SHAREHOLDERS' AGREEMENT
Dated as of January 29, 1997
By and Among
EURONIMBUS S.A.,
NIMBUS MANUFACTURING (UK) LIMITED
and
SAARBRUCKER ZEITUNG VERLAG UND DRUCKEREI G.m.b.H.
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS............................................. 2
1. Definitions............................................... 2
ARTICLE II BOARD OF DIRECTORS...................................... 6
2.1 Composition.............................................. 6
2.2 Chairman and Deputy Chairman of the Board of Directors... 7
2.3 Term..................................................... 7
2.4 Vacancies................................................ 7
2.5 Removal.................................................. 7
2.6 Meetings, Notice......................................... 8
2.7 Quorum................................................... 8
2.8 Committees............................................... 8
2.9 Voting................................................... 8
2.10 Major Management Decisions.............................. 9
2.11 Significant Management Decisions........................ 9
2.12 Approval of Certain Transactions........................ 10
2.13 Related Party Transactions.............................. 11
2.14 General Manager......................................... 11
2.15 Operating Committee..................................... 11
ARTICLE III TRANSFER OF SHARES...................................... 11
3.1 Restrictions............................................. 11
3.2 Permitted Transfers...................................... 12
3.3 Sales by Nimbus Subject to Tag-Along Rights............. 12
3.4 Grant to Nimbus of Bring-Along Rights................... 13
3.5 Saarbrucker's Right of First Offer from Nimbus.......... 13
3.6 Saarbrucker Right to Sell after Five Years;
Nimbus's Right of First Offer from Saarbrucker.......... 15
3.7 Change of Control........................................ 16
3.8 Transferee's Agreement................................... 17
ARTICLE IV IMPLEMENTATION.......................................... 18
4.1 Appointment.............................................. 18
4.2 Luxembourg Law........................................... 18
4.3 Best Efforts............................................. 18
ARTICLE V ACCOUNTING AND OTHER INFORMATION........................ 18
5.1 Quarterly Reports........................................ 18
5.2 Audits................................................... 19
5.3 Selection of Independent Public Accountants.............. 19
5.4 Access to Information Concerning Properties and Records.. 19
ARTICLE VI DISPUTE RESOLUTION...................................... 19
6.1 Dispute Resolution....................................... 19
6.2 Procedures............................................... 20
6.3 Awards................................................... 20
6.4 Enforcement.............................................. 20
6.5 Site and Language........................................ 20
ARTICLE VII SCOPE OF BUSINESS; EXCLUSIVITY.......................... 20
7.1 Scope of Business........................................ 20
7.2 Exclusivity.............................................. 20
ARTICLE VIII MISCELLANEOUS......................................... 21
8.1 Entire Agreement; Amendment.............................. 21
8.2 Captions................................................. 21
8.3 Counterparts............................................. 21
8.4 Notices.................................................. 21
8.5 Binding Effect; Benefit; Assignment...................... 23
8.6 Amendment and Modification............................... 23
8.7 Applicable Law........................................... 23
8.8 Severability............................................. 23
8.9 Termination.............................................. 24
8.10 Confidentiality......................................... 24
SHAREHOLDERS' AGREEMENT
SHAREHOLDERS' AGREEMENT, dated as of January 29, 1997 by and among EURONIMBUS
S.A., ("EuroNimbus") a corporation (sociJtJ anonyme) organized and existing
under the laws of the Grand Duchy of Luxembourg, NIMBUS MANUFACTURING (UK)
LIMITED ("Nimbus") a corporation organized and existing under the laws of
England and Wales and an indirect wholly-owned subsidiary of Nimbus CD
International, Inc. ("Nimbus Parent"), and SAARBRUCKER ZEITUNG VERLAG UND
DRUCKEREI G.m.b.H. ("Saarbrucker") a limited liability company organized and
existing under the laws of the Federal Republic of Germany.
W I T N E S S E T H :
WHEREAS, Nimbus owns 70% of the outstanding shares of common stock of EuroNimbus
and Saarbrucker owns 30% of the outstanding shares of common stock of
EuroNimbus; and
WHEREAS, Nimbus and Saarbrucker wish to provide a stable management environment
for EuroNimbus and provide a basis for the conduct of its business operations,
in part by restricting the transferability of the common stock of EuroNimbus, as
set forth herein; and
WHEREAS, the parties desire to enter into this Agreement to otherwise regulate
the relationship between Nimbus and Saarbrucker as Shareholders and to provide
for the operations of EuroNimbus.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth
and for other good and valuable consideration, the receipt and sufficiency
whereof is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1. Definitions. When used in this Agreement, the following terms
shall have the respective meanings specified below:
I.1 "Affiliate" shall mean and include, with reference to any Person, any
other Person other than EuroNimbus, Controlling, Controlled by or under common
Control with such Person.
I.2 "Agreement" and "this Agreement" shall mean this Shareholders'
Agreement.
I.3 "Beneficially Own" shall have the meanings specified
therefor in Rule 13d-3 under the U.S. Securities Exchange Act of
1934, as amended.
I.4 "Board of Directors" shall have the meaning specified therefor in
Section 2.1 hereof.
I.5 "Business Day" shall mean any day, excluding Saturday, Sunday or any
day which shall be a legal holiday in the States of New York or Virginia, the
Federal Republic of Germany, the Grand Duchy of Luxembourg or the United
Kingdom.
I.6 "Chairman" shall mean the Chairman of the Board of Directors.
I.7 "Change of Control" shall have the meaning specified therefor in
Section 3.7 hereof.
I.8 "Change of Control Notice" shall have the meaning specified therefor
in Section 3.7 hereof.
I.9 "Common Stock" shall mean the shares of common stock without
designation of par value of EuroNimbus.
I.10 "Control" shall mean the power to vote more than 50% of the Voting
Securities of an Entity or otherwise control the management and affairs of such
Entity (including by way of the power to veto any material act or decision).
