Exhibit 10.1
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STOCKHOLDERS AGREEMENT
DATED AS OF OCTOBER 31, 2006
BY AND AMONG
XXXXXXX I HOLDING CORP.,
ITS STOCKHOLDERS
AND
XXXXXXX INDUSTRIES, INC.
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TABLE OF CONTENTS
PAGE
STOCKHOLDERS AGREEMENT.........................................................1
ARTICLE I......................................................................1
REPRESENTATIONS AND WARRANTIES OF THE PARTIES.........................1
ARTICLE II.....................................................................2
VOTING AGREEMENTS.....................................................2
ARTICLE III....................................................................3
SPECIAL APPROVAL RIGHTS...............................................3
ARTICLE IV.....................................................................5
TRANSFERS OF SECURITIES...............................................5
ARTICLE V......................................................................6
TAKE-ALONG RIGHTS; SALE OF THE COMPANY................................6
ARTICLE VI.....................................................................8
LIQUIDITY EVENT.......................................................8
ARTICLE VII....................................................................9
PUTS AND CALLS........................................................9
ARTICLE VIII..................................................................12
AMENDMENT AND TERMINATION............................................12
ARTICLE IX....................................................................13
MISCELLANEOUS........................................................13
STOCKHOLDERS AGREEMENT
This Stockholders Agreement (this "AGREEMENT") is entered into
as of October 31, 2006, by and among (i) Xxxxxxx I Holding Corp., a Delaware
corporation ("HOLDINGS"), (ii) Xxxxxxx Industries, Inc., a Missouri corporation
(the "COMPANY"), (iii) the parties to this Agreement who are identified as
Employees in joinders to this Agreement (each, an "EMPLOYEE," and collectively,
the "EMPLOYEES"), (iv) AIP/CHC Holdings, LLC, a Delaware limited liability
company ("AIP"), (v) BNS Holding, Inc., a Delaware corporation ("BNS") and (vi)
each other holder of Securities who hereafter executes a separate agreement to
be bound by the terms hereof (a "NEW STOCKHOLDER"). AIP, BNS and the Employees
are sometimes referred to herein as "STOCKHOLDERS." Certain capitalized terms
used herein are defined in Section 9.1.
The parties hereto agree as follows:
ARTICLE I
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
1.1. REPRESENTATIONS AND WARRANTIES OF HOLDINGS AND THE
COMPANY. Each of Holdings and the Company hereby represents and warrants to the
Stockholders that as of the date of this Agreement:
(a) it is a corporation duly organized, validly existing and
in good standing under the laws of the its jurisdiction of incorporation, it has
full corporate power and authority to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby, and the
execution, delivery and performance by it of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by all
necessary corporate action;
(b) this Agreement has been duly and validly executed and
delivered by it and constitutes a legal and binding obligation of it,
enforceable against it in accordance with its terms; and
(c) the execution, delivery and performance by it of this
Agreement and the consummation by it of the transactions contemplated hereby
will not, with or without the giving of notice or lapse of time, or both (i)
violate any provision of law, statute, rule or regulation to which it is
subject, (ii) violate any order, judgment or decree applicable to it, or (iii)
conflict with, or result in a breach or default under, any term or condition of
its Articles or Certificate of Incorporation or Bylaws or any agreement or
instrument to which it is a party or by which it is bound.
1.2. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS. Each
Stockholder represents and warrants to Holdings, the Company and the other
Stockholders that, as of the time such Stockholder becomes a party to this
Agreement:
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(a) this Agreement (or the separate joinder agreement executed
by such Stockholder) has been duly and validly executed and delivered by such
Stockholder, and this Agreement constitutes a legal and binding obligation of
such Stockholder, enforceable against such Stockholder in accordance with its
terms; and
(b) the execution, delivery and performance by such
Stockholder of this Agreement (or any joinder to this Agreement) and the
consummation by such Stockholder of the transactions contemplated hereby (and
thereby) will not, with or without the giving of notice or lapse of time, or
both (i) violate any provision of law, statute, rule or regulation to which such
Stockholder is subject, (ii) violate any order, judgment or decree applicable to
such Stockholder, or (iii) conflict with, or result in a breach or default
under, any term or condition of any agreement or other instrument to which such
Stockholder is a party or by which such Stockholder is bound.
ARTICLE II
VOTING AGREEMENTS
2.1. ELECTION OF DIRECTORS.
(a) Each Stockholder hereby agrees that such Person will vote,
or cause to be voted, all voting securities of Holdings over which such Person
has the power to vote or direct the voting, and will take all other necessary or
desirable action within such Person's control, and Holdings will take all
necessary and desirable actions within its control, to cause the authorized
number of directors of the Board (the "BOARD") to be established at five
directors, and to elect or cause to be elected to the Board and cause to be
continued in office (i) at least one individual designated by AIP and (ii) at
least four individuals designated by BNS.
(b) If at any time AIP shall notify the other parties to this
Agreement of its desire to remove, with or without cause, any individual
designated by AIP from a Holdings directorship, all such parties so notified,
will vote, or cause to be voted, all voting securities of Holdings over which
they have the power to vote or direct the voting, and shall take all such other
actions promptly as shall be necessary or desirable to cause the removal of such
director.
(c) If at any time BNS shall notify the other parties to this
Agreement of its desire to remove, with or without cause, any individual
designated by BNS from a Holdings directorship, all such parties so notified,
will vote, or cause to be voted, all voting securities of Holdings over which
they have the power to vote or direct the voting, and shall take all such other
actions promptly as shall be necessary or desirable to cause the removal of such
director.
(d) If at any time any individual ceases to serve on the Board
(whether due to resignation, removal or otherwise), the party that designated
such individual to serve on the Board shall be entitled to designate a successor
director to fill the vacancy created thereby. Each Stockholder agrees to vote,
or cause to be voted, all voting securities of Holdings over which such Person
has the power to vote or direct the voting, and shall take all such other
actions as shall be necessary or desirable to cause the designated successor to
be elected to fill such vacancy.
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(e) Nothing in this Agreement shall be construed to impair any
rights that the Stockholders may have to remove any director for cause pursuant
to Section 141(k) of the Delaware General Corporation Law (or any successor
provision). No such removal for cause of an individual designated pursuant to
this Section 2.1 to be elected as a director of Holdings shall affect the rights
of AIP and BNS to designate a different individual pursuant to this Section 2.1
to fill the directorship from which such individual was removed.
(f) The board of directors of the Company and each of its
Subsidiaries shall have the same composition as the Board.
2.2. OTHER VOTING MATTERS. Each Stockholder hereby agrees that
such Person will vote, or cause to be voted, all voting securities of Holdings
over which such Person has the power to vote or direct the voting, either in
person or by proxy, whether at a stockholders meeting, or by written consent, in
the manner in which a Required Majority of the Board shall direct in connection
with the approval of any amendment or amendments to Holdings' Certificate of
Incorporation, the merger, share exchange, combination or consolidation of
Holdings with any other Person or Persons, the sale, lease, or exchange of all
or substantially all of the property and assets of Holdings, the Company and
their respective Subsidiaries, and the reorganization, recapitalization,
liquidation, dissolution or winding-up of Holdings or the Company.
