sub-class of Common Stock, by the holders
of at least a majority of shares of such adversely affected class, series or
sub-class of Common Stock; provided that no modification, amendment or waiver of
any provision of Section 2.1 above that adversely affects the rights of any
Stockholder shall be effective unless such modification, amendment or waiver is
approved in writing by such Stockholder. The failure of a party to insist upon
strict adherence to any term of this Agreement on any occasion shall not be
considered a waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement. No purported
waiver shall be effective unless in writing. The waiver by any party of a breach
of any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent or other breach.
9.13 Remedies. The Stockholders shall be entitled to enforce
their rights under this Agreement specifically 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 (without posting a bond or other security) in order to enforce
or prevent any violation of the provisions of this Agreement.
9.14 Counterparts; Joinder. This Agreement may be executed in
counterparts, each of which shall be considered an original, but all of which
together shall constitute one and the same instrument. Additional Persons may
become parties hereto upon the execution of a
24
joinder agreement among such person, the Company and holders of a majority of
the Common Stock.
9.15 Complete Agreement. This Agreement, the documents
expressly referred to herein (including the Registration Agreement) and other
documents of even date herewith embody the complete agreement and understanding
among the parties and supersede and preempt any prior understanding, agreements
or representations by or among the parties, written or oral, that may be related
to the subject matter hereof in any way, except for the Co-Investment Agreement
which will not be superseded or preempted as between Xxxx, X0X and their
Affiliates.
* * * * *
25
IN WITNESS WHEREOF, this Agreement has been duly executed by
the parties hereto, all as of the date first above written.
XXXXXXX HOLDINGS, INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Its:
---------------------------------------
ONEX AMERICAN HOLDINGS LLC
By: /s/ Xxxx X. Xxxxx
---------------------------------------
Its:
---------------------------------------
J2R PARTNERS VII
By: /s/ [ILLEGIBLE]
---------------------------------------
Its:
---------------------------------------
NORWEST EQUITY PARTNERS VII, LP
By: Itasca LBO Partners VII, LLP
Its: General Partner
By: /s/ [ILLEGIBLE]
---------------------------------------
Its:
---------------------------------------
XXXXXXXX STREET PARTNERS II
By: /s/ Xxxx Xxxxxxxxxx
---------------------------------------
Its:
---------------------------------------
[Signature Page to Investor Stockholders Agreement]
BCP II AFFILIATES FUND LIMITED PARTNERSHIP
By: Xxxxxx X. Xxxxx & Co. Incorporated
Its: General Partner
By: /s/ [ILLEGIBLE]
----------------------------------------
Its: Managing Director
----------------------------------------
XXXXX CAPITAL PARTNERS II LIMITED
PARTNERSHIP
By: Xxxxx Capital Partners Management
Company, L.L.C.
Its: General Partner
By: /s/ [ILLEGIBLE]
----------------------------------------
Its: Managing Director
----------------------------------------
XXXXX CAPITAL PARTNERS III LIMITED
PARTNERSHIP
By: Xxxxx Capital Partners Management
Company III, L.L.C.
Its: General Partner
By: /s/ [ILLEGIBLE]
----------------------------------------
Its: Director
----------------------------------------
BCP III SPECIAL AFFILIATES LIMITED
PARTNERSHIP
By: Xxxxx Capital Partners Management
Company III, L.L.C.
Its: General Partner
By: /s/ [ILLEGIBLE]
----------------------------------------
Its: Director
----------------------------------------
BCP III AFFILIATES FUND LIMITED PARTNERSHIP
By: Xxxxx Capital Partners Management
Company III, L.L.C.
Its: General Partner
By: /s/ [ILLEGIBLE]
----------------------------------------
Its: Director
----------------------------------------
[Continuation of Signature Page to Investor Stockholders Agreement]
/S/ X.X. Xxxxxxx
____________________________________________
X.X. XXXXXXX
/S/ Xxxxx X. Xxxx
____________________________________________
XXXXX X. XXXX
/S/ Xxxx X. Read
____________________________________________
XXXX X. READ
/S/ J. Xxxx Xxxxxx
____________________________________________
J. XXXX XXXXXX
/S/ Xxxx X. Xxxxxxx
____________________________________________
XXXX X. XXXXXXX
/S/ Xxxx X. Xxxxxx
____________________________________________
XXXX X. XXXXXX
/S/ Xxxxx X. Xxxx
____________________________________________
XXXXX X. XXXX
/S/ Xxxxxx X. Xxxxxx
____________________________________________
XXXXXX X. XXXXXX
/S/ Xxxxxx X. Xxxxxx
____________________________________________
XXXXXX X. XXXXXX
/S/ Xxxxxxx X. Xxxxx
____________________________________________
XXXXXXX X. XXXXX
[Continuation of Signature Page to Investor Stockholders Agreement]