I.11 "Deputy Chairman" shall mean the Deputy Chairman of the Board of
Directors.
I.12 "Director" shall have the meaning specified therefor in Section 2.1
hereof.
I.13 "Entity" shall mean any Person that is not a natural Person.
I.14 "EuroNimbus" shall have the meaning specified therefor in the
preamble to this Agreement.
I.15 "Fair Market Value" shall mean the price at which EuroNimbus, as a
going concern, could be sold in an arms' length transaction to an unaffiliated
bona fide third party purchaser in an orderly sale without regard to the
illiquidity of its Common Stock and shall reflect the aggregate exercise or
conversion price payable to EuroNimbus upon the exercise or conversion of all
warrants, rights and options to purchase capital stock of EuroNimbus and
convertible securities, the exercise or conversion of which is taken into
account in determining the fully-diluted per share fair market value of
EuroNimbus.
I.16 "FMV Arbitrator" shall have the meaning specified therefor in Section
3.7 hereof.
I.17 "FMV Arbitrator Notice" shall have the meaning specified thereforein
Section 3.7 hereof.
I.18 "General Manager" shall have the meaning specified therefor in
Section 2.14 hereof.
I.19 "Major Decision" shall have the meaning specified therefor in Section
2.10 hereof.
I.20 "Nimbus" shall have the meaning specified therefor in the preamble to
this Agreement.
I.21 "Nimbus Nominee" shall have the meaning specified therefor in Section
2.1 hereof.
I.22 "Nimbus Offer" shall have the meaning specified therefor in Section
3.5 hereof.
I.23 "Nimbus Offer Price" shall have the meaning specified thereof in
Section 3.5 hereof.
I.24 "Nimbus Offer Termination Event" shall the meaning specified therefor
in Section 3.5 hereof.
I.25 "Nimbus Parent" shall have the meaning specified therefor in the
preamble to this Agreement.
I.26 "Nimbus Put Notice" shall have the meaning specified therefor in
Section 2.11 hereof.
I.27 "Nimbus Put Price" shall have the meaning specified therefor in
Section 2.11 hereof.
I.28 "Nimbus Shares" shall mean all Voting Securities of EuroNimbus
presently owned or hereafter acquired by Nimbus and its Permitted Transferees.
I.29 "Operating Committee" shall have the meaning specified therefor in
Section 2.15 hereof.
I.30 "Permitted Transferee" shall have the meaning specified therefor in
Section 3.2 hereof.
I.31 "Permitted Transfer" shall have the meaning specified therefor in
Section 3.2 hereof.
I.32 "Person" shall mean and include any individual, partnership,
association, joint stock company, joint venture, corporation, trust, limited
liability company, unincorporated organization, or a government, agency or
political subdivision thereof.
I.33 "Put Option" shall have the meaning specified therefor in Section 3.7
hereof.
I.34 "Put Option Notice" shall have the meaning specified therefor in
Section 3.7 hereof.
I.35 "Put Option Price" shall have the meaning specified therefore in
Section 3.7 hereof.
I.36 "Saarbrucker" shall have the meaning specified therefor in the
preamble to this agreement.
I.37 "Saarbrucker Nominee" shall have the meaning specified therefor in
Section 2.1 hereof.
I.38 "Saarbrucker Offer" shall have the meaning specified therefor in
Section 3.6 hereof.
I.39 "Saarbrucker Offer Price" shall have the meaning specified therefor
in Section 3.6 hereof.
I.40 "Saarbrucker Offer Termination Event" shall have the meaning
specified therefor in Section 3.6 hereof.
I.41 "Saarbrucker Shares" shall mean all Voting Securities of EuroNimbus
presently owned or hereafter acquired by Saarbrucker and its Permitted
Transferees.
I.42 "Sale of the Business" shall have the meaning specified therefor in
Section 3.4 hereof.
I.43 "Shareholder" shall mean each of Nimbus and Saarbrucker and each of
their respective Permitted Transferees.
I.44 "Shares" shall mean the Nimbus Shares and/or the Saarbrucker Shares.
I.45 "Significant Decision" shall have the meaning specified therefor in
Section 2.11.
I.46 "Tag-Along Notice" shall have the meaning specified therefor in
Section 3.3 hereof.
I.47 "Transfer" shall have the meaning specified therefor in Section 3.1
hereof.
I.48 "U.S. GAAP" shall mean generally accepted accounting principles in
the United States set forth in opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as may be approved by a significant
segment of the accounting profession in the United States, in each case as the
same are applicable to the circumstances as of the date of determination.
I.49 "Tribunal" shall have the meaning specified therefor in Section 6.2
hereof.
I.50 "Voting Securities" shall mean, with respect to any Person, any
shares of stock or other equity interest thereof having general voting power
under ordinary circumstances to elect a majority of the Board of Directors or
other final decision making body of such Person (irrespective of whether at the
time any other class or classes of equity interests of such Entity shall have or
might have voting power by reason of the happening of any contingency).
ARTICLE II
BOARD OF DIRECTORS
1. Composition. (a) All affairs of EuroNimbus shall be managed by EuroNimbus'
Board of Directors (the "Board of Directors"). The Articles of Association of
EuroNimbus shall provide for a Board of Directors consisting of five or ten
directors (the "Directors"). The Board of Directors shall initially consist of
five Directors. Subject to Section 2.1(b), Nimbus shall be entitled to nominate
three Directors of the Board of Directors (each such Director, a "Nimbus
Nominee") and Saarbrucker shall be entitled to nominate two Directors of the
Board of Directors (each such Director, a "Saarbrucker Nominee"). The Directors
shall be appointed annually by the general meeting of the shareholders. The
Shareholders may only appoint those individuals nominated as described above.
Nimbus shall cause all of the Nimbus Shares to be voted in favor of the
Saarbrucker Nominees at each such general meeting of the shareholders to appoint
Directors and Saarbrucker shall cause all of the Saarbrucker Shares to be voted
in favor of the Nimbus Nominees at each such general meeting of the shareholders
to appoint Directors.