ARTICLE III
SPECIAL APPROVAL RIGHTS
3.1 RESTRICTED ACTIONS. None of Holdings, the Company nor any of their
respective Subsidiaries shall take any of the actions set forth in clauses (a)
through (l) below without the Required Consent of the Stockholders:
(a) except as provided in Article VI, enter into any merger,
consolidation, business combination, joint venture or other material corporate
transaction;
(b) sell, assign, convey or otherwise dispose of all or
substantially all of its assets;
(c) adopt any plan or proposal for a complete or partial
liquidation or dissolution or any reorganization or recapitalization or commence
any case, proceeding or action seeking relief under any existing or future laws
relating to bankruptcy, insolvency, conservatorship or relief of debtors;
(d) enter into any transaction with any Stockholder or any
Affiliate of a Stockholder, other than Permitted Stockholder Transactions;
(e) authorize or issue, or obligate itself to issue, any
equity security (including a security convertible into or exercisable or
exchangeable for any equity security);
(f) change its fiscal year or make any material change in its
accounting policies or procedures, unless required under GAAP or the Internal
Revenue Code of 1986, as amended;
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(g) take, or permit to be taken, any action that would prevent
the business of the Company, as it currently exists, from continuing on an
ongoing basis;
(h) modify, amend or take any action in contravention of its
articles of incorporation or bylaws (or equivalent governing documents),
including, without limitation, any term of the AIP Securities;
(i) except as provided in Section 3.2, below, establish any
committee of the Board, the Company or any Subsidiary;
(j) establish or acquire any subsidiaries that are not
wholly-owned by the Company or any of its Subsidiaries;
(k) commingle or permit to be commingled any funds with the
funds of any other Person; or
(l) agree or commit to any of the foregoing.
(m) Notwithstanding the foregoing, nothing in this Agreement
shall be construed to in any way limit or impair the rights or remedies
available to the Agent or Lenders under the Credit Agreement or the related
security documents entered into in connection therewith, or the Orix Credit
Agreement or the related security documents entered into in connection
therewith.
3.2 OPERATIONS COMMITTEE.
(a) The Board shall have a committee having the
responsibilities and authority set forth in this Section 3.2, and which shall be
designated the "OPERATIONS COMMITTEE." Except upon the occurrence and during the
continuation of a Suspension Event, the members of the Operations Committee
shall consist of the member of the Board designated by AIP pursuant to Section
2.1(a), above. Subsequent to the occurrence and during the continuation of a
Suspension Event, the members of the Operations Committee shall consist of all
of the members of the Board.
(b) The Operations Committee shall have the authority and
responsibility to:
(i) supervise the overall implementation of the
Company's Business Plan; and
(ii) supervise the development of the Company's
annual operating and capital budgets, which shall be subject to Board approval.
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ARTICLE IV
TRANSFERS OF SECURITIES
4.1. RESTRICTIONS ON TRANSFER OF SECURITIES.
(a) EMPLOYEE SECURITIES. GENERAL. No holder of Employee
Securities may Transfer any Employee Securities except in an
Exempt Employee Transfer.
(b) INVESTOR SECURITIES RIGHT OF FIRST OFFER. Neither AIP nor
BNS may Transfer any Securities except, respectively, in an
Exempt AIP Transfer or an Exempt BNS Transfer.
(c) EXCLUDED TRANSFERS. The rights and restrictions contained
in Section 4.1(a) shall not apply with respect to any of the following Transfers
of Securities:
(i) any Transfer of Securities to and among
stockholders of Holdings (subject to compliance with Sections 4.2 and 4.3, and
except as provided in Section 6.1);
(ii) any Transfer of Securities in accordance with
Section 5.1;
(iii) any Transfer of Securities incidental to the
exercise, conversion or exchange of such securities in accordance with their
terms, any combination of shares (including any reverse stock split) or any
recapitalization, reorganization or reclassification of, or any merger or
consolidation involving, Holdings; and
(iv) any Transfer of Securities to members of the
management of Holdings, management of the Company or management of their
respective Subsidiaries (other than a Transfer of all or substantially all of
the Securities held by BNS).
4.2. SECURITIES ACT COMPLIANCE. No Securities may be
transferred by a Stockholder (other than pursuant to an effective registration
statement under the Securities Act) unless such Stockholder first delivers to
Holdings an opinion of counsel, which opinion and counsel shall be reasonably
satisfactory to Holdings to the effect that such Transfer is not required to be
registered under the Securities Act.
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4.3. CERTAIN TRANSFEREES BOUND BY AGREEMENT. Subject to
compliance with the other provisions of this Article IV, any Stockholder may
Transfer any Securities held by such Stockholder in accordance with applicable
law; PROVIDED, HOWEVER, that if the Transfer is not made pursuant to a Public
Sale or a Sale of the Company, then the transferor of such Security shall first
deliver to Holdings a written agreement of the proposed transferee, including
the transferee in an Exempt Transfer that is not pursuant to a Public Sale or a
Sale of the Company, to become a Stockholder and to be bound by the terms of
this Agreement, including, without limitation, the requirements of Section 2.3
(unless such proposed transferee is already a Stockholder). All Employee
Securities will continue to be Employee Securities in the hands of any
transferee (other than the Company, Holdings or any transferee in a Public
Sale). All AIP Securities will continue to be AIP Securities in the hands of any
transferee (other than the Company, Holdings or any transferee in a Public
Sale). All BNS Securities will continue to be BNS Securities in the hands of any
transferee (other than the Company, the Employees, AIP or a transferee in a
Public Sale). All New Stockholder Securities will continue to be New Stockholder
Securities in the hands of a transferee (other than the Company, BNS, the
Employees, AIP or any transferee in a Public Sale).
4.4. TRANSFERS IN VIOLATION OF AGREEMENT. Any Transfer or
attempted Transfer of any Securities in violation of any provision of this
Agreement shall be void, and Holdings shall not record such Transfer on its
books or treat any purported transferee of such Securities as the owner of such
Securities for any purpose.
ARTICLE V
TAKE-ALONG RIGHTS; SALE OF THE COMPANY
5.1. TAKE-ALONG RIGHTS.
(a) SALE OF THE COMPANY. Each of Holdings or BNS , subject to
the approval of a Required Majority of the Board, (such party the "INITIATING
PARTY") may elect to consummate, or to cause the Company to consummate, a
transaction constituting a Sale of the Company. If an Initiating Party wishes to
exercise its rights under this Section 5.1(a), the Initiating Party shall notify
the Company and the Stockholders in writing of such election. If an Initiating
Party delivers such notice, the Stockholders will consent to and raise no
objections to the proposed transaction, and the Stockholders and the Company
will take all other actions reasonably necessary or desirable to cause the
consummation of such Sale of the Company on the terms proposed by the Initiating
Party. Without limiting the foregoing, (i) if the proposed Sale of the Company
is structured as a sale of assets or a merger or consolidation, the
Stockholders, will vote or cause to be voted all Securities that they hold or
with respect to which such Stockholder has the power to direct the voting and
which are entitled to vote on such transaction in favor of such transaction and
will waive any appraisal rights which they may have in connection therewith, and
(ii) if the proposed Sale of the Company is structured as or involves a sale or
redemption of Securities, the Stockholders will agree to sell their PRO RATA
share of Securities being sold in such Sale of the Company on the terms and
conditions approved by the Initiating Party, and such Stockholders will execute
any merger or sale agreement approved by the Initiating Party in connection with
such Sale of the Company.
(b) TAKE-ALONG CONDITIONS. The obligations of the Stockholders
with respect to the Sale of the Company are subject to the satisfaction of the
following conditions, (i) upon the consummation of the Sale of the Company, all
of the holders of a particular class or series of Securities shall receive the
same form and amount of consideration per share or amount of Securities, or if
any holders of a particular class or series of Securities are given an option as
to the form and amount of consideration to be received, all holders of such
class or series will be given the same option and (ii) all holders of then
currently exercisable rights to acquire a particular class or series of
Securities will be given an opportunity to either (A) exercise such rights prior
to the consummation of the Sale of the Company and participate in such sale as
holders of such Securities
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or (B) upon the consummation of the Sale of the Company, receive in exchange for
such rights consideration equal to the amount determined by multiplying (1) the
same amount of consideration per share or amount of Securities received by the
holders of such type and class of Securities in connection with the Sale of the
Company less the exercise price per share or amount of such rights to acquire
such Securities by (2) the number of shares or aggregate amount of Securities
represented by such rights.
(c) PURCHASER REPRESENTATIVE. If an Initiating Party enters
into any negotiation or transaction for which Rule 506 under the Securities Act
(or any similar rule then in effect) may be available with respect to such
negotiation or transaction (including a merger, consolidation or other
reorganization), each Stockholder that is not an "accredited investor" (within
the meaning of Rule 501(a) of the Securities Act) will, at the request of the
Initiating Party, appoint a purchaser representative (as such term is defined in
Rule 501 under the Securities Act) approved by the Initiating Party, and the
Initiating Party will pay the fees of such purchaser representative. If any such
Stockholder declines to appoint the purchaser representative approved by the
Initiating Party, such Stockholder will appoint another purchaser
representative, and such Stockholder will be responsible for the fees of the
purchaser representative so appointed.
(d) EXPENSES. Each Stockholder will bear such Person's PRO
RATA share (based upon the relative amount of Securities sold) of the reasonable
costs of any sale of Securities pursuant to a Sale of the Company (but only if
such Sale of the Company is actually consummated) to the extent such costs are
incurred for the benefit of all Stockholders and are not otherwise paid by the
Initiating Party, the Company or the acquiring party. Costs incurred by or on
behalf of a Stockholder for such Person's sole benefit will not be considered
costs of the transaction hereunder. In the event that any transaction that an
Initiating Party elects to consummate or cause to be consummated pursuant to
this Section 5.1 is not consummated for any reason, the Company will reimburse
Holdings for all actual and reasonable expenses paid or incurred by Holdings in
connection therewith.
ARTICLE VI
LIQUIDITY EVENT
6.1. EXCLUSIVE NEGOTIATION PERIOD. At any time subsequent to
the Trigger Date, AIP may deliver notice to BNS that AIP has elected to exercise
its rights under this Article VI. Promptly after delivery of such notice to BNS,
BNS and AIP will commence good faith negotiations and use their reasonable
efforts to enter into a definitive agreement providing for BNS's purchase of all
Securities held by AIP (a "DEFINITIVE AGREEMENT"). During the period beginning
on the Trigger Date and ending ninety (90) days (or such greater number of days
as to which AIP may consent in its sole and absolute discretion) after the
Trigger Date (such period, the "EXCLUSIVE NEGOTIATION PERIOD"), AIP shall not
solicit, initiate, discuss or encourage the submission of any proposal or offer
from any Person relating the acquisition of all or any part of the Securities
held by AIP.
6.2 ENGAGEMENT OF XXXXXXX, XXXXX; COOPERATION. If by the end
of the Exclusive Negotiation Period, BNS and AIP do not enter into a Definitive
Agreement, then AIP shall have the right, on behalf of Holdings and the Company,
to engage Xxxxxxx, Sachs & Co. to conduct an auction for a Sale of the Company.
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Such engagement shall include an undertaking by Xxxxxxx, Xxxxx & Co. to provide
a fairness opinion to the Board with respect to such Sale of the Company, and
shall otherwise be on customary terms and conditions, including with respect to
the fees payable to Xxxxxxx, Sachs & Co. upon consummation of such Sale of the
Company and the delivery of such fairness opinion. Holdings, the Company and
each of the Stockholders shall, to the extent Xxxxxxx, Xxxxx & Co. may
reasonably request in connection with such auction for the Sale of the Company,
use its commercially reasonable efforts to, and shall cause the Company's
Subsidiaries and the Company's and its Subsidiaries' respective officers,
employees and advisors to use their respective commercially reasonable efforts
to: (A) cooperate in the preparation of any offering memorandum, private
placement memorandum, prospectus, confidential information memorandum or similar
documents, (B) make senior management of the Company reasonably available for
meetings and due diligence sessions, and (C) cooperate with prospective
purchasers and their respective advisors in performing their due diligence.
6.3 SALE OF THE COMPANY. The Board, acting in its reasonable
discretion and in consultation with Xxxxxxx, Sachs & Co., shall determine which
prospective purchaser participating in the auction for the Sale of the Company
provided in Section 6.2 has offered the largest cash consideration for such Sale
of the Company; PROVIDED; HOWEVER; that if an Affiliate of Steel Partners II,
L.P., is among the group of prospective purchasers whose offers are being
considered, AIP shall have the right, acting in its reasonable discretion and in
consultation with Xxxxxxx, Xxxxx & Co. to make such determination. Upon such
determination, and provided that Xxxxxxx, Sachs & Co. has indicated that it will
provide a fairness opinion to the Board with respect to such Sale of the
Company, the Stockholders will consent to and raise no objections to the
proposed transaction, and the Stockholders and the Company will take all other
actions reasonably necessary or desirable to cause the consummation of such Sale
of the Company on the terms proposed by such prospective purchaser. The rights
and obligations of the Stockholders with respect to a Sale of the Company
pursuant to this Section 6.3 shall be the same as the rights and obligations of
the Stockholders with respect to a Sale of the Company pursuant to Section 5.1.
ARTICLE VII
PUTS AND CALLS
7.1. APPLICATION OF THIS ARTICLE. This Article VII shall be
applicable to any Stockholder who, as of the date of acquisition of any shares
of Common Stock, is an employee of Holdings or any of its Subsidiaries.
7.2. PUT OPTION.
(a) If the Stockholder's employment with Holdings and its
Subsidiaries is terminated by Holdings or its Subsidiaries without Cause, by the
Stockholder for Good Reason, or by reason of Stockholder's Disability, death or
Retirement , in each case prior to the earlier of (i) a Public Offering or (ii)
a Sale of the Company, then each of the Stockholder and the Stockholder's
Permitted Transferees (hereinafter sometimes collectively referred to as the
"STOCKHOLDER GROUP") shall have the right, subject to the provisions of Section
7.5 hereof, for 180 days following the date of termination due to death and for
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90 days for any other termination described in this sentence, to sell to
Holdings, and Holdings shall be required to purchase (subject to the provisions
of Section 7.5 hereof), on one occasion from each member of the Stockholder
Group, all (but not less than all) of the shares of Common Stock then held by
such member, at a price per share equal to the applicable purchase price
determined pursuant to Section 7.3(c).
(b) If the Stockholder Group desires to exercise its option to
require Holdings to repurchase shares pursuant to Section 7.2(a), the members of
the Stockholder Group shall send one written notice to Holdings setting forth
the intention to sell all of their shares of Common Stock pursuant to Section
7.2(a) within the applicable period described therein, which notice shall
include the signature of each member of the Stockholder Group (other than the
Stockholder if deceased or incompetent, in which case the signature of such
Stockholder's authorized representative). Subject to the provisions of Section
7.5, the closing of the purchase shall take place at the principal office of
Holdings on a date specified by Holdings no later than the 60th day after the
giving of such notice.
(c) In the event of a purchase by Holdings pursuant to Section
7.2(a), the purchase price shall be a price per share equal to the Fair Market
Value (measured as of the Termination Date).