(b) Subject to applicable law, the Shareholders may, by majority vote,
increase the number of Directors from five to ten. In the event that the number
of directors is increased to ten, the number of Nimbus Nominees shall be seven
and the number of Saarbrucker Nominees shall be three.
2. Chairman and Deputy Chairman of the Board of Directors. The Board of
Directors shall annually, by majority vote of the Directors, elect a Chairman
(the "Chairman"), who shall be a Nimbus Nominee and who shall preside at all
meetings of the Board of Directors and at all meetings of the shareholders at
which such person is present, but who shall have and perform no other special
duties. In addition, the Board of Directors shall annually, by majority vote of
the Directors, elect a Deputy Chairman (the "Deputy Chairman") who shall be a
Saarbrucker Nominee and who shall preside at all meetings of the Board of
Directors in the absence of the Chairman, but who shall have and perform no
other special duties.
3. Term. Directors shall hold office until the next annual general meeting of
the shareholders to appoint Directors and until their successors shall have been
duly appointed and shall have qualified, unless sooner displaced.
4. Vacancies. Whenever any vacancy shall have occurred in the Board of
Directors as a result of the death, resignation or other action or inaction of a
Director, such vacancy shall be filled by a majority of the Board of Directors;
provided, however, that the person chosen to fill such vacancy shall be a
nominee of the Shareholder which nominated the Director being replaced. The
person chosen to fill such vacancy shall hold office until the next annual
general meeting of the shareholders to appoint Directors and until his successor
is duly appointed and qualified.
5. Removal. A Director may be removed only with the consent of the
Shareholder who appointed such Director. The Shareholders agree that if Nimbus
shall notify Saarbrucker of Nimbus' desire to remove a Nimbus Nominee from the
Board of Directors, the Shareholders promptly shall do all things necessary
pursuant to EuroNimbus' Articles of Association and Luxembourg law to remove
such Nimbus Nominee and Saarbrucker shall cause all of the Saarbrucker Shares to
be voted in favor of such removal. The Shareholders further agree that if
Saarbrucker shall notify Nimbus of Saarbrucker's desire to remove a Saarbrucker
Nominee from the Board of Directors, the Shareholders promptly shall do all
things necessary pursuant to EuroNimbus' Articles of Association and Luxembourg
law to remove such Saarbrucker Nominee and Nimbus shall cause all of the Nimbus
Shares to be voted in favor of such removal. The term of any Director so removed
shall forthwith terminate and there shall be a vacancy or vacancies in the Board
of Directors, to be filled as provided in Section 2.4.
6. Meetings, Notice. (a) Regular meetings will be held at times and intervals
as shall be decided by the Board of Directors. Special meetings may be held at
any time upon the request of any two Directors and shall be held in such
locations as specified in the call or in a waiver of notice thereof.
(b) Directors may participate in a meeting of the Board of Directors or
any committee thereof, as the case may be, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and participation in a meeting pursuant to this
subsection shall constitute presence in person at the meeting.
7. Quorum. A quorum for the transaction of business shall be present at any
meeting of the Board of Directors if a majority of the Directors then in office
are present or represented by proxy, but if at any meeting of the Board of
Directors there shall be less than a quorum present or represented by proxy, a
majority of those present or represented by proxy may adjourn the meeting from
time to time until a quorum shall have been obtained.
8. Committees. The Board of Directors may, in its discretion, designate one
or more committees of the Board of Directors and appoint Directors to constitute
and serve on such committee or committees. Such committees shall have and may
exercise such powers as shall be conferred or authorized by the resolution
appointing them; provided that neither a Major Decision nor a Significant
Decision may be delegated to any such committee.
9. Voting. (a) Subject to the provisions of Sections 2.10 and 2.11, any
question presented to, or action taken by, the Board of Directors shall be
approved or disapproved at a meeting, at which a quorum shall be present and
acting throughout, in accordance with the votes of the majority of the entire
Board of Directors.
(b) Any action required or permitted to be taken at any meeting of the
Board of Directors or any committee thereof may be taken without a meeting by
unanimous written consent of all Directors or members of such committee, as the
case may be.
10. Major Management Decisions. Any proposal to change the jurisdiction of
organization of EuroNimbus (such decision, a "Major Decision") shall require the
prior written approval pursuant to a unanimous vote of the Shareholders.
11. Significant Management Decisions. (a) The following acts, expenditures,
decisions and obligations made or incurred by EuroNimbus (each a "Significant
Decision") shall require the approval of holders of at least 75% of the total
outstanding shares of Common Stock:
(i) except as otherwise permitted by Article III hereof, the sale,
conveyance, pledge, hypothecation, encumbrance, transfer or other
disposition by a Shareholder of any shares of Common Stock;
(ii) the discontinuance, winding up, dissolution or liquidation of
EuroNimbus' affairs;
(iii) any proposal to amend EuroNimbus' Articles of Association; and
(iv) any proposal to increase or decrease the authorized share capital
of EuroNimbus.
(b) In the event that any action described in clause (ii) of
Section 2.11(a) above shall not be approved by the Shareholders because of
the failure of Saarbrucker to vote the Saarbrucker Shares in favor of such
action, then Nimbus shall have the right, by notifying Saarbrucker within
30 days after the vote in respect of such action (the "Nimbus Put
Notice"), to sell to Saarbrucker, and Saarbrucker shall purchase from
Nimbus, all, but not less than all, of the Nimbus Shares at an aggregate
price equal to (i) the Fair Market Value of EuroNimbus multiplied by (ii)
the percentage of outstanding common stock represented by the Nimbus
Shares (the "Nimbus Put Price"). Upon receipt of the Nimbus Put Notice,
Nimbus and Saarbrucker shall promptly endeavor to agree on the Fair Market
Value of EuroNimbus for the purpose of determining the Nimbus Put Price.
In the event that Nimbus and Saarbrucker reach a written agreement as to
the Fair Market Value, the sale and purchase of the Nimbus Shares pursuant
to this Section 2.11(b) shall take place within ten days after such
written agreement is reached. In the event that a written agreement as to
the Fair Market Value has not been reached by Nimbus and Saarbrucker
within five days after the date of receipt of the Nimbus Put Notice by
Saarbrucker, then the determination of the Fair Market Value shall be
submitted to an internationally recognized accounting firm selected in
accordance with Section 3.7(d); provided, however, that Saarbrucker shall
submit the FMV Arbitrator Notice to Nimbus within ten days after receipt
of the Nimbus Put Notice; and, provided, further, that Nimbus shall select
the FMV Arbitrator within five days after receipt of the FMV Arbitrator
Notice from Saarbrucker. The FMV Arbitrator selected for purposes of this
Section 2.11(b) shall render a determination in accordance with Section
3.7(d); provided, however, that the FMV Arbitrator shall render a
determination of the Fair Market Value within 15 days of the selection of
the FMV Arbitrator. The decision of the FMV Arbitrator shall be final and
binding upon the parties hereto. In the event that the determination of
the Fair Market Value of EuroNimbus is submitted to the FMV Arbitrator,
the sale and purchase of the Nimbus Shares pursuant to this Section
2.11(b) shall take place within five days after a final determination is
reached by the FMV Arbitrator. On the date of receipt of the Nimbus Put
Price, Nimbus shall cause the Nimbus Shares to be transferred to
Saarbrucker and the appropriate notations to be made in EuroNimbus' share
register. Saarbrucker agrees that, in the event of any sale and purchase
of the Nimbus Shares pursuant to this Section 2.11(b), it shall cease any
use of the "EuroNimbus" name and any form or derivation thereof. In the
event that Nimbus elects to exercise its right to sell the Nimbus Shares
to Saarbrucker pursuant to this Section 2.11(b) and Saarbrucker fails to
consummate the purchase of the Nimbus Shares in accordance with this
Section 2.11(b), then Saarbrucker (y) shall be deemed to have voted the
Saarbrucker Shares in favor of the action described in clause (ii) above
that was not approved by the Shareholders, and (z) shall take all
necessary steps to approve and effect such action.
12. Approval of Certain Transactions. Each Shareholder promptly shall cause
its Shares to be voted to approve any Major Decision or Significant Decision
requiring such Shareholder approval to the extent that such action, decision or
transaction has been approved by the Board of Directors in accordance with
Section 2.10 or 2.11. The Shareholders shall not act to authorize or implement
any Major Decision or Significant Decision without such Major Decision or
Significant Decision having been first approved by the Board of Directors in
accordance with Section 2.10 or Section 2.11, as the case may be.
13. Related Party Transactions. Except as the Shareholders may otherwise
agree, any transaction between EuroNimbus, on the one hand, and either
Shareholder or any Affiliate of either Shareholder, on the other hand, shall be
on terms and conditions which could be obtained from an unaffiliated third party
in an arm's length transaction.
14. General Manager. The Board of Directors shall, with the approval of that
number of Directors which represents at least 75% of the total voting power of
the Board of Directors, appoint a General Manager of EuroNimbus (the "General
Manager"). The General Manager shall be the chief executive officer of
EuroNimbus and shall, subject to the supervision of the Board of Directors and
the provisions of this Agreement, the Articles of Association and applicable
law, exercise general management and control of EuroNimbus' affairs and shall
see that all orders and resolutions of the Board of Directors are carried into
effect. The General Manager shall have the power to execute bonds, mortgages and
other contracts and agreements and instruments of EuroNimbus and shall do and
perform such other duties as from time to time may be assigned by the Board of
Directors.
15. Operating Committee. The Board of Directors may establish an Operating
Committee (the "Operating Committee") comprised of representatives of Nimbus and
Saarbrucker or such other persons as the Board of Directors shall determine.
Notwithstanding any other provision of this Article II to the contrary (other
than the provisions under Sections 2.10 and 2.11), the Board of Directors may
delegate to the Operating Committee, to the extent permitted by applicable law,
any supervisory and management responsibilities of the Board of Directors.
ARTICLE III
TRANSFER OF SHARES
1. Restrictions. No Shareholder shall sell, assign, transfer, pledge,
hypothecate or otherwise dispose of or encumber any of its Shares or any
interest therein, to any Person (each of such actions, a "Transfer") except in
accordance with the provisions of this Agreement. The Shareholders agree that it
is their intention that the provisions of this Article III shall govern the
transfer of Shares. To the extent, and only to the extent, necessary to
effectuate the provisions of this Article III, the Shareholders hereby waive any
rights which they may have under EuroNimbus' Articles of Association or, to the
extent such rights may be waived, under Luxembourg law which may be inconsistent
with the terms of this Agreement. The Shareholders hereby agree that they shall
promptly take all such actions as may be necessary or appropriate in accordance
with Luxembourg law to effectuate the provisions of this Article III including,
without limitation, the adoption of shareholder resolutions approving Share
transfers.
2. Permitted Transfers. Notwithstanding anything to the contrary contained
herein, a Shareholder may at any time effect any of the following Transfers
(each a "Permitted Transfer" and each transferee, a "Permitted Transferee"):
(i) A Transfer by a Shareholder to any Affiliate of such Shareholder so
long as such Affiliate is a corporation, partnership or limited liability
company.
(ii) A Transfer by a Shareholder made pursuant to Section 3.3,
3.4, 3.5, 3.6 or 3.7 hereof;
(iii) With respect to Nimbus, a pledge of the Nimbus Shares to any bank or
other financial institution.
3. Sales by Nimbus Subject to Tag-Along Rights. (a) In the event that
Nimbus proposes at any time to effect a Transfer (other than a Permitted
Transfer described in Section 3.2 above) of any of the Nimbus Shares, then
Nimbus shall promptly give written notice (the "Tag-Along Notice") to EuroNimbus
and Saarbrucker at least thirty days prior to the closing of such Transfer. The
Tag-Along Notice shall describe in reasonable detail the proposed Transfer
including, without limitation, the name of and the number of Shares to be
purchased by the transferee, the purchase price of each Share to be sold, any
other significant terms of such sale and the date such proposed sale is expected
to be consummated.