7.3. CALL OPTIONS.
(a) If the Stockholder's employment with Holdings or any of
its Subsidiaries terminates for any of the reasons set forth in clauses (i),
(ii), (iii) or (iv) below prior to a Sale of the Company, Holdings shall have
the right and option to purchase, for a period of 90 days following the date of
such termination of employment of the Stockholder, and each member of the
Stockholder Group shall be required to sell to Holdings, any or all of the
shares of Common Stock then held by such member of the Stockholder Group (it
being understood that Holdings may elect to repurchase only the portion of
Common Stock subject to repurchase hereunder which may be repurchased for less
than Fair Market Value, if any), at a price per share equal to the applicable
purchase price determined pursuant to Section 7.3(c):
(i) if the Stockholder's active employment with
Holdings or any of its Subsidiaries is terminated due to the Disability, death
or Retirement of the Stockholder;
(ii) if the Stockholder's active employment with
Holdings or any of its Subsidiaries is terminated by Holdings or any such
Subsidiary without Cause or by the Stockholder for Good Reason or if Holdings or
any such Subsidiary elects not to renew Stockholder's active employment upon the
expiration in accordance with its terms of a written employment agreement with
Stockholder;
(iii) if the Stockholder's active employment with
Holdings or any of its Subsidiaries is terminated by the Stockholder after
December 31, 2011 for any reason not set forth in Sections 7.3(a)(i) or (a)(ii);
or
(iv) if the Stockholder's active employment with
Holdings or any of its Subsidiaries is terminated (A) by Holdings or any of its
Subsidiaries for Cause or (B) by the Stockholder for any other reason not set
forth in Sections 7.3(a)(i) or (a)(ii) on or prior to December 31, 2011.
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(b) If Holdings desires to exercise its option to purchase any
shares pursuant to this Section 7.3, Holdings shall, not later than 90 days
after the date of termination of Stockholder's employment, send written notice
to each member of the Stockholder Group of its intention to purchase shares,
specifying the number of shares to be purchased (the "CALL NOTICE"). Subject to
the provisions of Section 7.5, the closing of the purchase shall take place at
the principal office of Holdings on a date specified by Holdings no later than
the 60th day after the giving of the Call Notice.
(c) In the event of a purchase by Holdings pursuant to Section
7.3(a), the purchase price shall be:
(i) in the case of a termination of employment
described in Section 7.3(a)(i), (a)(ii), (a)(iii), the purchase price shall be a
price per share equal to the Fair Market Value (measured as of the Termination
Date).
(ii) in the case of a termination of employment
described in Section 7.3(a)(iv), a price per share equal to the lesser of (A)
Termination Book Value or (B) Cost;
PROVIDED that in any case the Board shall have the right, in its sole
discretion, to increase any purchase price set forth above.
7.4. OBLIGATION TO SELL SEVERAL. In the event there is more
than one member of the Stockholder Group, the failure of any one member thereof
to perform its obligations hereunder shall not excuse or affect the obligations
of any other member thereof, and the closing of the purchases from such other
members by Holdings shall not excuse, or constitute a waiver of its rights
against, the defaulting member.
7.5. DEFERRAL OF PURCHASES. (a) Notwithstanding anything to
the contrary contained herein, Holdings shall not be obligated or permitted to
purchase any shares of Common Stock at any time pursuant to Section 7.2 or
Section 7.3, respectively, regardless of whether it has delivered a notice of
its election to purchase any such shares, (i) to the extent that the purchase of
such shares (together with any other purchases of Common Stock pursuant to
Section 7.2 and/or Section 7.3 or pursuant to similar provisions in the
agreements with other management investors of which Holdings has at such time
been given or has given notice) would result (A) in a violation of any law,
statute, rule, regulation, policy, order, writ, injunction, decree or judgment
promulgated or entered by any federal, state, local or foreign court or
governmental authority applicable to Holdings or any of its Subsidiaries or any
of its or their property or (B) after giving effect thereto, in a Financing
Default, or (ii) if immediately prior to such purchase there exists a Financing
Default which prohibits such purchase. Holdings shall within 15 days of learning
of any such fact so notify the members of the Stockholder Group that it is not
obligated or permitted to purchase shares hereunder.
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(a) Notwithstanding anything to the contrary contained in
Section 7.2 or Section 7.3, any shares of Common Stock which a member of the
Stockholder Group has elected to sell to Holdings or which Holdings has elected
to purchase from members of the Stockholder Group, but which in accordance with
Section 7.5 are not purchased at the applicable time provided in Section 7.2 or
Section 7.3 (and have not been purchased by AIP or BNS pursuant to Section 7.7),
shall be purchased by Holdings on or prior to the 15th day after such date or
dates that (after taking into account any purchases to be made at such time
pursuant to agreements with other management investors) it is no longer
prohibited from purchasing such shares under Section 7.5, and Holdings shall
give the members of the Stockholder Group five (5) days prior notice of any such
purchase.
7.6. PAYMENT FOR COMMON STOCK. If at any time Holdings elects
or is required to purchase any shares of Common Stock pursuant to Section 7.2 or
Section 7.3, Holdings shall pay the purchase price for the shares of Common
Stock it purchases (i) first, by the cancellation of any indebtedness, if any,
owing from the Stockholder to Holdings or any of its Subsidiaries (which
indebtedness shall be applied pro rata against the proceeds receivable by each
member of the Stockholder Group receiving consideration in such repurchase) and
(ii) then, by Holdings' delivery of a check or wire transfer of immediately
available funds for the remainder of the purchase price, if any, against
delivery of the certificates or other instruments representing the Common Stock
so purchased, duly endorsed; PROVIDED that if any of the conditions set forth in
Section 7.5 exists which prohibits such cash payment, the portion of the cash
payment so prohibited may be made, to the extent such payment is not prohibited,
by Holdings' delivery of a junior subordinated promissory note (which shall be
subordinated and subject in right of payment to the prior payment of any debt
outstanding under the Credit Agreement and any modifications, renewals,
extensions, replacements and refunding of all such indebtedness) of Holdings,
substantially in the form of Exhibit A (a "JUNIOR SUBORDINATED NOTE"), in a
principal amount equal to the balance of the purchase price, payable in up to
five equal annual installments commencing on the first anniversary of the
issuance thereof and bearing interest payable annually at the publicly announced
prime rate of XX Xxxxxx Xxxxx, on the date of issuance. The Company shall use
its reasonable efforts to repurchase Common Stock pursuant to Section 7.2 and
Section 7.3 with cash and/or to prepay any Junior Subordinated Notes issued in
connection with a repurchase of Common Stock pursuant to Section 7.2 or Section
7.3, and, in any event shall, within 10 days following the termination or
removal of any condition in Section 7.5 that prohibited the repurchase of Common
Stock with cash or the repayment of any Junior Subordinated Note, repurchase
such Common Stock and/or repay such Junior Subordinated Note to the extent then
permitted by Section 7.5 (after giving effect to such repurchase or repayment).
If, at any time, the Company can repay some (but not all) of any Junior
Subordinated Note as a result of termination or removal of any condition in
Section 7.5 that prohibited such repayment, the Company shall, within 10 days of
termination or removal of such condition, repay the maximum amount permitted to
be repaid in accordance with Section 7.5.
7.7. AIP AND BNS PURCHASE RIGHTS. If at any time Holdings
elects not to purchase, or is prevented (including as the result of the
restrictions set forth in Section 7.5) from purchasing, any shares of Common
Stock pursuant to Section 7.2 or Section 7.3, Holdings shall give AIP and BNS
written notice of such election or bar not later than 30 days prior to the date
on which Holdings would otherwise be obligated to purchase such shares (in the
case of purchases pursuant to Section 7.2) or entitled to deliver the Call
Notice (in the case of Section 7.3). AIP shall have the right to purchase any or
all of the shares of Common Stock specified in such notice by giving written
notice to Holdings and BNS within 15 days of receiving such notice from
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Holdings. BNS shall have the right to purchase any of the shares of Common Stock
that AIP does not elect to purchase pursuant to the preceding sentence by giving
written notice of such election to AIP and Holdings within 25 days of receiving
the notice from Holdings provided in the first sentence of this Section 7.7.
Each purchase of shares of Common Stock pursuant to this Section 7.7 shall be on
the same terms and subject to the same conditions as are applicable to purchases
of shares of Common Stock by Holdings pursuant to Section 7.2 or Section 7.3, as
the case may be; PROVIDED; HOWEVER, that the provisions of Section 7.5 shall not
apply to any such purchase.