(b) Saarbrucker shall have the right, exercisable upon irrevocable written
notice to Nimbus within twenty days after receipt of the Tag-Along Notice, to
participate in such sale on the same terms and conditions as set forth in the
Tag-Along Notice, including, without limitation, the making of all
representations, warranties, indemnifications (including participating in any
escrow arrangements) and similar agreements, and to sell its pro rata portion of
the number of Shares owned by it.
(c) Saarbrucker shall effect its participation in the sale by delivering
on the date scheduled for such sale to the prospective transferee one or more
certificates, which represent the number of Shares which Saarbrucker is entitled
to sell in accordance with this Section 3.3. In addition, Saarbrucker shall
deliver such other documents and certificates as are required in connection with
such sale and cause the Saarbrucker Shares being sold pursuant to this Section
3.3 to be transferred to the prospective transferee and the appropriate
notations to be made in EuroNimbus' share register.
(d) The exercise or non-exercise of the rights of Saarbrucker hereunder to
participate in one or more Transfers by Nimbus shall not adversely affect its
right to participate in subsequent Transfers subject to this Section 3.3.
4. Grant to Nimbus of Bring-Along Rights. (a) Each time the Shareholders of
EuroNimbus meet for the purpose of approving a "Sale of the Business" (as such
term is hereinafter defined), Saarbrucker agrees to vote all of the Saarbrucker
Shares, and to sell all of the Saarbrucker Shares, as directed by Nimbus. In
order to effect the foregoing covenant, Saarbrucker hereby grants to Nimbus with
respect to all of the Saarbrucker Shares an irrevocable proxy (which is deemed
to be coupled with an interest) for the term of this Agreement with respect to
any shareholder vote to effect the Sale of the Business. As used herein, "Sale
of the Business" shall mean any transaction or series of transactions (whether
structured as a stock sale, merger, consolidation, reorganization, asset sale or
otherwise) negotiated on an arm's-length basis, which results in the sale or
transfer of all or substantially all of the assets or shares of capital stock of
EuroNimbus to an unaffiliated bona fide third party in which all consideration
payable to holders of the Common Stock is distributed pro rata pursuant to stock
ownership.
(b) In furtherance of its covenants in Section 3.4(a), Saarbrucker hereby
agrees to cooperate fully with Nimbus and the purchaser in any such Sale of the
Business, and to execute and deliver all documents (including purchase
agreements) and instruments as Nimbus and the purchaser reasonably request to
effect such Sale of the Business, including, without limitation, the making of
all representations, warranties and indemnifications (including participating in
any escrow arrangements) and similar arrangements. Nimbus agrees that upon such
Sale of the Business each Shareholder will receive its pro rata share of the
consideration paid by the purchaser determined on the basis of such
Shareholder's share ownership.
5. Saarbrhcker's Right of First Offer from Nimbus. (a) Nimbus agrees not to
trigger its tag-along obligations described in Section 3.3 or exercise its
bring-along rights described in Section 3.4 without first offering to
Saarbrucker the right to purchase such Nimbus Shares, the sale of which by
Nimbus to a third party would be governed by Section 3.3 or 3.4, for a specified
per Share price in cash (the "Nimbus Offer Price") to be determined by Nimbus in
its sole discretion (such offer being hereinafter referred to as the "Nimbus
Offer"). The Nimbus Offer shall be made by Nimbus by delivery to Saarbrucker of
a notice in writing setting forth the number of Shares to be offered and the
Nimbus Offer Price for such Shares. Within 30 days after delivery to Saarbrucker
of such notice, Saarbrucker may accept the Nimbus Offer in whole only and not in
part and only on the terms so stated. Such acceptance shall be made in the
manner described in Section 3.5(b) below. Any failure of acceptance prior to the
expiration of such 30-day period set forth above shall be deemed to be a
rejection of the Nimbus Offer.
(b) If Saarbrucker shall elect to accept the Nimbus Offer, Saarbrucker
shall, within the 30-day period set forth above, notify Nimbus in writing of the
acceptance of the Nimbus Offer. The closing of the purchase by Saarbrucker shall
take place no later than 90 days after the acceptance of the Nimbus Offer and
shall be subject to a stock purchase agreement between the parties containing
representations, warranties, terms and conditions customary for a transaction in
which the purchaser is already familiar with the company whose shares are being
transferred. On the date scheduled for closing, the Nimbus Offer Price in
respect of all of the Shares to which the Nimbus Offer related shall be paid in
full by Saarbrucker against transfer of such Shares to Saarbrucker and the
making of appropriate notations in EuroNimbus' share register.
(c) If Saarbrucker rejects the Nimbus Offer or fails to accept the Nimbus
Offer within the requisite time period (each "a Nimbus Offer Termination
Event"), Nimbus shall have the right to sell the Shares to which the Nimbus
Offer related to a Person other than Saarbrucker, provided that such sale shall
be (i) made at a price per Share in cash equal to or greater than 95% of the
Nimbus Offer Price and (ii) consummated within 180 days after the applicable
Nimbus Offer Termination Event. If Nimbus is unable to find purchasers for all
of the Shares to which the Nimbus Offer related on the terms and conditions
described above, or is unable to consummate such sales, within such 180-day
period, such Shares shall, subject to clause (d) below, again be subject to the
provisions of this Section 3.5.
(d) Notwithstanding the above, if Saarbrucker shall accept the Nimbus
Offer but then fail to close such purchase within the requisite time period,
then (i) Nimbus shall have the right to sell the Shares to which the Nimbus
Offer related without restriction and (ii) all further rights of Saarbrucker
under this Section 3.5 shall terminate and be of no further force and effect.
The parties acknowledge that if Saarbrucker shall accept the Nimbus Offer but
then fail to close such purchase within the requisite time period, this Section
3.5(d) shall constitute Nimbus' exclusive remedy for such failure to close,
unless such failure to close was caused by Saarbrucker's willful misconduct or
bad faith.
6. Saarbrucker Right to Sell after Five Years; Nimbus's Right of ' III.6
Saarbrhcker Right to Sell after Five Years; Nimbus's Right of First Offer from
Saarbrhcker. (a) If after five years Saarbrucker shall desire to sell all, but
not less than all, of the Saarbrucker Shares, Saarbrucker shall first offer to
Nimbus the right to purchase all, but not less than all, of the Saarbrucker
Shares for a specified per Share price in cash (the "Saarbrucker Offer Price")
to be determined by Saarbrucker in its sole discretion (such offer being
hereinafter referred to as the "Saarbrucker Offer"). The Saarbrucker Offer shall
be made by Saarbrucker by delivery to Nimbus of a notice in writing setting
forth the number of Shares to be offered and the Saarbrucker Offer Price for
such Shares. Within 30 days after delivery to Nimbus of such notice, Nimbus may
accept the Saarbrucker Offer in whole only and not in part and only on the terms
so stated. Such acceptance shall be made in the manner described in Section
3.6(b) below. Any failure of acceptance prior to the expiration of such 30-day
period set forth above shall be deemed to be a rejection of the Saarbrucker
Offer.
(b) If Nimbus shall elect to accept the Saarbrucker Offer, Nimbus shall,
within the 30-day period set forth above, notify Saarbrucker in writing of the
acceptance of the Saarbrucker Offer. The closing of the purchase by Nimbus shall
take place no later than 90 days after the acceptance of the Saarbrucker Offer
and shall be subject to a stock purchase agreement between the parties
containing representations, terms and conditions customary for a transaction in
which the purchaser is already familiar with the company whose shares are being
transferred. On the date scheduled for closing, the Saarbrucker Offer Price in
respect of all of the Shares to which the Saarbrucker Offer related shall be
paid in full by Nimbus against transfer of such Shares to Nimbus and the making
of appropriate notations in EuroNimbus' share register.
(c) If Nimbus rejects the Saarbrucker Offer or fails to accept the
Saarbrucker Offer within the requisite time period (each "a Saarbrucker Offer
Termination Event"), Saarbrucker shall have the right to sell the Shares to
which the Saarbrucker Offer related to a Person other than Nimbus, provided that
such sale shall be (i) made at a price per Share in cash equal to or greater
than 95% of the Saarbrucker Offer Price and (ii) consummated within 180 days
after the applicable Saarbrucker Offer Termination Event. If Saarbrucker is
unable to find purchasers for all of the Shares to which Saarbrucker Offer
related on the terms and conditions described above, or is unable to consummate
such sales, within such 180-day period, such Shares shall, subject to clause (d)
below, again be subject to the provisions of this Section 3.6.
(d) Notwithstanding the above, if Nimbus shall accept the Saarbrucker
Offer but then fail to close such purchase within the requisite time period,
then (i) Saarbrucker shall have the right to sell the Shares to which the
Saarbrucker Offer related without restriction and (ii) all further rights of
Nimbus under this Section 3.6 shall terminate and be of no further force and
effect. The parties acknowledge that if Nimbus shall accept the Saarbrucker
Offer but then fail to close such purchase within the requisite time period,
this Section 3.6(d) shall constitute Saarbrucker's exclusive remedy for such
failure to close, unless such failure to close was caused by Nimbus' willful
misconduct or bad faith.
7. Change of Control. (a) Notwithstanding anything to the contrary contained
herein, if Nimbus Parent shall undergo a Change of Control, Saarbrucker shall
have a one-time option, exercisable in accordance with this Section 3.7, to sell
to Nimbus all, but not less than all, of the Saarbrucker Shares (the "Put
Option") at an aggregate price (the "Put Option Price") equal to (i) the Fair
Market Value as of the date of the Change of Control multiplied by (ii) the
percentage of outstanding common stock represented by the Saarbrucker Shares.
(b) Within 30 days of the occurrence of a Change of Control, Nimbus shall
notify (a "Change of Control Notice") EuroNimbus and Saarbrucker in writing of
all details of such Change of Control, including the identity of the Person
exercising control over the business and affairs of Nimbus Parent as a result of
such Change of Control. Within 30 days after delivery to Saarbrucker of a Change
of Control Notice, Saarbrucker may elect to exercise the Put Option in whole
only and not in part and only in accordance with the provisions of this Section
3.7. If Saarbrucker elects to exercise the Put Option, Saarbrucker shall notify
Nimbus and EuroNimbus in writing (the "Put Option Notice") of its election to
exercise the Put Option, which such decision shall be irrevocable, within the
30-day period set forth above. Any failure to notify Nimbus and EuroNimbus
within such period shall be deemed a decision not to exercise the Put Option,
and the Put Option shall thereupon terminate.
(c) Upon receipt of the Put Option Notice, Nimbus and Saarbrucker shall
promptly endeavor to agree on the Fair Market Value of EuroNimbus for the
purpose of determining the Put Option Price. In the event that Nimbus and
Saarbrucker reach a written agreement as to the Fair Market Value, the sale and
purchase of the Saarbrucker Shares pursuant to this Section 3.7 shall take place
within 90 days after such written agreement is reached. On the date of receipt
of the Put Option Price, Saarbrucker shall cause the Saarbrucker Shares to be
transferred to Nimbus and the appropriate notations to be made in EuroNimbus'
share register.