ARTICLE VIII
AMENDMENT AND TERMINATION
8.1. AMENDMENT AND WAIVER. Except as otherwise provided
herein, no modification, amendment or waiver of any provision of this Agreement
shall be effective against the Company or the Stockholders unless such
modification, amendment or waiver is approved in writing by each of (a) the
holders of a majority of the BNS Securities and (b) the holders of a majority of
the Employee Securities and AIP Securities, taken together. The failure of any
party to enforce any of the provisions of this Agreement shall in no way be
construed as a waiver of such provisions and shall not affect the right of such
party thereafter to enforce each and every provision of this Agreement in
accordance with its terms.
8.2. TERMINATION OF CERTAIN PROVISIONS. The provisions of
Article II, Article V and Section 4.2 shall terminate upon the consummation of
the Company's first Public Offering.
8.3. TERMINATION OF AGREEMENT. This Agreement will terminate
in respect of all Stockholders (a) with the written consent of (i) the holders
of a majority of the BNS Securities, and (iv) the holders of a majority of the
Employee Securities and AIP Securities, taken together, (b) upon the
dissolution, liquidation or winding-up of the Company or (c) upon the
consummation of a Sale of the Company.
8.4. TERMINATION AS TO A PARTY. Any Person who ceases to hold
any Securities shall cease to be a Stockholder and shall have no further rights
or obligations under this Agreement.
ARTICLE IX
MISCELLANEOUS
9.1. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the meanings set forth or as referenced below:
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"AFFILIATE" of any particular Person means any other Person
Controlling, Controlled by or under common Control with such particular Person
or, in the case of a natural Person, any other member of such Person's Family
Group.
"AGREEMENT" has the meaning set forth in the Preface.
"AIP" has the meaning given such term in the Preface.
"AIP CHANGE OF CONTROL" means the failure of at least two of
Xxx X. Xxxxxx, Xxxx Xxxxxxxx and Xxxx Xxxxxx to devote the substantial majority
of their business time and attention to the affairs of AIP IV, LLC and its
Affiliates.
"AIP SECURITIES" means (a) the Common Stock acquired by AIP
pursuant to the Subscription Agreement dated as of the date of this Agreement,
(b) any Securities or Common Stock hereafter acquired by any holder of AIP
Securities, and (c) any securities of Holdings issued with respect to the
securities referred to in clauses (a) or (b) above by way of a payment-in-kind,
stock dividend or stock split or in connection with a combination of shares,
exchange, conversion, recapitalization, merger, consolidation or other
reorganization.
"ARBITRABLE DISPUTE" has the meaning given to such term in
Section 9.13.
"ARBITRATION EXPENSES" has the meaning given to such term in
Section 9.13.
"ARBITRATORS" has the meaning given to such term in Section
9.13.
"BNS SECURITIES" means (a) the Common Stock acquired by BNS on
the date of this Agreement under the Equity Purchase Agreement, (b) any
Securities or Common Stock hereafter acquired by any holder of BNS Securities,
and (c) any securities of Holdings issued with respect to the securities
referred to in clauses (a) or (b) above by way of a payment-in-kind, stock
dividend or stock split or in connection with a combination of shares, exchange,
conversion, recapitalization, merger, consolidation or other reorganization.
"BOARD" has the meaning given to such term in Section 2.1(a).
"BOOK VALUE" means, as to each share of Common Stock on any
date of determination, an amount equal to (i) the sum of stated capital in
respect of the Common Stock PLUS additional paid in capital in respect of the
Common Stock PLUS retained earnings of Holdings (net of the value of all accrued
and unpaid dividends on Holdings' preferred stock), each determined according to
GAAP, divided by (ii) the number of shares of the Common Stock outstanding on a
fully diluted basis.
"BUSINESS PLAN" shall mean (A) a proposed budget for the
forthcoming five (5) fiscal years, including an income statement prepared on an
accrual basis which shall show in reasonable detail the revenues and expenses
projected for the business of the Company and its Subsidiaries on an annual
basis for such period, a cash flow statement which shall show in reasonable
detail the receipts and disbursements projected for the business of the Company
and its Subsidiaries on an annual basis for such period and the amount of any
13
corresponding cash deficiency or surplus, and the projected borrowings of the
Company and its Subsidiaries for such period, and (B) a proposed business plan
for such period which shall show in reasonable detail the proposed business
operations of the Company and its Subsidiaries, including staffing levels, and
the operating strategy of the Company and its Subsidiaries. The Business Plan
for each five (5) fiscal year period shall be presented to the Board not later
than ninety (90) days prior to the beginning of such period, and the portions of
the Business Plan described in clause (A) of the preceding sentence shall, to
the extent practicable, be prepared on a basis consistent with the Company's
audited financial statement and GAAP.
"CALL NOTICE" has the meaning given such term in Section
7.3(b) hereof.
"CAUSE" as used in connection with the termination of
employment of any employee who is a Stockholder, (A) shall have the meaning set
forth in such Stockholder's employment agreement in effect as of such
termination of employment and (B) shall have the following meaning if such
Stockholder does not have an employment agreement in effect as of such
termination of employment: a termination of employment of such Stockholder by
Holdings or any of its Subsidiaries due to (i) a breach of such Stockholder's
fiduciary duties to Holdings or any of its Subsidiaries, (ii) any act of fraud
with respect to Holdings or any of its Subsidiaries, (iii) the commission by
such Stockholder of a felony or a crime involving moral turpitude, (iv) any act
or omission causing material harm to the standing and reputation of Holdings or
any of its Subsidiaries (other than any act or omission relating to a business
decision made in good faith by such Stockholder), (v) any act of gross
negligence or corporate waste by such Stockholder to Holdings or any of its
Subsidiaries, (vi) the commission of any intentional tort by such Stockholder
against Holdings or any of its Subsidiaries causing loss, damages or harm to
Holdings or any of its Subsidiaries in excess of $150,000, (vii) the
misappropriation of proprietary information or confidential information, or
(viii) the failure of such Stockholder to render services to Holdings or any of
its Subsidiaries in accordance with such Stockholder's employment which failure
amounts to a material neglect of such Stockholder's duties to Holdings or any of
its Subsidiaries and such failure continues for a period of 30 days after
written notice from Holdings or any of its Subsidiaries specifying such breach.
"CLOSING DATE" has the meaning given such term in the Merger
Agreement.
"COMMON STOCK" means, collectively, Holdings' common stock, no
par value and any other class or series of authorized capital stock of Holdings
which is not limited to a fixed sum or percentage of par or stated value in
respect to the rights of the holders thereof to participate in dividends or in
the distribution of assets upon any liquidation, dissolution or winding up of
Holdings.
"COMMON STOCK EQUIVALENTS" means (without duplication with any
Common Stock or other Common Stock Equivalents) rights, warrants, options
(including the Options), convertible securities, or exchangeable securities or
indebtedness, or other rights, exercisable for or convertible or exchangeable
into, directly or indirectly, Common Stock or securities exercisable for or
convertible or exchangeable into Common Stock, whether at the time of issuance
or upon the passage of time or the occurrence of some future event.
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"COMPANY" has the meaning set forth in the preface.
"COMPANY SALE" means a transaction with one or more
independent third parties pursuant to which such party or parties (i) acquire
(whether by merger, consolidation or transfer or issuance of capital stock)
capital stock of the Company (or any surviving or resulting corporation)
possessing the voting power to elect a majority of the board of directors of the
Company (or such surviving or resulting corporation) or (ii) acquire all or
substantially all of the Company's assets determined on a consolidated basis.
"CONTROL" (including, with correlative meaning, all
conjugations thereof) means with respect to any Person, the ability of another
Person to control or direct the actions or policies of such first Person,
whether by ownership of voting securities, by contract or otherwise.
"COST" means, with respect to shares of Common Stock, the
price per share paid by the Stockholder (as proportionately adjusted for all
subsequent stock splits, stock dividends and other recapitalizations).
"COSTS AND FEES" has the meaning given such term in Section
9.13 hereof.
"CREDIT AGREEMENT" means the Loan And Security Agreement,
dated as of October 31, 2006, among CS Acquisition Corp., a Missouri
corporation, Xxxxxxx Industries, Inc., a Missouri corporation, Xxxxxxx Bus
Corporation, a Kansas corporation, Wheeled Coach Industries, Inc., a Florida
corporation, Capacity of Texas, Inc., a Texas corporation, Mid Bus, Inc., an
Ohio corporation, Mobile Products, Inc., a Kansas corporation, the Guarantors
signatory thereto, the financial institution(s) listed on the signature pages
thereof and their respective successors and Eligible Assignees and GMAC
Commercial Finance LLC, a Delaware limited liability company, for itself as a
Lender and as Agent, as amended, restated, extended, renewed, refinanced,
replaced, supplemented or otherwise modified from time to time.
"DISABILITY" as used in connection with an employee of
Holdings or any of its Subsidiaries who is a Stockholder, means the inability of
such Stockholder to perform such essential functions of such Stockholder's job,
with or without reasonable accommodation, by reason of a physical or mental
infirmity, for a continuous period of six months. The period of six months shall
be deemed continuous unless such Stockholder returns to work for at least 30
consecutive business days during such period and performs during such period at
the level and competence that existed prior to the beginning of the six-month
period. The date of such Disability shall be on the first day of such six-month
period.
"EMPLOYEE" has the meaning set forth in the preface.
"Employee" and "Employment." The term "EMPLOYEE" means any
employee (as defined in accordance with the regulations and revenue rulings then
applicable under Section 3401(c) of the Internal Revenue Code of 1986, as
amended) of Holdings or any of its Subsidiaries, and the term "EMPLOYMENT" shall
include service as a part- or full-time employee to Holdings or any of its
Subsidiaries.
15
"EMPLOYEE SECURITIES" means (a) the Common Stock acquired by
the Employees on the date of this Agreement under Subscription Agreements, (b)
any Options and any Common Stock issued upon exercise of the Options, (c) any
Securities or Common Stock hereafter acquired by any holder of Employee
Securities, and (d) any securities of Holdings issued with respect to the
securities referred to in clauses (a), (b) or (c) above by way of a
payment-in-kind, stock dividend or stock split or in connection with a
combination of shares, exchange, conversion, recapitalization, merger,
consolidation or other reorganization.
"EQUITY PURCHASE AGREEMENT" means the Subscription Agreement
of even date herewith by and among Holdings and BNS.
"EXEMPT AIP TRANSFER" means a Transfer of AIP Securities (a)
pursuant to a Sale of the Company under Section 5.1 or other transaction
approved under Section 2.2, (b) pursuant to a Public Sale, (c) upon distribution
to AIP's members, (d) upon the death of such holder pursuant to the applicable
laws of descent and distribution, (e) to or among such holder's Family Group and
siblings, descendants of such siblings and any trust established and maintained
for the benefit of any of the foregoing or (f) incidental to the exercise,
conversion or exchange of such securities in accordance with their terms, any
combination of shares (including any reverse stock split) or any
recapitalization, reorganization or reclassification of, or any merger or
consolidation involving, Holdings.
"EXEMPT BNS TRANSFER" means a Transfer of BNS Securities (a)
pursuant to a Sale of the Company under Section 5.1 or other transaction
approved under Section 2.2, (c) pursuant to a Public Sale, (d) upon distribution
to any BNS's stockholders, (e) incidental to the exercise, conversion or
exchange of such securities in accordance with their terms, any combination of
shares (including any reverse stock split) or any recapitalization,
reorganization or reclassification of, or any merger or consolidation involving,
Holdingsor (f) pursuant to a pledge of BNS Securities to Steel Partners II,
L.P., or its Affiliate, as security for an obligation of BNS to Steel Partners
II, L.P., or its Affiliates.
"EXEMPT EMPLOYEE TRANSFER" means a Transfer of Employee
Securities (a) pursuant to a Sale of the Company under Section 5.1 or other
transaction approved under Section 2.2, (b) to Holdings pursuant to the call
option under Section 7.3, (c) to Holdings pursuant to an exercise of the put
option under Section 7.2, (d) pursuant to a Public Sale, (e) upon the death of
the holder pursuant to the applicable laws of descent and distribution, (f) to
or among such Employee's Family Group or (h) incidental to the exercise,
conversion or exchange of such securities in accordance with their terms, any
combination of shares (including any reverse stock split) or any
recapitalization, reorganization or reclassification of, or any merger or
consolidation involving, Holdings.
"EXEMPT TRANSFER" means an Exempt Employee Transfer, an Exempt
BNS Transfer and Exempt AIP Transfer.
"FAIR MARKET VALUE" as of any date means (a) with respect to
publicly traded Common Stock, the market trading price of such Common Stock, and
(b) with respect to non-publicly traded Common Stock, the fair market value of
such Common Stock (expressed on a per-share basis after giving effect to the
exercise of any options or warrants then outstanding if prior to a Company Sale
16
or after giving effect to the exercise of any vested options or vested warrants
then outstanding at the time of a Company Sale) as of the relevant date, as
determined in good faith by the Board based on such factors as the Board may
deem appropriate (PROVIDED that a Stockholder may request an independent
appraisal of such Common Stock by a nationally recognized investment banking
firm selected jointly by such Stockholder and the Board). In the event of an
independent appraisal pursuant to the foregoing clause (b), such appraisal shall
not give effect to any minority interest discount or lack of control, but shall
give effect to any illiquidity, and the cost of such appraisal shall be (A)
shared equally between the Stockholder and the Company if such appraisal is
within 10% of the appraisal provided by the Board, (B) paid by the Stockholder
if such appraisal is less than or equal to 90% of the appraisal provided by the
Board, and (C) paid by the Company if such appraisal is greater than or equal to
110% of the appraisal provided by the Board.
"FAMILY GROUP" means, with respect to any individual, such
individual's spouse and descendants (whether natural or adopted) and any trust
established and maintained for the benefit of such individual, such individual's
spouse or such individual's descendants.
"FINANCING DEFAULT" means an event which would constitute (or
with notice or lapse of time or both would constitute) an event of default under
any of the following as they may be amended from time to time: (i) the Credit
Agreement and any extensions, renewals, refinancings or refundings thereof in
whole or in part; (ii) any other agreement under which an amount of indebtedness
of Holdings or any of its Subsidiaries in excess of $1,000,000 is outstanding as
of the time of the aforementioned event, and any extensions, renewals,
refinancings or refundings thereof in whole or in part; (iii) any provision of
Holdings' or any of its Subsidiary's articles of incorporation as in effect on
the Closing Date; (iv) any amendment of, supplement to or other modification of
any of the instruments referred to in clauses (i) through (iii) above; and (v)
any of the securities issued pursuant to or whose terms are governed by the
terms of any of the agreements set forth in clauses (i) through (iv) above, and
any extensions, renewals, refinancings or refundings thereof in whole or in
part.
"FULLY-DILUTED SHARES" means, as of any date of determination,
the number of shares of such Common Stock outstanding plus (without duplication)
all shares of such Common Stock issuable, whether at such time or upon the
passage of time or the occurrence of future events, upon the exercise,
conversion or exchange of all then-outstanding Common Stock Equivalents.
"GAAP" means United States generally accepted accounting
principles consistently applied with prior periods.
"GOOD REASON" with respect to an employee who is a
Stockholder, means a material reduction of such Stockholder's duties and
responsibilities or a change in such Stockholder's duties and responsibilities
which are materially inconsistent with the type of duties and responsibilities
of such Stockholder at such time, or a material reduction in compensation paid
to such Stockholder (excluding any reduction in such Stockholder's salary that
is part of an overall plan to reduce the aggregate amount of salary paid to
management investors).
"HOLDINGS" has the meaning given in the Preface.
17
"HOLDINGS REORGANIZATION" means (a) a merger of Holdings into
the Company pursuant to which (i) the Company is the survivor, (ii) the Company
issues to the Stockholders a number of shares of Common Stock equal in relative
proportion to the number of Securities held by such Stockholders and (iii) all
Securities then held by such Stockholders are canceled or (b) a similar
transaction or exchange of securities pursuant to which (i) the Company issues
to the Stockholders a number of shares of Common Stock equal in relative
proportion to the number of Securities held by such Stockholders and (ii) all
Securities then held by such Stockholders are canceled.
"INDEPENDENT THIRD PARTY" means any Person who, immediately
prior to the contemplated transaction, does not beneficially own five percent
(5%) or more of the Fully-Diluted Shares who is not an Affiliate of any such
five percent (5%) beneficial owner and is not a member of the Family Group of
any such five percent (5%) beneficial owner.
"INITIATING PARTY" has the meaning given such term in Section
6.1(a).
"JUNIOR SUBORDINATED NOTE" has the meaning given such term in
Section 7.6.
"MERGER AGREEMENT" means the Agreement and Plan of Merger
dated as of September 26, 2006 among the Company, Steel Partners II, L.P. and CS
Acquisition Corp.
"NEW STOCKHOLDER" has the meaning given such term in the
Preface.
"NEW STOCKHOLDER SECURITIES" means (a) Common Stock hereafter
acquired by a New Stockholder and (b) any securities of Holdings issued with
respect to the securities referred to in clause (a) above by way of
payment-in-kind, stock dividend or stock split, or in connection with a
combination of shares, exchange, recapitalization, merger, consolidation or
other reorganization.
"OPERATIONS COMMITTEE" has the meaning given such term in
Section 3.2(a).
"OPTIONS" means any options to purchase shares of Common Stock
granted by Holdings to any Employee on or after the date of this Agreement.
"ORIX CREDIT AGREEMENT" means the Loan And Security Agreement,
dated as of October 31, 2006, among CS Acquisition Corp., a Missouri
corporation, Xxxxxxx Industries, Inc., a Missouri corporation, Xxxxxxx Bus
Corporation, a Kansas corporation, Wheeled Coach Industries, Inc., a Florida
corporation, Capacity of Texas, Inc., a Texas corporation, Mid Bus, Inc., an
Ohio corporation, Mobile Products, Inc., a Kansas corporation, the Guarantors
signatory thereto, the financial institution(s) listed on the signature pages
thereof and their respective successors and Eligible Assignees and ORIX Finance
Corp., a Delaware corporation, for itself as a Lender and as Agent, as amended,
restated, extended, renewed, refinanced, replaced, supplemented or otherwise
modified from time to time.
"OWNERSHIP PERCENTAGE" means, for each Stockholder, the
percentage obtained by dividing the number of shares of Securities (other than
Excluded Securities) held by such Stockholder by the total number of shares of
such Securities (other than Excluded Securities) outstanding.
18
"PERMITTED STOCKHOLDER TRANSACTIONS" means (i) the Management
Services Agreement dated as of October 31, 2006, between AIP IV, LLC and Xxxxxxx
Industries, Inc., (ii) the Management Services Agreement dated as of October 31,
2006, between BNS Holding, Inc., and Xxxxxxx Industries, Inc., and (iii) the
advisory fee letter dated October 31, 2006 between Xxxxxxx Industries, Inc. and
Steel Partners II, L.P.
"PERMITTED TRANSFEREE" means the transferees in any Transfer
described in clauses (f) or (g) of the definition of "Exempt Employee Transfer."
"PERSON" means an individual, a partnership, a joint venture,
a corporation, an association, a joint stock company, a limited liability
company, a trust, an unincorporated organization or a government or any
department or agency or political subdivision thereof.
"PUBLIC OFFERING" means a sale of Common Stock to the public
in an offering pursuant to an effective registration statement filed with the
SEC pursuant to the Securities Act, as then in effect, provided that a Public
Offering shall not include an offering made in connection with a business
acquisition or combination or an employee benefit plan.
"PUBLIC SALE" means a sale of Securities pursuant to a Public
Offering or a Rule 144 Sale.
"REQUIRED CONSENT OF THE STOCKHOLDERS" means the written
consent of AIP and BNS.
"REQUIRED MAJORITY OF THE BOARD" means the affirmative vote of
four (4) members of the Board, including at least one (1) member designated by
AIP.
"RETIREMENT" shall mean, with respect to an employee who is a
Stockholder, such Stockholder's voluntary retirement as an employee of Holdings
or any of its Subsidiaries on or after reaching age 62 or such earlier age as
may be otherwise determined by the Board after at least three years employment
with Holdings after the Closing Date.
"RULE 144" means Rule 144 adopted under the Securities Act (or
any successor rule or regulation).
"RULE 144A" means Rule 144A adopted under the Securities Act
(or any successor rule or regulation).
"RULE 144 SALE" means a sale of Securities to the public
through a broker, dealer or market-maker pursuant to the provisions of Rule 144
adopted under the Securities Act (or any successor rule or regulation).
"SALE OF THE COMPANY" means the consummation of a transaction,
whether in a single transaction or in a series of related transactions that are
consummated contemporaneously (or consummated pursuant to contemporaneous
agreements), (i) with an Independent Third Party or a group of Independent Third
Parties or (ii) with any other Person or Persons on an arm's-length basis
19
pursuant to which such party or parties (a) acquire (whether by merger, stock
purchase, recapitalization, reorganization, redemption, issuance of capital
stock or otherwise) more than 50% of the Securities, (b) acquire assets
constituting all or substantially all of the assets of Holdings, or (c) acquire
assets constituting all or substantially all of the assets of the Company and
its Subsidiaries on a consolidated basis.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means, collectively, the BNS Securities, the
Employee Securities, the AIP Securities and the New Stockholder Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time.
"STOCKHOLDER" has the meaning given such term in the Preface.
"STOCKHOLDER GROUP" shall have the meaning set forth in
Section 7.2(a).
"SUBSCRIPTION AGREEMENTS" mean the Subscription Agreements
between Holdings and the Stockholders party hereto.
"SUBSIDIARY" means any corporation with respect to which
another specified corporation has the power to vote or direct the voting of
sufficient securities to elect directors having a majority of the voting power
of the board of directors of such corporation.
"SUSPENSION EVENT" shall mean (i) an AIP Change of Control, or
(ii) an event of default under the Credit Agreement that remains uncured.
"TERMINATION BOOK VALUE" shall mean Book Value as of the last
day of the month during which the termination of employment giving rise to a
purchase of shares of Common Stock pursuant to this Agreement occurs.
"TERMINATION DATE" means the date upon which Stockholder's
employment with Holdings and its Subsidiaries is terminated.
"TRANSFER" means (in either the noun or the verb form,
including with respect to the verb form, all conjugations thereof within their
correlative meanings) with respect to any Security, the gift, sale, assignment,
transfer, pledge, hypothecation or other disposition (whether for or without
consideration, whether directly or indirectly, and whether voluntary,
involuntary or by operation of law) of such Security or any interest therein.
"TRIGGER DATE" means the earlier of (A) the fifth anniversary
of the Closing Date, and (B) after the occurrence of any of the events described
in clauses (1), (2) and (3) of Section 8.1(f) of the Credit Agreement (each such
event, a "TRIGGER EVENT"), the earlier of (1) six (6) months after the date of
the first Trigger Event to occur subsequent to the Closing Date, and (2) the
third anniversary of the Closing Date.
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9.2. LEGENDS.
(a) STOCKHOLDERS AGREEMENT. Each certificate or instrument
evidencing Securities and each certificate or instrument issued in exchange for
or upon the Transfer of any such Securities (if such securities remain subject
to this Agreement after such Transfer) shall be stamped or otherwise imprinted
with a legend (as appropriately completed under the circumstances) in
substantially the following form:
"THE SECURITIES REPRESENTED BY THIS
CERTIFICATE CONSTITUTE ["EMPLOYEE
SECURITIES"] ["AIP SECURITIES"] ["BNS
SECURITIES"] UNDER A CERTAIN STOCKHOLDERS
AGREEMENT DATED AS OF OCTOBER 31, 2006 AMONG
THE ISSUER OF SUCH SECURITIES (THE
"COMPANY") AND CERTAIN OF HOLDINGS'
STOCKHOLDERS AND, AS SUCH, ARE SUBJECT TO
CERTAIN VOTING PROVISIONS, PURCHASE RIGHTS
AND RESTRICTIONS ON TRANSFER SET FORTH IN
THE STOCKHOLDERS AGREEMENT. A COPY OF SUCH
STOCKHOLDERS AGREEMENT WILL BE FURNISHED
WITHOUT CHARGE BY HOLDINGS TO THE HOLDER
HEREOF UPON WRITTEN REQUEST."
(b) REMOVAL OF LEGENDS. Whenever in the opinion of Holdings
and counsel reasonably satisfactory to Holdings (which opinion shall be
delivered to Holdings in writing) the restrictions described in any legend set
forth above cease to be applicable to any Securities, the holder thereof shall
be entitled to receive from Holdings, without expense to the holder, a new
instrument or certificate not bearing a legend stating such restriction.
9.3. BINDING EFFECT. The provisions of this Agreement shall be
binding upon the parties hereto after a Holdings Reorganization. After a
Holdings Reorganization, all references to the Company or Holdings, as the case
may be, shall become references to the company surviving any merger which occurs
as part of a Holdings Reorganization.
9.4. ACKNOWLEDGMENT AND CONSENT. Each of the parties hereto
hereby consents and agrees to raise no objection to a Holdings Reorganization.
9.5. PURCHASER'S EMPLOYMENT BY THE COMPANY. Nothing contained
in this Agreement shall be deemed to obligate Holdings, the Company or any of
their Subsidiaries to employ any Stockholder in any capacity whatsoever or to
prohibit or restrict the Company (or any such subsidiary) from terminating the
employment of any Stockholder (if such Stockholder is an employee) at any time
or for any reason whatsoever, with or without Cause.
9.6. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
21
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
9.7. ENTIRE AGREEMENT. Except as otherwise expressly
contemplated hereby, this document embodies the complete agreement and
understanding among the parties hereto with respect to the subject matter hereof
and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
9.8. SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be enforceable
by Holdings, the Company and their respective successors and assigns and the
Stockholders and any subsequent holders of Securities and the respective
successors and assigns of each of them, so long as they hold Securities.
9.9. COUNTERPARTS. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
9.10. REMEDIES. Holdings, the Company and 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
(including costs of enforcement) 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 Holdings, the Company or any Stockholder may in such Person's sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance or injunctive relief (without posting a bond or other
security) in order to enforce or prevent any violation of the provisions of this
Agreement.
9.11. NOTICES. Any notice provided for in this Agreement shall
be in writing and shall be either personally delivered, or mailed first class
mail (postage prepaid) or sent by reputable overnight courier service (charges
prepaid) to Holdings and the Company at the address set forth below and to any
other recipient at the address indicated on the attached signature pages hereto
and to any subsequent holder of Securities subject to this Agreement at such
address as indicated by Holdings' records, or at such address or to the
attention of such other person as the recipient party has specified by prior
written notice to the sending party. Notices will be deemed to have been given
hereunder when sent by facsimile (receipt confirmed) delivered personally, 5
days after deposit in the U.S. mail and one business day after deposit with a
reputable overnight courier service. The Company's address is:
Xxxxxxx Industries, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxx, Chief Operating Officer
Fax: (000)-000 0000
22
Holding's address is:
Xxxxxxx I Holding Corp.
c/o BNS Holding, Inc.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, President and
Chief Executive Officer
Fax: (000) 000-0000
9.12. GOVERNING LAW. The construction, validity and
interpretation of this Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Delaware, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Delaware.
9.13. NON-BINDING MEDIATION; BINDING ARBITRATION. Any dispute,
controversy, or claim arising under or relating to this Agreement ("ARBITRABLE
DISPUTE") shall be resolved by final and binding arbitration in New York, New
York pursuant to the American Arbitration Association Commercial Arbitration
Rules, subject to the following:
(a) Any party may demand that any Arbitrable Dispute be
submitted to binding arbitration. The demand for arbitration shall be in
writing, shall be served on the other party in the manner prescribed herein for
the giving of notices, and shall set forth a short statement of the factual
basis for the claim, specifying the matter or matters to be arbitrated.
(b) The arbitration shall be conducted by a single arbitrator
(the "ARBITRATOR"). All arbitration proceedings shall take place in New York,
New York.
(c) Except as provided herein:
(i) each party shall bear its own "COSTS AND FEES,"
which are defined as all reasonable pre-award expenses of the
arbitration, including travel expenses, out-of-pocket expenses
(including, but not limited to, copying and telephone) witness fees,
and reasonable attorney's fees and expenses;
(ii) the fees and expenses of the Arbitrator and all
other costs and expenses incurred in connection with the arbitration
("ARBITRATION EXPENSES") shall be borne equally by the parties; and
(iii) notwithstanding the foregoing, the Arbitrator
shall be empowered to require any one or more of the parties to bear
all or any portion of such Costs and Fees and/or the fees and expenses
of the Arbitrator in the event that the Arbitrator determine such party
has acted unreasonably or in bad faith.
23
(d) The Arbitrator shall have the authority to award any
remedy or relief that a Court of the State of Delaware could order or grant,
including, without limitation, specific performance of any obligation created
under the Agreement, the awarding of punitive damages, the issuance of an
injunction, or the imposition of sanctions for abuse or frustration of the
arbitration process. Such decision and award shall be in writing and counterpart
copies thereof shall be delivered to each party. The decision and award of the
Arbitrator shall be binding on all parties. In rendering such decision and
award, the Arbitrator shall not add to, subtract from or otherwise modify the
provisions of this Agreement. Any party to the arbitration may seek to have
judgment upon the award rendered by the Arbitrator entered in any court having
jurisdiction thereof.
9.14. DESCRIPTIVE HEADINGS. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
9.15. BNS TAX LOSSES. BNS will use its commercially reasonable
efforts not to impair under Section 382 of the Internal Revenue Code of 1986, as
amended, (whether by action or omission) its ability to utilize its historical
net operating losses to offset the Company's taxable income. BNS will provide to
AIP such information as AIP may from time to time reasonably request with
respect to the status of BNS's historical net operating losses.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this
Stockholders Agreement on the day and year first above written.
XXXXXXX I HOLDING CORP.
By: /s/ Xxxx Xxxxxx
----------------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
XXXXXXX INDUSTRIES, INC.
By: /s/ Xxxx Xxxxxx
----------------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
BNS HOLDING, INC.
By: /s/ Xxxxxxx Xxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
Address: 00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, President and
Chief Executive Officer
Fax:(000) 000-0000
AIP/CHC HOLDINGS, LLC
By AIP IV, LLC, its sole member
By: /s/ Xxxx Xxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxx
Title: Manager
Address: 000 Xxxxx Xxxxxx
00 Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Fax:(000) 000-0000