(d) In the event that a written agreement as to the Fair Market Value has
not been reached by Nimbus and Saarbrucker within 90 days after the date of
receipt of the Put Option Notice by Nimbus, then the determination of the Fair
Market Value shall be submitted to an internationally recognized accounting firm
selected in accordance with this Section 3.7(d). Within 120 days after receipt
by Nimbus of the Put Option Notice, Saarbrucker shall designate not less than
three internationally recognized accounting firms by written notice (the "FMV
Arbitrator Notice") to Nimbus. Within 30 days after receipt of the FMV
Arbitrator Notice, Nimbus shall select one of the internationally recognized
accounting firms designated by Saarbrucker in the FMV Arbitrator Notice (the
"FMV Arbitrator"), the costs of which shall be borne equally by Nimbus and
Saarbrucker. Each Shareholder shall, and shall cause EuroNimbus to, upon
reasonable notice, afford the FMV Arbitrator and its representatives full access
during normal business hours to the properties, books and records of EuroNimbus
and shall cause EuroNimbus to furnish such additional information as the FMV
Arbitrator and its representatives shall reasonably request. Within 180 days of
the submission to the FMV Arbitrator, the FMV Arbitrator shall render a
determination of the Fair Market Value in accordance with this Section 3.7(d)
along with documentation supporting its determination. The decision of the FMV
Arbitrator shall be final and binding upon the parties hereto. The sale and
purchase of the Saarbrucker Shares pursuant to this Section 3.7(d) shall take
place within ninety days after a final determination is reached by the FMV
Arbitrator. On the date of receipt of the Put Option Price, Saarbrucker shall
cause the Saarbrucker Shares to be transferred to Nimbus and the appropriate
notations to be made in EuroNimbus' share register.
(e) For the purposes of this Agreement, "Change of Control" shall mean any
transaction, the result of which is that any Person becomes the Beneficial Owner
of more than 50% of the total aggregate voting power of all classes of
outstanding Voting Securities of Nimbus Parent.
8. Transferee's Agreement. No Shares shall be transferred to any Person not
a party to this Agreement unless such transfer is made in accordance with this
Agreement and unless the transferee agrees in writing to be bound by the terms
of this Agreement and to assume the obligations of the transferring shareholder
hereunder.
ARTICLE IV
IMPLEMENTATION
1. Appointment. Promptly upon the execution and delivery of the deed of
incorporation of EuroNimbus, Nimbus and Saarbrucker shall, at a special meeting
of the shareholders, appoint the initial Directors of EuroNimbus in accordance
with Article II hereof.
2. Luxembourg Law. Each of the Shareholders, to the fullest extent permitted
by Luxembourg law, waives any rights that it may have under Luxembourg law which
might be inconsistent with the terms of this Agreement and, to the extent such
rights cannot validly be waived, each such Shareholder will exercise such rights
only to the extent consistent with this Agreement.
3. Best Efforts. In the event that the Board of Directors takes or fails to
take any action, which action or failure to take action in any way impedes the
full implementation of the terms of this Agreement, the Shareholders shall, to
the extent practicable, do all things permitted by Luxembourg law that are
necessary, including the removal of Directors, as the case may be, to permit the
full implementation of this Agreement and shall cause the adoption of any
necessary Shareholders' resolution in connection therewith.
ARTICLE V
ACCOUNTING AND OTHER INFORMATION
1. Quarterly Reports. EuroNimbus shall prepare in accordance with generally
accepted accounting principles in Luxembourg, with a reconciliation to U.S.
GAAP, an unaudited consolidated balance sheet of EuroNimbus as at the end of
each of the first three quarters of each calendar year and the related
statements of income, shareholders' equity and cash flows for each of such
quarters then ended which shall be delivered to the Board not more than 30 days
after the end of each such calendar quarter.
2. Audits. As soon as practicable and in any event within 120 days after the
end of each fiscal year, EuroNimbus shall deliver to each Shareholder its
financial statements prepared in accordance with applicable legal requirements,
containing a consolidated balance sheet of EuroNimbus as at the end of such year
and the related statements of income, shareholders' equity and cash flow for the
year then ended, prepared in accordance with generally accepted accounting
principles in Luxembourg, with a reconciliation to U.S. GAAP, all certified by
the independent public accountants to EuroNimbus.
3. Selection of Independent Public Accountants. The Shareholders agree to vote
their respective shares in favor of such independent public accountants of
EuroNimbus as shall be recommended by a majority of the Board of Directors of
EuroNimbus, it being understood that such independent public accountants shall
initially be Coopers & Xxxxxxx, SociJtJ civile.
4. Access to Information Concerning Properties and Records. Each of the
Shareholders and their respective counsel, accountants, consultants and other
representatives, shall, upon reasonable notice, be entitled to full access
during normal business hours to the properties, books and records of EuroNimbus
in order that they may have the opportunity to make such investigations as they
shall reasonably desire of the affairs of EuroNimbus including making copies of
such information that they may reasonable desire in furtherance of such
investigation. The Shareholders shall take all action necessary or appropriate
to ensure EuroNimbus shall cause its officers and employees to furnish such
additional financial and operating data and other information and respond to
such inquiries as the Shareholders shall from time to time reasonably request.
Any information so obtained may be used by the Shareholders in any manner
permitted by this Agreement.
ARTICLE VI
DISPUTE RESOLUTION
1. Dispute Resolution. Any dispute, controversy or claim arising out of or in
connection with this Agreement, or the breach, termination or validity hereof,
shall be settled by final and binding arbitration under the Rules of Arbitration
of the International Chamber of Commerce.
2. Procedures. Any disputes subject to resolution pursuant to this Article
VIII shall be resolved through the following procedure. The arbitral tribunal
(the "Tribunal") shall be composed of three arbitrators who shall be appointed
as follows: each Shareholder shall have the right to appoint one arbitrator; the
two arbitrators so appointed shall then appoint a third arbitrator who shall
serve as chairperson. If a party, or parties, entitled to appoint an arbitrator,
fails to appoint an arbitrator within thirty (30) days of receiving notice of
the commencement of the arbitration, such arbitrator shall at the written
request of any party be appointed by the International Chamber of Commerce.
3. Awards. Any award made by the Tribunal shall be final and binding upon
each party to this Agreement, each of whom expressly waives all right to appeal
or recourse to any court.
4. Enforcement. Any award made by the Tribunal may be enforced by any court
having jurisdiction in the same manner as a judgment in such court.
5. Site and Language. The place of arbitration conducted hereunder shall be
Luxembourg and the language of the arbitration shall be French (with
simultaneous translation into English and German).
ARTICLE VII
SCOPE OF BUSINESS; EXCLUSIVITY
1. Scope of Business. EuroNimbus shall manufacture compact discs (including
CD-Audio, CD-ROM, DVD and DVD-ROM products) and related printing and packaging
components through the establishment of a manufacturing facility in Luxembourg
for sale throughout the European Union. EuroNimbus shall use all commercially
reasonable efforts to supply Saarbrucker and its Affiliates with all of their
respective compact disc requirements, it being understood that EuroNimbus will
give priority treatment to the compact disc requirements of Saarbrucker and its
Affiliates to the extent such requirements relate to contractual obligations of
Saarbrucker and its Affiliates to the European Union.
2. Exclusivity. Saarbrucker agrees that, for so long as Nimbus and
Saarbrucker are Shareholders of EuroNimbus, Saarbrucker and its Affiliates shall
purchase from EuroNimbus all of its CD-Audio, CD-ROM, DVD and DVD-ROM
requirements and further agrees that it shall not sell or market, directly or
indirectly, any compact disc product that is not manufactured by EuroNimbus.
ARTICLE VIII
MISCELLANEOUS
1. Entire Agreement; Amendment. This Agreement and the Agreements referred
to herein (and the documents and instruments contemplated by each of such
agreements to be executed, delivered and performed by the parties thereto)
contain the entire agreement between the parties hereto with respect to the
subject matter hereof and supersede all prior arrangements or understandings
with respect thereto.
2. Captions. The descriptive headings of the several Articles and Sections
are inserted for convenience only, do not constitute part of this Agreement and
shall not in any way affect the meaning or interpretation of this Agreement.
3. Counterparts. For the convenience of the parties, any number of
counterparts of this Agreement may be executed by the parties hereto and each
such executed counterpart shall be deemed to be an original instrument.
4. Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered in person or
by mail or overnight courier, postage prepaid, or sent by telex, telegram or
telecopier (confirmed by mail with postage prepaid), as follows:
(a) if to Nimbus, to it at:
Nimbus Manufacturing (UK) Limited
Llantarnam Park, Xxxxxxx, Xxxxx XX00 0XX
Xxxxxx Xxxxxxx
Telephone: (1633) 877121
Telecopier: (1633) 865520
Attention: Xxxxxx Xxxx
with a copy to:
Nimbus CD International, Inc.
000 Xxxxx Xxx Xxxx, Xxxxxxxxx Xxxx,
Xxxxxxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: L. Xxxxxx Xxxxxx
and a further copy to:
White & Case
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
(b) if to Saarbrucker, to it at:
Saarbrucker Zeitung Verlag und Druckerei, G.m.b.H
Xxxxxxxxxxxxxxxx 00-00, 00000 Xxxxxxxxxxx
Xxxxxxx Xxxxxxxx of Germany
Telephone: (00) 000-000-0000
Telecopier: (00) 000-000-0000
Attention: Ghnter Kamissek
(c) if to EuroNimbus, to it at:
x/x Xxxx & Xxxxxxx
Xxxxxx Xxxxxxxxx 00, X.X. 000, X-0000 Xxxxxxxxxx
Telephone: (0352) 45 58 58
Telecopier: (0352) 45 58 59
Attention: Xxxx Xxxxxxx, Esq.
or to such other Person or address as any party shall specify by notice in
writing to each of the other parties. All such notices, requests, demands,
waivers and communications shall be deemed to have been received on the date of
delivery unless if mailed, in which case on the third Business Day after the
mailing thereof or unless if by overnight courier, in which case, on the second
Business Day after dispatch thereof, except for a notice of a change of address,
which shall be effective only upon receipt thereof.
5. Binding Effect; Benefit; Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any party hereto
without the prior written consent of the other party, except as otherwise
permitted by this Agreement. Nothing in this Agreement, expressed or implied, is
intended to confer on any Person other than the parties hereto or their
respective successors and permitted assigns, any rights, remedies, obligations
or liabilities under or by reason of this Agreement.
6. Amendment and Modification. Subject to applicable law, this Agreement
may be amended, modified and supplemented only in a writing executed by all of
the parties hereto.
7. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of Luxembourg, without regard to the conflict of laws
rules thereof.
8. Severability. If any term, provision, covenant or restriction contained
in this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void, unenforceable or against its regulatory policy,
the remainder of the terms, provisions, covenants and restrictions contained in
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
9. Termination. This Agreement may be terminated by express
written agreement of the Shareholders.
10. Confidentiality. Subject to the requirements of applicable law, each
party shall, and shall cause its employees, servants, agents and representatives
to, maintain in confidence all information received from EuroNimbus and shall
use such information only for the benefit of EuroNimbus, and shall not, and
shall cause its employees, servants, agents and representatives not to, disclose
any such information to a third party or make any unauthorized use thereof. Each
party shall, and shall cause its employees, servants, agents and representatives
to, treat all such information with the same degree of care against disclosure
or unauthorized use which it affords to its own confidential information. The
obligation of confidentiality and non-use shall not apply to any information
which (a) was not previously treated as confidential by EuroNimbus, (b) is or
becomes generally available to the public through no fault of the receiving
party, (c) is independently developed by the receiving party or (d) is received
in good faith from a third party who discloses such information to the receiving
party on a non-confidential basis.
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be
executed in its name and on its behalf by its officer duly authorized thereunto,
effective as of the date first written above.
NIMBUS MANUFACTURING (UK)
LIMITED
By
Name:
Title:
SAARBRUCKER ZEITUNG VERLAG UND
DRUCKEREI G.m.b.H.
By
Name:
Title:
EURONIMBUS S.A.
By
Name:
Title:
